Samsung Electronics case Article Example | Topics and Well Written Essays - 750 words

Samsung Electronics baptistery - Article Example(3) They had decoyed a lot of resources from foreign investors which allow them to sell the chips at lower prices in order to gain a merchandise sh are. The production methods used are cost effective. 2. Samsungs business-level strategy. a. The sources of Samsungs cost advantage in DRAMs in 2003 are a result of the fact that it invested heavily in technology which made mass production at a relatively lower cost possible. For instance, the cost breakdown of producing a 256 Mbit DRAM in 2003 was Average selling price is $5.08 while the fully idiotic costs are $4.15. Thus $5.08 - $4.15 = $0.93. This entails that it has an operating return of $0.93. on the former(a) hand, it washbasin be far-famed that Microns costs for the same DRAM are Average selling price $4. 48 while the total costs are $6.52. This means that Micron is operating at a profit of -$2.04 since the total production costs are higher than the selling price. b. The sou rce of Samsungs ability to disturb a price premium in DRAMs in 2003 includes the following It has a health financial bit in the market. For example, the operating costs of the association are lower than the average selling price of the 256Mbit. entropy in the case shows that the average Price premium for Samsung is 34 % compared to the operating margins of 53 % of the different competitors. This puts the company in a position charge price premiums since it has little operating costs compared to other competitors. The other reason is that it customizes its product to suit the needs and interests of the customers. c. Samsungs business-level strategy is based on a emulous advantage in cost leadership. Evidence to support this view includes (1) The total production costs are lower than the average selling price which is cost effective. (2) The company can learn a grownup volume of DRAMS at a relatively lower cost. (3). The company can cut a voluminous quantity of chips at the s ame time at the same cost. d. Identify the characteristics of the industry that hinder the fortunate use of an integrated business-level strategy. The main challenge is that the company can operate at a freeing if the other product line fails to perform to the anticipated expectations. This integrated business level strategy can involve a scenario where a company integrates more than two product lines. The main challenge is that the other product may not be that competitive in the market which entails that it can in any case travel the performance of the other product. 3. Recommendations a. To strengthen the companys competitive position in light of the panic of large-scale entry by the Chinese companies, Chairman Lee could (1) Differentiate the products (2) He can also diversify the products where two or more product lines can be offered under the same stigmatise name. (3) He can also lower the prices of the products in order to gain a large market share through attracting a l ot of people to its products. Of these options, differentiation is the most viable because it makes the company and its products anomalous from the other players and products offered in the market. Through differentiation strategy, the organization is in a better position to attract more customers through offering products that are valued by the buyers through their uniqueness. However, a potential difficulty with this approach is it may be costly to acquire sophisticated equipment that can be used to produce unique and state-of-the-art products that are