Samsung Case Study Essay

From pioneering in memory DRAM semicon to exiting the low-margin DRAM market – Intel was primarily a Memory semicon manufacturer before it entered microprocessors in 1980s. Its added value in the memory industry in 1970s was very high because of its advances in MOS process to produce DRAM. However, with increase in competition and the advancement of Japanese conglomerates in the memory industry Intel was forced to play a chasing game to improve performance and reduce costs. In the mid-1980s, Intel’s market share in the core memory business was <1%, however it was continuing to invest in this domain. They finally exited the DRAM market, which was more of a cash burner with low-margins.

By the early 1980, Intel’s total share in DRAM was barely 1% and manufacturing was restricted to one fab out of Intel’s eight fab, where the Japanese semiconductor companies had captured nearly half of the world memory market. There are several factors that forced Intel to exit the DRAM market, those are the same lessons learned.

Third, Samsung created new uses for DRAM by outing its manufacturing and R&D in support of design firms (i.e., Rambus). Over the years, new DRAM products were launched which shared a common core design. This way, more DRAM chips were produced and sold, helping the company, not only to achieve larger economies of scale, but also to learn more about the market and its preferences.

Industries will look different with all of these forces. The strategy will change based on how these forces look for the organization and industry. These concepts can be applied across the board, and they help organizations from getting trapped into the latest trends and technology out there selling solutions. This matrix really helps to

For years, AMD held the place of a distant follower of the large microprocessor market leader, Intel. Up to there, the competitor Intel led the market (with a “push” strategy) by creating consumer needs thanks to technological innovations. Those were linked with strong marketing campaign in order to facilitate a quicker adoption process of their new product line. However, in 2003, AMD change its traditional strategy to use a widely different one by switching into a blue ocean strategy. Indeed, AMD has changed course to become a “starter” firm. AMD has decided to launch at first its own brand server microprocessor range, called “Opteron” before one of Intel. At this moment, the firm made the decision to initiate the moves of server segment and therefore take heavier risks in term of investments, sales, pushing partners

• Learning curve has to be steep, i.e. Cost reduction has to be fast with change in technology

Threat of New Entrants: In 2008, the threat of new entrants was not very high. Sony’s Playstation, Microsoft’s Xbox, and Nintendo’s gaming systems were

In  the  next  section  we  will  analyze  the  level  of  competition  within  memory  industry  based  on  Porter’s   model, Samsung's competitive advantage and its sustainability considering the current market situation.  3. Analysis:  Considering  Porter’s  model  as  a  framework  to  analyze  the  level  of  competition  within  DRAM  memory  business,  the  threat  of   new   entrant  is  high  compared  to  the  threat  of  substitutes  and  established  rivals in horizontal competition.  If  we  look  at  rivalry within  the DRAM industry between established  players,  Samsung  has  a clear  advantage  over  its  competitors.  Samsung  is  the   market  leader  in  DRAM  memory  business. It  has  a wide  range of products and its products has a higher brand value.  Threat  of  new  entrants  is  high  as  Chinese  competitors  have  easier  access  to  large  pool  of  local  engineering talent and have a growing market  for these DRAM chips. The  government is also  providing all  sorts  of  assistance, like subsidized  land, for  the initial setup. Samsung has several options to  deter  the entry  of  new  Chinese  competitors.  One  option  Samsung  have  is  to  continue  to  explore  and  increase  market  shares  of  flash  memory  markets  which  is  a  new  and  growing  market.  Samsung  can  also  take  advantage  by  lowering  the  price  of  DRAM  chips.   This  would  force   a  price  war  and  drive new

By the end of 2012, Samsung electronics become the largest producer of televisions and mobile phone. In order to achieve the success and the dramatic rise in consumer electronics sector, the company initiated new methods to innovate and create high quality products .

With Intel have very few substitutes in the microprocessor industry, it is it is most certain that current customers will not want to switch and use another company’s products. High switching cost presents low bargaining power to the customers mainly because it would be very expensive to switch to a competitor, and since Intel is the leader in the market, switching

The evolution of the world has left nations with an ever changing business environment which keeps companies on their toes.With the technological advancements as well as changes in demographic, many companies have to rapidly change the way they react to these changes in order to stay relevant in a competitive environment (Jovanović, 2015). Samsung has adapted to today’s business through adopting Western business practices into its Japanese system as well as digital technology(Khanna, Song & Lee, 2011).The role of management in today’s industry has rapidly changed from the role of a manager imposing restrictions to an organisational tool, not only for a company but personally as well (McCrimmon, 2010).Management system used in Samsung during the S-level recruitment program proves the importance of managerial ranks as well as an organised system(Khanna et al, 2010).

True to nearly any commoditized product, pricing and availability became the only two significant differentiators quickly as Intel increased

Company Background: Samsung is a South Korean multinational company those starting its business as a small trading company and right now becoming world largest corporation. The company deals with its business in several sectors such as advance technology, finance, petrochemical, semiconductors, plant construction, skyscraper, medicine, fashion, hotels, chemical and others. The company was established in 1969 in Suwon, South Korea and known globally for its electronic products (Kelly, 2011). The company is manufacturing several latest technologies, electronic appliances such as mobile phones, tablets, laptops, TVs, refrigerators, air conditioners, washers and other products. The company runs its operations and sales its products in 61 countries with approx 160,000 employees in all over the world (SAMSUNG, 2014). Moreover, the company acquired the position of the world biggest IT maker in 2009 by beating the Hewlett-Packard (HP) previous leader. Its sales revenue in the segment of LCD and LED is the highest in the world. Furthermore, Samsung also becomes world leader in the segment of tablets, mobile phones and gadgets.

a new memory chip is introduced, price is high, yield is low, and production capacity

Learning and experience Curve: Between 1983 and 1985, Samsung allocated more than $100 million in into DRAM technology, even paying another firm to teach them how to produce 64k DRAMs. As the market grew, firms tried to catch up to where Samsung already had a foothold. To further make advancements efficiently, Samsung has had separate R&amp;D groups compete within their company to come up with the same solution.