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Analysis of Samsung's market expansion strategy in South Korea

2021-05-19 来源: 51Due教员组 类别: Essay范文

Essay代写范文:“韩国三星的市场扩张战略分析”,这篇论文主要描述的是三星电子作为韩国境内最大的电子产品制造商之一,三星集团的发展十分迅速,从一个小型出国公司,逐渐的发展成为了一个大规模的跨国公司,在全球各地都设有法人及办事处,其扩张的速度十分迅速,这得益于三星集团坚持创新战略和强调生产数量的发展战略,三星集团不断的汲取国外先进的技术,在产品的开发方面取得了突破性的进步。有论文需要帮忙的亲亲可以联系我们的专属客服,微信号Even100100进行咨询喔~

A small export business in Taegu, Korea is the origin where Samsung has grown to become one of the worlds leading electronics companies, specializing in digital appliances and media, semiconductors, memory, and system integration (Samsung Corporate Profile, 1995-2012). Samsung goes global in scope and nature with more than 285 overseas operations in 67 countries. In order to explore the possible and introduce new products to meet the demand of the consumer, Samsung spends lots of effort in its research and development to maintain its position in the digital market. The success of Samsung is through innovation, helping it to be “first” in many new product development and technological breakthroughs (“Samsung Press Information”, n.d.).

In the 1980s, Samsung’s entry into the electronic industry had four important features which emphasize on mass production, reliance on foreign technology, a follow-the-leader strategy and government support (Youngsoo, 1997). First, Samsung entered the electronic industry with the influence by two manufacturing activities of textile and sugars which require a large scale of operation. Secondly, Samsung’s choose Sanyo and NEC as joint venture partners due to the language difficulties inherent in learning about the American technology (SEC, 1989). Its business started with imported foreign technology having a close relationship with Japanese electronics firms. Thirdly, Samsung entered the Korean electronic industry as a market follower. Before Samsung entered the industry, Goldstar Electrical which is another Korean firm had started assembling vacuum tube radio for a US firm in 1959 and had built up export capabilities for ten years. Finally, since the Korean government introduced the Electronic Industry Promotion Law marking the beginning of official support in 1968, Samsung enjoyed government support for its expansion into electronics (Youngsoo, 1997).

In order to share vision, knowledge and experience, Samsung has been forming cooperative alliances with some of the leading names in the global technology arena. The alliances include cooperation with Microsoft, AOL Time Warner and Sprint in the areas of technology and marketing, collaborating with Dell, IBM, Compaq and Hewlett-Packard to reduce risks in entering new business areas and to secure stable suppliers and working with Intel, Sony and Qualcomn on technology exchange as well as standardization. With the aim of being a total solution provider in the areas of home, mobile and office through Digital Convergence and Networking, the partnerships are designed to provide all customers with efficiency, productivity and stability (“Samsung Press Information”, n.d.).

Current Expansion Strategy

On 12th February 2012, Corning and Samsung has agreed to joint venture. Both company has declare that they will invent a new product together that based on the strength of both companies. Samsung, an electronic production company that is well known for mobile devices with clear and high resolution display has merge with Corning which is well known super scratch and shatter resistant Gorilla Glass manufacturing company. These merging forces have produced a variety amount of smart phones and tablets currently in the market today (GSM Arena News, 2012).

Based on Samsung which have good experience in producing well product such as Super AMOLED Plus that display on most smart phone and other range of OLED televisions, both companies would try to create a new glass substrate to accommodate the fast growing OLED market by the name of ‘Lotus Glass'. These merging forces later on produce an OLED back pane glass substrate to matching Samsung uses and, as the press release states "the broader Korean market", which could involve the purchase of such a product to companies like LG. The thought of joint venture are based on Samsung having a leading presence during the display market. OLED technology-based revenue was expected to exceed $4 billion in 2011 and by 2018 is expected to reach more than $20 billion (or approximately 16% of the total display industry). So both companies are expect to be riding high within the mobile display market over the next few years as this match, looks to be made in heaven (GSM Arena News, 2012).

On 26th April 2012, Kodak and Samsung have decided to form as strategic alliance. Together both companies will sell consumer inkjet printers in Europe. During this agreement, Samsung will be marketing Samsung branded all-in-one inkjet printers using Kodak’s printer and proprietary ink technology. These printers will be launched in Germany (Zoltan Arva-Toth, 2012).

Mark Kurz, General Manager says that Kodak’s technology in the year 2012 can finally prove its strength in the consumer inkjet market and the improvement of Kodak has risen in order to compete in business market. After forming as strategic alliance, Samsung will be able to influence others Kodak’s leading technology and imaging science to launch the incoming inkjet printer business. So Kodak will be able to grow in its business as a win-win situation. Furthermore, Jürgen Krüger, Director of IT Solutions Printing at Samsung Electronics, says that with a nearly perfect collaboration, Samsung will be able to receive benefit from Kodak based on their well experience in inkjet technology. Based on the collaboration with Kodak, Samsung now can perform better in a segment below the laser printer line-up. Later on, Mark Kurz added that the link with Samsung is the natural extension of Kodak’s consumer inkjet business, and the company will continues to invest in the market with its own award-winning KODAK All-in-One Printers, along with KODAK Ink Cartridges and KODAK Inkjet Paper Germany (Zoltan Arva-Toth, 2012).

