That company was Samsung Electronics, and it is now the world's largest and most profitable consumer electronics company. Its 123,000 employees make a range of products as diverse as cellphones and flat-panel televisions, washing machines and vacuum cleaners.
So why is Kim Byung Cheol, a senior executive at Samsung, so anxious about his company's future? Because, Kim and others fret, Samsung has still not mastered one crucial factor: originality.
With deep pockets, Samsung has won over consumers with clever designs and multifunction gadgets, like camcorders that download songs and refrigerators that also surf the Internet. It has swept up awards for cellphone designs that look like dashboards, tuxedos or pebbles in a stream. Last year, the company had US$59.2 billion (RM216 billion) in sales and reported profit of US$7.9 billion (RM29 billion), 13 times as much as the 2005 earnings forecast by its rival Sony.
Analysts and Samsung executives agree that the company has excelled at refining other people's inventions, a strategy that worked fine while the company was climbing to the top. But now that it is the leader, Samsung has to set itself apart by creating novel products of its own, especially if it wants to stay ahead of fast-rising Chinese rivals.
They say this means coming up not just with minor hits but with breakthrough inventions like the Apple iPod or the Sony Walkman. Otherwise, they warn, Samsung risks the same fate as many of the once formidable Japanese electronics giants whom Samsung overtook on its way to the top.
"We are at a pivotal moment for the company," said Kim, a vice-president in charge of long-term research and development (R & D). "If we don't become an innovator, we could end up like one of those Japanese companies, mired in difficulties."
Kim is helping lead Samsung's push to reach this goal, which the company is pursuing with the same ferocity and determination that it has used to conquer global markets. The company plans to invest some US$40 billion (RM146 billion) on R & D during the next five years, double what it spent in the preceding five years. It more than doubled its number of researchers, to 32,000, from 13,900 six years ago.
Nowhere is Samsung's effort to reinvent itself more apparent than here in Suwon, where the company has built what it calls the largest R & D centre in Asia, with space for 15,000 engineers. The centre stands on the site of the company's original 1969 electric fan factory.
Suwon's newest facility is the Digital Research Centre, completed in September with the floor space of 30 football fields and special picture and sound labs big enough for 9,000 researchers, though it has so far hired only 5,200. Of those, 150 are from foreign countries like China, India and the US.
Kim said the new labs reflected Samsung's shift away from simply developing products, towards basic research to find the next big idea.
"If you look at Samsung's R & D 10 years ago, we had a lot more D than R," Kim said from his office here. "Today, R is getting much more attention."
If any company can transform itself, ana- lysts say, Samsung can.
With a market value exceeding US$100 billion (RM364 billion), Samsung has done well, they say, because it is the rare corporate giant that remains nimble on its feet. It excels at identifying new technologies and business opportunities early, and then seizing control of the market with overwhelming production volume.
It did this with rear-projection TVs, a popular product in the US that was long dominated by Sony. Samsung saw its chance to break into the American market when Texas Instruments approached it during a 2001 trade show in Tokyo, Samsung executives said.
Texas Instruments, based in Dallas, gave Samsung information about a new computer chip it had developed that used millions of microscopic mirrors to project images onto screens. The American company had already shopped the chip to the Japanese makers Hitachi, Matsushita and Mitsubishi Electric, which were each developing a single TV model using the chip, the executives said.
Samsung jumped on the new technology, producing its first prototype within 12 months, in January 2002. Over the next months, Samsung introduced three models using the technology, called digital light processing, or DLP, with prices for TVs ranging from US$3,500 to US$5,000 (RM12,740 to RM18,200), less than half the Japanese makers' prices. By December 2003, Samsung had produced one million DLP TVs, becoming the market leader.
"This new technology was the chance we needed," said David Steel, a vice-president in Samsung's digital media division in Suwon. "Then we ruthlessly executed by moving faster than the competition, not only to catch up but to pass."
Steel says one secret to Samsung's speed is the fact that the company makes almost every major electronics component, from computer chips to plasma screens. Often, building new products just requires assembling these components in new combinations, like technological building blocks.
He said this also allowed Samsung to go in new directions, building multifunctionality into household electronics and other consumer goods.
"We think big trends like convergence, and the move to wireless and networking, will play to our strengths," Steel said. Steel, a Briton with a doctorate in physics, also exemplifies a recent push by Samsung to attract foreign talent. Hired in 1999, he was the first non-Korean to reach a top management position.
Samsung's rivals see it as a formidable competitor but not yet a trailblazer. But that could change soon, they say.
