SAMSUNG SEMICONDUCTORS

Expansion & marketing plan in Hungarian market

Supervisor: Sir Kamran Makbool

Submitted By: Anwar Ulhaq Amir Shehzad

Acknowledgment
First and foremost, we would like to thank to our instructor of this project, Mr. Kamran Makbool for the precious supervision and advice. He motivated us greatly to work on this project. His enthusiasm to motivate us contributed tremendously to our task. We also would like to thank him for showing us some model that related to the theme of our project. Further, we would like to thank the authority of IIUI for providing us with a high-quality environment and facilities to complete this project. It gave us a prospect to contribute and learn how to expand business globally.

Table of Contents

South Korea
Korea is an independent kingdom for much of its long history. It was occupied by Japan from start in 1905 following the Russo-Japanese War. In 1910, it regained its freedom following Japan's surrender to the United States in year 1945. After World War II, the Republic of Korea (ROK) was set up in the southern part of the Korean Peninsula while a Communist-style government was installed in the north. During the Korean War (1950-53), U.S forces and UN forces fought alongside armed forces from the ROK to defend South Korea from DPRK attacks supported by China and the Soviet Union. A peace agreement was signed in 1953, splitting the peninsula along a demilitarized zone at about the 38th parallel. Thereafter, South Korea achieved rapid financial growth with per capita income rising to roughly 14 times the level of North Korea. South Korea today is a fully functioning modern democratic state.

Chaebols: Korea is home of large firms in a set, called Chaebols, which can be classified as
multinational enterprises (MNEs) in the listing of the worlds largest 500 companies, ranked by sales for 2001. In 2004, there were eleven Korean firms in the list of the worlds largest 500. These large firms are analyzed here as the basic set which will determine the success of Korea in developing multinational enterprises. The starting point of this theory of the MNE is the suggestion that an MNE goes in a foreign country to further expand on its firm-specific advantage (FSA).These can be technology based, knowledge based, or they can reflect administrative and/or marketing skills. The FSAs need to be notable from Koreas country-specific advantages (CSAs) where the latter are available to all firms situated in Korea; in contrast FSAs are the capabilities of each specific firm. The presence of Korean firms is at least as stable as the other large 500 companies. Two Korean firms among Koreas twelve largest firms in 2001, that is 17%, were unlisted in 2004, while ninety-four firms among the worlds major 500 firms were unlisted in 2004, that is, 19%.

It is significant to note that four Korean trading firms, Samsung Corporation, Hyundai, LG International and SK Global, were listed in the worlds largest 500 companies. These firms make up to 34% of the Koreas largest 12 firms profits in 2001. Over the same time period, Koreas worldwide trade had increased more than 60%: from US $292 billion to US $478 billion. Rising from darkness 25 years ago, Korean electronics companies have come to own a important share of the world electronics market today. They are now the key DRAM suppliers in the world. They conduct state-of-the-art R&D projects, establish overseas ventures, and support world-class university science and technology programs. Due to technology, manufacturing procedures, capabilities, and infrastructure have made them so victorious. This information, attached with understanding of the future direction of the Korean electronics industry, is vital to U.S. competitiveness, to help U.S. businesses determine in which market sectors to compete and in which areas subcontracting, outsourcing, and partnership agreements would be favorable.

Geographic and economic statistics

Location: Eastern Asia, southern half of the Korean Peninsula neighboring the Sea of Japan and the Yellow Sea. Geographic coordinate: 37 00 N, 127 30 E Area total: 99,720 sq. km. Country comparison to the globe: 109 Land: 96,920 sq. km. Water: 2,800 sq. km. Terrain: mostly hills and mountains. Wide coastal plains in west and south. Natural Resources: coal, tungsten, graphite, molybdenum, lead, hydropower potential. Languages: Korean. English Religion: Christian (26.3%) (Protestant 19.7%, Roman Catholic 6.6%), Buddhist (23.2%,) other or unknown 1.3%, none 49.3% (1995 census) Population: (48,860,500) (July 2012 EST.) Country comparison to the globe: 25

Economy overview: South Korea over the past four decades has demonstrated incredible
expansion and global incorporation to become a high-tech industrialized market. In the 1960s, GDP per capita was similar with levels in the poorer countries of Africa and Asia. In 2004, South Korea joined the trillion dollar club of globe economies, and at present is among the world's 20 largest economies. Initially, a system of close government and business ties, including directed credit and import limitations, made this achievement possible.

The government promotes the import of raw materials and technology at the cost of consumer goods, and encouraged savings and investment over expenditure. The Asian economic crisis of 1997-98 exposed longstanding weaknesses in South Korea's growth model including high debt/equity ratios and massive short-term foreign borrowing. GDP plunged by 6.9% in 1998, and then recovered by 9% in 1999-2000. Korea adopted various economic reforms following the crisis, including greater openness to overseas investment and imports. Growth moderated to about 4% per annum between 2003 and 2007. With the global economic depression in late 2008, South Korean GDP growth slowed to 0.3% in 2009. In the third quarter of 2009, the financial system began to recover, in large part due to export growth, little interest rates, and an expansionary fiscal policy, and growth was 3.6% in 2011. In 2011, the US-South Korea Free Trade contract was ratified by both governments and is expected to go into effect in early 2012. The South Korean economy's long term challenges include a swiftly aging population, inflexible labor market, and heavy dependence on exports, which comprise half of GDP. GDP: $1.554 trillion (2011 est.) GDP growth rate: 3.6% (2011 est.) Exports commodities: semiconductors, wireless telecommunications equipment, motor vehicles, computers, steel, ships, and petrochemicals. Imports commodities: machinery, electronics and electronic equipment, oil, steel, transport equipment, organic chemicals, plastics. Natural resource: Coal, tungsten, graphite, molybdenum, lead, hydropower potential. Industries: Electronics, telecommunications, automobile production, chemicals

shipbuilding, steel. Export: Semiconductors, wireless telecommunications equipment, motor vehicles, computers, steel, ships, petrochemicals. Import: Machinery, electronics and electronic equipment, oil, steel, transport equipment, organic chemicals, plastics.

Country specific advantage (CSA)

Country specific advantage in; Electronics: South Korea is a major manufacturer of electronics, producing color televisions, videocassette recorders, microwave ovens, radios, watches, personal computers, and technology products. In 2005 the electronics industry produced US$23 billion value of goods (up 35 percent from 2000), to become the world's sixth major manufacturer. The total value of parts and components (including semiconductors) created in 1988 totaled US$9.7 billion, overtaking consumer electronics production (US$9.2 billion) for the first time. Manufacture of industrial electronics also grew considerably and totaled US$4.6 billion (20 percent of total production). By 2003 important shifts were occurring within the electronics industry. In 2005 South Korea had lost some of its cost advantage to newer customer electronics producers in Southeast Asia. At the same time, demand of electronic components and of industrial electronics, particularly computers and telecommunications tools, continued to increase.

The company which we choose:

SAMSUNG ELECTRONICS (SEMI-CONDUCTORS)

The Samsung Group is a multinational corporation headquartered in Samsung Town, Seoul, South Korea. It is the world's leading corporation by revenue with annual revenue of US $178.4 billion in 2012 and is South Korea's main cabal. The meaning of the Korean Hanja word Samsung is "Tri-Star" or "three stars". The Samsung Group is composed of various international joined businesses, most of them united under the Samsung brand including Samsung Electronics, the world's major electronics company, Samsung Heavy Industries, the world's second largest shipbuilder and Samsung C&T, a major global manufacture company.

