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Friday, October 25, 2019
samsung in china :: essays research papers
Environmental Analysis External Environment Chinese Market -à à à à à still socialist economy ââ¬Å¾Ã »Ã à à à à huge gap between the stated plans and the actual ability of government to manage and control the economy ââ¬Å¾Ã »Ã à à à à tremendous amount of economic interaction took place outside the governmentà ¡Ã ¦s formal economic plan -à à à à à many smugglings and piracies -à à à à à regional blockades -à à à à à over-employment problem Chinese color TV Market -à à à à à full production capacity in demand ââ¬Å¾Ã »Ã à à à à principal battleground -à à à à à high competition ââ¬Å¾Ã »Ã à à à à Japanese firms: high-end market. Increasing production bases ââ¬Å¾Ã »Ã à à à à Domestic Firms: low-end market. But they were less competitive in large screen TV. -à à à à à small color TV market was shrinking ââ¬Å¾Ã »Ã à à à à large market size of these product lines facilitated the fast achievement of cost reduction(economy of the scale, learning effect) Consumer analysis -à à à à à only 41% of households had color TV ââ¬Å¾Ã »Ã à à à à 80% of urban, 28% of rural ââ¬Å¾Ã »Ã à à à à Low-end market is not a viable long-term. But overall market was still expanding. -à à à à à Buying power: expanding both high-ends and low-ends -à à à à à Tendency that first image of a product lasted long in the eyes of the consumer. ââ¬Å¾Ã »Ã à à à à the reason for differentiation needed focusing on high-ends -à à à à à consumer preference ââ¬Å¾Ã »Ã à à à à Urban- brand name, functionality were important factors. ââ¬Å¾Ã »Ã à à à à Rural- reasonable quality and low price were preferred. -à à à à à High protected market: too much tariff cost ââ¬Å¾Ã »Ã à à à à localization needed Domestic (Korean) Market -à à à à à Deteriorating of competitive advantage: rising the labor cost -à à à à à Korean government policy: supportive of big business ââ¬Å¾Ã »Ã à à à à getting worse of Korean market ââ¬Å¾Ã »Ã à à à à Losing the M/S in the U.S. and no longer competitive in the low-end product ââ¬Å¾Ã »Ã à à à à need to change the strategy focusing on high-end, high-tech -à à à à à Liberalization of Korean market ââ¬Å¾Ã »Ã à à à à Foreign firms were permitted to sell their product directly ââ¬Å¾Ã »Ã à à à à More competitive in Domestic market, losing the domestic M/S ââ¬Å¾Ã »Ã à à à à Samsung had to expand the foreign market. Internal Environment Experience in the U.S. -à à à à à Set up the subsidiary there in 1979 -à à à à à 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. -à à à à à Samsung produced a few of the most popular sizes TV for cost reduction through economies of scale and the experience curve. -à à à à à Dual brand policy: adopting à ¡Ã §buyer brand name(large retailers or OEM)à ¡Ã ¨ mostly but trying to build its own brand image -à à à à à Establishing a production subsidiary in the U.S. because of trade barrier -à à à à à Policy of Japanese firms: targeting high-ends for differentiation through brand name recognition ââ¬Å¾Ã »Ã à à à à Matsushita: 4% of M/S in 1995 but could be high-price, higher profit -à à à à à Policy of Samsung: still pricing strategy even though it had good quality of product ââ¬Å¾Ã »Ã à à à à 3% of M/S, but much less profit than Matsushita and facing intense competition -à à à à à Importance of TV industry to Samsung: second proportion of Samsung electronics ââ¬Å¾Ã »Ã à à à à It was getting worse in situation of Samsung electronics, so needed some way to solve these problems Market participation in China -à à à à à later market entering than Japanese firms -à à à à à 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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