Preview

An Industry Analysis of Samsung

Good Essays
Open Document
Open Document
1932 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
An Industry Analysis of Samsung
Question 1) How attractive is Samsung’s primary (core) industry? Conduct an industry analysis.
Five Forces Model: 1. Barriers to Entry
Because of the extremely intricate and sophisticated nature of manufacturing semiconductors, a competitor should expect high initial capital requirements to build facilities needed for production. Cost to build a new semiconductor fab has gone up from $200 million in 1985 to $3 Billion in 2004. Incumbent companies have capabilities to design newer generations of semiconductors with greater amounts of memory and processing abilities that make older generations obsolete. Older generations tend to drop half their amount in price one year after a new model is reduced (exhibit 6). The United States and Taiwan governments restricted domestic producers from shipping semiconductor equipment to China. China’s government began to subsidize all semiconductor infrastructural needs to local producers in hope of making China competitive in the market. Micron was granted amnesty in an April 2005 price fixing charge against Hynix, Infineon, and Samsung for bringing the alleged wrong doing to the US Department of Justice. This type of coordination is prevalent among firms in an Oligopoly, in which Barriers to Entry are categorized as high. 2. The Power of Suppliers
With each generation of semiconductor equipment, the technology grew more complex and the number of suppliers became more concentrated. Although these suppliers are concentrated and hold a lot power on the raw materials industry, they lack the incumbent specialization knowledge to compete with incumbent firms. Samsung spent billions in research to develop their current stacking strategy to fit more cells into a semiconductor chip; technology suppliers cannot compete with. Applied Materials, Tokyo Electron, and ASML dominated key segments of the equipment market. Suppliers of memory raw materials would provide discounts of up to 5% for high volume buyers. This shows

You May Also Find These Documents Helpful

  • Good Essays

    With the rapid evolution of telephony in the past few years, many wireless chipset manufacturing plants have confronted challenges adapting to the emerging market trends. In 2009, MediaTek took the fabless semiconductor market by surprise, capitalizing on roughly a third of the sales of the entire market. Although, as the marketplace evolved, so did technological innovation in the field, leaving Mr. Tsai, the CEO of MediaTek, with a great dilemma. Tsai confronts great challenges in attracting tier-one companies (I.E Nokia, Motorola, or Samsung) to purchase MediaTek’s product, due to major competitors in the industry. Currently, MediaTek is indirectly a mass supplier of chipsets to the Shanzhai (counterfeit) market. Tsai is sceptical of the company’s future in this market segment due to its uncertain characteristics and unforeseeable evolution, and is thus contemplating shifting to the more rigid market segment; tier-one brands.…

    • 1566 Words
    • 6 Pages
    Good Essays
  • Good Essays

    Samsung does have competitive advantage on both ends of the “value stick”. At the top, Samsung is able to demand higher prices for its products, while also driving lower production costs by using various innovations and efficiencies.…

    • 1182 Words
    • 5 Pages
    Good Essays
  • Powerful Essays

    Recent quality related issues have put Samsung Electronics, one of the world’s largest technology companies at risk. These quality concerns, spiked through recent recalls and external complaints, have generated a flow of bad news coming to the desk of quality director Kevin Sarni. The issues most commonly found within the complaints related to display issues, customer service support, faulty electric components, audio, and safety. Of the main issues, display and customer service support appeared to be the most detrimental. Once the patterns and themes became visible, Samsung and its quality director Kevin Sarni were challenged with immediately identifying root causes. This was not an easy task, although with the help of a Six Sigma Black Belt consultant, Sarni was able to begin further qualitative analysis to determine where action is necessary.…

    • 1454 Words
    • 6 Pages
    Powerful Essays
  • Good Essays

    Cisco Case Study

    • 551 Words
    • 3 Pages

    | Threats * Increasing competition * Price centered competition from competitors in Asia * Risk of inventory obsolescence due to rapid technological advances…

