Samsung Electronics - Harvard Business School Essays
Introduction: With the introduction of new Chinese competitors in the DRAM market it is necessary for Samung to access their strategy for the future. Looking at past trends in the DRAM market, current market situation, and projections for the Flash market, the best option for Samsung is to focus their efforts on growing the Flash technology, while maintaining their DRAM output. This is the best course of action because Samsung’s customer loyalty will carry their market share in the DRAM market, while they are focusing on establishing this type of dominance in the Flash market.
Problem Statement: Memory industry is …show more content…
As the memory technology grew more complex, the number of suppliers became more concentrated. Only 23 key players are dominating the equipment market but they are also providing a discount for high volume buyers (like Samsung). So, the suppliers are powerful and have a higher bargaining power against low volume buyers (new Chinese companies). One of the options that Samsung has going forward, is to suppress the Chinese entrants by decreasing margins on the lowend DRAMs. A competitive price along with Samsung’s wellknown quality would likely push its Chinese competitors towards more operational losses. Meanwhile, Samsung would still be able to earn revenues from its wide range of other memory products. However, a price war like this cannot be expected to