– Google is first and foremost a business and its primary goal is to make money. But the company also should take into account the reputation factors that could have negative effect because of moving to China. They had their reputation on stake. Their main purpose is to provide information to people but they went against this principle and violated the human right for freedom of speech. 2) Companies in China (Baidu, Sougou, 360 search) – Google is the most popular search engine and is given first priority in searching than any other search engine, so there will be high competition between the rival companies which in return will decrease their market value and may have to face some loses.
South Korean government will try providing subsidy to Samsung product to keep GDP. Apple and Samsung companies they are very competitive to each other, if one of the companies is in hard situation, it makes benefit to the anther company. This concept is called cross elasticity of demand. This term can be defined as “a calculation of the amount of demand for a product changes when there is change in price of another product”. .
COST STRUCTURE OF SAMSUNG Low cost structure of Samsung and high responsiveness to economic events has made Samsung more competitive. For example, initially Samsung focused more on volume and domination on market rather than increasing profitability. However, in 1990s, during the Asian financial crisis, Samsung cut costs and reemphasized product quality and manufacturing flexibility, which allowed its consumer electronics move from project phase to store shelves within next six months. Under the resources-based view of strategic management, effective resources available to a firm, as well as the competency of a firm is responsible in affecting competitive advantage received by a firm. The competitive advantage received by a firm will likely
External Market Environment The economic environment of the external market deals with Samsung having the largest market share of Android smartphones. The reduced purchasing power of buyers limits the expansion of Samsung to further areas. They must stick with solutions that continue to earn profits instead of experimenting as much. Samsung operates within the macroeconomic environment allowing it to change its strategies. Samsung pushes to expand to new markets and develop new ideas to more developed countries with more spending money.
Kotler pays high importance to the factor “culture” in his “Model of Buyer Behavior” (Sahney, 2013). Unlike the Western consumption culture, Chinese have a culture that tends to be emphatic of luxury. Literature allows the assumption that in fact it seems significantly easier for luxury brands to be sold in China than ordinary brands (Tsai, 2005). This is something that most auto marketers in China seem to have failed to understand; and in turn has evidentially negatively affected their brand penetration and total sales in the country (Li, Lai, Kline, & Wang,
In this way, the sale of products in world-wide market will increase. • Increased labor costs in China could take away the cost advantage of some Apple products. • Decaying middle-class incomes in some developed countries, including the United States, could shrink the potential market for higher-end consumer goods such as those marketed by Apple. • A strong U.S. dollar could increase exchange rates, making it more expensive for Apple to do business in key markets like Europe and
Since 1985, an export tax rebate policy was executed to enhance the competitiveness of China as an export country. In addition to the originally low-priced land, and the cheap labor force, because of the large population, China becomes the ideal place of building factories. Therefore, the foreign companies minimized their cost while avoided pollution problems could be brought by the production process. Now, the factories’ negative influence on environment started to shown as the form of air
These people might be looking for the following benefits:- 1. Self-directed pleasure: the hedonic experiences of using the product for one’s own pleasure 2. Self-gift giving: the use of a product for its utility that may enhance one’s emotions 3. Congruity with internal self: the brand image is the reflection of one’s own personality Casaburi (Casaburi 2005) in his paper about the influence of culture on luxury products talks about the difference in motivation for the people in different culture. In emerging economy like China which is seeing a growth in western luxury products recently, people feel that luxury brand is something that gives them social status and acceptance in elitist groups.
The company’s product life cycle is in the saturation phase and it is going towards decline. Due to this company has also lost its profit share in the global market. The company has decided to freeze the wages of Korean employees on account of profit fall in the mobile market (J. Lee 2015). Slowly-2 company external challenges are impacting the internal policies and decision making of the company. China and India are two big markets.
The Galaxy S6 is $900 and the S7 is $1,150 according to Samsung’s website. Samsung is running a Competition based pricing strategy ad they have their prices around where the main competitor Apple is at, but they try to add more value to their offering, therefore a little value-based pricing. The price could be impacted by the products life cycle (ASSUMPTION) i.e. the Galaxy S series phones are now within the growth stage as they have taken over more phone sales than Apple whilst the image of the brand Samsung is growing. The price is definitely affected by competition, as it is competing with the top brand Apple, who is well known for higher