    • 551 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    Intel Case

    • 585 Words
    • 3 Pages

    Japanese larger firms entered in to DRAM business as the demand for DRAMs were huge. And the multibillion dollar Japanese companies like Mitsubishi and Hitachi were able produce more effectively than Intel, which directly impact the cost and these companies were well ahead of Intel in quality also. The close relationship with equipment manufactures helped Japanese DRAM producers to improve their manufacturing process to improve the yield. Because of the large yield difference between Intel and Japanese companies, Intel started to lose the market. Intel’s process of new product introduction was slower than its competitors, such as TI or Mostek. According to Moore, Intel was more than generation behind in developing. Overall because of these issues Intel’s market share declined to a very low position.…

    • 585 Words
    • 3 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Samsung Electronics

    • 838 Words
    • 4 Pages

    To focus on the global memory chip industry, the primary threat facing the firm contained suppliers and price-conscious buyer. Based on the Porter’s Five Forces Model, the powerful suppliers can squeeze the focal firm, the powerful buyers can lower profit the focal firm by demanding lower price and higher levels of quality and service. From the case, with different semiconductor equipment, the technology become more complex and the number of suppliers became more intensive. Suppliers of raw materials would give discount of up to 5% for high-volume buyers. OEMs were the largest buyers. In the global PC market in 2005, because rivalry between PC producers was intense, there was no one controlling more than 20%. Also the memory industry had high entry barriers. Companies needed large amounts of capital investment and technology support. At the beginning of Korea’s semiconductor industry in 1974, without strong financing and proprietary technology, the start-up ran into financial difficulties.…

    • 838 Words
    • 4 Pages
    Satisfactory Essays
  • Powerful Essays

    Samsung Case Study

    • 2712 Words
    • 11 Pages

    Samsung has grown to become of the world’s leading companies with a brand value estimated at US$18 billion and over 263,000 employees in 68 countries as of 2007. Since its beginning in 1938, Samsung has developed itself with a strong emphasis on a core set of values, later formalised as the “Single Samsung” spirit. Despite its impressive financial success, management is concerned that the unique culture of Samsung is under threat from within. This is due to a shift in the value orientation of a younger generation of employees, who identify less with traditional practices and favour more open and egalitarian human resource policies.…

    • 2712 Words
    • 11 Pages
    Powerful Essays
  • Powerful Essays

    Porter (2008) asserts that in every industry there are five forces forming the competitive nature of the industry, and understanding how they interact provides a firm with an opportunity to build an entry strategy that can improve its competitiveness and profits (p. 80). These forces are threat of new entrants, threat of substitutes, bargaining power of suppliers, bargaining power of buyers, and intensity of rivalry, and they must be assessed for each industry on an individual basis. The strength and weaknesses of each of these forces indicates the attractiveness of the industry and therefore, must be continuously evaluated not only from an industry perspective, but even more so, by each manufacturer/firm on an individual basis.…

    • 2231 Words
    • 9 Pages
    Powerful Essays
  • Satisfactory Essays

    Intel Swot Analysis

    • 693 Words
    • 3 Pages

    For the large semiconductor companies like Intel or AMD, suppliers have lack of selling power because semiconductor companies have hundreds of suppliers. Intel’s raw materials like silicon, semiconductors, and others can be purchased from a litany of manufacturers, thus affording the Intel a great deal of buyer power in selecting with whom to do business.…

    • 693 Words
    • 3 Pages
    Satisfactory Essays
  • Powerful Essays

    Micron, a top competitor in the Semiconductor-Memory Chip Industry, was founded in 1978 by twins Joe and Ward Parkinson and colleague Doug Pitman in the basement of a dentist’s office. Certainly what can be regarded to as humble beginnings, has now transformed into a company at the forefront of the semiconductor field, going public in 1984. Micron has a Market Capitalization of $5 B. It makes DRAM (Dynamic Random Access Memory), NAND Flash and other memory technologies. The company sells to customers in networking and storage, consumer electronics, and mobile telecommunications, but the bulk of its sales are in the computer market. Intel and Hewlett-Packard are its leading customers. Micron’s mission statement is “Be the most efficient and innovative global provider of semiconductor solutions.” Mark Durcan, the…

