Konka Group Company Limited

Emerging Chinese MNCs:

Konka Group Company Limited • Introduction
- A look into the future • Economic Analysis
• Company Analysis
Presented by:
• Recommendations
Ahmed Binte Kashfi • Q&A
Syed Najibullah
Rashid Rezoana
Hassan Tareq

Group - C

Economic Analysis Company Analysis

Introduction Impact of inflation on economic growth & exchange rate Introduction

30
Economic Economic
Analysis 25 Analysis
P ercentage

20

Company 15 Company
Analysis 10 Analysis

5
0
Recommendation Recommendation
1992 1993 1994 1995 1996 1997 1998

Year

growth rate inflation3 exchange rate

1994 1995 1996
Group - C 1.13% 1.50% 2% Group - C

INTERNAL ORGANIZATIONAL
ANALYSIS
Introduction
Konka's market share in China Introduction 1) Financially sound company

Economic 30 Economic
2) Already emerged as the best
Analysis
25 25 Analysis selling CTV brand through its own brand
P e rc e n ta g e

20 and low price

Company 15
18 Company
Analysis
10
13 Analysis 3) Backward & Forward linkage
9
5 4.39 5.8 4) It has set up Konka Technology
Recommendation 0 Recommendation Development Centre Co. in the Silicon
1993 1994 1995 1996 1997 1998 Valley in December, 1997

Year
Mkt share in chinese mkt
Group - C Group - C

1
 Consolidated Balance Sheet: Konka Group Co. Ltd
(unit '000 Yuan) Net Sales & Profit Margin
Introduction Introduction

2500000 10,000.00
Economic Economic 8,574.00
Analysis 2000000 Analysis 8,000.00
1500000
V a lu e

6,343.00
6,000.00

V a lu e
Company 1000000 Company 5,006.00
Analysis Analysis 4,000.00 3,610.00 3,580.00
500000 3,059.00
2,400.00
0 2,000.00 2,180.00
0.09 0.09 0.07 0.07 0.05 0.05 0.06 0.06
Recommendation 1995 1996 1997 1998 Recommendation 0.00
Year 1993/12 1995/12 1997/12 1999/06
Year
Fixed assets Net current asset Shareholders equity share capital net sales profit margin

Group - C Group - C

COMPETITIVE ANALYSIS
• Existing players with strong brand
Introduction
BROAD ENVIRONMENTAL ANALYSIS Introduction recognition (Example Sony, LG etc).
• China facilitating international market expansion
Economic for Konka Economic
• Research and Development is feasible
Analysis Analysis for Konka for it’s inexpensive R&D cost
Konka is accessible to large loan (in 1997-
1998 US$458 million) structure.
Company Company
Analysis • High entry costs acts as a blockade for new Analysis Konka spends 3% of its revenue
entrants whereas players like Sony spend around
• Demand for television is growing with the 6-7% of sales revenue on R & D.
Recommendation Recommendation
emergent number of “couch potatoes”.
• Penetrating the market with low price
better quality products.

Group - C Group - C

OPPORTUNITIES FOR AND STRENGTHS AND WEAKNESSES OF

THREATS TO AN ORGANISATION KONKA
Introduction Introduction
• Possibility to create a positive - Chinese brands are hardly recognized in
Economic brand image through heavy Economic the foreign market
Analysis Analysis
promotion and advertising - Konka is deficient in technological
advancement judge against to the industry
Company
Analysis
• Awe the market with newly Company
Analysis leaders and followers
developed products
- Commendable cash position would
Recommendation • Existing brands (Sony, LG etc.) Recommendation hasten market promotion
can counter attack Konka making •- Market entry would not be much daunting
survival challenging as it already has fairly strong grip in
several markets
Group - C Group - C

2
 SWOT Analysis & Organizational Objective

NEED FOR STRATEGIC ACTION Broad

Introduction
• Strategic action is required for creating strong Environmental
Opportunities
Analysis
Economic brand image and awareness globally for & threats
Analysis to Konka
ORGANIZATIONAL LONG RANGE Competitive Organizational
Company OBJECTIVES Analysis Need for long-range
Analysis strategic objective
• Sustain long-term growth in the global action
bazaar Strengths &
Recommendation Internal Weaknesses
organizational of Konka
analysis

Group - C Group - C

RECOMMENDATION

Introduction • Transnational Strategy can be used to Introduction

achieve core competency and to get a better
Economic hold of the markets. Economic
Analysis Analysis

• Konka can use a three step penetration

Company Company
Analysis
approach where it will Analysis
- Push sales in biggest markets
- Nurture its way through the secondary
Recommendation Recommendation
Market
- Seek new markets

Group - C Group - C

Introduction
• The company can welcome custom made Q&A
Economic products ordered by the customers
Analysis
• Increase share of trade in parts and
Company components.
Analysis
•Reintegrate through Global Production
Network (GPN).
Recommendation
Thank You.

Group - C Group - C