7. Value Chain Has a state of art R&D facility and a fabricating unit in Seol. Infrastructure Human Resource Management Strong vendor relations Values human resources a lot Recruitement Competitive Pay scales SUPPORT ACTIVITIES Excellent R&D work New Products Introductions Technology Development Lowest Raw Material Cost in the Industry High Technology based operations Very strong Brand. Known for its Quality. Rated in the top 20 brands of the world Customer Oriented PRIMARY ACTIVITIES Inbound Logistics Operations Outbound Logistics Marketing / Sales Service Self Distribution Central computer linked with vendors
8. Analysis – Samsung Economies of scale in semiconductor production. High Investment in R&D R&D Facility & Fabricating unit at single site. Innovative human resource policies, performance based promotions. Wide range of customized end products for meeting customer demands. Reliable Product- Very high brand value.
10. Samsung’s cost advantage Low labor cost at Korea. Higher capacity utilization, lower depreciation cost Raw Material, Labor, Depreciation, R&D, SG&A- these cost are substantially higher for competitors.
11. Major Challenges China is a major upcoming threat Major chip producers are partnering with Chinese company i.e. Infenion, Elpida signed agreement with SMIC. Chinese are desperate in gaining market share at the cost of losses. Chinese Govt is ready to provide cheap finance to set up JV.
12. Conclusion Samsung is ahead in Learning curve- emphasis more in R&D works. Play on “legacy” and “specialty” product. May collaborate with Chinese partners to expand joint investments. Probably a better option….. Produce low end product in china, high end product in Korea. Ensure better control over Intellectual Property
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