    • 9390 Words
    • 38 Pages
    Powerful Essays
  • Satisfactory Essays

    SAMSUNGSAMSUNG-THE MAKING OF GLOBAL BRAND Presented By:SIMRANJEET (50802063) ROHIT CHANDRA(50802056) LMT SOM CONTENTS       Background of the Samsung Mission statement (Aim & Goal) Objective Product Initiatives Advertising & Promotional Strategies SWOT Analysis SAMSUNG ELECTRONICS« Samsung was established in 1969 as the flagship company of SAMSUNG CORPORATION  It was the third largest player in the Korean electronics market after LG and Daewoo …

    • 896 Words
    • 4 Pages
    Satisfactory Essays
  • Powerful Essays

    Samsung SECA has successfully repositioned itself from an unremarkable producer of low-to-mid-market customer electronics and computer components into a provider of stylish, leading-edge consumer electronics due to its shift towards digital technology.…

    • 1427 Words
    • 6 Pages
    Powerful Essays
  • Powerful Essays

    The five dimensions of Entrepreneurial Orientation are key factors that firm’s practice in order to be successful in an industry. These five factors consist of autonomy, innovativeness, proactiveness, competitive aggressiveness, and risk taking. The first dimension, autonomy, describes how an independent action by a person or a team working on project has a vision or concept for a business and develops the plan and carries it out, onto completion. The second dimension is innovativeness in which a firm or business must be willing to bring a new product into a market through such means as experimentation and imaginative processes; thereby creating these new products or services and laying a new production line process on how these products are entered into the market. This process is the most difficult to achieve due to the fact that creativity and technology must work together in order to be successful. The third factor is proactiveness, where firms capitalize on new opportunities by monitoring trends of their current customers and anticipated the needs and wants of their customer in order to catch the market at the right time. This is only done when a company is proactive and is adaptive to changes in markets. The fourth dimension is competitive aggressiveness; a firm has an concentrated attempt to oust other companies in their own industry by using tactics such as combative posture or an aggressive response to improve one’s own companies position in a market. This can be also used to overcome a threat in one’s marketplace. The fifth and last factor is risk taking, which involves a firm taking a chance on a project or venture without knowing the probable outcomes of their action. These risks may require substantial resource and capital to move forward with a venture and can lead to loosing the firm large amounts of capital if it fails. Jong Yong Yun incorporated all five dimensions of entrepreneurial orientation when he…

    • 1316 Words
    • 6 Pages
    Powerful Essays
  • Powerful Essays

    By examining figure 2 (semiconductor equipment spending by geographic region) it is obvious that the Asia-Pacific using on Semiconductor supplies is expanding year on year, and outpaced Europe's use marginally in the year 2000, and is relied upon to keep on developing throughout the following couple of years. With the end goal K&S should keep on holding its overwhelming position in the business it must research conceivable chances and guarantee that their inventory network is dexterous enough to have the ability to meet client prerequisites in this developing business sector.…

    • 2436 Words
    • 10 Pages
    Powerful Essays
  • Good Essays

    The Japan Polysilicon market has been growing at a negative CAGR of 4.6% from 2008 to 2013 in terms of revenue. The revenue generated by the polysilicon market in Japan has decreased from USD ~ million in 2008 to USD ~ million in 2013. The major reason responsible for a negative growth rate especially during 2010-2013 has been the problem of oversupply posing a challenge to the polysilicon manufacturers in the market. On the other hand the demand and production volume of polysilicon also picked up pace in the last few years. This was majorly on account of the manufacturers expanding their production capacity in order to cater to the growing demand.…

    • 764 Words
    • 5 Pages
    Good Essays