Samsung was founded by Lee Bungan churl in year 1938. Over the next three decades the group expands into areas including food processing, textiles, insurance, securities and retail. Samsung entered the electronics market in the late 1960s and the construction and shipbuilding industries in the mid of 1970s; these areas would drive its successive growth. Following Lee's death in 1987, Samsung was divided into four business groups Samsung Group, Shinseki Group, CJ Group and Hansel Group. Since the 1990s Samsung has progressively more globalized its activities, and electronics, particularly mobile phones and semiconductors, have become its most significant source of income. Important Samsung industrial subsidiaries include Samsung Electronics (the world's largest information technology company measured by 2012 revenues, and 4th in market

value), Samsung Heavy Industries (the world's 2nd-largest ship builder measured by 2010 revenues), and Samsung Engineering and Samsung C&T (respectively the world's 13th and 36thlargest construction companies). Other important subsidiaries include Samsung Life

Insurance (the world's 14th-largest life insurance corporation),Samsung Ever land (operator of Ever land Resort, the oldest theme park in South Korea),Samsung Tec win (an aerospace, surveillance and defense corporation) and Ceil(the world's 16th-largest advertising agency measured by 2011 revenues). Samsung has a dominant influence on South Korea's economic development, politics, media and culture, and has been a major driving force behind the "Miracle on the Han River".

Its associate companies produce around a fifth of South Korea's total exports. Samsung's returns were equal to 17% of South Korea's $1,082 billion GDP. Samsung has been the world's most accepted consumer electronics brand since 2005 and is the best known South Korean brand in the world. Samsung Group accounts for more than 20% of South Korea's total exports and is the principal in many domestic industries, such as the financial, chemical, retail and entertainment industries. The company's strong authority in South Korea is able to be seen throughout the country, which has been referred to as the "Republic of Samsung.
From its foundation as a small export business in Taegu, Korea, Samsung has developed to become one of the worlds leading electronics companies, specializing in digital appliances and media, semiconductors, memory, and system assimilation. Today Samsung's modern and top quality products and processes are globe recognized. This timeline captures the most important milestones in Samsung's history, showing how the business expanded its product lines and reach, grew its profits and market share, and has followed its mission of making life better for customers around the world.

History
1938 to 1970: In 1938 Lee Byung-chull (19101987) of a large landowning family in the Uiryeong county came to the close to Diego city and founded Samsung Sang hoe, a small trading corporation with forty workers located in Su-dong . It deal in groceries produced in and around the city and produced its own noodles. The corporation prospered and Lee moved its head office to Seoul in year 1947. When the Korean War broke out, however, he was enforced to leave Seoul and started a sugar refinery in Busannamed Ceil. After the war, in year 1954, Lee founded Ceil Monika and built the factory in Chrisman-dong, Diego. It was the biggest woolen mill ever in the country and the business took on the aspect of a major corporation. Samsung diversified into various areas and Lee sought to help establish Samsung as an industry leader in a wide range of enterprises, moving into businesses such as insurance, securities, and retail. Lee placed great significance on industrialization, and focused his financial development strategy on a handful of great domestic conglomerates, protecting them from competition and assisting them economically. In 1947, Cho Hong-jai (the Hyosung groups founder) together invested in a new business called Samsung Muslin Gongs a, or the Samsung Trading Corporation, with the Samsung Group founder Lee Byng cull. The trading company grew to become the present-day Samsung C&T Corporation. But after some years Cho and Lee separated due to differences in administration between them. He required getting up to a 30% group share. After agreement, Samsung Group was separated into Samsung Group and Hyosung Group, Han kook Tire, and others. In the late 1960s, Samsung Group entered into the electronics business. It formed numerous electronics-related divisions, such as Samsung Electronics Devices Co., Samsung ElectroMechanics Co., Samsung Corning Co., and Samsung Semiconductor & Telecommunications Co., and prepared the facility in Suwon. Its first creation was a black-and-white TV set.

1970 to 1990: In year 1980, Samsung acquired the Gumi-based Hangar Jenna Tongs in and entered the telecommunications hardware business. Its first products were switchboards. The facility was developed into the telephone and fax manufacturing systems and became the main part of Samsung's mobile phone manufacturing. They have created over 800 million mobile phones to date. The corporation grouped them together under Samsung Electronics Co., Ltd. in the 1980s. After Lee, the founder's death in 1987, Samsung Group was divided into four business groups Samsung Group, Shinseki Group, CJ Group and Han solo Group. Shinseki (discount store, department store) was at first part of Samsung Group, divided in the 1990s from the Samsung Group along with CJ Group (Food/Chemicals/Entertainment/logistics) and the Han solo Group (Paper/Telecom). Today these separated businesses are independent and they are not part of or attached to the Samsung Group. One Hansel Group representative said, "Only people ignorant of the laws governing the company world could believe something so absurd," adding, "When Hanson separated from the Samsung Group in year 1991, it severed all payment guarantees and shareholding ties with Samsung affiliates." One Hanson Group source asserted, "Hanson, Shinseki, and CJ have been under independent administration since their respective separations from the Samsung Group." One Shinseki department store executive director said, "Shinseki has no payment guarantees linked with the Samsung Group." In the 1980s, Samsung Electronics began to invest a lot in research and development, investments that were essential in pushing the company to the forefront of the international electronics industry. In year 1982, it built a TV assembly plant in Portugal; in 1984, a plant in New York; in 1985, a plant in Tokyo; in 1987, a facility in England; and another facility in Austin, Texas in year 1996. As of 2012, Samsung has invested more than US$13 billion in the Austin facility, which works under the name Samsung Austin Semiconductor LLC. This makes the Austin location the major foreign investment in Texas and one of the main single foreign in the United States.

1990 to 2000: Samsung started to rise as an global corporation in the 1990s. Samsung's construction branch was awarded a contract to build one of the two Petronas Towers in Malaysia, Taipei in Taiwan and the Burg Khalifa in UAE. In 1993, Lee Kun-he sold off ten of Samsung Group's subsidiaries, downsized the corporation, and merged other operations to focus on three industries: electronics, engineering, and chemicals. In 1996, the Samsung Group reacquired the Sungkyunkwan University foundation. Samsung became the major producer of memory chips in the world in year 1992, and is the world's second-largest chipmaker after Intel . In year 1995, it formed its first liquid screen. Ten years later, Samsung grew to be the world's leading manufacturer of liquid-crystal display panels. Sony, which had not invested in large-size TFT-LCDs, contacted Samsung to work together, and, in 2006, S-LCD was established as a joint venture between Samsung and Sony in order to present a stable supply of LCD panels for both manufacturers. S-LCD was owned by Samsung (50% plus 1 share) and Sony (50% minus 1 share) and operates its factories and services in Tangjung, South Korea. As on 26 December year 2011 it was announced that Samsung had acquired the stake of Sony in this joint venture. Compared to other major Korean businesses, Samsung survived the 1997 Asian financial crisis relatively undamaged. On the other hand, Samsung Motor was sold to Renault at a significant loss. As of year 2010, Renault Samsung is 80.1 percent owned by Renault and 19.9 percent owned by the Samsung. Additionally, Samsung manufactured a range of aircraft from the year 1980s to year 1990s. The corporation was founded in 1999 as Korea Aerospace Industries (KAI), the outcome of merger between then three domestic major aerospace divisions of Samsung Aerospace, Daewoo Heavy Industries, and Hyundai Space and Aircraft Corporation. However, Samsung still make aircraft engines and gas turbines.

