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Question 1: Should Samsung come to India?

Answer 1: Factors supporting India as a high potential market: Administrative reforms: Delicensing of Industrial investments. Reduction of import duties. Deregulation of industries reserved for public sectors. Encouragement to FDI (Foreign Direct Investment). Exchange rate reforms such as rupee convertibility. Capital market reforms including free pricing of equity and access to off shore equity and debt. Tax reforms. Economic trends: Stable GDP growth since last four years from 0.8 in 1991-92 to 6.3 in 1994-95 (Table 3). Industry growth grows to 8 times in last four years (Table 3). Manufacturing increasing to 9 times in last four years (Table 3).

Political environment: States increasingly competing for foreign investments with each other. Investment climate: New policy for increase in FDI to 51%. Liberal plant location policies, special incentives for plants setup in export processing zones.

Penetration of TVs in India The Color Television, black and white television penetration in rural India has doubled in last 5 years.

Question 2:What Should be the mode of entry for Samsung in India?


Answer2 : The preferred mode of entry for Samsung in India: Given the time period, the market condition, the socio economic factors and the political scenario in India, the most appropriate mode for Samsung to enter into the Indian market would be a joint venture (51:49) with one of the existing electronics company. Samsung can choose either with Videocon or Onida as both of these companies have not shown much of growth in past 3 years and the sales for both of these are stagnant (Exhibit 6). The reasons that would make these companies to enter in a joint venture with Samsung are: Samsung is a global leader in technologies like Dynamic Random Access Memory (15% of global production). Samsungs semi conductor division is the best in the world, with a sales growth rate of 61%. Samsung is the seventh largest manufacturer of semi-conductors. Samsung has 1413 local patents and 752 international patents, this is supported by a strong research and development department.

This would give Samsung the following advantages: The local market knowledge of the partner would come in handy as the existing companies have better information regarding the market and customer behavior. The existing local service network and logistics would give Samsung to understand the Indian market along with providing the much needed service advantage.

Question 3: Why Should Samsung globalize?


Answer 3: The reasons for Samsung to go global are: Samsung is financially very healthy to takes risk for entering in to the global scenario. Samsung is a global leader in DRAMs and semiconductor production which can support its increasing requirements. Samsung has a large pool of IPRs that give it a edge over the other players in the market. Market shares for Samsung has dropped in Korea in last five years by almost 6% (Table-1) The rising labor costs in Korea in recent years. The withdrawal of government support. The market penetration of Korean goods in US to the Chinese goods.

Question 4: What should be the possible product mix option?


Answer 4: