Case # 2

Samsung

Team International
Yuliya Rudenko Lily Nguyen Justin Kelly Martin Pirgiotis Jun Lee

BUSA 499 Prof. Chung Lee 04/02/2008

Samsung 2 Executive Summary

Samsung has made themselves noticeable as one of the most innovative and quality brands in the electronics industry. Samsung strives to be sustainable and achieve competitive advantage by remaining at the forefront of the digital market. Samsung policy is "We will devote out human resources and technologies to create superior products and services thereby contributing to a better global society. In todays digital era, speed is the essential competitive as new technologies constantly introduced to the market. Thus, Samsung spend lots of effort in expanding their R&D center. Samsung Corporation has become one of the world's leading memory producers in all types of PCs, digital cameras, game players, and other electronics products. Since Samsung bought DRAM technology from other company, they have developed and come up with better technology. Samsung has introduced many products with low price and high technology. Although Samsung has been very successful, they have a few issues that need to be looked at in order for them to stay up to date and maintain long term profits. Problems that have been identified with Samsung are; increased competition means decrease in Samsung's profits and market share because it generates oversupply and decrease in sales. Competition affects Samsung's market share because new entrants will segregate the market by offering lower cost products with a variety of functions. Furthermore, Samsung is also facing a Chinese DRAM company because of limitability of their resource. There are many competitors that produce similar products as Samsung; Samsung has to deal with competitors in five different industries. They are doing this by differentiating their products and adding different features into their products. The two possible solutions for the stated problems are 1) If Samsung wants to be the leading company within electronic industry, they need to differentiate their products enough from their competitors and introducing a new cell phone with touch screen and new features to stay current in the market. 2) Samsung is currently is one of the leading businesses in the electronic industry. In order for the company to stay competitive, they need to go to the different global markets and try to introduce their products to new demographics. In order for Samsung to be successful they need to go Global. This solution offers a physical presence and greater opportunity for talent buildup, and brand name establishment in foreign markets. The Global solution has many advantages in developing growth, pressure on competition, and international development.

Samsung 3 Table of Contents

Page #

Executive Summary..2 Samsungs background..............4 External Analysis......5

Five Forces of Competitiveness....5

Threat of Entry.......5 Threat of Rivalry7 Threat of Substitutes..8 Threat of Suppliers............10 Threat of Buyers....11

o o

Product/Market Positioning...12 Products & Market Positioning Diagram..12 Value 13 Rarity14 Imitability 14 Organization ....15 Competitive and Economic Implication..15 Cost leadership....15 Products Differentiation ..15 Problem....17 Solution 1.....17 Solution 2.....18

Internal (VRIO)13
o o o o o o o

Major Issue .17

Trade Offs ...19 Recommendation.....22 Competitive Advantage..23 Managerial Implication24 Conclusion ..25 References26

Samsung 4 Samsungs Background Samsung Electronics Company was established in Taegu, Korea in 1969 by Byung-Chull Lee. During that time the company only manufactured black-and-white TV sets. Since 1969, the company has enjoyed steady growth. At the end of 2004, Samsung had around $80 billion in net sales, $60 billion in assets and had 113 thousand employees worldwide. Also, in 2004 Samsung stood up ahead of many their competitors such as Phillips, Kodak, and Panasonic (Barney & Hesterly, 2008, PC 2-1). By that time the company produced TVs, AV equipment, and computers; the Telecommunication Business, which manufactured mobile phones and networking equipment; the LCD Business, which made LCD panels for notebook computers, desktop monitors, and HDTV; and the Digital Appliances Business, which produced and sold refrigerators, air conditioners, and washing machines (Barney & Hesterly, 2008, PC 2-6). Samsung believes that the success of their contributions to society and to the mutual prosperity of people across national boundaries truly depends on how they manage their company. (Samsung, 2008) Kun Hee Lee, current chairman of the Samsung Group always teaches his employees: always demand superiority in product design and process efficiency. Under Lees leadership, Samsung Corporation has become one of the worlds leading memory producers in all types of PCs, digital cameras, game players, and other electronics products (Barney & Hesterly, 2008, PC 2-1).

