A South Korean Company that Operates in China Essay -- Asian Economics

A South Korean Company that Operates in mainland chinaThis underwrite addresss the requirements at hand to select a South Korean company that has operations in ChinaExecutive SummaryIn 1992, Samsung Electronics adopted the form of a wholly ownedsubsidiary as the entry mode into China. Its entry into China was in come out to carry on growth due to the tough competition in Korea. Chinawas selected in order to take advantage of its offset wages for the massproduction of low to medium priced products. The initialmanufacturing ground was at Tianjin due to its costal location hencemaking it easy to export abroad and to major(ip) locations in China. The accredited focus of producing low cost products resulted in a cheapimage of Samsung in China and led to a loss of US$210,000 in 1998 forits Suzhou division. The 1997 Asian economic crisis led to Samsungshifting its focus towards higher quality products. Samsung realisedthey could not compete with the Chinese manufacturers in terms of low priced products. In order to remain competitive in China, Samsungshifted its marketing strategy to one based on selection andconcentration. After 1997, the focus was on the 10 major cities inChina including Beijing, Tianjin, Suzhou, Shanghai and Guangzhou.Samsung came up with the 5% strategy, targeting their products atthe top 5% earners in China. The intensity of their Research &Development (R&D) in China grew with the expansion of their plant atSuzhou. Recently, there appears to be a shift in their operations fromthe Pearl River Delta to the Yangtze River Delta. This allows Samsungto take advantage of the better skilled personnel office and infrastructureavailable for R&D. Samsung also set up a second Headquarters inBeijing which is responsible for marketing, personnel recruitment andfor formation of Samsungs long term ambitions in China.IntroductionThe Samsung group has 116 subsidiaries in 67 countries and receivedsales revenue from local subsidiaries of US$29billion. Over the ultimately 5years sales and net income have increased 1.6 times and 45 times,respectively. Sales in 2010 are anticipated to be 1.9 times that of2002, with pre-tax bread expected to increase 2.1 times. Samsung is a heavily diversified company, and in order to bestdemonstrate its market entry to China, the report will look at theelectronics arm to demonstr... ...eman, E., 2003. Can the Pearl River Delta region still compete?, in The China Business Review, 30(3) 6-17, pages 53-63. Skopal, A. and C.J.Zhu, 2002. An evaluation of entry strategy development in China?, in The 4th International Symposium on Multinational Business Management Proceedings, Nanjing, China, whitethorn 19-21, pages 65-73 refreshing York Times, 1991, (cited 9 May 2005) Korean Companies in China, youthful edition (East Coast), New York, pg. D20, Christian Science Monitor, 1992, (cited 9 May 2005) High-Tech Giant Gears for Future The president of Samsung Electronics Company, pre-1997 Full text, Boston, Ma ss, pg. NOPGCIT, Strategic Direction, 1999, (cited 9 May 2005), Samsung Electronics play the China Card, Bradford Jul/Aug, Vol.15, Iss. 7, pg. 24 Sender H., 2003, (cited 9 May 2005) World Business (A Special Report) Back From the Brink Samsung Electronics got into trouble by beingness like many Asian firms It survived by being different, Wall Street Journal (Eastern Edition), New York, Sep. 22, pg. R.5 Lee, B. J., 2004, (cited 9 May 2005) Gotta Be Chinese, Newsweek New York Jun 28, Vol. 143, Iss. 26, pg. E8