2. We now turn to the future. Articulate three alternative strategies for Samsung going forward, i.e., state which products/markets and which competitive advantages Samsung should emphasize, with particular emphasis on the threat from China. Compare and contrast these strategies, and choose one as a strategic recommendation.
After thoroughly analyzing all the data we consider three strategies that Samsung could take in order to face the increasing Chinese competition are:
• Partner with a Chinese company
• Go to China and build plant
• Status Quo (i.e. stay in Korea and don’t worry about Chinese competition)
The first strategy stems from the low labor cost that China has. The advantages of this strategy are twofold. First, partnering with a Chinese producer could further reduce Samsung’s average cost by exploiting a cheaper labor (Chinese labor is on average 57% cheaper, see Exhibit 7a). Second, partnering with a Chinese company could potentially enable Samsung to......
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