Samsung 5 External Analysis

The Industry type for Samsung is consumer electronics and entertainment. The market type is monopolistic competition because there are many producers and many consumers in the given market. Furthermore, when it comes to monopolistic competition, it involves a great deal of non-price competition which is based on product differentiation. Also, the producers have a certain degree of control over price. The electronics industry is a very wide category and it contains many types of products. Samsung competes with other companies in providing customers with a wide array of products that are good quality and affordable price. What they don't do is specialize in a certain product and thus they can't make an expensive superior product. With intense rivalry and competition in the industry, Samsung is satisfying consumers who want modern reliable products ranging from cell phones to home electronics.

The threat of entry The threat of entry to this industry depends on what part of the industry the company is trying to enter. If they enter a specific category of products such as mp3 players or cameras, Samsung will have a low threat level of entry from new companies. If a company decides to enter the same wide variety of product offering as Samsung then there will be a high threat level of entry. Therefore, for Samsung, the threat of entry is high. This is due to the fact that the Samsung Company is very widespread in terms of product offerings and service. Samsung offers a wide variety of products such as; mobile phones, television, mp3/audio, cameras, computers and home appliances. There are already many companies that are offering similar products and it is hard for the company to focus on a specific products. Technology is very important because

Samsung 6 the company has to keep up with latest trends and technology in all of its sections. It is difficult for new companies to enter the industry and compete with the larger companies specifying in an section because of already existing outstanding products in the electronic industry e.g. Apple's music entertainment products, or Sony's audio entertainment systems, or Canon's camera products. The new entrants of the electronic entertainment industry have to focus on whether to specialize in one area like music, TV, camera etc, or whether to have a wide variety of products for a affordable price. If they choose the latter, they will lost likely have to enter a price war. Samsung focuses on providing quality affordable price products for a wide group of people. Although with the rise of technology and high consumer interest in electronics, the industry is very popular and profitable for companies who have access to technology and capital. High capital is required to enter into electronic industry due to requirements of large investments on technology, distribution and marketing. New entrants in the industry have to spend a lot of money and time on branding and customer knowledge. The barriers to entry are high but are declining because of new technology and lower costs of production. The impact of new technology means that for content creation, the cost of digital cameras and video editing software is declining. The content storage is not limited by physical shelf space and server costs are declining. For product distribution, the growing number of distribution channels and the internet provides global distribution. Furthermore, bandwidth costs are declining. This makes it more attractable for new companies to enter the electronics and entertainment industry market. According to Airborn electronics, a realistic development path for a startup company will usually involve designing a low volume high price version of their product first, and then moving to high volume designs as the market matures. This is only possible where the economic demand for the product is "elastic" - in other words there is some demand even when the price is high.

Samsung 7 Fortunately, high technology products usually exhibit elastic demand (Airborn E. 2008). The consumer product market on the other hand can be a little bit less elastic - This means that the demand goes down drastically when price is more than the consumer is willing to pay for. This means that it may be very difficult for a startup company to produce a new consumer product. Thus, the barriers to entry may be high in the industry depending on the economy. If the economy is good and people have more money to spend on electronics, it is better for the company, if not, there is a high barrier. In terms of product differentiation, there is a lot of specialization and increased value by companies to make their products stand out and gain competitive advantage. According to Chaffin, Apple has around 82% of the market share for mp3 players because they differentiate and specialize their mp3 products (Chaffin, 2008). A way for a new company to compete right now in the mp3 market is by price and lower quality alternative products or try to come up with new technology and features. For new companies to compete with Samsung they have to differentiate and specialize their products which can be very costly.

