How can Samsung remain surviving despite facing three major controversies: product, company and politics?

If it were any other company that encountered multiple rounds of turmoil similar to Samsung's, it would probably have been shattered or fallen apart.

The latest data released by IDC shows that although Samsung's mobile phone sales in 2016 fell by 3% year-on-year compared with 2015 due to the explosion and global recall of Galaxy Note 7, and its sales in the fourth quarter of 2016 fell by 5.2% year-on-year compared with 2015, Samsung still ranked first in the global smartphone sales list in 2016 with a total sales volume of 310 million units.

So, how can Samsung, which is constantly in turmoil, remain "unbeatable" or "immortal" in the market competition? What lessons can it bring to domestic mobile phone manufacturers such as Huawei, Lenovo, and Xiaomi?

Three major storms weigh on Samsung: Many people think Samsung is doomed

Since the fall of 2016, Samsung has been in constant turmoil, being involved in a "product crisis", "company crisis" and "political crisis".

In terms of products, the Galaxy Note 7 battery explosion incident put Samsung on the "crater" all of a sudden. Under the negative reinforcement effect, many of Samsung's home appliances, from mobile phones to washing machines, have fallen into the shadow of "explosion" one after another.

At the corporate level, Samsung suffered a loss of US$5 billion due to the full recall and discontinuation of the Galaxy Note 7 mobile phone, triggering complaints from shareholders and investors about low returns. The proposal to split and reorganize Samsung and establish a holding company and operating company structure has also attracted much attention and controversy.

On the political level, Samsung has also been embroiled in the country's political crisis over its alleged transfer of millions of euros to a foundation run by a close friend of the South Korean president. Lee Jae-yong, vice chairman of Samsung Electronics and actual controller of the Samsung Group, was summoned by prosecutors as a bribery suspect and appeared at the headquarters of the Special Prosecutor's Office. Rumors that Lee Jae-yong "will be arrested or imprisoned" have been difficult to dispel.

If these three crises had occurred to other companies, they would have probably been "hopeless" long ago. However, the "immortal" Samsung seems to have withstood these crises and controlled the related impacts.

Market performance is decent: What is the key to Samsung's survival?

Although Samsung was plagued by three major crises, namely "product crisis", "corporate crisis" and "political crisis", the affected company still basically managed to remain "invincible" or "immortal".

The latest data released by IDC shows that the total global smartphone sales in 2016 were 1.4706 billion units. Among them, Samsung accounted for 21.2% of the global smartphone sales with 311.4 million units, continuing to hold the title of global smartphone sales champion.

Statistics from the website of the State Intellectual Property Office show that as of December 1, 2016, Samsung Electronics had published 37,003 inventions in China, authorized 17,808 inventions, 2,054 utility models, and 5,484 designs.

It can be seen that even though Apple's search cycle is later than Samsung's, Samsung's various patent indicators are several to dozens of times that of Apple.

Simply put, although Samsung is involved in various disputes or turmoil, due to its solid advantages in technological innovation and patent accumulation, Samsung's building will not fall easily.

Samsung's deep accumulation in the traditional home appliance field means that even though it has fallen into a consumer trust crisis due to the Note7 explosion, based on its important position in the smartphone industry chain, it can still obtain commercial returns from other links, including chips, screens, etc.

In addition to smartphone products, Samsung can be found in home appliances such as televisions, washing machines, refrigerators, and air conditioners.

It can be said that Samsung is an all-round player in the field of home appliances. This versatility is not only reflected in the fact that Samsung has products in these fields, but also in the fact that Samsung has considerable say in the technical fields of these products.

From this perspective, although the Note7 has caused Samsung phones to fall into a short-term embarrassment, it will not cause Samsung to "be unable to recover."

Samsung's latest financial report shows that Samsung Electronics' net profit in the fourth quarter of 2016 was 6.92 trillion won; operating profit in the fourth quarter was 9.22 trillion won, a year-on-year increase of 50.19%, setting a new high in more than three years.

Although Samsung's mobile business operating profit plummeted 96% in the third fiscal quarter due to the Note 7 explosion incident, Samsung's operating profit for the entire fiscal year still increased. Samsung's operating profit for the entire fiscal year increased by 10.7% from last year to 29.24 trillion won.

It is worth mentioning that the reason for Samsung's fourth-quarter revenue surge came precisely from the chip and screen sectors. Among them, the operating profit of the semiconductor business (that is, providing memory chips to other companies) surged 76.8% year-on-year, and the operating profit of the display panel business surged more than 300% year-on-year.

Looking ahead to market layout: Samsung is still at a low position after the storm

Regarding the corporate governance crisis, the trend of splitting up companies cannot be considered a completely negative effect. It reflects more of the problems at the shareholder level. Of course, during the splitting and restructuring process, whether the Li family's control will be strengthened or weakened depends on how the final restructuring plan is determined.

However, no matter how the operating rights, management rights and equity are sorted out, although it will have an impact on the layout of Samsung's existing businesses, it should still be within a controllable range. More importantly, if the heads of each business line or the management team become part of the shareholders as a result of the split and reorganization, it may be able to further stimulate the innovation capabilities of Samsung's various business lines.

The brief involvement in the political crisis only "exposed" the relationship between some large companies and national governance. In South Korea and the United States, most powerful companies are more or less involved in their own country's politics, with the aim of winning government support for the development of their own business.

In fact, in the eventful year of 2016, which was full of bad news, Samsung also had some good news.

For example, Samsung Electronics plans to acquire Harman International for US$8 billion ($112 per share) in order to strengthen its voice in the fields of intelligent networking and autonomous driving and officially enter the automotive market.

It is worth mentioning that Samsung's successive moves in the automotive field may be more noteworthy. As early as 1994, Samsung Electronics established the "Samsung Motors Company", but after the outbreak of the Asian financial crisis in 1998, this business was also hit hard, and Samsung eventually transferred this automotive asset to Renault.

Now, in addition to the planned $8 billion acquisition of Harman International, Samsung has previously decided to invest 3 billion yuan in BYD, and it was once rumored that Samsung was interested in acquiring all or part of the business of Magneti Marelli, an auto parts manufacturer under Fiat Chrysler Automobiles.

Obviously, from batteries, accessories to systems, Samsung's huge investments in the automotive field are all aimed at gaining a leading edge in the era of the Internet of Things or driverless cars.

If smartphones and traditional home appliances are Samsung's present, then the automotive business should be an important part of Samsung's future layout. More importantly, with the help of Internet of Things technology, Samsung's existing mobile phones, TVs and other home appliances as well as future cars can be "connected", which is obviously an important force that will enable Samsung to continue to maintain its leading position in the future.

Therefore, although the Galaxy Note 7 explosion incident served as a fuse, causing Samsung to fall into trouble in 2016, based on its forward-looking layout, technological innovation and patent accumulation, short-term twists and turns are unlikely to cause fatal damage to Samsung.

This is also the top priority that other domestic companies including Huawei, Lenovo, and Xiaomi need to learn: how to respond to and overcome the crisis, and at the same time, win a "turnaround" in the future.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.