Submitted by: Submitted by ariadnakiuka
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Category: Business and Industry
Date Submitted: 03/11/2016 09:34 PM
SAMSUNG ELECTRONICS
CASE STUDY
Attention: Chairman Kun Hee Lee
Ariadna Torres Niubo
2016400073
Corporate Strategy
- What recommendation would you make to Chairman Lee regarding
Samsung’s response to the threat of large-scale Chinese entry? Why you
make such recommendation?
Samsung should defend its technological leadership and its benefit advantage,
investing in R&D, strengthening its superior product, design and process efficiency to
fight against the Chinese competitors. The company has to focus more on Flash and
less in DRAM or SRAM, should start winding down PC chips and focus more on mobile
and should defend the older generation of the legacy market for the next decade.
If we talk about DRAM, in terms of frontier products we can see that Samsung has a
core competence in design while China has a lack of technology and will need at least
10 years to catch up them. Due to this, Samsung should continue developing new
frontier products in DRAM. Moreover, in terms of legacy products this are the ones that
will take the biggest hit due to the ability of China to cheaply produce mass older
generation chips. Despite that fact, Samsung can still defend its position near-term.
They should produce for more or less 10 years until China gets good. After this, they
should wind this down and outsource this production to Chinese MFGs by sharing
blueprints. Finally, in terms of specialty products this are the ones that should require
to be produced to the most and to be invested to the most with the highest margins
because they would know that any Chinese firm will be able to do that due to the lack
of technology that they would have. Samsung should put more efforts in producing
more specialty products from old legacy products. At the end of this process they
should invest the earnings from the specialty products for Frontier and Flash R&D and
for that reason specialty products can be viewed as the future “cash cow” of the
company....