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Issue:

Business

 

Written by:

Polly B

 

Date added:

June 12, 2014

 

Level:

University

 

Grade:

A

 

No of pages / words:

7 / 1836

 

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New entrants were required to come in on a very large scale for effectively minimizing costs, which the Chinese companies succeeded in doing. Samsung had scale of economies in research and chip fabrication and was world leading memory producer for all types of PC’s, digital cameras and other electronic products...
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Samsung had demand side benefits of scale as it demanded superiority in product quality and efficiency and it was a well established and trusted brand name ($5.2 billion in 2004). High switching costs were associated with the industry as due to established production lines and multibillion dollar commitments, it would be extremely costly and time consuming for a company to divest into different technologies and design commitments...
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