The threat of Rivalry The threat of rivalry in the consumer electronic market is very high. Not only does a company have to compete on a level of technology and price, but they also have to keep track of what the competition is doing. There is a high intensity and constant competition in the electronics industry and usually the main competitors come up with new products very often. If a company does not keep up with trends and new products, they will lose their customers and profits. According to Barney and Hesterly, high levels of rivalry are indicated by such actions as frequent introduction of new products by firms in an industry (Barney, Hesterly, 2008: pg 46). In the mp3 industry, Apple introduces new 'I' products very often. In TV/DVD markets there are

Samsung 8 fewer introductions of new products because they are more expensive. The mobile phone market comes out with new products very often. There is a huge competition and rivalry amongst these markets. According to Barney and Hesterly, rivalry tends to be high where there are numerous of firms in an industry and these firms tend to be roughly the same size. Such is the case with the laptop personal computer industry. Worldwide, over 120 firms have entered the laptop computer market and no one firm dominates in market share (Barney, Hesterly, 2008: pg 46). Furthermore, rivalry tends to be high when firms are unable to differentiate their products from competitors in an industry. This can be seen in the personal computer and DVD industry. In the PC laptop industry, companies are focusing more on services that accompany the laptops and the designs of the computers. In the DVD industry the products are very similar and perform the same functions, thus it is hard to compete with existing companies. If a company decided to compete in this industry, they have to compete with intense price rivalry. Dell focuses their strategy on selling their computers online and providing excellent customer service. They save money on not having a physical store and focus on online distribution instead. This saves them money and they can compete on other levels. With the popular trend of the internet, companies are now competing with providing more services online and expanding their online advertisement.

The threat of Substitutes Substitutes in the consumer electronics industry are many and the different companies competing in this industry must apply many strategies in order to compete and make profits. The substitutes in the electronics market can be divided in to 4 categories. As will be mentioned the important factors in every industry of the general electronics market. Telecom - The substitutes in the telecom industry are landline phones and email. At the

Samsung 9 moment, landline phones are losing popularity because of lower prices and popularity of cell phones and internet calling programs. In the cell phone industry, Apple's I phone has the latest technology with its Touch screen, but companies are following and introducing new phones. Technology is very important in this market. Samsung has just introduced new line of innovative cell phones for 2008. Cell phones and PDA's have standard features and the only product differentiation lies with adding services such as Bluetooth, gaps and other communication applications and tools that are important for customers in the cell phone industry. it is important to know that there are several companies who compete based on price in the cell phone industry because it is a product that all kind of customers want. Samsung provides an affordable PDA with the modern features to satisfy the average telecom user. Apple and Nokia are selling mobile phones with new technology for a high price for customers who are willing to pay more. There are not many substitutes for PDA's. The main one is using a cell phone or computer, laptop to call someone using e.g. Skype. Laptops / PC - In the PC industry, the threat of substitutes is not very high because there are not many products that can do what a computer or laptop can provide. The only substitutes are portable and handheld devices. They are competing on price and trying to increase value based on service and customization. The major substitutes for computers are PDA's and cell phones for contacting other people. In terms of writing documents, portable devices are substitutes. Digital Cameras - In the digital camera industry, there are two major substitutes. The first one is the film camera, and the other one is the cell phone camera. Unfortunately, there is not much interest in film cameras because of outdates technology and cell phone cameras don't provide the same quality and storage as digital cameras.

Samsung 10 HD TV - Television have recently become very popular with the new HD technology. The substitutes for TV's are computers and laptops. For people who travel a lot, prefer to watch movies and favorite shows on their laptops because they can download or stream popular tv shows and movies from online sites. Furthermore, another substitute for TVs are going to the movies or watching videos on your Ipod. Because of the limited availability and space on Ipods and the smaller size of a laptop screen, TVs will still stay popular and be high in demand.

