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Brand Internationalization Strategy of Samsung and Its Enlightenment to China’s Home Appliance Industry

Author: HanJiaShuai
Tutor: CheLiJuan
School: Dongbei University of Finance
Course: International Trade
Keywords: Samsung Brand Brand Internationalization Digital Innovation Diversification Differentiation
CLC: F426.6;F273.2
Type: Master's thesis
Year: 2011
Downloads: 645
Quote: 1
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Abstract

At present, there are mainly twelve famous home appliance brands all over the world including six Japanese enterprises (Panasonic, Sony, Toshiba, Sanyo, Sharp and Hitachi), two American enterprises (GE and Whirlpool), two European enterprises (Siemens and Electrolux) and two Korean enterprises (Samsung and LG). They mainly account for more than ninety percent of the market share in the global home appliance market. Therefore, it is an important symbol of the success of Chinese home appliance enterprises’internationalization that Chinese home appliance enterprises have the world-class brands. Only when Chinese home appliance enterprises take possession of the world-class brands can they make excess profits in the international market. China’s home appliance industry, in which the first foreign-funded enterprises involved, has developed for more than thirty years from the late 1970s to today. Up to now, it has already become the most competitive and the most mature industry in the domestic market. The inrush of foreign home appliance brands leads to a sharp drop in the number of Chinese brands in the domestic market, a weak consumption growth and endless price wars, all of which have seriously affected the long-term development of China’s home appliance industry. Meanwhile, China’s home appliance enterprises are facing a good opportunity for brand internationalization with the development of the economic globalization and the diversification of consumer demands from all countries around the world.On March 1st,1938, Li Bingzhe, the founder of Samsung Group, set up an enterprise named "Samsung Chamber of Commerce", which was the predecessor of Samsung Group, with 30,000 won in the city of Daegu of South Korea. In the beginning, Samsung Chamber of Commerce was just a small rice mill mainly engaging in the export business of fish, vegetables and fruit. In the year of 1947, Samsung Chamber of Commerce moved to Seoul and changed the name into "Samsung Corporation" the next year. Due to the outbreak of Korean War in 1950, it had to move to Pusan, the temporary capital of South Korea at that time. In the January of 1951, it changed its name into "Samsung Co., Ltd." which remained in effect today. In the 1950s, Samsung got into sugar industry, wool industry and some other manufacturing industries. In the sixties to seventies of the last century, Samsung Group began to implement the diversification strategy and expanded into business fields such as the petrochemical industry, the shipbuilding industry, the airline industry, the electronics industry and the telecommunication industry. Currently, Samsung Group is the largest conglomerate in South Korea with twenty-six subsidiaries and other corporate organizations. It has already set up more than three hundred offices ranging over a number of business fields such as electronics, finance, technology and chemistry in nearly seventy countries. In the year of 2006, Samsung Group had three subsidiaries in the top 500 global corporations ranked by an American magazine named "Fortune". Among the top 500 corporations, Samsung Electronics ranked 46 with the revenue of 78.7 billion dollars; Samsung Life Insurance ranked 224 with the revenue of 26.6 billion dollars; Samsung Corporation ranked 445 with the revenue of 15.1 billion dollars. Samsung Group with the revenue of 120.4 billion dollars became the leading conglomerate in deed in South Korea.In recent years, some Chinese home appliance enterprises have regarded Samsung as the model to learn from and imitate and worked out a timetable in order to surpass Samsung. The reason why China’s home appliance enterprises regard Samsung as the learning and imitating model is that there is a realistic path to follow. First of all, Samsung is an Asian brand with strong Eastern business characteristics which has a great similarity with Chinese enterprises and the successful experience of Samsung is most worth studying. Secondly, the implementation of Samsung’s brand promoting strategy has brought a rapid increase to the brand value in order to make Samsung become a world-class brand which has a significant enlightenment for China’s brands to improve the bargain ability and to escape from the misunderstanding of vicious price wars. The experiences of Samsung’s success may be similar to what China’s home appliance enterprises will encounter in the near future. Thirdly, the products of Samsung were once synonymous with cheap goods and Samsung had no influence and low status in the international market. Also, it once resorted to the excessive pursuit of the large-scale production in order to obtain the operation pattern of winning by price. All the above circumstances are similar to both the past and present situations of China’s home appliance industry. Therefore, it is tremendously significant for the development and growth of China’s home appliance industry to make a careful study and analysis on brand internationalization strategies.This thesis aims to conclude the enlightenment of Samsung’s brand internationalization strategies to China’s home appliance industry through the introduction of the development of Samsung, analysis on its brand internationalization strategies in details and the combination with the current status of China’s home appliance industry. The first part is the introduction part including background, research significance and practical value and relevant theories both at home and abroad. The second part mainly summarizes the concepts of both brand and brand internationalization. The third part introduces the development of Samsung and analyzes the current status of Samsung with the method of SWOT. The fourth part is considered as the most important part in the thesis. It makes deep analysis and discussion on the brand internationalization strategies of Samsung from three parts including accurate brand positioning and core value forming strategy, digital innovation strategy and brand internationalization promotion strategy. The fifth part analyzes the development of China’s home appliance industry, its current issues and status and the necessities and benefits of the implementation of brand internationalization. The sixth part is the conclusion that the enlightenment of Samsung’s brand internationalization strategies to China’s home appliance industry includes three main parts:the feasibility of transition from OEM to the establishment of self-owned brand and the implementation of brand internationalization, technology innovation in the process of production and the great support of the government.

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