Steeltech Competing In Chinas Auto Market Harvard Case Study Solution

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Steeltech Competing In Chinas Auto Market Case Study Solution & Analysis


Historically, the company's core customers consist of the Original Devices Manufacturers (OEMs), which used to sell Steeltech Competing In Chinas Auto Market Case Study Help items withtheir own brand name. Its customer circle consists of Original Devices Manufacturers (OEMs), who utilized to sell Company items with their own brand name. He repositioned Enterprise as a worldwide brand name and educated his divisional supervisors to comprehend marketing and its importance.

Problem Statement

Business's shift from a product based to a marketing company is not going as efficiently as planned.Overcoming the hesitation of divisional supervisors to include marketing effectively is still a major challenge. Developing a constant brand name identity throughout the entire world and utilizing marketing strategies that finest fits the regional culture is no easy task. The M-net program analysis have actually been actually practical in figuring out the high and less possible development areas, but allocation of resources accordingly is not well gotten amongst the managers. There is no consensus amongst the hierarchy regarding the very best matched future method.
Executive Summary
Situational Analysis

Steeltech Competing In Chinas Auto Market Case Study Solution efforts for developing its brand name throughout the world was started after introducing the "new management effort" by Chairman Lee in 1993. The goal was to change Enterprise from a low-cost OEM to a high value-added item company. To make the vision of Business a truth, Chairman Lee designated Yun as a vice chairman in 1997. Yun had a rather clear photo in his mind about how Org can transform from a low end to a luxury product company. He understood that transformation can only be done through positioning Venture as a company using high-end products and this might just be done through high level of marketing.

In spite of having a clear vision about how to construct Organization brand, with a prospective assistance of its executives, Yun dealt with several marketing challenges in early years of its efforts.

One of the marketing obstacles for Yun was the understandings of executives about the value of marketing. They considered marketing and selling as very same tools and thought that quality items do not needed marketing for increasing sales. As their focus towards marketing was rather low in their previous service practices, and the existing marketing requirement was excessive high, the gap was too larger and to fill this space with wrong understandings about marketing was quite challenging for Yun.

Along with it the product range of the business was increasing with the ripening of brand-new item concepts by the R&D sector of Org. Yun had a difficulty to carry out marketing preparation and to create marketing budgets for existing as well as for brand-new products from the very beginning, and this would take a substantial time.

A huge shift would be required in present marketing expenditures to develop the Steeltech Competing In Chinas Auto Market Case Study Help brand. This would result in increased marketing expenditures for Enterprise and might disrupt the administration regarding increased expenditures, as they hesitated to marketing expenditures previously and a sudden huge shiftwould make them disturb. This could lead to decreasing executive support for worldwide marketing. In this scenario, Yun deals with an obstacle for validating increased marketing expenses by showing the long term value of substantial marketing expenses.

Internal Analysis
SWOT Analysis

Steeltech Competing In Chinas Auto Market Case Study Solution strengths lie in its huge product portfolio. Enterprise has biggest number of patents in the industry with overall number of 15499 patents given in United States( USP).

Another strength of Steeltech Competing In Chinas Auto Market Case Study Solution is its ability to establish innovative items at a continuous rate. It significant proves for the innovation and item designing of Company is that the business has received a lot of awards for its innovation and item design.

Unlike Apple and other rivals, Organization is focused on producing devices which can be easily integrated with any kind of open source Operating System (OS) and software application. This supplies Organization an edge over Apple devices.
Porter's 5 Forces Analysis
Corp's ability to produce high-end products at low expense of production is also one of the significant strength of Organization as it makes it possible for the company to capture more market by providing quality products with expense control.

Weak points

Business's weak points are concealed in the company's reliance on outsourcing software application for its gadgets due to business's inability in establishing software, unlike Sony. Steeltech Competing In Chinas Auto Market Case Study Solution likewise has low profit margins as compare to Apple due to big difference in the prices of Apple and Business with a much lesser difference in quality.


Opportunities for Steeltech Competing In Chinas Auto Market Case Study Help lie in the growing Smartphone market and the company's efficiency in the market. Corporation presently runs in about 80 countries and the company has an opportunity to increase its geographical growth by moving towards more emerging markets outside Asia.