"Our TVs are better," Nobuyuki Oneda, Sony's chief financial officer, said during an interview earlier this year. "But Samsung's cash flow is amazing. It is hard to invest in and develop products at the same pace as Samsung."
Another new Samsung strength, analysts say, is design. The company has opened design centres in Los Angeles, San Francisco, Tokyo, Shanghai and Milan. Recent designs for flat-panel TVs are based on trends noticed at furniture shows in Italy.
At headquarters in Seoul, designers are told to find inspiration outside the office, and are given Wednesday afternoons off to do so, said Christian Collins, a senior manager in Samsung's cellphone division. Collins, an American, was hired away from Verizon Wireless.
Executives also note that Samsung has reinvented itself before.
When the company was founded as part of the Samsung industrial group, it was so little known that the only market where it could sell its first black-and-white television sets was Panama. By the early 1990s, Samsung had become a successful producer of low-cost commodity electronics, many of them sold under different brand names.
Then Lee Kun Hee, Samsung group chairman, started a sweeping makeover, pushing the company to focus on quality instead of quantity.
Samsung pushed its way up the technological ladder, elbowing aside previous incumbents, most of them Japanese. In 1992, it became the world's largest producer of memory chips. In 1995, it made its first liquid crystal display (LCD) screen, a technology it eventually mastered to the po int that the former front-runner, Sony, joined it in a joint venture to build LCD screens.
Samsung has also tried hard to improve its international image. It h as spent more than US$6 billion (RM22 billion) since 1998 on marketing, sponsoring the past five Olympics and erecting a large video sign in Times Square in New York in 2002. - NYT
Thirty-seven years ago, 36 employees began assembling electric fans in a small workshop in this city just south of Seoul.
That company was Samsung Electronics, and it is now the world's largest and most profitable consumer electronics company. Its 123,000 employees make a range of products as diverse as cellphones and flat-panel televisions, washing machines and vacuum cleaners.
So why is Kim Byung Cheol, a senior executive at Samsung, so anxious about his company's future? Because, Kim and others fret, Samsung has still not mastered one crucial factor: originality.
With deep pockets, Samsung has won over consumers with clever designs and multifunction gadgets, like camcorders that download songs and refrigerators that also surf the Internet. It has swept up awards for cellphone designs that look like dashboards, tuxedos or pebbles in a stream. Last year, the company had US$59.2 billion (RM216 billion) in sales and reported profit of US$7.9 billion (RM29 billion), 13 times as much as the 2005 earnings forecast by its rival Sony.
Analysts and Samsung executives agree that the company has excelled at refining other people's inventions, a strategy that worked fine while the company was climbing to the top. But now that it is the leader, Samsung has to set itself apart by creating novel products of its own, especially if it wants to stay ahead of fast-rising Chinese rivals.
They say this means coming up not just with minor hits but with breakthrough inventions like the Apple iPod or the Sony Walkman. Otherwise, they warn, Samsung risks the same fate as many of the once formidable Japanese electronics giants whom Samsung overtook on its way to the top.
"We are at a pivotal moment for the company," said Kim, a vice-president in charge of long-term research and development (R & D). "If we don't become an innovator, we could end up like one of those Japanese companies, mired in difficulties."
Kim is helping lead Samsung's push to reach this goal, which the company is pursuing with the same ferocity and determination that it has used to conquer global markets. The company plans to invest some US$40 billion (RM146 billion) on R & D during the next five years, double what it spent in the preceding five years. It more than doubled its number of researchers, to 32,000, from 13,900 six years ago.
Nowhere is Samsung's effort to reinvent itself more apparent than here in Suwon, where the company has built what it calls the largest R & D centre in Asia, with space for 15,000 engineers. The centre stands on the site of the company's original 1969 electric fan factory.
Suwon's newest facility is the Digital Research Centre, completed in September with the floor space of 30 football fields and special picture and sound labs big enough for 9,000 researchers, though it has so far hired only 5,200. Of those, 150 are from foreign countries like China, India and the US.
Kim said the new labs reflected Samsung's shift away from simply developing products, towards basic research to find the next big idea.
"If you look at Samsung's R & D 10 years ago, we had a lot more D than R," Kim said from his office here. "Today, R is getting much more attention."
If any company can transform itself, ana- lysts say, Samsung can.
With a market value exceeding US$100 billion (RM364 billion), Samsung has done well, they say, because it is the rare corporate giant that remains nimble on its feet. It excels at identifying new technologies and business opportunities early, and then seizing control of the market with overwhelming production volume.
It did this with rear-projection TVs, a popular product in the US that was long dominated by Sony. Samsung saw its chance to break into the American market when Texas Instruments approached it during a 2001 trade show in Tokyo, Samsung executives said.
