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Case Summary
Korea Semiconductor
company founded, began
with Wafer production.
And acquired by Samsung
latterly
8 Wafer technology
developed, dramatically
shift to Samsung of
production capacity
1974
1980
1992
2004
2005
Industry Summary
Semiconductor Industry
68.2
521.5
896.4
535.3
Logic Chips
672.8
19%
Samsung
Micron
Infineon
Hynix
SMIC
3%
33%
Memory Chips
FLASH
32%
Mobile devices
SRAM
10%
Server & Workstation
DRAM
58%
Desktop
25%
Samsung
Micron
Infineon
Hynix
SMIC
Industry Summary
DRAM Production
Electronics design tools; Samsung
develop in-house
Wafers; Samsung owned technology
to produce DRAM with the largest
wafer (more production capacity)
Materials; Semiconductor (Silicon
and Germanium) are costly in
production process and has a few
suppliers
System Firms; Samsung can
customize to met customer
requirements
Technological factors
Global force
Social force
Natural environment
(-) Products is more sensitive with climate
Difficult
to Survive
Industry Analysis
Threat of New Entrants :
(+) High Investment required
(+) High Production Technology
(+) High Switching cost
Bargaining Power
of Suppliers :
Analysis result :
Semiconductor industry is
unattractive market for new
entrant
Bargaining Power of
Buyers :
Rivalry among Existing
Competitors :
(-) High competition
(-) Market moving fast
(-) Price is competitive factor
Threat of Substitute
Products :
Analysis
Result
Primary Activities
Support Activities
Internal Analysis
Firm Infrastructure : Adaptability culture organization
Human Resource Management : Acquire Korean global talent
Technological Management : Products development competition
Procurement : Economies of scale purchasing, Focus on potential
suppliers
Inbound
Logistics :
Operations Outbound
:
Logistics :
Marketing
& Sales :
Focus on
time to
market,
Volume,
consistency
Focus on
quality, high
capacity and
low defect
Variety of
products,
older-tech.
promotion
Focus on
time to
market,
consistency
Services :
Customize to
customer
demands
Primary Activities
Support Activities
Internal Analysis
Marketing
& Sales :
Focus on
quality, high
capacity and
low defect
Variety of
products,
older-tech.
promotion
Services :
Customize to
customer
demands
Capability
Innovative products
High capacity
Varity of products
Best quality
Customize to customers demand
Intangible
Competency
scholarship
Brands : Value $12.6 billion (21stof the world)
Company : Reward outstanding performance
Culture
do not punish failure
Excellence HRM
Effective procurement by volume
Creativity human capital
Effective production technologies
SWOT Analysis
STRENGTHS
Process excellence
High competency
Strong researcher team
Good Organization Structure
OPPORTUNITIES
Market being growth
No substitute technology
High demands
Government supports
WEAKNESSES
Low quality of brand image
International cultural lacking
Inter-cultural crashing
THREATS
China competitors
Social resistance, environmental
effects
20%
Strategic Analysis
Flash
Market Growth
Flash
DRAM
SRAM
0%
DRAM
10X
0.1X
Continuous product
improvement is very importance
Small company needs partners
for more competitive advantage
to survive in the market
Less competitive advantage /
less margin (low price strategy
needed)
Sized by revenue
Low
Products Development
High
Low
High
Broad Differentiation
Strategy
Best-Cost Provider
Strategy in the Present
Focused Low-Cost
Strategy
Focused Differentiation
Strategy in the Future
Cost Leadership Strategy
Differentiation Strategy
Business Strategy
Sub-branding for penetrate to high-end market, higher positioning as
high quality products provider
Build valuable brand / Communicate values to customer and more
focus on flash memory products
More promotion and selling campaign for DRAM products, preparing
for price war coming of China competitors
Develops new products with green technology, less energy
consumption and toxic materials
Corporate Strategy
Forward vertical integration for expanding business to downstream,
utilizes strength of technology expertise, manufacturing resources
and a large scale electronic materials provider to be a electronic
devices manufacturer
Build up business in China, for blocking growth of China competitors
and gain cost advantage from low cost manufacturing (lower labor
rate)
Implementation Strategy
Prepares organization that suitable for international business
especially in China, recruits Chinese employee for faster familiar
with chinas culture and market behaviors
Clearly formulation of forward vertical integration strategy, what
business units should to do (e.g. computer, cellphone, data storage)
Keeps investment on R&D to be leader in innovation, technology
and cost advantage production
Communicate vision and missions needed to employee
Align goals of all related business sections to consistent with
corporate goal