The vibrant industry environment of innovation market position a serious risk on Business's survival and force the company to spend much of its incomes share on R&D in order to endure in the long run. The market saturation in industrialized countries i.e. saturation of mobile company is also a big risk for the business's development in the presence of strong rivals like Apple.

4 P's of Marketing
Swot Analysis

Company uses quality items and has a rather abundant portfolio which caters to various sectors. LCD and mobile phones are the most significant products of Enterprise, whereas DRAM is likewise not far behind in comparison of them.

• Laptops.
• Smart phone.
• Air conditioning system.
• Personal computers.
• Disk drives.
• Washing machines.
• Fridges.
• Video cameras.
• Microwaves.
• Flash memory.


Steeltech Competing In Chinas Auto Market Case Study Analysis uses both market competitive and market skimming prices methods for its wide array of items. In competitive pricing it adjusts the price according to the competition in order to get advantage, whereas, it uses market skimming strategy where the product has an added value and by selling a few items it can reach break-even.


It has among the best supply chain networks, with retail suppliers, their own sole suppliers, E commerce channels like Amazon etc. All its items are timely supplied to the selling location/ provided to the clients directly in case of online order.

Vrio Analysis
It wasn't a well-known company outside of Korea up until 1993. The management initiative taken by their CEO has actually pushed them to market more efficiently outside the borders and now it has actually gotten in the league of top 25 companies in the world in just 9 years. This is an impressive achievement regardless of the ongoing arguments amongst the supervisors about embracing marketing practices. It uses both offline & online channels of promotion to market their products. Paid item advertisements, social promo and digital ads are utilizes to develop awareness about Business products.

Value Chain Analysis.

It's an analytical framework for recognizing company activities that add value or competitive benefit for the company.

Incoming Logistics.

For its incoming logistics it owns various logistics firms as it subsidiaries. It looks after its suppliers and produces an unified relationship with them and even decreased their payment cycles to increase this relationship further which adds value to their chain network.


Business's core competency is its mass manufacturing it produces 90% of its items in-house. Divided into three different departments its operations are namely IT & Mobile Communications, Device Solutions and Customer Electronic Devices. It is preserving operation centers worldwide to even more add value to its value chain network.

Outbound Logistics.

Its outgoing logistics system efficiency is among the primary reasons Steeltech Competing In Chinas Auto Market Case Study Solution has the ability to compete with Apple. Corporation's own Electronic Logitec system plays a significant function in the outgoing logistics operations. It even performs the jobs of collection of payment, settling insurance claims, etc. on behalf of Venture.

Marketing and Sales.

Bring in target consumer attention towards the product is done through marketing and sales to interact with them the worth and competitive benefit the product offers. Steeltech Competing In Chinas Auto Market Case Study Help marketing spending plan is continually on the rise considering that they began their repositioning worldwide and will continue to do so as they are continuously seeking to broaden and invest in high prospective growth markets. The budget is invested in occasions, print and media advertisements, public relations etc.

Org Service. Business put their consumers on top and continuously strive to deliver unmatchable customer care requirements. As after sales service is becoming exceptionally important to keep consumers delighted and engaged, they even perform surveys through 3rd parties to learn their consumer's feedback and execute it in the positive way to lower or if possible completely remove their customer problems. By adding a direct support line to contact them 24 hours they have even more increased the added worth of Steeltech Competing In Chinas Auto Market Case Study Help service.


Steeltech Competing In Chinas Auto Market Case Study Help has actually diversified market segmentation, based upon its arrangement of large range of items to a great deal of customers. Enterprise target consumer segments can be divided into 3 classifications i.e. Steeltech Competing In Chinas Auto Market Case Study Help IT and Mobile Communications, Company Customer Electronics and Org Gadget solutions.


Steeltech Competing In Chinas Auto Market Case Study Solution geographic segmentation is based upon 2 requirements i.e. area and density. Venture serves about 80 countries worldwide with its products offered to Urban in addition to Backwoods of the country. The Business is likewise growing its global presence and the business's flexibility in locating its plants motivates worldwide expansion of Organization.