In May 2012, Samsung and Qualcomm Incoporated have joined together to form Alliance for Wireless Power (A4WP) that aims for development of wireless charging. It has been formed to establish a single standard to allow device to charge wirelessly. It also will focus on new wireless power transfer technology which allows for simultaneous charging of multiple devices in cars, on tabletops, and elsewhere. This wireless power approach will brings a lot of benefits which include easy to implement a transmitter and receiver antenna design, a simple wireless power control system, and the ability to transfer power via non-metallic surfaces (Waugh, 2012). Wireless power has the potential to improve convenience and user experience in consumer devices suck as mobile phones charging process. So that, both companies will play an important role in developing this infrastructure which for the development of wireless power (Waugh, 2012). As consequence, this strategy able to helps Samsung to improve their profits and gaining customer loyalty due to good services provided.

Samsung Electronics Co. Ltd and IBM has signed a cross-license agreement with license each other patent portfolios. However, the terms and conditions of this agreement were not disclosed (IBM, 2011). Both companies have built strong patents portfolios which include semiconductors, telecommunications, visual and mobile communications, software, and technology-based services to cover wide range of technologies. This agreement enables them to innovate and operate freely for each other’s patent so that can help them pace with advanced technology and business demands and then achieve business growth. Furthermore, collaboration between both leading companies in technology industry can reinforces the ability to provide better products and services to the consumer and allows them to gain competitive advantages (Taft, 2011). For example, Samsung and IBM cooperate on making a low-power and server-class implementation of ARM processor might useful for all Samsung’s devices that created (Morgan, 2011).

Besides, Samsung Electronics Co. Ltd and Microsoft Co. have agreed to cross-license agreement with the patent portfolio of both companies, which provide broad coverage for each company’s products and protect them from competitors. Under the agreement, Microsoft will getting royalty fees for any Samsung’s smart phone and tablets that running the Android mobile platform (Microsoft, 2011). In addition, Samsung also agreed to market the Window Phone and collaborate with Microsoft on Window Phone development. This strategy allows both companies increase exposure of Window Phone and continue to bring latest innovations to the mobile industry. At the same time, Microsoft intellectual property can helps Samsung on research and development that able lead to invention of new products and services to deal with millions of consumers and businesses (Thurrott, 2011). Samsung can avoid from legal battles and disputes over the mobile patent and resolve patent lawsuits through this cross-licensing agreement.

Future Expansion Strategy

The current expansion strategies mentioned above are working well for Samsung at this particular moment. But the company will eventually have to try to improve and further expand their business to gain more sales and profit as well as globalize its products to gain more market share. Samsung’s future expansion plan can be done through the Turnkey Projects. In terms of carrying out international business, this method is special in a way that the firm agrees to a contract which hires other companies or contractors to be fully involved in designing, constructing and setting up a manufacturing facility. And when the project is up and running, it will be turned over back to the purchaser to continue it’s functioning for a sum of fee, according to the contract details. The ideal country for Samsung to conduct this strategy would be in Vietnam, which has cheap labour and material costs to conduct business activities. It would also be a strategic location for Samsung to monitor the development because Vietnam is located in South East Asia, which is relatively near to the main office of Samsung. The main benefit that Samsung will be able to get from implying Turnkey Projects is to fully utilize the resources that are available for them and yet not needing to commit into a long-term plan to operate the business plan. Besides, the government of Vietnam also give many incentives to foreign multinational company to invest in their country to create more job opportunity and increase their national income. For Samsung, they can enjoy tax incentives and other benefits that can easily make Samsung lower their own manufacturing costs if setup their operation or manufacturing in Vietnam to supply more product in whole world market.

The total sum to enter a new market is fairly high because the company will have to bear the costs used through researching, analyzing, and setting up local manufacturing factories. There is always a risk to incoming investing companies and Samsung will have to be careful not to make the wrong decisions and lose the money. Through implementing the Turnkey Projects, Samsung will have enough insurance and backup from these local contractors to wholly set up their local manufacturing facilities and taking the first step to make sure that the facilities and workers are able to perform their tasks efficiently. Besides that, turnkey projects also is a method that easily can let the company earn the profit in short term period and is very useful in which the invest country is limited by the local authority or government in term of legal and regulation (Hill, 2011) . Other than that, Samsung will be able to penetrate into the country’s market far more easily and faces lesser risk. Another attractive point that encourages the company to implement the Turnkey Projects is because of the knowledge the local contractors has on how and whatever it takes to assemble up and run the complex manufacturing processes. By handling the setup process over to a team of experienced contractors, Samsung will be able to expand out to several countries throughout the same time, without having to deal with the huge amount of pressure and problems faced during the market penetration period. This will greatly increase the chance and success rate for Samsung and its expansion strategy because it helps them to save time, cost and also man-power, yet being able to reach out to a much more amount of countries.