The threat of Suppliers For companies, the threat of suppliers can be high depending on how many products they are selling and how differentiated they are. For example, in the HD and Blue ray competition, HD lost because the suppliers determined that they would go with blue ray instead of HD because of partnerships. Creating good supply chain management and a long term personal relationship with suppliers is very important for electronics companies. If they buy in bulks and have long lasting partnerships, they will reduce their costs by being more efficient in their SCM. Many suppliers work on integration and material-substitution projects to drive down costs. Technology has a very important factor in suppliers. By creating partnerships, suppliers can choose who they want to supply and what price to take. If they create a good that is very new and trendy, they can chose to supply to companies that will provide them with easier SCM and better price. Suppliers also want companies who they know will buy a lot in the long term, they want to create partnerships with companies to earn profits in the long run. Although because of price wars, suppliers are more and more forced to cut their prices as their customers can go to other suppliers who may offer better components at a lower cost. Suppliers are also starting to lose power because more and more firms are starting to produce their own products and components

Samsung 11 in-house. The threat of Buyers The threat of buyers is very huge. The customer is the most important factor in the buying process. They decide where to buy the product and how much they want to pay for it. Most of the electronic entertainment products are created from wants, not needs, therefore the customer does not have to buy the product to survive. They can chose what to buy and from which company. Therefore it is important for the companies to create value and set a price that the customer is willing to pay for. In the consumer electronic industry, there are many products with different prices and different features. It is up to the customer to decide what features they need. Since there are a lot of buyers in the industry, there is not a large threat, but companies have to keep the buyer in mind and listen to what they want. Since the products are not very standard and differentiated, there is a lower threat of buyers. Furthermore, when the buyers are not earning significant economic profits, buyers may be very sensitive to costs and look for the lowest possible cost and highest possible quality of a product.

Samsung 12 Product/Market Positioning As mentioned earlier, Samsung has positioned themselves as wide variety products, good quality-affordable priced company. There are many companies competing in the same industry like Apple with its mp3 and computer products, Canon with its camera systems and Sony with music entertainment and HD TV. Samsung is one of the largest electronics and IT companies. According to Fortune, they have made themselves noticeable by being ranked second company in their industry (Electronics, electrical equipment) with a fortune 500 rank of 46 (Fortune, 2007). We have chosen to position Samsung's products in 5 different categories, because they have different position in each category. Products & Market Positioning Diagram

High Prices

LCD

Mobile

HD TV/DVD

Digital Appliance

Low Perceive Value

High Perceive Value

Semi Conductor

Low Prices

Samsung 13

Internal (VRIO)

Table 1-1. Samsungs VRIO Framework SAMSUNGS V.R.I.O FRAMEWORK Resources

Yes Yes Yes

No No No

Yes No No

No Yes Yes

Normal Normal Normal

Strength Strength Strength

Value Since 1969 through 2005, Samsung has become a large consumer electronic company that produces semiconductors, digital media, telecom, LCD and digital appliance products. Samsung achieved success from five different categories from their resources which it can divide into three parts; technology, human resource and corporate strategy. First, Samsung has innovative technology in R&D market. Samsung did not have technology to produce DRAM in 1980s; they bought technology from another company to manufacture DRAM. However, Samsung can produce DRAM based on that technology and established two teams for design DRAM (Barney, 2008:PC2-8). Second, Samsung has great human resource and policies. Samsung does not care about employees background; they only hire employees who have abilities. Therefore, Samsung can have employees from many other countries and talents people. Also, they tried to develop employees skills through place program. Samsung tried to hire and develop quality employees

Samsung 14 and rewarded those employees. Third, Samsungs corporate strategies bring success in their business. In 1980s, Samsung had to make important decision of DRAM style. There were two different DRAM styles and Samsungs Chairman decided to produce DRAM with stacking style which brings success to Samsung (Barney, 2008: PC2-8). Samsung could lose DRAM market depending on that decision, because both DRAM style were popular and it is hard to choose which style is better than the other. Another strategic challenge for Samsung was having partnership with Chinese DRAM Company in 2005. This Chinese company followed what Samsung did in 1980s, they expend their market and this was threat for Samsung. Became partner with Chinese company, Samsung would have access to China DRAM market in the future (Barney, 2008:PC2-20). Rarity Each company has their own resources, it can be something that other companies already have or are unique. Samsungs resources are valuable but many other companies have technology, human resource and corporate strategy. A company can acquire technology if they have enough investment, also a company can have good employees depend on their flexibility. Once a company have quality employees, those people will lead the company to success way and provide strategic decisions. Imitability Except technology, human resource and strategy does not costly to imitate; also, Samsung bought the technology from other company at the beginning. Therefore, all of resources are imitable for competitors. Currently, Samsung is facing Chinese DRAM Company because of imitability of their resource.

