Wednesday, October 2, 2019
samsung in china :: essays research papers
Environmental Analysis External Environment Chinese Market -     still socialist economy „ »Ã‚     huge gap between the stated plans and the actual ability of government to manage and control the economy „ »Ã‚     tremendous amount of economic interaction took place outside the government ¡Ã‚ ¦s formal economic plan -     many smugglings and piracies -     regional blockades -     over-employment problem Chinese color TV Market -     full production capacity in demand „ »Ã‚     principal battleground -     high competition „ »Ã‚     Japanese firms: high-end market. Increasing production bases „ »Ã‚     Domestic Firms: low-end market. But they were less competitive in large screen TV. -     small color TV market was shrinking „ »Ã‚     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 „ »Ã‚     80% of urban, 28% of rural „ »Ã‚     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. „ »Ã‚     the reason for differentiation needed focusing on high-ends -     consumer preference „ »Ã‚     Urban- brand name, functionality were important factors. „ »Ã‚     Rural- reasonable quality and low price were preferred. -     High protected market: too much tariff cost „ »Ã‚     localization needed Domestic (Korean) Market -     Deteriorating of competitive advantage: rising the labor cost -     Korean government policy: supportive of big business „ »Ã‚     getting worse of Korean market „ »Ã‚     Losing the M/S in the U.S. and no longer competitive in the low-end product „ »Ã‚     need to change the strategy focusing on high-end, high-tech -     Liberalization of Korean market „ »Ã‚     Foreign firms were permitted to sell their product directly „ »Ã‚     More competitive in Domestic market, losing the domestic M/S „ »Ã‚     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  ¡Ã‚ §buyer brand name(large retailers or OEM) ¡Ã‚ ¨ 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 „ »Ã‚     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 „ »Ã‚     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 „ »Ã‚     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.
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