Samsung's Survival of the Asian Financial Crisis

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Maria Tropiano Case 3-1: Samsung’s Survival of the Asian Financial Crisis “Although the Asian financial crisis severely affected the Korean economy,” The Korean electronics company, Samsung, has not only survived the crisis but also now competes “head on” with much older Japanese companies, Sony and Panasonic, as one of the largest technology companies in Asia. Basically, Samsung found its way out of the crisis by successfully engaging the business of North American and Western European markets, which had money to spend and a strong need for “technologically advanced products.” In other words, Samsung averted the crisis by targeting the U.S. market and by developing highly-designed products which would differentiate Samsung from its competitors in order to “generate increased revenues.” By doing so, Samsung has been able to “capture the TV market in the U.S. and become the largest maker of DRAMs and LCD monitors.” DRAMs are dynamic random access memory chips that Samsung has been very successful in producing. It is also important to note that Samsung needed to reduce its work force in order to invest in innovations which greatly helped the company survive. In response to the labor cuts and the crisis in general, the Korean government helped Samsung revitalize its profitability by encouraging Samsung to consider larger markets. As a result of these efforts and “increasing its design staff and budget” Samsung is now “one of the most innovative companies and leading brands in the world.” Because of the crisis, Samsung has raised R & D expenditures and has increased brand equity and market capitalization. Therefore, Samsung considers the financial crisis to be a blessing in disguise because the company is now more successful than
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