Dynamic Capabilities at Samsung Electronics: Analysis of its Growth Strategy in Semiconductors

Abstract

Samsung Electronics has emerged as the world’s largest memory chip maker with a leading position in the DRAM and NAND flash markets. This paper explores and analyzes the key success factors of Samsung in the semiconductor industry using the dynamic capabilities framework. Based on literature review and case studies, the following five dimensions of dynamic capabilities were identified to explain Samsung’s successful growth in semiconductors: 1) opportunity recognition and entrepreneurial insight by top management, 2) rapid catch-up through technology acquisition and learning, 3) leapfrogging competitors through product and process innovation 4) product line diversification leveraging existing capabilities and resources, 5) resource release through restructuring during the financial crisis. This study provides insights on the growth strategy of a latecomer firm striving for global leadership and illustrates the importance of dynamic capabilities in creating competitive advantage and sustaining growth.