Speaking to 1,800 senior executives gathered for a yearly company meeting, Chairman Lee Kun-hee emphasized the need for Samsung to abandon the old ways and pursue innovation in 2014.
Lee, the son of Samsung founder Lee Byung-chul, has been the chairman of the company since 1987. The meeting held yesterday in Seoul comes 20 years after Lee’s famous “change everything except for your wife and kids” speech, which marked the beginning of Samsung’s rise as a world leader in consumer electronics.
While Samsung has enjoyed a year of record profits as the comfortable world leader in TVs, smartphones, and semiconductors, Lee Kun-hee urged his employees to avoid complacence and “build up competitiveness that cannot be copied by rivals”. The 71-old Mr. Lee commented that there “were greater opportunities when things were not going well”, a view that’s apparently shared by the market – Samsung lost billions in market capitalization in the first day of the year, as investors worry that slowing smartphone sales and the absence of a new growth engine could affect Samsung’s performance.
“Old strategies, hardware-oriented processes and corporate cultures should be boldly thrown away” said Lee, who demanded more breakthroughs in technology and in the market. Over the past years, Samsung has made huge efforts to improve its software offerings, an area that it hasn’t excelled in so far. Some initiatives in this direction are the establishment of software development centers in North America, the redirection of R&D funds to software, acquisitions of software startups, and a series of biannual developer conferences, the first of which was held this fall in San Francisco. Samsung is also heavily investing in developing an Android alternative in Tizen, with the first commercial devices due to arrive this spring.
Lee acknowledged that Samsung has moved successfully from simple volume production to making high-quality products, but now it’s time for the company to offer more “class” and upgrade the value of its products and services. Samsung’s high-end products have been heavily criticized for their cheap feel, though rumors suggest that might change come the Galaxy S5.