2000 to 2013: In Year 2000, Samsung opened a programming laboratory in Warsaw, Poland. Its work began with set-top-box technology before getting into digital TV and smart phones. As of 2011, the Warsaw base is Samsung's most significant R&D center in Europe, estimate to be recruiting 400 new-hires per year by the end of 2013. In 2001 Samsung Techwin became the exclusive supplier of a combustor module for the RollsRoyce Trent 900 used by the Airbus A380, the world's major passenger airliner. Samsung Techwin is also a revenue-sharing contributor in the Boeing's 787 Dream liner GEnx engine program. In 2010, Samsung announced a 10-year expansion strategy centered around five businesses. One of these businesses was to be focused on bio pharmaceuticals, to which the corporation has committed 2.1 trillion. In December 2011, Samsung Electronics sold its hard disk drive (HDD) company to Seagate. In the first quarter of 2012, Samsung Electronics became the world's largest mobile phone maker by unit sales, overtaking Nokia, which had been the market leader since year 1998. In the August 21 edition of the Austin, Samsung confirmed policy to spend 3 to 4 billion dollars converting half of its Austin chip manufacturing plant to a more beneficial chip. The conversion should start in early 2013 with manufacture on line by the end of 2013. On March 14, 2013, Samsung unveiled the Galaxy S4 mobile. On 24 August 2012, 9 U.S jurors ruled that Samsung had to pay Apple Inc. US$1.05 billion in compensation for violating six of its patents on Smartphone technology. The award was still less than the US$2.5 billion requested by Apple. The decision also ruled that Apple didn't breach five Samsung patents cited in the case. Samsung decried the decision saying that the move could damage innovation in the sector. It also followed a South Korean ruling stating that both corporations were guilty of infringing on each other's intellectual property. In the first trading after the ruling, Samsung shares on the Kospi index fell 7.7%, the major fall since October 24, 2008, to 1,177,000 Korean won. Apple then wanted to ban the sales of eight Samsung phones (Galaxy S 4G, Galaxy S2 AT&T, Galaxy S2 Skyrocket, Galaxy S2 T-Mobile,

Galaxy S2 Epic 4G, Galaxy S Showcase, Droid Charge and Galaxy Prevail) in the United States which has been denied by the court. On 4 September 2012, Samsung announced that it plans to observe all of its Chinese suppliers for possible breach of labor policies. The corporation said it will carry out audits of 250 Chinese companies that are its private suppliers to see if kids under the age of 16 are being used in their factories. In 2013 news outlets in Australia and New Zealand reported a number of Samsung washing machines unexpectedly catching on flames.

Why Expanding??????
Because Shipments of dynamic random access memory (DRAM) for use in smart phones is set for extraordinary triple-digit growth , outpacing the expansion of the entire DRAM market by a factor of three, according to an IHS supply DRAM Market Brief from information and study provider HIS. DRAM shipments in Smartphone handsets, as measured in 1 gigabit-equivalent units, are projected to rise to 1.7 billion in 2011, up 157.2 percent from 672.0 million in 2010. By 2015, shipments will enhance to 13.9 billion units, up 700 percent from 2011. DRAM usage in smart phones is raising at a swift clip, as a result of high memory densities in these devices, along with ever-rising sales to consumers, said Clifford Leimbach, analyst for memory demand forecasting at IHS. Contrast to this years stunning DRAM growth in smart phones, a shipment growth amounting to a much less spectacular 50 percent is expected for the total DRAM market, which is dominated by sales to the PC production. The major growth difference between the two sectors explains why DRAM manufacturers are aggressively vying for a bigger piece of the cell phone DRAM marketplace. While DRAM also is used in devices like tablets and PCs, smart phones will continue to control an increasing portion of the DRAM market. Smartphones share of total DRAM use will grow to 7.6 percent this year, up from 4.4 percent in 2014. This will expand to 10.6 percent next year and then climb to 13.4 percent in 2015, 14.9 percent in 2016 and 16.0 percent in 2017.

SWOT ANALYSIS
INTERNAL ENVIORNMENT EXTERNAL ENVIORNMENT

STRENTH

WEAKNESS

OPPERTUNITY

THREAT

Strengths:
Samsung has a huge market for selling television which have innovative features such as internet based function and recommendations on programmers based on user views. The company has been able to make marvelous strides over the years, and the goods for the television division have a wide range of price points to provide accommodation different consumer groups. Samsung is one of the major and the most dominant Smartphone manufacturer worldwide. The corporation has sold more phones internationally compared to its closest competitor, Apple which is the second main manufacturer. The Samsung Galaxy S series phones are the key reason for gaining a large market share over a 4 year time period. The most recent handset had sold millions of units within one quarter of release which prove that the business can shift millions of units through innovation. The camera division of Samsung is also building impressive changes to the overall marketplace. The corporation has produced a camera which has the Android operating method by Google which is a first in the business. The camera allows the user to control images and be able to share their photos instantly to fashionable social networking sites via its built in 4G and Wi-Fi functionality.

Samsung is viewed prestigiously in the world. Healthy organizational culture for the workers to learn. Skilled and capable employees are working to meet competitively in the surroundings. Significant attitude towards the customers. Aggressive marketing promotion. Timely service. Diversity in the services, which make easy almost each and every segment of the world.

Weaknesses
The laptop division & the tablet division of Samsung is somewhat missing compared to the overall market and its competitors. The business is trying to release fresh products within this area but global sales of laptops have declined for a few years now and tablet sales have improved. The company has yet to monopolies on this modified in technology as the tablets they have released are not that eyecatching to consumers. The fact that the corporation is selling millions of units of mobile phones is a big achievement, however the main problem with this is that the corporation is not making a good margin on the those sales. The manufacturing of their goods is highly fragmented as well, where Samsung has made dozens of different types of handsets to accommodate various price points. This may be creating mixed message to sponsors who may find that a smooth product offering would better in the long term.

Marketing tactics are weak as compare to apple. Usually try to recruit internally. Pay roll problems.

Opportunities
Samsung said that they will announce a smart watch in the month of January 2014, but this is not confirmed. If Samsung were to discharge a smart watch, then they would the first corporation to release a product like this to the market. Although there are other smaller start-up corporation planning to release their own smart watches, Samsung would be the first big corporation to produce them on a global scale. Another part Samsung could look into is having health applications and products, much like the Nike Fuel band or Nike+. Samsung could try and partner with Adidas to generate a similar product which would allow both companies to enter a marketplace which they do not operate in at the moment. Creating a product which would be package with similar health wristbands with a compatible Smartphone would permit the companies to attract various consumer bases. Adidas could use

celebrities such as ROJER FEDERAL to promote the products in advertisements as well as be endorsed by Samsung itself.

It can sponsor the events, teams and conduct activity shows. They can improve their HR practices so that the workers retain in the company. They can prefer outsiders for the job on the vacancy.

Threats
Apple releasing latest flagship mobile devices is the major threat to Samsung at the moment, especially the release of a budget I-Phone product. The fact that a budget I-Phone would allow Apple to sell to developing markets such as India can cut Samsungs market share. The popularity of the IPhone is evident as consumers are loyal to the corporation they buy from and can make it hard to transfer to a different handset. Other areas which can be threat to Samsung are the fact that the manufacturing factories of the corporation can be hit by natural disasters. The supply chain can be disrupted which can cause key problems especially if new products were to be released soon. The corporation would need to act fast in making sure that the supply can meet the prerequisite of consumers, as well as ensure that the factories are well maintained properly during and after the natural disasters happens.

DESTINATION
Hungary

Background:
Hungary is a landlocked country in Central Europe. It is situated in the Carpathian Basin and is bordered by Slovakia to the north, Ukraine, and Romania to the east, Serbia, and Croatia to the south, Slovenia to the southwest and Austria to the west. The country's capital, and largest city, is Budapest. Hungary is a member of the European Union, NATO, the OECD, the Visegrd Group, and is a Schengen state. Following a Celtic and a Roman period, the foundation of Hungary was laid in the late 9th century by the Hungarian prince Arpad, whose great-grandson Saint Stephen I was crowned with a crown sent by the pope from Rome in 1000 AD. The Kingdom of Hungary existed for 946 years and at various points was regarded as one of the cultural centers of the Western world. After about 150 years of partial Ottoman occupation (15411699),

Hungary was integrated into the Habsburg Monarchy, and later constituted half of the AustroHungarian dual monarchy (18671918). A great power until the end of World War I, Hungary has lost about 70 percent of its territory, along with one third of its ethnically Hungarian population, and all its sea ports under the Treaty of Trianon, the terms of which have been considered excessively harsh by many in Hungary. The kingdom was succeeded by an authoritarian regime, and then a Communist era (19471989) during which Hungary gained widespread international attention during the Revolution of 1956 and the seminal opening of its border with Austria in 1989, thus accelerating the collapse of the Eastern Bloc. The present form of government is a parliamentary republic, which was established in 1989. Today, Hungary is a high-income economy. Hungary is one of the thirty most popular tourist destinations in the world, attracting 10.2 million tourists a year (2011). The country is home to the largest thermal water cave system and the second largest thermal lake in the world (Lake Heinz), the largest lake in Central Europe (Lake Balaton), and the largest natural grasslands in Europe. Location: Central Europe, northwest of Romania Area: total: 93,028 sq km country comparison to the world: 110 Natural resources: bauxite, coal, natural gas, fertile soils, arable land

Economy - overview: Hungary has made the transition from a centrally planned to a market economy, with a per capita income nearly two-thirds that of the EU-25 average. The private sector accounts for more than 80% of GDP. Foreign ownership of and investment in Hungarian firms are widespread, with cumulative foreign direct investment worth more than $70 billion. In late 2008, Hungary's impending inability to service its short-term debt - brought on by the global financial crisis - led Budapest to obtain an IMF/EU/World Bank-arranged financial assistance package worth over $25 billion. The global economic downturn, declining exports, and low domestic consumption and fixed asset accumulation, dampened by government austerity measures, resulted in an economic contraction of 6.8% in 2009. In 2010 the new government implemented a number of changes including cutting business and personal income taxes, but imposed "crisis taxes" on financial institutions, energy and telecom companies, and retailers.

