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

A South Korean Company that Operates in chinaThis report addresss the requirements at hand to select a South Korean company that has operations in mainland mainland Chinaexecutive SummaryIn 1992, Samsung Electronics adopted the form of a wholly ownsubsidiary as the entry mode into China. Its entry into China was in format to maintain growth due to the tough arguing in Korea. Chinawas selected in order to take advantage of its crushed wages for the massproduction of minor to medium priced products. The initialmanufacturing groundwork was at Tianjin due to its costal location hencemaking it late to export abroad and to major locations in China. Theoriginal 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 edges of l owpriced products. In order to remain competitive in China, Samsungshifted its marketing schema to one found on selection andconcentration. After 1997, the focus was on the 10 major cities inChina including capital of Red China, 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 & training (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 and infrastructureavailable for R&D. Samsung in any case set up a second Headquarters inBeijing which is responsible for marketing, personnel recruitment andfor shaping of Samsungs long term ambitions in China.IntroductionThe Samsung group has 116 subsidiaries in 67 countries and received gross sales revenue from local subsidiaries of US$29b illion. Over the last 5 age sales and net income have increased 1.6 times and 45 times,respectively. gross sales in 2010 are anticipated to be 1.9 times that of2002, with pre-tax profits judge to increase 2.1 times. Samsung is a heavily diversified company, and in order to high hatdemonstrate 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 descent 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, May 19-21, pages 65-73 wise York Times, 1991, (cited 9 May 2005) Korean Companies in China, late 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 unspoiled text, Bo ston, Mass, 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) sanction From the Brink Samsung Electronics got into trouble by being 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