Samsung 15 Organization Samsung has developed DRAM technology in better ways but they brought technology from another company, but Samsung has built own human resources and polices that supports corporate strategy. Competitive and Economic Implication From Table 1-1, two valuable resources that were exploited by the organization represent that Samsung is a strong company. Overall, Samsung has a competitive parity and normal economic scale; all of resources work as competitive advantage for Samsung. Cost leadership Since Samsung bought DRAM technology from other company, they has develop and come up with better technology. Samsung has introduced many products with low price and high technology products. High technology requires high cost; Samsung tried to reduce cost by having main R&D facility and fab line in South Korean instead of having many branches in other countries (Barney, 2008:PC2-17). These cost leadership came from Samsung policy, which is We will devote out human resources and technologies to create superior products and services thereby contributing to a better global society (Samsung, N/A). Products differentiation Samsung has tried to differentiate their products from other companies based on three categories, which are product attributes, firm-customer relationships and firm linkages. There are many competitors that produce similar products as Samsung; Samsung has to deal with competitors in five different industries. Samsung add different features into their products to differentiate from others. For example, adding pod cast feature into headset in order to provide more function fro customers

Samsung 16 (Samsung to put podcast feature on handsets, 2007). Feature difference attracts more customers and Samsung trying to differentiate their products by present new features. Samsung was not popular brand, but they became No.1 TV market in 2007 (Moon, 2008). Currently, Samsung is a well known brand, they have reputation from customers and provide quality products to customers. Also, Samsung opened showroom in the New York City to create loyalty with customers. Samsung differentiate their products by acquiring other companies. Samsung Electronics has acquired Phoenix SecureCore in 2007, in order to produce firmware for their electronic devices (SAMSUNG LICENSES PHOENIX SECURECORE, 2007). Also, use their supply chain management system to forecast trends and sales, therefore, Samsung can prepare for next strategies (Moon, 2008).

Samsung 17 Major Issue

Issue: Competition is the causes of Samsung profits and market share declines. Increased competition means decrease in Samsungs profits and market share because it generates oversupply and decrease in sales. Oversupply is due to increase in supply while sales are decreasing. This happens because more than one company is offering the same product, therefore more selection to consumer in which creates demand in lower prices. Competition affects Samsung market share because new entrants will segregate the market by offering lower cost products with variety functions (Barney & Hesterly, 2008, PC 2-1~21).

Solutions

Solution # 1 Samsung needs to redesign itself to make innovative electronics. If Samsung wants to be the leading company within electronic industry, they need to differentiate their products enough from their competitors. It is not that easy to be the top competitor in the electronics industry. However, in order to continue to attract new and current customers Samsung needs to bring something new and improved to the market. One of the suggestions is to introduce a new electronic roll-up Go board. That would be a fantastic idea for the company, because not many Samsungs competitors are producing this kind of product. Currently, Samsung is one of the top sellers and most recognized brand for their cell phones around the world. Introducing a new feature for cell phone such as TV, phone banking and translator would be a great benefit for them, especially, if they brought this product to their Chinese market, since innovated cell phones are really popular there. If they continue to upgrade

Samsung 18 and improve their electronics they would have advantage over their competitors. By differentiating their products from their competitors, they would be able to continue to be the top leading company in the electronic industry.

