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Samsung Electronics - Case Study Example

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Chinese entered in the field of semiconductor in 2000 and within a short span of four years had gained a significant market share in the world market. The huge success of the Chinese firms could primarily be attributed to their focused approach and determination to reach the…
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Samsung Electronics Case Study
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Download file to see previous pages What the Chinese lacked in design and production, they compensated in their business acumen. They forged alliances with those market leaders only and got the license to from them to produce chips based on blueprints and sold at low cost, in order to penetrate the market.
Thus, looking at the market strategy of the Chinese firms and their potential to imitate and innovate existing products, there is genuine threat from the Chinese firms. Samsung needs to look at the various options of competitive advantage to respond appropriately so that it could maintain its leadership position within the semiconductor market. There are two main areas where Samsung can keep ahead of the Chinese firms. The first one is its state of the art R&D which greatly facilitates development of new products through specialized product development teams. The new products ensure that the constantly changing preferences of the customers are met timely thus making certain that they maintain their leadership position. Chinese not only lack R&D facilities but lack of experience is also a big drawback in the area of R&D.
The second important area is its design and production line. Backed by effective R&D team, the company has the requisite infrastructure and capabilities to design and produce innovative products. The Chinese firms have yet to acquire expert knowledge of the design and production technology of core units of semiconductors. This gives a huge advantage to Samsung to go in for new products and create niche market for them in the emerging new economies like India, China, Brazil etc. It is assumed that despite huge government concessions to Chinese firms in China, lack of effective intellectual property laws would be a big deterrent for other big companies to transfer technology. Samsung, therefore, would be right to continue innovative products and add-ons for existing as well as for new market.
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