The IMF/EU bail-out program lapsed at the end of the year and was replaced by Post Program Monitoring and Article IV Consultations on overall economic and fiscal processes. The economy began to recover in 2010 with a big boost from exports, especially to Germany, and achieved growth of approximately 1.4% in 2011. At the end of 2011 the government turned to the IMF and the EU to obtain a new loan for foreign currency debt and bond obligations in 2012 and beyond. Whether negotiations result in a loan depend on Hungary meeting EU and IMF requirements for ensuring the independence of monetary, judicial, and data privacy institutions. The EU also launched an Excessive Deficit Procedure and requested that the government outline measures to sustainably reduce the budget deficit to fewer than 3% of GDP. Unemployment remained high, at nearly 11% in 2011. Ongoing economic weakness in Western Europe is likely to further constrain growth in 2012. GDP (purchasing power parity): $4.421 trillion (2011). GDP (purchasing power parity): $195.6 billion (2011) Country comparison to the world: 55 $192.4 billion (2010) $190 billion (2009) GDP (official exchange rate): $138.1 billion (2011) GDP - real growth rate: 1.7% (2011) Country comparison to the world: 161 1.3% (2010) -6.8% (2009)

GDP - per capita (PPP): $19,600 (2011) Country comparison to the world: 63 $19,200 (2010) $18,900 (2009) GDP - composition by sector: Agriculture: 4.1% Industry: 29.1% Services: 66.7% (2011) Industries: mining, metallurgy, construction materials, processed foods, textiles, chemicals (especially pharmaceuticals), motor vehicles Exports - commodities: machinery and equipment 55.3%, other manufactures 30.6%, food products 7.4%, raw materials 3.2%, fuels and electricity 3.3% (2009 est.) Exports - partners: Germany 25%, Romania 5.7%, Austria 5.4%, Slovakia 5.4%, Italy 5%, France 4.8%, UK 4.6% (2010) Imports: $101.5 billion (2011) Country comparison to the world: 34 $87.17 billion (2010) Imports - commodities: machinery and equipment 44.7%, other manufactures 41.3%, fuels and electricity 5.1%, food products, raw materials 6.7% Imports - partners: Germany 24.7%, Russia 8.6%, China 8.4%, Austria 6.2%, Slovakia 4.9%, Poland 4.7%, Netherlands 4.4%, Italy 4.3% (2010 est.) Culture Name Hungarian

Alternative Names Magyar Orientation Identification: Hungarian derives from Onega; a Bulgarian-Turkish tribe's self-name. Between the sixth and eight centuries C.E. both the Hungarian tribes and the angers lived just northeast of the Black Sea. Location and Geography: Hungary is a landlocked country in central Europe. Covering an area of 35,934 square miles (93,030 square kilometers), the country is in the Carpathian Basin, surrounded by the Carpathian Mountains, the Alps, and the Dinaric Alps. The Danube River divides Hungary and bisects the capital, Budapest. Hungary lies within the temperate zone and has four distinct seasons. Demography: Hungary has lost population since the early 1980s. The population was 10,065,000 in 1999, 48,000 less than it had been a year earlier. As in several European countries, the population of the elderly is on the rise and that of children on the decrease. The officially recognized minorities are Armenians, Bulgarians, Croats, Germans, Greeks, Poles, Romanians, Roma (Gypsy), Serbs, Slovaks, Slovenes, and Ukrainians. The largest minority is the Roma, who make up about 5 percent of the population, numbering approximately 500,000. The second largest minority are the Germans, who number an estimated 170,000. There are 80,000 to 110,000 Slovaks as well as about 35,000 Croatians, 15,000 to 25,000 Romanians, 80,000 to 100,000 Jews, and 5,000 Serbs. Linguistic Affiliation: Hungarian belongs to the Igor branch of the Finno-Ugric language family. Before World War II, German was the most important and frequently used second language. During the socialist period, Russian was mandatory in schools and universities. English has become the most valued second language, particularly for younger people with entrepreneurial ambitions and in academia, the sciences, and various businesses and services.

Symbolism: The Hungarian language constitutes one of the most significant national symbols. History also has a central meaning in national awareness and identity. Related to history is the national coat of arms, which depicts the House of Arpads Arpad led the Hungarian conquest in 896 C.E. and his offspring founded the state and ruled until the male line died out in the early fourteenth century. On this family crest is the crown that national tradition connects with the person of King Is van (9971038) (Saint Stephen), the country's first Christian king. This crown, usually called Sacred Crown or Holy Crown, has always been endowed with a mystical and transcendent meaning. Historically, the crown validated and legitimated the ruler. Even though the kingdom of Hungary ceased to exist in 1918, the crown continues to hold deeply meaningful national significance. The red, white, and green flag also is a powerful national symbol. The national anthem, written in 1823, is symbol of the eastern origins and history of the Hungarians in the form of a prayer that begs God to help the nation. The gigantic painting entitled "The Arrival of the Hungarians" is another national symbol. Feisty originally painted it for the millennial celebration (1896). The most significant manifestation of national unity is the sense of linguistic and cultural connection that includes the national language, literature, music, folk culture, folk literature, folk traditions, and history. A deep, permeating consciousness is another integral element of national identity. It can be summarized as "we are all alone" and is based on historical reasons and the "otherness" of the language and the origins of Hungarians. While the consciousness of "we are all alone" was dormant during the socialist period (19481989), it still remained a recognizable and crucial part of the national identity. History and Ethnic Relations Emergence of the Nation: There is evidence that the Hungarian nation was a unit in the Middle Ages. In Latin chronicles dating back to the tenth century, there are colorful origin myths of the

Hungarians "conquering" and occupying the Carpathian Basin and their conversion to Christianity under King Stephen. Many Hungarians consider their nation "the final fortress of Western Christianity and civilized Europe." National Identity: In the middle Ages, groups and nationalities that were not ethnically Hungarian lived in the nation. After the late middle Ages, a dual national consciousness is demonstrable. On the one hand, there was a nationstate that ethnic Hungarians and nonHungarians could share. On the other hand, there was a narrower sense of belonging to the Hungarian linguistic, cultural, and ethnic community. In 1526, a young Hungarian king fell in a battle with the Ottoman Turks. On the basis of a marriage contract, the Habsburgs claimed the Hungarian throne. After conquering the Ottomans in 1686 and 1712, the Habsburgs ruled all of Hungary. The population accepted their right to rule but kept and observed their own laws, legislative powers, parliament, and administrative division. From time to

