Contents

• Executive summary
• Introduction
• Samsung electronics – Memory business
• Products
• Market segmentation
• Competitors
• Competitive advantage
• Sustainability of competitive advantage
• Market threats
• Proposed plan to mitigate threats to leadership
• Recommended course of action
• Conclusion
• References

Description

Samsung Electronics has grown from a small time company in 1987 to become the second largest profit making electronics company outside of the United States in 2003 under the leadership of Kun Hee Lee, Chairman of the Samsung Group (Siegel & Chang, 2006). Samsung Electronics, which is a part of Samsung Group has turned out to be its flagship company during the last 20 years. The company is world leader in memory chip production and sales. There are various factors that contributed to the market leadership. Some of them are sustained investment in cutting edge technology even in the face of market conditions that called for selling memory chips at prices lower than the cost of manufacturing to gain market leadership when the industry demands increased. When the memory market surged in the early 90s the vast investment in research & development and production facilities paid off since Samsung stood out as the sole company to meet the increased market demands. Samsung’s policy of delivering low cost but high quality memory chips with the use of cutting edge technology and committed workforce helped them to beat the monopoly of Japanese companies (Siegel & Chang, 2006). But of late Samsung is facing a similar situation Japanese companies faced a decade ago or so from Samsung, that new Chinese entrants are threatening the leadership of Samsung by manufacturing low cost memory chips. Samsung memory division is at cross roads on deciding as to whether to cede leadership in the low cost memory market to Chinese companies and concentrate on quality products manufactured through cutting edge technology or to partner with Chinese companies so as to hold on to the leadership.