Contrasting Samsung and Blackberry
There were two technology stories published Sunday about companies that couldn’t be in different places — Samsung and Blackberry.
While the Wall Street Journal was reporting executives departing Blackberry, the New York Times had a profile of the successful Samsung.
Let’s first look at the Blackberry story in the Wall Street Journal by Will Connors:
The leadership upheaval at BlackBerry Ltd. continues under interim Chief Executive John Chen, according to people familiar with the matter.
The smartphone maker’s executive vice president in charge of global sales, Rick Costanzo, will be leaving the company by early next year, according to these people. Chris Wormald, who was in charge of BlackBerry’s mergers and acquisitions strategy, will be gone by the end of this month, according to one of these people.
Both men, long-term employees, couldn’t be reached for comment. The company declined to comment.
Their departures would come just weeks after BlackBerry’s chief marketing officer, chief operation officer and chief financial officer left the Waterloo, Ontario, company, which scrapped a plan to sell itself last month when it named Mr. Chen interim chief executive.
When Mr. Chen took over, he told employees during a town-hall meeting, “Things are going to get worse before they get better,” and that, “Not all of you will be here,” according to a person in attendance that day.
Which is true not only for those executives but also for the more than 4,000 people Blackberry is planning to lay off. It’s hard to get ahead when you’re cutting staff, production and retrenching.
Lee Kun-hee, the man who built the most successful, most admired and most feared business in Asia — a $288 billion behemoth that is among the most profitable in the world — had a message for his employees this year: You must do better.
At other companies, congratulations might have been in order. His companies were headed to another extraordinary year. But this was Samsung, the South Korean industrial group that Mr. Lee, an elfin man with a stubborn will, transformed from a second-rate maker of household appliances into a conglomerate with a flagship electronics business that has left most rivals eating its silicon dust. There would be no pat on the back for Samsung’s 470,000 employees. Instead, in June, he sent a companywide email sternly urging them to raise their game.
“As we move forward, we must resist complacency and thoughts of being good enough, as these will prevent us from becoming better,” Mr. Lee, who is 71, wrote. Samsung’s management, he said, “must start anew to reach loftier goals and ideals.”
Two decades earlier, having taken over the company from his father, Mr. Lee met with dozens of his executives and gave them a similar order, one that remains embedded in company lore: “Change everything but your wife and children.”
That message was effective. Samsung’s sales are equal to about one-quarter of South Korea’s economic output. Samsung Electronics, the flagship, posted $190 billion in sales last year — about the same sales as Microsoft, Google, Amazon and Facebook combined.
Last year, Samsung shipped 215 million smartphones, about 40 percent of the worldwide total, analysts estimate; this year, it is expected to ship more than 350 million. Interbrand, a marketing consulting firm, ranked Samsung as the eighth-most-valuable brand in the world. Mr. Lee is one of the world’s richest men.
The contrasts between these two mobile phone makers are stark. Blackberry, once the darling of business and ubiquitous in every meeting, is being replaced as other devices move in offering faster, smarter and sleeker phones. Samsung is at the top of its game right now, dominating the market along with Apple Inc. and pulling in money.
The Times reported that one key to Samsung’s success is its vertical integration:
The company’s sweet spot has become electronics: It makes chips, display panels and many other electronic parts, and then assembles its own smartphones and other devices.
This kind of vertical integration has fallen out of fashion in the West, where it is considered unwieldy. While Apple designs its hardware and software, for example, the company buys chips from other companies, including Samsung, and outsources the assembly of iPhones, iPods and iPads.
The only problem is that Samsung often finds itself in first place and needing to create the next trend, the Times said. With competitors such as Blackberry cutting employees and struggling to stay alive, that should give Samsung an advantage if they can stay focused.
It’s hard to see how Blackberry regains a foothold in the market. The technology and brand already seem outdated. The departure of more talent just makes it harder for the company to turn things around.