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Samsung Electronics: Case Study: Samsung Electronics Case

994 Words4 Pages

2. Case: Samsung Electronics
(a) What kind of competitive advantage are the Chinese entrants seeking? How close are they to achieving that?
The Chinese entrants were seeking to base their competitive advantage on being low cost and by offering older generation products. These entrants had little difficulty in raising money from local and international sources and with their access to talented local engineers, the Chinese had high potential to build the skill needed to compete with Samsung in coming years. However, at the time, the Chinese entrants were not looking to compete with new types of cutting edge memory chip as they lacked the necessary organizational experience and knowledge required to master the design and production process. With the amount of resources the Chinese entrants had attracted, they were looking to compete on the basis of price by offering products at low prices and grow their market share at the expense of profitability exactly what Samsung did 20 years ago. These Chinese entrants also enjoyed government support as the government was committed to subsidize all infrastructure needs, provide cheap land and utilities, engineering talent, tax incentives and other essential resources to those companies who wanted to build semiconductor facility with a Chinese partner, thereby paving the roads for Chinese companies to flourish in the semiconductor industry.
By 2010, China was expected to become the second largest purchaser of semiconductors, after the

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