Solution #2 Samsung needs to go globally into new and different markets. Samsung is currently one of the leading businesses in the electronic industry. In order for the company to stay competitive, they need to go to the different global markets and try to introduce their products to new demographics. When entering into a new market such as India they would go as transactional and establish joint ventures in the country. Samsung should take advantage of local skills and try to produce their products in that country. That way, it would cost them less and would bring a new market at the same time. Memory chips are not doing so well in the U.S due to competition and other problems. As is mentioned in the news.zdnet.com, Samsung Electronics it shut down six of its chip production lines after a power cut at a plant near Seoul, prompting expectations of tighter supply and a rise in prices. Introducing this product to a new country such as India after upgrading with more memory, they would be able to attract a new market for it. Also, after entering into the new global market, they should introduce the Samsung touch screen and other features for cell phones; since Apple did not introduce those phones worldwide, there would be a benefit to bringing them there before Apple does.

Samsung 19 Trade-Offs To properly examine the varying benefits of both solutions a tradeoff chart is used to visually represent the comparison. The chart is below and a comparison analysis follows the tradeoff chart to explain the more complex ideas.

Table 1-2A. Comparison of Samsung Strategic Options Redesign Low High High Med Med Med Med Med High Global High Low Med High High High High High High

Long-Term Cost Short-Term Cost Product Differentiation Long-Term Growth International Development Pressure on Competition Profit Generation Potential For Failure Brand Name Development

Long-term and short-term costs are a generalized guesstimate of the finances involved in setting up either solution. Long-term costs will be higher in the Global solution because foreign direct investment is necessary. The purchase of PP&E is required as well as recruiting talent in the foreign country and setting up a brand name in a new market. Short-term costs are low because a build up of resources is required and only the planning and regulation discovery costs will be incurred in the short term. Short-term costs will be high because new design plans and machinery purchases are necessary. A new culture will need to be established to spur on continued development and innovation. Long-term costs should be low if the culture is built properly and only requires maintenance costs. Product differentiation should be very high under the Redesign solution as that is its aim. Redesign would aim to improve upon previous designs or scrap them in hopes of creating new

Samsung 20 products with added value. Global solution should increase product differentiation by unlocking new and foreign talent. Differentiation will naturally occur when an influx of foreign design talent enters Samsungs ranks. Long-term growth is highest under the Global solution due to its entry into foreign markets and tapping foreign design and manufacturing talent. Redesign solution is only medium due to only design increases and not capacity increases. International development is greatest under Global due to the physical presence into new markets such as India and China. Redesign is medium because the focus is not international development it would merely be a by-product. The new releases such as touch phones into the Chinese market keep the idea of international development afloat. Pressure on competition will be highest under the Global solution because foreign competition will now deal with the physical presence of Samsung. When foreign competition peers over their shoulder they will see Samsung producing superior products at a faster pace. Pressure on competition will be high as the globalization of Samsung draws domestic and foreign attention. Competition and investors will see Samsung positioning itself to pass its competition. The redesign solution will place design and innovation pressure on its competition in the same manner as Apple. Potential for failure is the highest under the global solution due to the sheer amount of foreign investment involved. If the solution fails to deliver the losses will very large, PP&E will be abandoned, and brand name will be tarnished. Redesign solution will experience failure if new designs and products are rejected. Brand name will suffer as a result and the cost would necessarily be a direct cost but a loss felt on the bottom line. Brand name development is high for both solutions. Redesign if successful will give the

Samsung 21 appearance as innovative and cutting edge. Perceived value will increase as brand name equity increases. Global solution will increase brand name by entering new markets and tapping new talent. New talent will most likely lead to innovation and creativity thus creating the same benefits as Redesign solution.

