samsung in china

678 Words2 Pages
bulb-icon

Recommended: Samsung entry strategies global market

Environmental Analysis

External Environment
Chinese Market
- still socialist economy
„» huge gap between the stated plans and the actual ability of government to manage and control the economy
„» tremendous amount of economic interaction took place outside the government¡¦s formal economic plan
- many smugglings and piracies
- regional blockades
- over-employment problem

Chinese color TV Market
- full production capacity in demand
„» principal battleground
- high competition
„» Japanese firms: high-end market. Increasing production bases
„» Domestic Firms: low-end market. But they were less competitive in large screen TV.
- small color TV market was shrinking
„» large market size of these product lines facilitated the fast achievement of cost reduction(economy of the scale, learning effect)

Consumer analysis
- only 41% of households had color TV
„» 80% of urban, 28% of rural
„» Low-end market is not a viable long-term. But overall market was still expanding.
- Buying power: expanding both high-ends and low-ends
- Tendency that first image of a product lasted long in the eyes of the consumer.
„» the reason for differentiation needed focusing on high-ends
- consumer preference
„» Urban- brand name, functionality were important factors.
„» Rural- reasonable quality and low price were preferred.
- High protected market: too much tariff cost
„» localization needed
Domestic (Korean) Market
- Deteriorating of competitive advantage: rising the labor cost
- Korean government policy: supportive of big business
„» getting worse of Korean market
„» Losing the M/S in the U.S. and no longer competitive in the low-end product
„» need to change the strategy focusing on high-end, high-tech
- Liberalization of Korean market
„» Foreign firms were permitted to sell their product directly
„» More competitive in Domestic market, losing the domestic M/S
„» Samsung had to expand the foreign market.

Internal Environment
Experience in the U.S.
- Set up the subsidiary there in 1979
- Focusing on the low-end market segment based on competitive labor cost in Korea because of large demand and low competition base, and low barrier in the U.S.
- Samsung produced a few of the most popular sizes TV for cost reduction through economies of scale and the experience curve.
- Dual brand policy: adopting ¡§buyer brand name(large retailers or OEM)¡¨ mostly but trying to build its own brand image
- Establishing a production subsidiary in the U.S. because of trade barrier
- Policy of Japanese firms: targeting high-ends for differentiation through brand name recognition
„» Matsushita: 4% of M/S in 1995 but could be high-price, higher profit
- Policy of Samsung: still pricing strategy even though it had good quality of product
„» 3% of M/S, but much less profit than Matsushita and facing intense competition
- Importance of TV industry to Samsung: second proportion of Samsung electronics
„» It was getting worse in situation of Samsung electronics, so needed some way to solve these problems

Market participation in China
- later market entering than Japanese firms
- The establishment of SCH would enhance its image in China and speed up the accumulation of local knowledge of the market.

Show More
Related

  • Stratsim Swot Analysis Essay

    1027 Words  | 3 Pages

    Firm E also has higher technological capability to reach out to market segment that our firm dominates. It has also been noted that the stock price of Firm E rose $7 to $50, increasing its value and giving the firm an incredible amount of capital to be invested for market capture. It has also been identified that our firm mostly compete against other players in market segments that are more price sensitive than those in others. This generally results in generating low returns when the cost of competition is high. For this particular market segment, however, price-based competition does not necessarily lead to increases in the size of the marketplace. Although, price-based competition is minimized with minimal gross margin for economy products, this competition could be intensified by providing our customers with rebates, preferred financing and long-term warranties. With such immediate capital available at hand, firms such as Firm E can attract our customer at its

    Read More

  • Rise Of Technology In Business

    993 Words  | 2 Pages

    ...with many advantages which benefits all the business and it also bring the new business opportunity.

    Read More

  • Gome Electrical Appliances Case Study

    767 Words  | 2 Pages

    Realizing that fierce price war in China’s color television industry brought them ever-decreasing profit margins hard to bear, in 2000, some core members of the color TV industry formed a price alliance intended to stifle the price war and re-establish their leadership in the value chain of home appliance. Responding to the price control, Gome initiated its powerful strike by lowering the price of Prima’s (a member of the alliance) color televisions to an extent lower than the price laid down by the alliance. The consumers’ response confirmed Gome’s low prices strategy at the beginning, while the allied manufacturer’s once again signal of price control was obviously aimed at Gome’s defiant market strategy.

    Read More

  • Samsung 4ps Case Study

    1010 Words  | 3 Pages

    1) Discuss how Samsung achieved they have adopted in the global marketplace based on the 4Ps of the marketing mix? Do you justify the Samsung strategy of redefining brand is giving fruits in today’s technology driven marketplace.