Time there were anti-Habsburg revolts, conspiracies, and political unrest. In 1848, a revolution led by Lagos Kossuth demanded democratic reforms and more independence from Austria. However, Austria defeated the revolution. This was the first time that the general population, including the peasantry, experienced a sense of national unity. While some of the nationalities shared that experience, most turned against the Hungarians. The Austrian tyranny that followed the revolution of 1848 ended with the 1867 AustrianHungarian Compromise. With this accord, the Austro-Hungarian monarchy was established. The Austro-Hungarian monarchy ended after World War I. The Trion Treaty of 1920 ended the territorial integrity of Hungary. Nearly 70 percent of its historical territory and 58 percent of its former population were ceded to neighboring countries. One-third of ethnic Hungarians came under foreign rule. With the assent of the Western powers, Hungary came under Soviet occupation after World War II. Under the leadership of Moscow and the Moscow-led Hungarian Communist Party, the "building of socialism" began. In 1956, the nation rose up against the Communist rule and occupation by the Soviet Union. The revolt was defeated and approximately

two hundred thousand Hungarians, mostly young people, skilled workers, white-collar workers, professionals, and intellectuals, escaped to the West. By 1968 Hungary had become the "happiest barrack in the lager" as a result of the economic reforms of the New Economic Mechanism and with some social and political liberalization. In 1989, Hungary was the first Socialist Bloc country to open the "Iron Curtain," providing a transit route for thousands people emigrating from East Germany to West Germany, precipitating the fall of the Berlin Wall and the reunification of Germany. The "softer" regime under Janos Kadar was successful in weakening traditional national consciousness, along with previously closely knit community networks and religious worldviews and values. After forty years of socialism, the general tendency among many in the population is to be individualistic, survival-oriented, and likely to work out strategies of compromise. Ethnic Relations: After the 1989 change of regime, the Hungarian government assumed responsibility for the ethnic and linguistic maintenance of ethnic Hungarians living outside the nation's borders. The government tries to establish and maintain fair and friendly relations with the governments of neighboring countries. There are frequent complaints, however, that the Hungarian minorities' ethnic and cultural maintenance is made difficult by the host countries. Hungary continues to strive for friendly relations with the surrounding countries. Ethnic and national minorities are encouraged to set up their own self-governing councils, and their cultural and educational institutions receive state support. Among the minorities, the Roma are in an extremely difficult situation. Their high birth rate, disadvantageous economic position and social status, and the subjection to prejudice have worsened their economic circumstances and social integration. Urbanism, Architecture, and the Use of Space Until the middle of the nineteenth century, Hungary was a primarily rural agrarian society. Often Hungarian villages had large populations. The church was always in the center of the village.

Many settlements were "two-church villages," indicating that two groups settled there at different periods. On the Great Hungarian Plain instead of villages, there was a loose network of huge agro towns that were located far from one another, each with a population from 20,000 to 100,000. Until recently, most Hungarians engaged in agriculture. The large agro towns were administered as villages, with most of their inhabitants living like peasants. In the early eighteenth century, individual, isolated homesteads sprang up. Only seasonally occupied at first, they eventually became permanent residences of mostly extended families. However, even though about 50 percent of the people in the agro towns lived and worked outside towns on these homesteads, they still considered themselves townspeople. As a result of industrialization after the establishment of the Austro-Hungarian monarchy in 1867, a number of industrial-commercial-merchant cities sprang up. Between 1867 and the beginning of World War I, Budapest grew into a huge metropolis with a population of over a million. In the center of cities there are city halls and other public buildings as well as churches, shopping districts, and remnants of traditional marketplaces. Some churchyards still have small cemeteries. Until recently, it was customary to have a Tisza sober (clean room) in peasant houses that were used mainly for special visits and particular rituals and occasions such as births, christenings, weddings, and funerals. There were also "sacred corners" that were decorated with pictures of various saints and pictures and statues brought back from Catholic pilgrimages. In Protestant households, the walls of those rooms depicted religious reformers and the heroes of the 1848 revolution. Food and Economy Food in Daily Life: Magyar Kenner (Hungarian bread) remains very important in the rural and urban cuisine. For the last one hundred fifty years, wheat has been one of the most important crops both for domestic use and exportation. Pig breeding became the most important type of

animal breeding in the 1870s, and since then the meat and byproducts of pigs have predominated in the national diet. Food Customs at Ceremonial Occasion:. The cuisine at most village weddings includes chicken soup with special csiga noodles that were traditionally believed to have fertility-inducing properties, gullys , stuffed cabbage, sweetened millet, sweetened rice and other rice dishes, and butter-cream tortes and other baked goods. According to the national self-image, Hungarians are wine drinkers, but beer drinking is more common. Since the early 1990s there has been an attempt to familiarize the population with regional wines. Basic Economy: Before World War II, Hungary was an agricultural country. During the socialist regime, forced industrialization took place. However, more than half the population does some agricultural work for household use and supplemental income. Major Industries. Tourism continues to be a great Hungarian success. The production of barley, corn, potatoes, wheat, sugar beets, and sunflower seeds, along with grapes and wine making, is important. Mines are no longer subsidized by the government, and many mines have closed. Trade: Imports include metal ores and crude petroleum, while exports include agricultural products, consumer goods, leather shoes, machinery, transport equipment, chemicals, textiles, wines, iron, and steel. Between 1948 and 1989, more than half of foreign trade was with the Soviet Union and other socialist countries. Since the early 1990s, foreign Trading partners have been Germany, Italy, Austria, the United States, and some of the formerly socialist countries. Social Stratification Classes and Castes: Early in the socialist period, the nationalization of industries, commerce, and most services, along with the forced collectivization of agrarian landholding, brought about

the end of private property. Communist Party leaders, secretaries, and members lived better and had access to more goods than did the rest of the population. Privatization of industry, commerce, and some services took place after 1990 as Western capital flowed into Hungary. As a result of a complex and controversial system of property compensation, most arable land and real properties were reprivatized after more than four decades. The income gap then widened between the rich and the poor. It increased in 1998 as 38 percent of the population earned below the minimum annual wage. In contrast, the rich seem to have increased their wealth at a rapid rate. Upward social mobility still depends on the channeling of students into educational institutes. A disproportionate number of students in high schools, colleges, and universities come from intellectual, upper management, or otherwise "elite" families. Symbols of Social Stratification: Western-style clothes, especially American jeans, are worn by the bulk of the younger population in both urban and rural areas. New clothes are very expensive and brand names such as Levi-Strauss can be bought only by a small segment of the population. Shiny polyester or nylon leisure suits worn with expensive, name-brand sports shoes are signs of new and successful entrepreneurs. Many of the new rich drive expensive foreign cars. The number of cell phones and their frequent and public uses are striking. There are numerous luxurious new or elaborately remodeled villas in Budapest that are owned by the new economic elite. Foreign travel has become a flaunted symbol of wealth and status.

Political Life Government: All levels of government were under the control of the Communist Party between 1948 and 1989. The change of regime in 1989 brought in a multiparty government and a parliamentary democracy with elected representatives. At the end of the twentieth century, there were 182 officially registered political parties. Leadership and Political Officials: There is a president, who is the head of the state and may be elected for two five-year terms. The prime minister is the leader of the party with the most seats.

The parliament is called the National Assembly, with 386 deputies who are elected for four-year terms. The Constitutional Court was established in 1990. There is a Judicial Supreme Court that is essentially a final court of appeal. Social Problems and Control: Alcoholism is a widespread and significant problem. In addition, drug abuse has increased since the end of the socialist regime. After the outbreak of the war in the former Yugoslavia in 1991, Hungary became a favorite place for international organized crime organizations that engage in drug, weapons, and people smuggling; prostitution rings; and money laundering. The crime rate is rapidly increasing. The population worries about the lack of public safety and generally blames crimes on the Roma as well as refugees and other foreigners. Psychological problems, particularly depression, increased significantly between 1988 and 1996, and, although the number of suicides has been declining, Hungary continues to have the highest rate of suicide in the world. Military Activity: Modernization of the army began in the early transition period (19901994) and has continued since the country has become part of the North Atlantic Treaty Organization (NATO). There is an ongoing process of integrating the Hungarian armed forces with NATO organizations and the filling of alliance posts. The army is being converted to a mixed structure that is composed of volunteers and conscripts. All males between ages 18 and 55 are required to serve in the armed forces, but conscription is selective. For example, students in universities serve for a very short time or not at all and conscientious objectors are given civilian jobs. There are 80,000 people serving in the army, air force, border guards, and the small fleet guarding the Danube River. Gender Roles and Statuses Division of Labor by Gender: Men are expected to work, earn, and provide for their families, while women are expected to take care of the children and the domestic chores. These ideal roles are rarely achieved today. In the last couple of generations, the rate of divorce and remarriage has increased dramatically. Since the change of regime (in 1989) cohabitation of unmarried couples and the number of children born outside of marriage have grown. These patterns are more common among those with less formal education, money, and social prestige.

