...Preface This report investigates how Samsung was able to build a competitive advantage in the global memory chip industry and what steps it should take to sustain its advantage in the face of the imminent threat of Chinese competition. Analysis of Samsung’s business strategy and competitive advantage Porter’s 5 forces model in Exhibit 1 is used to analyze the global memory chip industry and Samsung’s strategy to date. Samsung had become the dominant player in the global memory chip industry and was able to increase the gap from other competitors in terms of technology and market share by following the below strategy. 1. Aggressive investments in R&D The memory chip industry is technology driven. A significant investment is required in R&D at the product design stage. As illustrated in exhibit 1 Samsung Electronics had maintained its technology leadership by outspending its rivals in R&D by over 1.5 to 20 times from 1998 to 2003 (Exhibit 3), which was possible thanks to the Samsung group’s diversified portfolio that allowed it the take calculated financial risks. Since Samsung was able to create and maintain technology leadership it was able to earn a very high premium at the initial stages of a new product to recover its initial investment and if competitors began producing the same product it could aggressively lower prices to make it difficult for followers to stay in the competition. 2. Differentiation Faced with the challenge that the DRAM industry...
Words: 1105 - Pages: 5
...“Samsung” case study 1. Introduction: Samsung Electronics Company, henceforth called “Samsung” in this case, was established in 1969 to manufacture black-and-white TV sets. In 1974, Samsung, which was a producer of low-end consumer electronics, purchased Korea Semiconductor Company and began its semiconductor industry. Under the leadership of the chairman of Samsung Group, Kun He Lee, Samsung has risen, with a remarkable speed, to become the world’s leading memory producer, ranking 2nd just behind Intel. Meanwhile, Samsung used the earnings from memory division to invest in various technology products like mobile phones, liquid crystal displays and so on. These businesses made Samsung generate the second-largest net profit of any electronic company outside the US. In spite the current success, Samsung was facing the competition from Chinese producer that would sacrifice profits for market share by providing cheap DRAM products. So what should Samsung do? There are 3 potential options: 1. Directly confront the competition from Chinese companies, perhaps by driving down DRAM prices, offer favorable service or coalescing with other memory producers. 2. Cede the DRAM market and shift to other businesses. 3. Collaborate actively with Chinese companies, maybe by expanding joint investment in China. And at the same time, increase its investment in cutting-edge products, particularly for new niche markets. The following paragraphs will first focus on analyzing memory market...
Words: 2020 - Pages: 9
...Table of Contents TABLE OC CONTENT 1.Introduction ……………………1 2.Current performance …………1 3.Market share………………………2and 3 4.Ansoff's Matrix - Planning for Growth…..4 5.PEST ANALYSIS………………………………………4 6.Marketing MIX………………………….6 7.Porter’s Five Forces…………………….7 8.Swot Analysis ……………………………9 9.Conclusion …. .………………………………..11 10.Recommandations………………………..11 11. References………………………………….12 The purpose of this paper The purpose of this paper is to outline the Samsung’s current situation, addressing where and how they currently operate, both in the home market and globally. Detailing such information as market share, product ranges, pricing strategies, competitor analysis, plus other key issues that are relevant to the company and products we are reviewing. We will present issues that will have an impact on the company’s future global strategy. 1.Introduction . Samsung electronics is South Korean global company, a part of the Samsung group established in 1938,employing approximately 206000 people in 197 offices across the 72 countries. The company sales is $ 143.1 billon in 2011 considerably 13% more than previous year(annual report of Samsung 2012).Samsung operates in intense competition from growing number of competitors .All of them have strong brand equity such as LG electronics ,Whirlpool ,Nokia ,Apple and Sony. Among its several products single galaxy s devises has been huge success for Samsung.It announces that it had sold 20 million units Galaxy S...
Words: 2459 - Pages: 10
...1- What might have happened to Apple if its top executives had not supported investment in iPads? Answer- The idea of an iPad took the market by storm. If Apple’s executives had not supported the investment in iPad, then any of their rivals would have launched a tablet. Just like Samsung, HP, Microsoft did just after Apple launched their iPad. If that would have happened, then Apples share in the electronic industry would be limited to mobile phones and computers only and Apple would have lagged behind from its rivals and the scenario of today’s electronic market would have been different. 2. Why would it be unethical for Apple to sell its iTunes customer information to other businesses? Answer- If Apple ever tried to sell its customer information to any third party institution, then it would be really unethical act because Apple is carrying the trust of millions of its customers and if they sold that information to someone then that information can be used for many illegal ways, because it contain both financial and personal information of the user. So by doing this Apple will be breaking the trust of millions of its customers. 3. Evaluate the effects on Apple’s business if it failed to secure its customer information and all of it was accidentally posted to an anonymous website. Answer- Although, the protection of this type of information is among the top priority of it companies, but still if this information is leaked someday then it will be proved as a disaster...
