Samsung in China
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Environmental Analysis
External Environment
Chinese Market
still socialist economy
huge gap between the stated plans and the actual ability of government to manage and control the economy
tremendous amount of economic interaction took place outside the governmentЎ¦s formal economic plan
many smugglings and piracies
regional blockades
over-employment problem
Chinese color TV Market
full production capacity in demand
principal battleground
high competition
Japanese firms: high-end market. Increasing production bases
Domestic Firms: low-end market. But they were less competitive in large screen TV.
small color TV market was shrinking
large market size of these product lines facilitated the fast achievement of cost reduction(economy of the scale, learning effect)
Consumer analysis
only 41% of households had color TV
80% of urban, 28% of rural
Low-end market is not a viable long-term. But overall market was still expanding.
Buying power: expanding both high-ends and low-ends
Tendency that first image of a product lasted long in the eyes of the consumer.
the reason for differentiation needed focusing on high-ends
consumer preference
Urban- brand name, functionality were important factors.
Rural- reasonable quality and low price were preferred.
High protected market: too much tariff cost
localization needed
Domestic (Korean) Market
Deteriorating of competitive advantage: rising the labor cost
Korean government policy: supportive of big business
getting worse of Korean market
Losing the M/S in the U.S. and no longer competitive in the low-end product
need to change the strategy focusing on high-end, high-tech
Liberalization of Korean market
Foreign firms were permitted to sell their product directly
More competitive in Domestic market, losing the domestic M/S
Samsung had to expand the foreign market.
Internal Environment
Experience in the U.S.
Set up the subsidiary there in 1979
Focusing on the low-end market segment based on competitive labor cost in Korea because of large demand and low competition base, and low barrier in the U.S.

Samsung produced a few of the most popular sizes TV for cost reduction through economies of scale and the experience curve.
Dual brand policy: adopting Ў§buyer brand name(large retailers or OEM)ЎЁ mostly but trying to build its own brand image
Establishing a production subsidiary in the U.S. because of trade barrier
Policy of Japanese firms: targeting high-ends for differentiation through brand name recognition
Matsushita: 4% of M/S in 1995 but could be high-price, higher profit
Policy of Samsung: still pricing strategy even though it had good quality of product
3% of M/S, but much less

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Korean Government Policy And Chinese Market. (July 14, 2021). Retrieved from https://www.freeessays.education/korean-government-policy-and-chinese-market-essay/