Samsung Electronics Strategic Analysis
Memo
To: Kun Hee Lee, Chairman and CEO of Samsung Electronics
From: Josh Graham, Senior Consultant, Whirlwind Consulting Co.
Date: 28-Apr-08
Re: Emerging Chinese DRAM industry
Executive Summary
Whirlwind Consulting Company has reviewed the current position of Samsung in the semiconductor and memory chip industry, and has completed an extensive internal and external analysis to determine Samsung’s options in response to the threat of significant future expansion within the Chinese semiconductor industry. It is our opinion that Samsung should begin an incremental decline in the production of low-end DRAM memory chips, and initiate an extensive strategic movement towards capturing the higher-end of the DRAM market, as well as new niche markets, such as Flash memory.
The external analyses showed that there are many competitors that have begun to focus solely on production of low end DRAM. The greatest threat observed is the rampant growth of the Chinese company SMIC, which comes as a result of low-cost production and tax-incentives from the Chinese government. The primary recommendation that resulted from this analysis is that the low-end DRAM market has become overcrowded, while the high-end market is currently occupied by only one major competitor, Eplida Memory.
The internal analyses were a clear indication that Samsung’s current organizational structure, policies, and business strategy are all competitive advantages. The conclusions drawn from the SWOT analysis were that Samsung’s strengths carry more weight than your weaknesses, and that the opportunities that exist, if properly exploited, should help Samsung navigate the threats with no significant difficulties. The financial analysis was also an indication of the exemplary track record of Samsung Electronics, most notably the semiconductor division. Our opinion is that Samsung should have no financial difficulty with shifting your...
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