With Samsung aiming to further expand into new markets which are large countries with different cities and states, there will surely involve a huge amount of analysis costing and setup costs if Samsung were to build up their own local manufacturing facilities. There is a greater possibility for Samsung to sign local contractors to help with the setup and make the first step to get the company running, and then take over the management when these local manufacturing facilities are already working without problems. This will prove to be better and much more efficient ways of entering these new markets by saving the costs bear by Samsung. If this plan proves to be successful, Samsung can then take further action in entering several other new markets around the globe, such as the Middle East, the United States, and Europe etc with much ease.

Furthermore, with Samsung current successful strategy that fully best use of experience curve and high efficiency that operate in whole world only can earn profit in short-term duration, with long term distance and new market potential is arise such as Brazil and China, and other countries. Samsung should implement wholly owned subsidiary strategy in the potential place with low cost of production and cheap labour cost. Samsung should consider the market of Southeast Asia which is expanding and growing rapidly that can fulfil the need and wants of Samsung.

With Samsung aimed to provide great quality and fully innovation product to customers around the world, Samsung Electronics corporation is technology based corporation which selling different kinds of variety technology products. With this strategy, Samsung can easily protect its own corporation technology as core competency, and increase the chance of having position in the technology industry and able to achieve economies of scale by reducing the cost of production and labour cost. In technology industry, first mover advantage is important to achieve biggest profit and can lower the cost of production which can remain the competiveness of the corporation. As mentioned above, the market of Southeast Asia is the great option for Samsung to implement the wholly owned subsidiary strategy by setting up a Greenfield Venture to complete the assemble or production process which also can apply in other foreign western country for the development and research purpose for Samsung products. Besides that, Samsung also can transfer the knowledge, competencies, skill, and products by having wholly owned subsidiary company in foreign country that full of creativity and innovation with technology. For example, Samsung have setup the SEA which is Samsung Electronics America to promote and responsible for offering customers with innovative and quality product. (Samsung Electronics Corporation)

On the other hand, Samsung also can implement the acquisitions of the potential firm that gives benefits to Samsung to keep the competitiveness and market attractiveness by having few joint ventures with other big corporation to invent or develop new innovative products. For example, in last year December, Samsung have been joint venture with Sony by having the LCD (Liquid Crystal Display) for mutual benefits for both multinational corporations. But at the end, Sony has break off from the joint venture and force Samsung to purchase all the entire share of Sony Corporation which causes Samsung to be fully wholly owned subsidiary of LCD products. By implementing the acquisitions strategy, it shows that Samsung is fully operating the company without sharing profits with other corporation. Samsung can easily pre-empt their main competitor such as LG in home product and Apple in technology product. Besides that, this strategy is less risky compare to the wholly owned subsidiary strategy because due to the acquisitions strategy, it can adopt all the valuable assets of the company that been acquainted include factories, valuable assets, local brand name, managers knowledge in local area which can easily reduce the risk of national cultural differences and diversity (Hill, 2011).

Conclusion

Today, Samsung is leading global digital marketplace by continually launching new products and remained at the forefront of the digital revolution. Due to the trend of globalization, many companies actually decided to expand their business across national boundaries. Samsung has taken great opportunities to increase their global market share through various expansion strategies. Samsung has form joint venture with Corning (Gorilla Glass manufacturing company). As a result, this joint venture has produced a variety amount of smart phones and tablets currently in the market today.

Besides that, Kodak and Samsung have decided to form as strategic alliance. Together both companies will sell consumer inkjet printers in Europe. Based on the collaboration with Kodak, Samsung now can perform better in a segment below the laser printer line-up. The alliance with Qualcomm Incoporated has further improve their profits and gaining customer loyalty due to good services provided. Samsung and Qualcomm Incoporated have joined together to form Alliance for Wireless Power (A4WP) that aims for development of wireless charging.

In addition, Samsung Electronics Co. Ltd and Microsoft Co. have agreed to cross-license agreement with the patent portfolio of both companies, which provide broad coverage for each company’s products and protect them from competitors. Next, Samsung also reach cross-license agreement with IBM. Both companies have built strong patents portfolios. Cross licensing with Microsoft and IBM to reach a patent-sharing deal and gaining competitive advantage.

Samsung’s future expansion plan can be done through the Turnkey Projects, wholly owned subsidiary strategy and acquisition strategy. Moreover, Samsung should implement wholly owned subsidiary strategy in the potential place with low cost of production and cheap labor cost. On the other hand, Samsung also can implement the acquisitions of the potential firm that gives benefits to Samsung to keep the competitiveness and market attractiveness by having few joint ventures with other big corporation to invent or develop new innovative products.

As a conclusion, it is more beneficial to invest in foreign market. Different cultures, rules and regulations may cause problems, but it may just well turn out to be profitable and educational in a long run. All these strategic movements of Samsung are well thought and planned which lead them to the greatest success.

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