Words: 1020 - Pages: 5
...Apple Software includes the OSX system, iTunes media player and multiple creativity software. The company’s brand is known for its high level of design, ease of use, and now iCloud, operating in nearly 400 retail stores in 14 countries (apple.com). To better understand Apple’s positioning against the other players, our team has divided Apple Inc.’s line of business into regions and retail: Asia, Europe, Americas, Japan and Retail. PORTER’S FIVE FORCES Porter’s Five (some may argue 6+) model is an analysis tool that helps “determine industry profitability because they influence the price, cost and required investment of firms in an industry” (M. Porter). Rothaermal further argues that the model reflects the industry’s attractiveness. First image below shows the traditional Porter’s model with the 5 forces, where the image on the latter shows additional factors that may affect the firm’s profitability and attractiveness. Exhibit 1.1 Porter’s Original Five Forces Model (Strategic Management Insight) Exhibit 1.2 Porter’s “Five” Forces Model (Lecture 2, R. Herko) The following analysis is for the Asian region, including: China, Hong Kong, Taiwan, Singapore, Korea, New Zealand and Australia....
Words: 2092 - Pages: 9
...iPhone 5 Report | | Assessing and analysing the three levels of the marketing environment | By Simona Zhelyazkova Vasileva, Student Number 201230259 | 2. Executive summary The report provides an analysis and evaluation of the three levels of the marketing environment of iPhone 5. It analyses the relationship between the influence of internal, macro and microenvironment on the product development and the potential success of iPhone 5 in the UK market. The internal environment will be examined by concentrating on product’s strengths, weaknesses, opportunities and threats and its innovative features, using a SWOT analysis. A comparison between previous Apple products and iPhone 5 will be presented. The actors close to the company, the external forces that affect the company’s ability to serve its customers and the exact way they exert an influence on product development will be taken into consideration. The substitutes, which present a threat for iPhone 5 developments and success will be analysed. In addition, the report will take into account previous problems that Apple Company had faced and will attempt to give some solutions to these problems. After presenting detailed information and the results of the investigation of the different forces that exert an impact on iPhone 5 developments, the report will conclude whether the product would be successful. Recommendations for improving the product weaknesses and enhancing the market strategy of the Apple will be...
Words: 4153 - Pages: 17
...ultra-competitive IT industry, ASUS’s success is noticeable. In this essay, Five Forces Model is used to analyse the reason for AUSU’s success and its opportunity and challenge in the future. It introduces some information about AUSU at first. Then it states Porter’s Five Forces Model and the application of it. Finally, some important changes taking place in the macro-environment that might have an impact on the IT industry especially on PC suppliers such as AUSU will be discussed. In this essay, it focuses on two major changes influence PC companies as AUSU. The first one is the popularity of tablet PCs as IPAD. The second one is the exploding of smart phones as millions of people upgrade from simple ‘feature phones’ to more sophisticated Smartphone like the iPhone and Android. Both of them are relevant with Threats of substitute products. Discussion Firstly, ASUS’s is introduced, this is the world's fifth-largest PC vendor by 2013 unit sales ASUS appears in Business Week’s ‘InfoTech 100’ and ‘Asia’s Top 10 IT Companies’ rankings, and it ranked first in the IT Hardware category of the 2008 Taiwan Top 10 Global Brands survey with a total brand value of $1.3 billion (Asus Reviews, Ratings, and Pricing, 2014). ASUS has a primary listing on the Taiwan Stock Exchange and a secondary listing on the London Stock Exchange. The ASUS brand is founded on four core values known as ASUS DNA. ASUS DNA comprises ‘the 5 ASUS Virtues of Humility, Integrity, Diligence, Agility and Courage’, ‘Focus...
Words: 2249 - Pages: 9
...APPLE INC. TABLE OF CONTENT INTRODUCTION… …………………………………………………………... 1 METHODOLOGY……………………………………………………………… 1 COMPETITION……….……………………………………………………….. 2 PORTER’S 5 FORCES……………………………………………………. 2 ANSOFF’S METRIX……………………………………………………… 2 SWOT AND PASTE ANALYSIS……………………………………………… 3 CONCLUSION ………………………………………………………………….. 4 RECOMMENDATION………………………………………………………… 5 APPENDICES ……………………………………………………………………… 6 REFERENCE LIST ……………………………………………………………… 7 1. Introduction Apple Inc. is an America multinational cooperation that produces software and electronics like phones, computers and tablets. According to Steve Jobs (CEO) perspective, he wanted a unique and effective insight about how people wanted to interact with technology. Steve Job believes in the ideology of Henry Ford who once said. “If I had asked people what they wanted, they will say faster horses.” Further illustrating the ideology that customer’s main problem is thinking on what they know instead on what is possible. So Job and his colleagues thought about customer experience more deeply than the customers could. According to Steve Job, Apple’s mission statement is to contribute to the world by making tools for the mind that advance humankind, through the innovation of PC and mobile devices. Thus, this vision statement is satisfactory and suited to the condition of apple. However...