    Read More

  • Castrol Engine Oil Case Study

    719 Words  | 2 Pages

    For production of this range of products the company using latest updated technology and a different new manufacturing machines. Which produce a number of products with in a seconds by using this advance technology machines we can save the time and increase production rate

    Read More

  • Samsung Marketing Case Study

    2292 Words  | 5 Pages

    We are mainly using a premium price strategy for the product. This high price will help to create a positive image among the customers even it shows a higher position from the competitors too (Marketing, 2016).We are using high price because of the quality and the unique facility with the new television. Apart from this, to some extent we are focusing on value-added strategy too, like: free shipping and installation and credit options too.

    Read More

  • Essay On Bargaining Power Of Panasonic

    718 Words  | 2 Pages

    “The relative strength of buyers is affected by buyers’ price sensitivity” (The Open University 2007). The bargaining power of Panasonic’s buyers is high because of the electronic products which are highly price sensitivity. In today’s world, electronic products are considered to be luxury good and demand for the electronic products is getting higher because of the modern lifestyle (Lancaster 2002). Thus, this forces the Panasonic to reduce prices in order to maintain their customers.

    Read More

  • Disruptive Technology Essay

    1511 Words  | 4 Pages

    First of all, it is very important to distinguish the key terms used in this article that are “sustaining technology” and “disruptive technology”. Sustaining technology, which is also called sustaining innovation, maintains a steady rate of product improvement. On the other hand, disruptive technology opens a totally new market by its new elements. Usually, disruptive technology has to “sacrifice performance along dimensions that are important to current customers”. Following Bower and Christensen, there is a new innovation introduced the market whose att...

    Read More

  • Mattel

    532 Words  | 2 Pages

    4.     Cost reductions by outsourcing production to low-cost foreign factories in places such as China.

    Read More

  • The Electronics Industry in India

    518 Words  | 2 Pages

    Private, foreign investments were encouraged. This was the starting point of forex to pour in. Easing the Norms for the investment, reduction in duties and deli censing of several consumer electronic products marked attraction of foreign investors. The domestic circle response to this was also favorable to the government policies. Allowing this industry for the private sector enabled entrepreneurs build industries to meet suppressed demand. Improvements in this industry have not been only to a particular area but in each and every process right from acquiring the raw materials to the packed product. Long steps have been made in the area of consumer products, communication, biomedical instrumentation, networking and defense. This resulted in significant market growth by late 1990’s. The sales of some basic units increased three-fold .the main area of focus has now turned to design, Compact packing and to provide vale added service.

    Read More

  • An Overview of Business Strategies

    2251 Words  | 5 Pages

    The second way is to achieve low direct and indirect operating costs is gained by offering high volumes of standard products and offering basic no-frills products. Production costs are kept low by using less parts and using standard components. Limiting the number of models produced to ensure larger producti...

    Read More

  • Portfolio Overview of Unilever and P&G

    860 Words  | 2 Pages

    ... brands. For established brands, the strategy that Schroiff described as "adaptive” (Arnold 7) should continue. The adaptive strategy would include maintaining existing local brands while creating economies of scale by standardizing technical product features when possible such that not destroying product value in the market. The benefits of satisfying markets-specific needs should outweigh any resultant increase in costs. Brand and product features differentiation as well as emphasizing the functional performance and emotional value of the product should be part of the marketing strategy.

    Read More

  • Advantages Of Samsung's Product Development

    720 Words  | 2 Pages

    Samsung has gained a competitive advantage with customer excellence with the use of tools such as the company’s laboratory in Seoul that studies how consumers get products out of boxes, read instructions, follow icons on cell phones, and much more. Things like this help the Samsung to understand its customer’s better than Sony, Which allows them to more appropriately cater to the consumer’s needs.

    Read More

  • Samsung Organizational Structure

    840 Words  | 2 Pages

    During the 90s, Samsung just like other Multinational companies moved to China due to the attractive manufacturing conditions. This was a major step towards the expansion of Samsung as a global technological corporation. However, with time Samsung discovered the value of the China not only as a manufacturing hub but ...

    Read More

  • Characteristics Of Lenovo

    710 Words  | 2 Pages

    Product is everything, both favourable and unfavourable that a person receives in an exchange. A product may be a tangible good such as a pair of shoes, a service such a haircut, an idea such as ‘don’t litter’ or any combination of these three. Packaging, style, colour, option and size are some typical product features. Just as important are intangibles such as service the seller’s image the manufacture’s reputation and the way consumers believe others will view the product.

    Read More

More about samsung in china

Open Document