Samsung 22 Recommendation The proposed benefits of the Global solution are far too great to bypass. The Global solution offers a physical presence and greater opportunity for talent buildup, and brand name establishment in foreign markets. The trade-off table shows the decided advantage the Global solution presents

Table 1-2B. Comparison of Samsung Strategic Options Redesign Low High High Med Med Med Med Med High Global High Low Med High High High High High High

Long-Term Cost Short-Term Cost Product Differentiation Long-Term Growth International Development Pressure on Competition Profit Generation Potential For Failure Brand Name Development

Global solution has many advantages in developing growth, pressure on competition, and international development. The drawbacks for employing this strategy are the high costs involved and the potential for failure. If Samsung does not increase the perceived value of their products but incurs high costs in the process further market share losses will follow. The Redesign solution offers high potential for success if the culture of innovation can be successfully established. New designs and product offerings can improve sales in the short and long term. The drawback to this strategy is the culture for innovation is essential and difficult to establish. Furthermore, long term growth capacity is not as great as the Global strategy due to only culture change not accompanies by physical growth. Design and manufacturing facilities in the two most heavily populated countries will

Samsung 23 establish brand name and loyalty among the newly empowered citizens of China and India. A price tag cannot be placed on the tremendous value of brand loyalty in countries that have strict and loyalist family structures. The upside of establishing brand name, brand loyalty, and employing the best and brightest a country offers is enough to push the Global solution past the Redesign solution.

Competitive Advantage Innovation is Samsung only way to achieve sustainable and competitive advantage. In today digital era, speed is the essential competitive as new technologies constantly introduced to the market. To remain at the forefront of the digital market, Samsung spend lots of effort in expanding their R&D center. Each year the company invests approximate of 9% of their sales revenue into R&D activities (Samsung, 2008). As of today Samsung had approximate 17 R&D centers operates overseas. The R&D focuses on exploring the possible and introduces new products to meet the supply demand of consumers. Besides R&D, brand is another competitive advantage of Samsung. Samsung build it brand images by rapidly take initiative in executing change and innovation with a sense of crisis, and constantly strive to innovate (Samsung, 2008). As a result, the Brand Keys Customer Loyalty Engagement Index recognized Samsung for number one in customer loyalty in the cell phone category for seven years in a row.

Managerial Implication

Awareness of Foreign Competition

Samsung 24 When competing in a global environment firms need to pay strict attention foreign competition build up. Samsung should have recognized the potential for Chinese threat many years ago. The buildup of Chinese manufacturing prowess, design capabilities, and heavy government aid and involvement has not been a 2 or 3 year spurt. Chinese build-up began in the early 90s and Samsung should have recognized the long-term potential for threats and reacted accordingly. Samsung now has the ability to enter into the new China in India. Samsung should recognize its faults and make its presence know and soak up all the technical talent available from burgeoning India.

Lead by Example Samsung is a market leader or major market share holder in its many segments. Samsung leads but does not lead a pace that cannot be followed or easily copied. For an example, Apple leads the digital music player market at a pace that its competitors cannot follow. Apple passed its competition through its competitive advantage; innovation. Company culture at Apple creates the pace of innovation and new product designs and introductions. Samsung needs to lead the market through an innovative competitive advantage to push a pace not easily copied.

Samsung 25 Foreign Talent Investment Samsung has encountered foreign competition because foreign competition has acquired its own domestic talent. Samsung should invest heavily into establishing its brand name in foreign countries to attract talent. The Global solution expressed is an excellent example of how to physically set up property and plant to attract talent. A physical presence in a country will plenty of bright young people will attract many of the best and brightest. Foreign talent is often of the same quality as domestic talent and often wages are significantly less. As future managers increase awareness of foreign competition and talent they will be better aligned to take advantage of opportunities.

Conclusion Samsung provides the electronics market with a full range of great consumer products, ranging from mobile devices to home appliances. They have proved themselves an innovative and efficient company that strives to provide their customers with the newest products for a great price. With their wide range of products they have generated a powerful supply of products. The imitability of their resource that Samsung is facing from Chinese DRAM Company has to make Samsung think of new ways to stay on top of the market and stay profitable in the long run. In order to secure future success in a very competitive market, they need to focus on being innovative and expand their products in to new markets and countries. Samsung should also invest heavily into establishing its brand name in foreign countries to attract talent. Applying all of these recommendations and suggestions will generate a better future for Samsung and will make them be able to compete with other companies in the industry.

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