Words: 1901 - Pages: 8
...SAMSUNG ELECTRONICS CASE STUDY Attention: Chairman Kun Hee Lee Ariadna Torres Niubo 2016400073 Corporate Strategy - What recommendation would you make to Chairman Lee regarding Samsung’s response to the threat of large-scale Chinese entry? Why you make such recommendation? Samsung should defend its technological leadership and its benefit advantage, investing in R&D, strengthening its superior product, design and process efficiency to fight against the Chinese competitors. The company has to focus more on Flash and less in DRAM or SRAM, should start winding down PC chips and focus more on mobile and should defend the older generation of the legacy market for the next decade. If we talk about DRAM, in terms of frontier products we can see that Samsung has a core competence in design while China has a lack of technology and will need at least 10 years to catch up them. Due to this, Samsung should continue developing new frontier products in DRAM. Moreover, in terms of legacy products this are the ones that will take the biggest hit due to the ability of China to cheaply produce mass older generation chips. Despite that fact, Samsung can still defend its position near-term. They should produce for more or less 10 years until China gets good. After this, they should wind this down and outsource this production to Chinese MFGs by sharing blueprints. Finally, in terms of specialty products this are the ones that should require to be produced to...
Words: 528 - Pages: 3
...PORTERS FIVE FORCES Porter's Five Forces is a framework for industry analysis and business strategy development formed by Michael E. Porter of Harvard Business School in 1979. Porter referred to these forces as the micro environment. They consist of those forces close to a company that affect its ability to serve its customers and make a profit. The overall industry attractiveness does not imply that every firm in the industry will return the same profitability. Firms are able to apply their core competencies, business model or network to achieve a profit above the industry average. The five forces of porter’s five forces model are as follows: 1. The threat of the entry of new competitors 2. The threat of substitute products or services 3. The bargaining power of customers (buyers) 4. The bargaining power of suppliers 5. The intensity of competitive rivalry 1. The threat of the entry of new competitors Profitable markets that yield high returns will attract new firms. This results in many new entrants, which eventually will decrease profitability for all firms in the industry. The new entrants face barriers to entry. They need to overcome them to compete successfully. Some of the barriers are capital requirement, customer loyalty, experience, etc. Specialized technology, production and distribution require high capital costs which acts as one of the barrier. The high customer’s loyalty and experience of the established firms also...
Words: 2144 - Pages: 9
...3141 group ass: porter 5 forces and life cycle Porter’s Five Forces Model: Porter’s five forces model is commonly used when making an analysis of competitive structure of an industry and the factors need to consider and analyse include: competitive rivalry within an industry, barriers or threats to entry, supplier power, buyer power, and threat of substitutes. 1. Competitive rivalry within an industry: When analyzing an industry, it is necessary to pay attention on each main competitor, there are a few factors that every company should analyse, these include the concentration, structural diversity, differentiation, and production capacity, applying in Motorola, competition is caused by the presence of many other companies that compete for the same target market and supply, secondly, low switching cost for customers to choose between all the similar products, thirdly, there is rare strategy for remedy when the company losing its market position and advantages, and lastly, a diversity of rivals with different histories, culture, and environment. Motorola is also facing a problem that there are many competitors such as Apple, Samsung, LG, Sony, and so on, the competition in the smartphone industry is really high, one of the important way that the company needs to consider is “the fight of high value”, they should work to gain more valued consumers, and gain the advantages that to always go first and support a country or city which is in the most difficult period...
