SAMSUNG ELECTRONICS COMPANY LTD.
Samsung Group (Samsung) is a South Korea conglomerate with diversified operations in various industries including electronics, financial services, chemicals and infrastructures. It has operations around the world. Established in 1969, Samsung Electronics Company Ltd (SEC) celebrated its 40th anniversary in 2009. It was ranked number 1 for sales among global information technology companies for the first time. With sales of KRW 165 trillion and operating profits of KRW 16.2 trillion, it showed that the growth rate of SEC and placed SEC as an important player in the global electronics industry.
Why does Samsung trade internationally?
Samsung Electronics operates in a highly competitive business environment and faces intense competition from a growing number of competitors, many of whom have strong consumer brand equity such as LG International, Whirlpool, Motorola, Nokia, and Sony. Competition in the global market is based on a number of factors including performance, innovation, product features, quality, cost, selling price, distribution, and financial incentives. In the past, Samsung’s competitors, especially global competitors with low-cost sources of supply, have aggressively priced their products and introduced new products in order to increase market share. Such an intense competition faced by the group threatens to erode its market share. 1a.To seek higher expected rate of return
Through international portfolio, the managers of Samsung electronics can choose from a larger amount of assets than the domestic-only asset allocations. Therefore, the internationally diversified portfolios can have a higher expected rate of return, and have a lower level of portfolio risks.
Advantages of internationally trade
1b.Growing a new market:
In the early years, SEC realized only internalization could improve its competitive advantage. To earn its place as today, SEC had to take some time to study electronics penetration into a new market to suit customers’ needs. For instance, in 2003, the Dallas-based vendor, a subsidiary of Korea’s Samsung Electronics Company Ltd., had decided to push the industry into new markets and increase brand value in the United States. SEC manufactures and distributes consumer electronics, communication products, semiconductor products and home appliances. The diversified operations enable SEC to attract an extended customer base and reduce its business risks.
The company has a strong market position in most of its product segments. Samsung Electronics, Samsung’s subsidiary, is one of the leading players in semiconductor, telecommunication, digital media and technology of digital convergence, handset and smartphone market. It is the global leader in monitors and TVs, and is the world's largest manufacturer of DRAM, SRAM and flash memory. According to DisplaySearch, the company is the top player in the global TV market with an almost 25% market share in flat-panel televisions category. For example: Smartphone market in India is one of the least penetration among countries in Asia / Pacific. Samsung has the presence powerful at Indian market and can use opportunity this to expand his business. 1b. Growing a diversify global business
In addition to the robust market position, SEC is looking to diversify its portfolio to create a more balanced business strategy capable of delivering a sustainable sales growth. SEC is one of leading players in the consumer electronics industry. It will provide them with a great competitive advantage and provide opportunities for synergy and with the substantial increased in investment in higher-growth in markets like American and be more advantageous to their business plan.
The company also managed to achieve positive market outlook for global consumer electronics. The global consumer electronics industry has witnessed a significant growth in the recent time. As per...
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