CASE STUDY: SAMSUNG ELECTRONICS

Omer Asif 4506-FMS/MBA/s-10 23(a)

Samsung is a digital leader is ahead in Learning curve (A graph that depicts rate of learning) emphasis more in R&D works. Play on legacy and specialty product. In January 2008, Samsung Electronics won 32 innovation and design engineering awards at the Consumer Electronics Show, the largest show of its kind in the world. Samsung can collaborate with Chinese partners to expand joint investments. A better option for Samsung to produce low end product in china, high end product in Korea.

Problem Statement:
How should Chairman Lee and the senior management team at Samsung react to the threat of Chinese competition? China is a major upcoming threat. Major chip producers are partnering with Chinese company i.e. Infenion, Elpida signed agreement with SMIC. Chinese are desperate in market share at the cost of losses. Samsung believes that their success of contributions depends upon how they manage their company. Their goal is to create future with their customers. As Samsung is the digital leader and is leading in terms of low cost and productivity. While China lacks the core competencies which Samsung have Samsung have a very efficient human resource. Samsung provides maximum value to its customers by providing expected technology in their product in time. Chairman Samsung argue his employees they must think of Quality 1st. Samsung can compete China by reducing faults in its product and achieving quality. Samsung products are more reliable than China. Samsung has also the ability to customize products on customers demand. In 1970s Samsung electronics itself was a producer of low end consumer electronics so Samsung group can also take benefit from its past experiences. Samsung team has a very strong working environment and its culture is very strong so it can lead the company to compete with Chinese rivals. If Samsung moves to china it will be opposite of training them to compete with more efficiencies and also giving them the competency of making their products more low cost effective. If Chinese firms get the command over production they will definitely be more efficient in reducing their costs because of low cost of labor and Chinese rivals also bear losses to get market share so this situation would be more critical for Samsung to compete. On the other hand Samsung has cost advantage of Low labor cost at Korea. Higher capacity utilization, lower depreciation cost. Raw Material, Labor, Depreciation, R&D these cost are substantially higher for competitors. .