Chinese Business
Case Study 1- Samsung China ¡®The Introduction of color TV¡¯
EXECUTIVE SUMMARY
This is a case study report on Samsung China ¡®The introduction of color TV¡¯. The main focus of this report analyzes the information provided by Samsung¡¯s official website and the printed text provided by the unit coordinator; Professor David Zhang. This report will first identify the primary and secondary problems, followed by a PEST analysis which will consist of the 4 aspects of political, environmental, social and technological issues. Based on the findings from the PEST analysis, this report will recommend some appropriate solutions and alternatives.
The problems faced by Samsung China in this particular case study are not considered serious as Samsung has established itself as a reputable organization both locally and internationally. The political environment may seem to be uncontrollable but will significantly improve after China gains full membership with the WTO and China welcoming FDI. The rest of the PEST analysis such as economical, social and technological components is all favorable for Samsung to change its multiple business units¡¯ strategies to a single focused business strategy. However, the only crucial factor will be the time duration and the possible resistance for the changes to take place.
A few assumptions have been made
1) There are no major human resource related issues and problems
2) SCH marketing director, Mr Hyun Young-Koo is a capable marketing director and is deemed to be the best suited person for restructuring Samsung¡¯s business system in China.
3) Resistance from Samsung¡¯s business units are kept minimal.
4) While Samsung is advancing with its proposal in China, there are no major changes or counter reaction from its competitors.
PRIMARY PROBLEMS
1) Too many separate business strategies adopted by too many Samsung¡¯s individual business units (lack of focus).
2) The China market can be very complex for Samsung as a foreign investor.
3) Unclear market segment and product line.
4) Ever increasing competitiveness from competitors.
SECONDARY PROBLEMS
1) Resistance from Soul-based people in Samsung Electronics to produce high-end products, preferring to do business in China through higher volume than higher priced.
2) Strong Japanese competitors.
3) Disadvantage of selling Samsung television more cheaply to off-set the Japanese high brand image.
4) Tendency to follow USA¡¯s operation footsteps (which may not be appropriate for some China market situations).
PEST ANALYSIS
Political
The China market is indeed a very unique one. Although China has introduced many market-driven economic reforms, it is primarily a centrally planned socialist economy. There is a high degree of competition among the government at both the central and local levels. This could be due to the fact for the lack of a better organized planning system, there is still a huge gap between the stated plans and the actual ability of the Government to manage and control the economy. There is also another unique concept of emphasizing Social Profitability over Economic Profitability adopted by the Chinese Government, which is often the [next page]