Samsung Tesco Emerges as Trendsetter in Local Retailer Market
- Aims to become the industry leader with a projected 10 trillion won in sales by 2008


Samsung Tesco Co. was catapulted to the No. two position in the local retailer industry in 2002 in three years after it was established as a joint venture between Samsung Corp. and Tesco in May 1999. Tesco of the United Kingdom, the world's third largest retailer, operates a chain of retail superstores selling a diverse range of products including groceries, books, CDs, electronics, and wine. Under the brand "Homeplus", Samsung Tesco, now operates 31 superstores, called "Hypermarkets" and five super express stores across the nation, and sets its sights on becoming the industry leader with 10 trillion won in sales and raising the number of stores to 73 by 2008.
Behind the success story of Samsung Tesco is that the company attaches priority on creating increasing value for customers to earn their lifetime loyalty.
In particular, Homeplus puts the concept "Value Store" on a pedestal, not that of a discount store, The Value Store is aimed at ensuring service quality innovation by not just selling products, but also simultaneously offering the best services, diverse convenience and cultural and entertainment activities for creating the increasing value for customers.
In accordance with the differentiating concept, Samsung Tesco has exerted itself to offer cheaper prices than its rival discount stores; equip Homeplus stores with diverse products - 100,000 stock keeping units - offer a more pleasant environment than departments; boast of leisure, education and other facilities, including 29 cultural centers, the nation's largest number,; and offer optimum hospitality through customer service centers.
The government conferred Lee Seung-han, president of Samsung Tesco Co., on the Order of Industrial Merit, Gold Tower in recognition of his meritorious contribution in ensuring quality management during the 30th Nation Quality Management Convention, organized by the Korea Standards Association on Nov. 19. Samsung Tesco President Lee became the first person from the distribution industry to have received the coveted order. His award recognizes that he has contributed to the development of the nation through his excellent quality management capabilities, attracting foreign investments, and providing support to farmers and smaller companies. He is also credited with having introduced and implemented his own quality management system, dubbed "Hexagon Management," and diverse practical cases of quality management.
Lee articulated that "Homeplus's mission, vision, and corporate culture are based on the "value for customers." Its mission to create increasing value for customers to earn their lifetime loyalty, the vision "World Best Value Retailer," and the "Ten Commandments" for Homeplus, the core values of the chain retailer, demonstrate management's commitment to realizing the value for customers, he said.
Asked to comment on the strong points of the company and what has prompted to gain momentum, Samsung Tesco President said he believe that the growth of the corporation hinges on its corporate culture. Lee has earned a reputation for having initiating a new corporate culture, dubbed "Synbaration," since the establishment of Samsung Tesco. Synbaration, or CPS, a combination of Korean "Synbaram," based on sentiment, enthusiasm and teamwork, and the West's rational culture, has paid off: Samsung Tesco has built up its unique corporate culture that has brought about employees' satisfaction and subsequently resulted in service quality renovation.
CPS stands for Customer-focused culture, Professional culture and Synbaram culture, and the corporate culture is rated to be one of benchmark subjects in the corporate community. The corporate culture was selected one of the success cases introduced during the Global Government Innovation Expo, organized in Seoul last July by the Presidential Committee on Government Innovation and Democratization (PCGID) in cooperation with the IASIA and IIAS, as well as in a collection of innovative cases of enterprises, compiled by the government. Samsung Tesco has been awarded the New Corporate Culture Grand Prize for fourth consecutive time in a row for assimilating the corporate culture.
What steps Samsung Tesco has taken to post a sustainable growth? The remarkable achievements the company has made is attributable to management policy focusing on the value for customers, its unique corporate culture as well as the company's strenuous efforts to ensure service quality renovation in terms of the value for customers, employees and its subcontract companies and the regional community. The service quality renovation drive is considered to have contributed to the development of Homeplus and improving a national competitive edge.
Boosted by the strength of the momentum it has gained, Samsung Tesco is committed to realizing its vision of becoming the world best value retailer through its unique quality management system, dubbed "Hexagon Management."
Samsung Tesco President Lee said he have the faith that if employees concentrate their energies into their jobs, the world of management could be elevated to that of art in which artists devote their heart and mind in pursuit of perfection for a lifetime.
He said he puts quality management on a pedestal, saying that quality management means a management activity aimed at improving performances by raising the quality of management. He also stressed that success or failure of management depend on manpower and operation structure, and it indicates the significance of corporate culture in management. Lee numerated six leadership virtues - firm vision, cool-minded professionalism, hot enthusiasm, cooperative teamwork and the ability to foster followers for the future and pure mind for serving others.
Seol Do-won, managing director of Samsung Tesco, presented his company's success story on quality management during the 30th National Quality Management Convention. He introduced his company's business structure in which 120 Homeplus Super Express outlets, a new off-line form of store, will be established by 2008 on top of the existing Homeplus outlets. The long-term plan calls for making an on-lime shopping will turn into the most profitable model of furnishing 15,000 kinds of products and landing 25,000 orders per outlet and per annum as well as offering financial services, including loans, insurance, and cash dispensing business to Homeplus customers under strategic alliance with financial institutions, the first such model in the distribution industry. nw