Words: 871 - Pages: 4
...Pilani INTRODUCTION Kun Hee Lee is the chairman of Samsung Electronics, a Korean major in semiconductor industry. Semiconductor industry can be divided into logical chips and memory chips. Samsung overtook its Japanese rivals in 2003 and became leader in memory segment of the industry. By 2003 it showed the second largest net profit of any electronics company outside US. The memory industry is one with high degree of competition and rivalry. Currently Samsung is facing threat from Chinese companies. Chinese companies have the advantage of obtaining capital from the world market and with the talent available locally then can create serious threat to Samsung. It may happen that they will overtake Samsung just as it did against Japanese companies. Kun Hee Lee, who do a lot of research and analysis of Samsung’s competitors, their products and the man behind the low cost high quality principle of Samsung saw this potential threat and want to work out a strategy that will help Samsung to avoid this and excel. The case is about this strategy formulation that Kun Hee Lee have to do for making Samsung capable of taking over its Chinese rivals and ensuring a win. PROBLEM STATEMENT To design a strategy that makes Samsung capable to take on expected threat from Chinese rivals who have better cost advantage and win the situation. PEST ANALYSIS: Porter’s 5 Forces: SWOT Analysis: Financial Statement Analysis Samsung Return on Assets An indicator of how profitable a...
Words: 774 - Pages: 4
...OF TECHNOLOGY 4 ROLE OF R&D 5 TECHNOLOGICAL INNOVATION 7 ANALYSIS 10 (i)SAMSUNG 10 (ii)APPLE 12 PORTER’S 5 FORCE MODEL COMPARISON 15 SWOT ANALYSIS 17 CONCLUSION & RECOMMENDATION 19 REFERENCES 21 INTRODUCTION This paper seeks to compare core and enabling technologies of two organizations in the consumer electronics industry. Apple is currently first in the brand value while Samsung is sitting in the second position. Whereas Samsung has the maximum market share in the mobile industry. Apple leads the line in the tablet segment. Both the companies compete fiercely in almost all the segments such as Laptops, mobiles. Apple’s is preparing the next innovative product called the Apple Tv. Apple and Samsung both generate huge profits but it is the latter which returns huge revenues each year and Apple is slightly losing its charm since Samsung is coming up with innovative and high tech products every year.. This paper further analyzes contrasting strategies of core and enabling technologies between two organizations. Both companies rely heavily on R&D and Innovating new technologies. Apple has been the leading innovator since the launch of its first iPhone. On the other hand Samsung over the past few years has been top notch since launching the Samsung S series mobile. When it comes to the PC and Laptop Apple leads Samsung. Apple has its own OS and user friendly interface which...
Words: 4213 - Pages: 17
...technology company that manufactures and sells PC, tablets, workstations and displays. Dell practices “Direct Business Model” that involves selling products directly to customers without intermediaries. Developed by founder and current CEO Michel Dell, this business strategy has proved to be highly effective in terms of gaining significant cost advantage in competition. Post navigation← PreviousNext → Dell Porter’s Five Forces Analysis Posted on September 1, 2015 by John Dudovskiy Porter’s Five Forces analytical framework developed by Michael Porter (1979)[1]represents five individual forces that shape the overall extent of competition in the industry. These forces are represented below: Porter’s Five Forces Threat of new entrants to consumer electronics industry is not significant due to cost and financial, knowledge and technological barriers. However, it is important to note that new businesses may overcome these barriers if they are able to introduce new products to the market based on innovative concepts. Large players such as Dell, Apple, HP, Samsung and Acer derive extensive benefits from the economies of scale and this fact represents an additional entry barrier to the consumer electronics industry. Bargaining power of buyers is immense due to the abundancy of offer and little differentiation amongst products. Moreover, there are usually no additional costs for Dell customers to switch to the competition and the majority of customers are well educated...
Words: 903 - Pages: 4
...SAMSUNG CW1 OVERVIEW of SAMSUNG SLEPT : http://research-methodology.net/samsung-pestel-analysis/ http://managementstudyguide.com/pestle-analysis-of-samsung.htm http://pestleanalysis.com/steeple-analysis-samsung/ http://www.formasup-npc.org/creasup/PESTEL.pdf http://www.marketingminefield.co.uk/pestle-analysis/ http://www.academia.edu/7103572/The_Complete_External_and_Internal_Analysis_of_Apple.Inc_and_its_SWOT_Analysis Political Samsung operates everywhere in the world and in most of the markets, the political environment is stable with some minor problems in few foreign markets, for example in India. Also Samsung is operating in emergent countries like Brazil, Turkey. This countries are recently had some tensions with the population and the government. The presence of the company is too in Africa, which the governments are not stable. The major problem can be from South Korea because there are some times some tensions with the North Korea. It means there are a threat to be in war between South Korea and North Korea. The company have to be aware about this political instability in his strategy. Economic This factor is really important for a company like Samsung. The new markets in the developing countries had to rethink about their strategy in the goal to extend their presence. And in the same time they had to take count about the global economic crisis. The purchasing power of consumers has known a decrease. The environment since the global crisis...
Words: 1106 - Pages: 5
