What recommendation would you make to Chairman Lee regarding Samsung`s response to the threat of large-scale Chinese entry as of 2014?
Samsung Electronics have
dominated the DRAM market since in the 1980s. Their advantage and core
competencies derive from its work conditions where their weekly schedule
consisted of Monday-Tuesday-Wednesday-Thursday-Friday-Friday-Friday[1].
Also, unlike Japanese, German & US companies, they can achieve their goals
through intensive capital supply and incisive R&D. But their core
competencies have one weakness, ‘inimitable’. Core competencies with the value
& rareness can give companies a strength but just temporarily without
inimitability. Chinese entry with more larger capital supply may harm Samsung
Electronics`s profit and finally will catch up Samsung`s technology. Also they
have abundant demand for DRAM made by Chinese company and it`ll make Chinese
company to easily compete with Samsung Electronics`s chicken game. So, how will
it be possible to response to the threat of Chinese entry? It should make the
entry barrier in DRAM market.
Apple`s innovation is not
derived from its intensive capital supply or incessant working labor. They just
re-created the market structure and shouted to the consumer to follow. When
nobody thought of the personal computer, Apple made it. When every company thought
of analogue cell phone market, they pioneered the smart phone market. The
memory business including DRAM market was originally designed by the Intel
which now don`t participate in the DRAM market. Intel didn`t created the DRAM
in optimal way but their own way. And also Samsung Electronics can also do in
another way. Applicable but more efficient or market-breaking innovation can be
attainable with the new DRAM market pioneering.
Creating the entry barrier
through developing the new market have weaknesses. First, developing also
possible in another companies including Chinese. So, Samsung Electronics`s
should use its whole competencies to pioneering. Second, if they failed to make
the new market it`ll severely damage the Samsung Electronics`s profit. Sony
failed to make VCR market monopolistic to their way. And it also harmed their
profit with their reputation as a leading electronics company.
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