1. What are the ingredients of SEC’s corporate turnaround strategy? Since 1997, Samsung has pursued a bold combination of strategies which have allowed it to innovate & produce higher-quality products across all the categories. Those strategies are mentioned below in detail: A. Vertical Integration – manufacturing continued to remain Samsung’s core competence as always. Samsung believed that if it got out of manufacturing then it would loose the edge since everyone could get the same technology but not everyone was capable of making an advanced product. Farming out manufacturing operations would expose Samsung to inventory risks thus its fate would be in the hands of its suppliers and to prevent that, between 1998 and 2003, Samsung invested $19 billion in new chip factories, $17 billion was invested in 2003 in new manufacturing facilities for LCDs used in flat-screen TVs and such. Samsung not only manufactured for customers internal to the company but also external customers, which included Apple, Sony, etc. so as to ensure that its plants remained competitive. The company was also savvy about its choice of plant locations; for example, to keep costs low, it operated manufacturing plants in China, however R&D facilities were set up in India to take advantage of country’s low cost human capital. Samsung also avoided the commoditization trap that allowed the company to command premium margins by manufacturing special order items such as memory chips for Dell, Microsoft and Nokia. B. Hardware Focus – Samsung kept its laser focus on hardware when companies such as Sony & Apple were engaged in software, and hardware. Rather than create its own software, Samsung hardware supported open architecture, which allowed company’s electronic devices such as phones & TVs to utilize software built by other companies. This allowed customers being