Samsung to Build Handset Plant in Vietnam

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Summary

Samsung Electronics(SEC), the biggest electronic company in Korea, will invest 50.5 billion won due to the construction of handset plant in Northern Vietnam. It is the second handest manufacturer and will make a small "IT-Cluster" to produce the core components.

It will invest its Asian Corporation to establish the plant in Bac Ninh Province, Vietnam, 30 kilometers northeast of Hanoi to achieve the 100 million goal production due to increasing demand for moblie devices in Southeast Asia and its product price is under $100.

In addition, it will take part in talks with Vietnam parts makers to complete the "IT-Cluster" plan.

SEC has had a strategy to win at the competition with Nokia getting more market share of Asian emerging markets. And Vietnam's handset market is growing rapidly in addition to economc development and large inflow of foreign capial.

As a member of ASEAN, Vietnam also determine cell phone in SEC's Vietnam plan will be likely to a 5% tariff cut in other ASEAN members.

SEC would like to found the overseas plants in order to expand the foreign market, and Gumi plant is used to operate handset facilities in China, India, and Brazil.

Opinion

Because Vietnam is one of the developed country in Southeast Asia and he is developing fast, the selection of the plant site is very desirable. However, SEC's Asian center is located in Singapole, so each other of the plant and the center's employees needs to communicate well. The relationship with SEC's headquater is also important since it directs the main instructions. If either of the center or the plant overlooked them, the plan of "IT-Cluster" and the strategy of Asian emerging market is in failure.

SEC's price and product policy is also good. Even though Vietnam is a developing nation, almost all the people of Vietnam are poor. Therefore, it is incorrect to fix the price too high and to target the luxurious concept.

In conclusion, SEC's strategy is very excellent and the foreign plant have to increase more. Because It has a small market share in Europe because of Nokia, aggresive and close plan is required in handset market.

Entry2 - 20300576 Cho Kyung Chan