Most Hungarian men do not help with the housework, and few women object to this arrangement. Only among a small percentage of young, mostly urban couples and an even smaller segment of middle-aged intellectuals and professionals is there evidence of a changing pattern in the gendered division of labor in the domestic sphere. The Relative Status of Women and Men: The images of the mother and motherland are expressed in the national literature and culture. Since the early nineteenth century, the centrality of the mother-son relationship has been idealized in literature and the public consciousness. The mother is often hailed as the core of the national identity, the guardian and cultivator of a "real" culture that is untouched by foreign influences. Marriage, Family, and Kinship Marriage: Marriages are no longer arranged. Young people usually marry for love or to have children. The perpetual shortage of apartments is a problem for married couples. Young married couples frequently move into the small apartment of either set of parents. While traditionally a young married couple lived near the parents of the groom, today, if a couple cannot set up an independent new household, they move in with the set of parents who will welcome them and has the most room. Most households consist of a married or unmarried couple and their children. Even when a couple lives in a separate household, great value is placed on having the help of a grandmother or grandfather. Kin Groups: Kin groups are often large in villages and smaller in urban centers. God parenthood is still much valued. Extended families living in the same household are very rare. Socialization Infant Care: Traditionally, newborns were swaddled; today they are wrapped in warm blankets when they are very young, but swaddling is no longer practiced. Infants and toddlers are usually put into a separate space to sleep and play. Parents try to calm an active baby rather than stimulate it. There seems to be a growing child centeredness that is manifested in focusing on children and often giving them more material goods and privileges than the family can afford.

Good children are obedient, mindful, diligent, respectful, industrious, quiet, and good students. In rural areas, more emphasis is placed on respect and industrious behavior. The actual behavior of children rarely approximates these expectations. Child rearing and Education: Formal education is compulsory between six and sixteen years of age. The rate of literacy is 98 percent. Traditionally, most people considered a high school diploma as the final formal educational goal. Higher Education: Since the 1980s more value has been placed on college or university education. This is illustrated by a slightly increased enrollment in colleges and universities and in an expansion of educational opportunities in institutes of higher learning. Etiquette Hospitality entails an extraordinary effort to feed and care for guests. Guests are always encouraged to step into one's home first. On the streets, it is customary for men to walk on the left side of women, ostensibly because in the past gentlemen kept their swords on the left side and women had to be on the opposite side of the sword. A Hungarian man enters first into a pub, restaurant, coffeehouse, or other public establishment. Friends, family members, and close acquaintances who have not seen one another for a while greet and part from one another with pecks on both the left and right cheeks. Touching the hands, arms, and shoulders of partners in conversation is common. It is customary for a woman to offer her hand first both to men of all ages and to younger women and children. Differentiated formal terms of address are seldom used among younger people. Informal styles of greeting and terms of address are used from the moment of initial meeting. Considerably less time is spent visiting and socializing in coffeehouses and on the streets than in the past.

Bodily contact is rather intimate on public transportation and in malls and shopping centers. In isolated rural settlements, villagers still stare at strangers. Religion Religious Beliefs: According to surveys in the early 1990s, 72 percent of Hungarians are Roman Catholic, 21 percent are Calvinist reformed, 4 percent are Lutherans, nearly 1 percent is Jewish, and After Russia, Hungary has the largest Jewish population in its region. About 80 percent of Hungarian Jews live in the capital city. About half the Jewish population is over the age of 65 There was an official campaign against all religions during the socialist regime. Those who openly practiced a religion were discriminated against and often punished. The state closed most parochial schools and dissolved or disbanded religious orders and institutions. After 1989 and during the periods of privatization, many schools and other formerly parochial buildings were returned to the churches. As compensation for the confiscated properties, the state financially supports parochial schools and other religious institutions. Among large segments of the population, religious indifference and often explicitly antireligious attitudes prevail. This is an outcome of the lax, individualist, atomizing policies of the last decade of socialism. Alongside the major denominations, there are an increasing number of small sects, religious movements, and Eastern religious practices, along with a growing number of followers of proselytizing Western missionaries. Many Hungarians do not formally belong to or regularly practice any religion, but baptisms, weddings, and funerals tie them informally to churches. Rituals and Holy Places: Among the sacred places of the Hungarian Roman Catholic Church are the city of Esztergom, where Saint Stephen was born; Pannonhalma, where the first Benedictine Order was founded in 996 C.E. ; the city of Eger; and a number of provincial rural settlements and places of annual pilgrimage. Calvinists in eastern Hungary consider Debrecen the "Calvinist Rome." The religious centers for Lutherans are Budapest and Sopron. Budapest has the largest synagogue in Europe.

Death and the Afterlife: In addition to traditional in-ground burial, cremation with special places to put funerary urns has been practiced since before World War II. Because of a lack of cemetery space in the cities and the great expense of traditional funerals, cremation is widely practiced. Medicine and Health Care Western medicine is practiced, although many individuals have turned to alternative medicine such as acupuncture and herbal and homeopathic remedies. In addition to Western medical treatment, frequenting medicinal spas, getting professional deep tissue and other types of massage, and drinking mineral water continue to be very popular. Secular Celebrations Major national holidays include 20 August, commemorating the death of King Stephen. This day is also an ecclesiastical feast day. During the socialist regime (19481989), 20 August was renamed the Day of the Constitution and the Day of New Bread. Another major national holiday is 15 March, which commemorates the bloodless democratic civil revolution that broke out in 1848. Since the change of regime in 1989, 23 October has been a day of remembrance of the revolution of 1956, when Hungarians rose against the Soviet occupation. Though not an official holiday, the Day of the Martyrs of Arad (6 October) is a significant time of remembrance. In addition, there are numerous local memorial celebrations, art festivals, and folk festivals. Among the many festivals and fairs are the southern Folklore Festival along the Danube, the northern region's annual Palos Festival, and the annual Bridge Fair. In the annual Budapest Spring Festival, there are art exhibits and musical and theatrical events. The Arts and Humanities Support for the Arts. Support for the arts during the socialist period was provided primarily by the State. Since 1989, there has been much less governmental support and more private, individual, and corporate sponsors for artists.

The State of the Physical and Social Sciences The physical and social sciences are taught on sophisticated and advanced levels in universities, research facilities, and other institutes. State funding continues to be a key resource, but it has decreased in the last decade. There has been a "brain drain" as younger and middle-aged scientists leave temporarily or permanently for better wages and opportunities and more advanced laboratories and instruments in Western Europe, the United States, Canada, and Australia.

PESTLE ANALYSIS
Political: The countrys foreign policy focuses on strengthening its integration into the EU and
various Euro-Atlantic institutions, and it has maintained strong relations with its neighbors over the years. Nevertheless, corruption at the institutional level has traditionally hindered prospective investments. Political Conditions:

President: Pal Schmitt Prime Minister: Viktor Urban

Minister of Foreign Affairs: Janos Martini

Ambassador to the United States: Gyorgy Szapary Ambassador to the United Nations: Csaba Korosi Form of government: Parliamentary Republic

A new constitution was adopted on 18 April 2012, which will enter into force on 1 January 2013 upon its Signing by President Schmitt on 25 April 2012. Political Stability - Hungary political system is very stable. It is a democratic nation, where elections are held democratically every five years. All political parties strongly believe in democracy. Relations with major powers its government maintains good relations with all major powers and power blocs of the world. This leads to Hungary firms not getting excluded in the tendering process. Government Policy - The Hungary government as well as the government owned companies have decided to award more IT Projects to Hungary IT companies.