Texas Instruments, based in Dallas, gave Samsung information about a new computer chip it had developed that used millions of microscopic mirrors to project images onto screens. The American company had already shopped the chip to the Japanese makers Hitachi, Matsushita and Mitsubishi Electric, which were each developing a single TV model using the chip, the executives said.
Samsung jumped on the new technology, producing its first prototype within 12 months, in January 2002. Over the next months, Samsung introduced three models using the technology, called digital light processing, or DLP, with prices for TVs ranging from US$3,500 to US$5,000 (RM12,740 to RM18,200), less than half the Japanese makers' prices. By December 2003, Samsung had produced one million DLP TVs, becoming the market leader.
"This new technology was the chance we needed," said David Steel, a vice-president in Samsung's digital media division in Suwon. "Then we ruthlessly executed by moving faster than the competition, not only to catch up but to pass."
Steel says one secret to Samsung's speed is the fact that the company makes almost every major electronics component, from computer chips to plasma screens. Often, building new products just requires assembling these components in new combinations, like technological building blocks.
He said this also allowed Samsung to go in new directions, building multifunctionality into household electronics and other consumer goods.
"We think big trends like convergence, and the move to wireless and networking, will play to our strengths," Steel said. Steel, a Briton with a doctorate in physics, also exemplifies a recent push by Samsung to attract foreign talent. Hired in 1999, he was the first non-Korean to reach a top management position.
Samsung's rivals see it as a formidable competitor but not yet a trailblazer. But that could change soon, they say.
"Our TVs are better," Nobuyuki Oneda, Sony's chief financial officer, said during an interview earlier this year. "But Samsung's cash flow is amazing. It is hard to invest in and develop products at the same pace as Samsung."
Another new Samsung strength, analysts say, is design. The company has opened design centres in Los Angeles, San Francisco, Tokyo, Shanghai and Milan. Recent designs for flat-panel TVs are based on trends noticed at furniture shows in Italy.
At headquarters in Seoul, designers are told to find inspiration outside the office, and are given Wednesday afternoons off to do so, said Christian Collins, a senior manager in Samsung's cellphone division. Collins, an American, was hired away from Verizon Wireless.
Executives also note that Samsung has reinvented itself before.
When the company was founded as part of the Samsung industrial group, it was so little known that the only market where it could sell its first black-and-white television sets was Panama. By the early 1990s, Samsung had become a successful producer of low-cost commodity electronics, many of them sold under different brand names.
Then Lee Kun Hee, Samsung group chairman, started a sweeping makeover, pushing the company to focus on quality instead of quantity.
Samsung pushed its way up the technological ladder, elbowing aside previous incumbents, most of them Japanese. In 1992, it became the world's largest producer of memory chips. In 1995, it made its first liquid crystal display (LCD) screen, a technology it eventually mastered to the po int that the former front-runner, Sony, joined it in a joint venture to build LCD screens.
Samsung has also tried hard to improve its international image. It h as spent more than US$6 billion (RM22 billion) since 1998 on marketing, sponsoring the past five Olympics and erecting a large video sign in Times Square in New York in 2002. - NYT
That company was Samsung Electronics, and it is now the world's largest and most profitable consumer electronics company. Its 123,000 employees make a range of products as diverse as cellphones and flat-panel televisions, washing machines and vacuum cleaners.
So why is Kim Byung Cheol, a senior executive at Samsung, so anxious about his company's future? Because, Kim and others fret, Samsung has still not mastered one crucial factor: originality.
With deep pockets, Samsung has won over consumers with clever designs and multifunction gadgets, like camcorders that download songs and refrigerators that also surf the Internet. It has swept up awards for cellphone designs that look like dashboards, tuxedos or pebbles in a stream. Last year, the company had US$59.2 billion (RM216 billion) in sales and reported profit of US$7.9 billion (RM29 billion), 13 times as much as the 2005 earnings forecast by its rival Sony.
Analysts and Samsung executives agree that the company has excelled at refining other people's inventions, a strategy that worked fine while the company was climbing to the top. But now that it is the leader, Samsung has to set itself apart by creating novel products of its own, especially if it wants to stay ahead of fast-rising Chinese rivals.
They say this means coming up not just with minor hits but with breakthrough inventions like the Apple iPod or the Sony Walkman. Otherwise, they warn, Samsung risks the same fate as many of the once formidable Japanese electronics giants whom Samsung overtook on its way to the top.
"We are at a pivotal moment for the company," said Kim, a vice-president in charge of long-term research and development (R & D). "If we don't become an innovator, we could end up like one of those Japanese companies, mired in difficulties."
