Samsung Electronics Essay example

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Samsung Electronics case study
The Samsung Electronics Company was the largest conglomerate in South Korea. The total net sales of the Samsung Group were $135 billion in 2004. It has 337 overseas operations in 58 countries. Electronic, finance, and trade and services were the three core sectors within the Samsung Group. Semiconductor products were classified into two different categories of chips, which are memory and logic.

To focus on the global memory chip industry, the primary threat facing the firm contained suppliers and price-conscious buyer. Based on the Porter’s Five Forces Model, the powerful suppliers can squeeze the focal firm, the powerful buyers can lower profit the focal firm by demanding lower
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In 1996, DRAM market began experiencing a cyclical decline, Hynix increased its capital investments into the downturn, at the same time, and Samsung maintained the minimum capital investments. To response market growth, Samsung significantly increased its investments, however, Hynix decreased its capital investment.

The most appropriate action for Samsung is technology development. In order to develop frontier technology for the next generation of DRAM, Samsung created an unusual internal competition across global R&D site. Through this way, company set up competing product development teams throughout its operations. As the company developed, Samsung wanted to be number one. The senior manager planned to increase the size of the wafers used to cut the DRAM chips to eight inches. Samsung went ahead, no other company wanted to take the risk of investing 8-inch mass production. Samsung produced multiple product, over time; new DRAM products with product-specific applications in laptops and personal game players were developed by Samsung. In 2005, there were no perfect substitutes that could even challenge DRAMs or Flash memory. Despite the benefits of these new types of memory, Samsung was contemplating memory based on newer nanotechnology.

The competitive advantage of Samsung was the reliability of its products and its ability to customize products to customer demands. The first
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