Economic:

Hungary had been experiencing serious structural problems for several years

before the global economic crisis in 2008. Short-sighted economic policies (e.g. government overspending and real wage growth exceeding productivity growth), followed since 2001, have led to ever increasing macroeconomic pressures. Hungary is a strongly export-oriented economy. The drastically declining demand in the most important export markets, most notably Germany, therefore, clearly inhibits a quick recovery. Hungary GDP: Hungary Gross Domestic Product is worth 130 billion dollars or 0.21% of the world economy, according to the World Bank. Hungary GDP Growth Rate: The Gross Domestic Product (GDP) in Hungary expanded 0.5 percent in the third quarter of 2011 over the previous quarter. Sector wise GDP: Agriculture: 2.4%, Industry: 37.3%, Services: 60.3% (2012 EST.)

Hungary Interest Rate: The benchmark interest rate in Hungary was last reported at 7 percent. In Hungary, interest rates decisions are taken by the Monetary Council of the Hungarian National Bank. Hungary Inflation Rate: The inflation rate in Hungary was last reported at 4.1 percent in December of 2012. From 1992 until 2010, the average inflation rate in Hungary was 12.01 Hungary GDP per capita: The GDP per capita in Hungary was last reported at 5629 US dollars in December of 2012, according to the World Bank. Hungary Industrial Production: Industrial Production in Hungary expanded 3.5 percent in November of 2011.

Hungary Unemployment Rate: The unemployment rate in Hungary was reported at 10.6 percent in September of 2011 to November of 2011 period. From 1999 until 2010, Hungarys Unemployment Rate averaged 7.13 percent

Social:

Hungarys literacy rate is one of the highest in the world. The government has also

taken several initiatives to improve education in the country, thereby enhancing productivity and the employment prospects of its citizens. However, Hungarys ageing population presents a significant challenge to the government as it could curb economic development and increase social security expenditure. Education - large number of technical institutes, colleges and universities all over the country provide IT education. Hungary Population: The total population in Hungary was last reported at 10.0 million people in 2011 from 10.0 million in 1960, changing 0 percent during the last 50 years. Ethnic groups: Hungary include Magyar (nearly 90%), Romany, German, Serb, Slovak, and others Religion: majority of Hungary people are Roman Catholic; other religions represented are Calvinist, Lutheran, Jewish, Baptist, Adventist, Pentecostal, and Unitarian. Language: Hungarian & Magyar are the predominant language. Age structure: 0-14 years: 14.6% (male 767,824/female 721,242) 15-64 years: 68.7% (male 3,361,538/female 3,444,450) 65 years and over: 16.7% (male 622,426/female 1,058,582)

Festivals: In January and February Budapest International Circus Festival attracts thousands of overseas visitors. March or April, Budapests own Titanic International Film Festival comes to

town .The Spring Festival, at the end of March, The Autumn Music Festival, held over ten October days. The country also has a long tradition of celebrating Christmas during December

Technological: Hungarys ICT market has witnessed significant improvement and

growth over the years. The Hungarian internet access market grew by 8.3% in 2011 to reach a value of $459 million. The total size of the IT market increased from $3.1 billion in 2009, to $4 billion in 2011 and is expected to stabilize to around $5 billion by 2015. Nevertheless, in terms of innovation, Hungary lagged considerably behind the EU25 average and is also far behind the developed EU nations in terms of the number of patents per million people. Furthermore, the country faces significant risk due to the lack of ICT skills, which remains a considerable roadblock to growth. National Office for Research and Technology (NKTH) is a government office responsible for the Hungarian Governments science, technology and innovation policy. NKTH has the following responsibilities and missions: Elaborating the government strategy in the field of research, technology development, and innovation, Forming the means and tools for the R&D and innovation policy at government level, Preparing documents concerning the national science and technology policy, Representing Hungarian interests in international and EU S&T affairs, Co-coordinating the activity of the Research and Technology Innovation Fund, Supervising the Agency for Research Fund Management and Research Exploitation, Raising public understanding and awareness in research and innovation.

Recent technological developments in Hungary: The new technology developed by Cellum allows using mobile telephones as MasterCard bank cards in Hungary. Hungary is the first country in Europe to implement the new technology. Development in the field of renewable resources: The Hungarian National Renewable Action Plan has targeted to increase the share of renewable energy sources to 147% until 2020.

LEGAL

Hungary has a comprehensive legal and regulatory framework, with a

Constitutional Court for ensuring the constitutionality of laws, and a regular judicial system headed by the Supreme Court for adjudicating on civil, criminal and administrative cases. The independence of the judiciary was strengthened by the establishment of the National Council for Justice in 1997. Intermediate courts of appeal were established in 2003 to speed up the system but it is still overburdened. There are also significant problems related to loopholes, which are exploited by people aiming to evade the system. Taxation Corporate income tax: Corporate tax is set at 19% (tax base is profit before taxes) and tax payable may be reduced by various tax incentives. Corporate tax can be reduced to 10% for the sum of a companys tax base that does not exceed HUF 50 million if: Labor Law in Hungary Contract of work: The contract must be set out in writing Compulsory contents of the contract of employment: 1. Name and designation of the parties 2. Agreement on the employees job description on his/her basic salary, 3. on the site at which work is to be carried out Working hours: In Hungary full-time work involves eight hours work a day, and 40 hours a week. Regulations on employment or the agreement of the parties may establish longer working hours (though not exceeding 12 hours a day and no more than 60 hours a week).

ENVIORNMENTAL:

Hungary has been largely successful in managing its

environmental concerns and has a strong environmental record among the industrialized countries. It has a strong environmental policy framework in place, and focuses on implementing environmental policies so as to address environmental and energy concerns. Furthermore, as a member of the EU, Hungary also has to meet the specifications with respect to GHG emissions, particularly those regarding the reduction of pollutants causing climate change. However, the country's environmental record is under constant scrutiny due to the amount of hazardous waste that it generates. Environment Regulations: In Hungary environmental protection matters have been managed by the Ministry of Environmental Protection and Water (Ministry) since 1988, The Ministry is responsible for the development of environmental policies and for international co- operation. The effective day-to-day management of environment-related matters is mostly carried out by the regional organizations (agencies) of the Ministry The main, general environmental protection rules are laid down in Act LIII of 1995 on the General Rules of Environmental Protection (Environment Act). According to section 68 of the Environment Act, prior to the commencement of activities that has or may have a significant impact on the environment; an environmental impact assessment must be carried out.

Why choose Hungary? Because:

well educated skilled young talents IT ad software superpower A VERY GOOD DEMOCRACY its central location, the availability of cheap and skilled labor, modern infrastructure, tax incentives, relatively transparent investment environment, Favorable living conditions. The per capita capital inflow is the highest in the central and eastern European regions. Several multi-national companies have played an important role in the modernization of the economy, contributing to the addition of jobs and GDP growth. Automobiles, high-tech electronics, light manufacturing, chemicals and, more recently, the service sector, have attracted most of Foreign investments have played a dominant role in Hungarys rapid expansion and have been a driving force of its economic growth engine. Major part of the FDI came from Austria, Germany, the US, the UK, France, China, Japan, the Netherlands, Sweden, Finland, Norway, Hong Kong, Italy, Switzerland, Canada and Belgium. Over the years, the production base of electronic components and semiconductors has shifted from the developing countries to the emerging markets.. Hungary is home to many of the major electronics equipment manufacturers and has received considerable investment from major end users of semiconductors industry. Low labor costs and unsaturated markets, combined with steady economic growth have made the Hungarian market attractive for the semiconductors manufacturers.

Top Semiconductor buyer in Hungarian market (2012) Ranked by purchasing revenue.