Kim is helping lead Samsung's push to reach this goal, which the company is pursuing with the same ferocity and determination that it has used to conquer global markets. The company plans to invest some US$40 billion (RM146 billion) on R & D during the next five years, double what it spent in the preceding five years. It more than doubled its number of researchers, to 32,000, from 13,900 six years ago.
Nowhere is Samsung's effort to reinvent itself more apparent than here in Suwon, where the company has built what it calls the largest R & D centre in Asia, with space for 15,000 engineers. The centre stands on the site of the company's original 1969 electric fan factory.
Suwon's newest facility is the Digital Research Centre, completed in September with the floor space of 30 football fields and special picture and sound labs big enough for 9,000 researchers, though it has so far hired only 5,200. Of those, 150 are from foreign countries like China, India and the US.
Kim said the new labs reflected Samsung's shift away from simply developing products, towards basic research to find the next big idea.
"If you look at Samsung's R & D 10 years ago, we had a lot more D than R," Kim said from his office here. "Today, R is getting much more attention."
If any company can transform itself, ana- lysts say, Samsung can.
With a market value exceeding US$100 billion (RM364 billion), Samsung has done well, they say, because it is the rare corporate giant that remains nimble on its feet. It excels at identifying new technologies and business opportunities early, and then seizing control of the market with overwhelming production volume.
It did this with rear-projection TVs, a popular product in the US that was long dominated by Sony. Samsung saw its chance to break into the American market when Texas Instruments approached it during a 2001 trade show in Tokyo, Samsung executives said.
Texas Instruments, based in Dallas, gave Samsung information about a new computer chip it had developed that used millions of microscopic mirrors to project images onto screens. The American company had already shopped the chip to the Japanese makers Hitachi, Matsushita and Mitsubishi Electric, which were each developing a single TV model using the chip, the executives said.
Samsung jumped on the new technology, producing its first prototype within 12 months, in January 2002. Over the next months, Samsung introduced three models using the technology, called digital light processing, or DLP, with prices for TVs ranging from US$3,500 to US$5,000 (RM12,740 to RM18,200), less than half the Japanese makers' prices. By December 2003, Samsung had produced one million DLP TVs, becoming the market leader.
"This new technology was the chance we needed," said David Steel, a vice-president in Samsung's digital media division in Suwon. "Then we ruthlessly executed by moving faster than the competition, not only to catch up but to pass."
Steel says one secret to Samsung's speed is the fact that the company makes almost every major electronics component, from computer chips to plasma screens. Often, building new products just requires assembling these components in new combinations, like technological building blocks.
He said this also allowed Samsung to go in new directions, building multifunctionality into household electronics and other consumer goods.
"We think big trends like convergence, and the move to wireless and networking, will play to our strengths," Steel said. Steel, a Briton with a doctorate in physics, also exemplifies a recent push by Samsung to attract foreign talent. Hired in 1999, he was the first non-Korean to reach a top management position.
Samsung's rivals see it as a formidable competitor but not yet a trailblazer. But that could change soon, they say.
"Our TVs are better," Nobuyuki Oneda, Sony's chief financial officer, said during an interview earlier this year. "But Samsung's cash flow is amazing. It is hard to invest in and develop products at the same pace as Samsung."
Another new Samsung strength, analysts say, is design. The company has opened design centres in Los Angeles, San Francisco, Tokyo, Shanghai and Milan. Recent designs for flat-panel TVs are based on trends noticed at furniture shows in Italy.
At headquarters in Seoul, designers are told to find inspiration outside the office, and are given Wednesday afternoons off to do so, said Christian Collins, a senior manager in Samsung's cellphone division. Collins, an American, was hired away from Verizon Wireless.
Executives also note that Samsung has reinvented itself before.
When the company was founded as part of the Samsung industrial group, it was so little known that the only market where it could sell its first black-and-white television sets was Panama. By the early 1990s, Samsung had become a successful producer of low-cost commodity electronics, many of them sold under different brand names.
Then Lee Kun Hee, Samsung group chairman, started a sweeping makeover, pushing the company to focus on quality instead of quantity.
Samsung pushed its way up the technological ladder, elbowing aside previous incumbents, most of them Japanese. In 1992, it became the world's largest producer of memory chips. In 1995, it made its first liquid crystal display (LCD) screen, a technology it eventually mastered to the po int that the former front-runner, Sony, joined it in a joint venture to build LCD screens.
Samsung has also tried hard to improve its international image. It h as spent more than US$6 billion (RM22 billion) since 1998 on marketing, sponsoring the past five Olympics and erecting a large video sign in Times Square in New York in 2002. - NYT
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