(Revenue in $M)

Ranking
1

Company
Apple

2011
486

2012
559.4

Growth
15.1%

Hewlett-Packard

292

273

-6.5%

Dell

212

220.9

4.2%

Sony

184

188.9

2.7%

Panasonic

182

174.8

-3.9%

Nokia

179

193.5

8.1%

Cisco system

176

184.3

4.7%

Canon

146

150.5

3.1%

Toshiba

112

114.2

1.8%

10

Fujitsu

116

111.8

-3.6%

EXPANSION STRATEGY
Exporting: Although Samsung have done the PEST analysis but still its very risky to directly invest in Hungary and build a manufacturing business. So in start Samsung will enter in Hungarian market by using exporting as medium of entering. Direct exports It represent the most basic mode of exporting made by Samsung, capitalizing on economies of scale in production concentrated in the home country and affording better control over distribution. Sales representatives Sales representatives represent us in Hungarian markets for an established commission on sales. They will also provide us support services regarding local advertising, local sales presentations, customs clearance formalities, legal requirements and demand conditions.

Advantages

Control over selection of foreign markets and choice of foreign representative companies

Good information feedback from target market Better protection of trademarks, patents, goodwill, and other intangible property Potentially greater sales than with indirect exporting.

Disadvantages

Higher start-up costs and higher risks as opposed to indirect exporting Greater information requirements Longer time-to-market as opposed to indirect exporting.

MARKETING PLAN
SEGMENTATION STRATEGY:
Segmentation variables may be used to divide the product-market into segments. Demographic and psychographic (lifestyle and personality) characteristics of buyers are of interest. The use situation variables consider how the buyer uses their product. Variables measuring buyer needs and preferences includes brand awareness, and brand preferences. Purchase behavior variables describe brand use and consumption. Demographics are often more useful to describe segments after they have been formed rather than to identify them. Geographic location may be useful for segmenting product markets. Demographic information helps to describe groups of buyers such as heavy users of a product or brand. Life style variables indicate what people do, their interests, their opinions and their buying behavior. Lifestyles characteristics extend beyond demographics and offer a more penetrating description of the consumer. The core theory of product segmentation is that a company can produce a single product with relatively minor variations, market it to different customer groups -- sometimes under different brand names -- and thereby increase market share while reducing the cost of developing radically different products. Segmentation relies on market research to identify the product characteristics that resonate with target markets. Product development engineers then provide different iterations of the same basic model that meet the preferred traits for each market segment. Market targeting is the second step of a market strategy. Once the market has been segmented, the ideal segment needs to be chosen or targeted. The first thing to do is to analyze the segment attractiveness. Some of the characteristics for an ideal segment include size of the segment, growth rate of the segment, brand loyalty of existing customers, level of competition, and most importantly, potential for profit. This information can be acquired through market research. The next step would be to do an internal analysis to determine compatibility levels with the segment. The most important question would be to see if the firm can offer a superior value as compared to what already exists. The other thing to keep in mind is the firms availability of resources vis-vis capital requirement for the segment. At an operational level, it is important to see if the firm has access to the distribution channels for the segment. Once these steps are taken care of, the following market targeting strategies can be followed:

Single segment strategy: A single market segment is targeted with the entire product mix. This strategy is usually followed by small firms with limited resources. This allows the firm to focus exclusively on the segment and gradually expand. Product specialization strategy The firm specializes in a particular product and targets various segments using different market strategies. This strategy is helpful if the firm has a flagship product with universal appeal. Market specialization strategy The firm specializes in a particular market and provides various product combinations for this market. This strategy is helpful if the firm has an established presence in a particular market, but no flagship products to leverage. Mass marketing strategy The firm targets all the market segments with the entire product mix. There is intensive investment in market and advertising strategies because competition levels are very high. This strategy is followed by corporate giants with large amount of resources. Niche strategy- This is a special case of single segment strategy, when the segment is extremely small and/or non-conventional. This is the exact opposite of mass marketing wherein the firm focuses on its key strengths which may have little or no universal appeal. However, if successful, this can be the most successful of all strategies, with high growth rates and brand loyalty. POSITIONING STRATEGY: Positioning is what the customer believes about your product's value, features, and benefits; it is a comparison to the other available alternatives offered by the competition. These beliefs tend to base on customer experiences and evidence, rather than awareness created by advertising or promotion. Generally, there are six basic strategies for product positioning: 1. By attribute or benefit- This is the most frequently used positioning strategy. 2. By use or application- The users of Apple computers can design and use graphics more easily than with Windows or UNIX. Apple positions its computers based on how the computer will be used. 4. by product or service class 5. by competitor 6. by price or quality-

Here we see thoroughly all the strategies, now we will choose the positioning strategy because
our customers believes about our product value, features, and benefits; it is a comparison to the other available alternatives offered by our competitors. We know that we are specialized in semiconductor manufacturing, so we will use this positioning strategy. This will help to understand about our product. PRODUCT STRATEGY: SAMSUNG has segmented their products into six categories. Semiconductors TV/AUDIO/VEDIO CAMERA/ CAM RECORDER MOBILE PHONE HOME APPLIANCES PC/PERIPHERALS/ PRINTERS Reposition of its products. In early 1990th Samsung was still perceived as a conservative manufacturer and always associated its brand with bargains. Samsung realized that low price is just a major means to compete in the lower-market whereas in upscale market technology and brand are competitive means. Samsung decided to penetrate the upscale market and gave up lower-market in order to exalt its brand image. It repositioned all series of its products such as mobile phone, consumer electronics and memory flash to upscale market. Correspond to Samsungs new position in the market it has relatively higher price in its category. To Samsung higher price would bring more profit and at the same time it is the better imply of good quality. The strategy of reposition helps Samsung starting to build its noblest image. Technology innovation Samsung recognized that digital is the future developing aspect of consumer electronics. They regard the digital age as having both incalculable potential and risks. It's a time of intense competition-fortunes can be made or lost in the blink of an eye. (Samsung group timeline and history, 2005) Samsung took this challenge as an opportunity. They switched their core competitive power from mass manufacture to its own brand which based on digital technology. It is well positioned as one of the world's recognized leaders in digital technology and eventually become the world top innovative company in technology. It starts to provide

consumers with innovative and cutting edge products and rapidly become a huge player in electronics field competing toe to toe with another magnate Sony. Samsung launched an industry design revolution in order to get rid of its image of imitator. It employed world top designers to expand their thought and keep track on the world highest level. It achieved most of the Award of American Industry Design which is the most important award in industry design area on the global basis. Its brand was recognized by the consumers and specialists. The technology breakthroughs enhanced Samsungs brand image of young, fashionable and strong function. So in product strategy we will be focus on brand, our product quality, technology and better performance. PRICING STRATEGY: Price is one of the classic 4 Ps of marketing (product, price, place, promotion). There are different strategy is made for retailer which is different from the pricing strategy of retailer because company buy product in bulk amount as compare to the retailer so they get the discount in purchase of bulk quantity. As the retailer is becoming more prices sensitive so they want a good quality product in low or in a reasonable price. The company is focusing on the retailer to satisfy them with the classic and superior quality product in a reasonable price. Samsung is making different brands under its product category and that price reasonable so that the more price sensitive retailer can easily buy it. PROMOTION STRATEGY: There are different type of promotional mix will be used in order to promote classic brand. Traditional media is used to promote the brand also the nontraditional media is also used. A successful product or service means nothing unless the benefit of such a service can be communicated clearly to the target market. An organizations promotional mix strategy can consist of: ADVERTISING: The company will use any non-personal paid form of communication using any form of mass media to promote the new brand.

PUBLIC RELATIONS: It involves developing positive relationships with the organization media public. The art of good public relations is not only to obtain favorable publicity within the media, but it is also involves being able to handle successfully negative attention. PERSONAL SELLING: It involves selling a product service one to one basis and make customer aware about the new brand. SALES PROMOTION: This is commonly used to obtain an increase in sales in short term. It could involve using money off coupons or special offers. The firm provides special offers and discount for the new brand. DIRECT MAIL: Direct mail allows an organization to use their resources more effectively by allowing them to send publicity material to a named person within their target segment. By personalizing advertising, response rates increase thus increasing the chance of improving sales so direct mail will be used to attract customer. The firm provides information about the new brand and its collection to attract more customers. INTERNET MARKETING: By internet marketing the company will promote and sell company services online to their customers.