The demographic division of Steeltech Competing In Chinas Auto Market Case Study Analysis is based upon gender, age, life-cycle phase and profession. Venture produces items that can be used by both males and females. The target customers for Company IT and mobile interaction items have an age variety of 18-65 with bulk at a young or freshly wed life process phase. They are mainly professionals, students and employees. Apart from it, Company Customer Electronics are targeted to a client segment with an age range of 25-65. They are mainly workers and professionals. Nevertheless Steeltech Competing In Chinas Auto Market Case Study Solution Gadget Solutions are targeted at students, staff members and specialists with an age range of 25-65.


The psychographic division of Steeltech Competing In Chinas Auto Market Case Study Analysis s based upon the social class and the life style of the consumer. Business target customers on the basis of social class are primarily upper middle, middle and working class consumers, as Enterprise sell products like mobile phone not much more affordable i.e. Motorola as well as not much costly i.e. Apple. It provides quality products to middle level customers at a slightly high price than others targeting the exact same section.


Steeltech Competing In Chinas Auto Market Case Study Help majority target clients have distinct behavioural attributes. It has customers with an enthusiastic, fashionable and identified character with moderate level of loyalty towards the brand name. Its customers have some degree of shift towards other renowned brands i.e. Apple. The majority of Org consumers want quality as well as expense control. Due to the fact that of its moderate rates with a degree of quality, they are brought in towards Organization.

Quantitative analysis.

Sales of Org has increased amazingly from 16 billion $ in 1997 to 44.6 billion $ in 2002, and the net revenue of.48 billion $ to 5.9 billion $. It has also lowered its debt from 15 billion $ to 4.6 billion $. Digital media is the largest selling classification of Enterprise with sales of 13.9 billion $, whereas, Telecommunication and Semiconductors sectors both reached 11 billion $ in sales. Due to the fact that of the high overhead expense, revenues/ sales are increasing but net profit is not increasing accordingly. New expansions and employing's were the main factor of the boost in the overhead expenses, with china currently not providing any profit to Corporation, however there is so much capacity in the current market with 75 % yet to be explored.

Qualitative analysis.

Yes, this decision is based on the mission of Kim to target the younger audience and produce an international brand name image of the company. Whereas, the core strength of the business is currently making but long gone are those days when great products were selling themselves. In the existing age marketing is very crucial and companies can not prosper without it. Kim has actually currently begun to reinforce the marketing activities of Corporation and very soon it will turn into one of its core strength like producing if not much better.



Company runs designs, makes and offer a large portfolio of customer electronics. It operates in an incredibly competitive environment and has actually effectively placed itself as the maker of quality items. The response is yes.


As, said previously that Steeltech Competing In Chinas Auto Market Case Study Help runs in a highly competitive environment, which indicates all the business have similar products. So, the response for rarity is no.


Due to the nature of the market, it is very simple for rivals to comprehend the functionality of the products and quickly make their own models. Yes, Enterprise is only behind IBM in registering brand-new patents each year, but the advantage is extremely short term in this industry.


Chairman Lee has totally turnaround Corp, from going almost insolvent during the Asian financial crisis of 1997 to the top 25 company on the planet. Definitely yes there appertains company in the company and the outcomes promote themselves.

External Environmental Analysis

PESTLE Analysis


Being an international brand spread almost in every country worldwide, bulk of the environments like USA, Europe, China and so on, are very conductive for its operations. It deals with some political pressures in less developed countries where law and order scenario is not great. Latin American, African and some Asian nations fall in this category, where political instability do have an impact on Steeltech Competing In Chinas Auto Market Case Study Help operations.


Buying power of consumers is important for business like Business to grow and succeed. Emerging markets like India, middle-eastern countries and so on provide development opportunities, whereas, due to economic crisis even the consumers of industrialized countries suffer badly. For this reason it is extremely crucial for the business to keep an eye on the continuous economic scenario of the nation prior to going into the marketplace.


Multinational business need to face different social and cultural issues throughout its operations in a foreign nation. Company has actually also dealt with lots of problems but have embraced to the local environments of the majority of the nations remarkably well. It has customized its products, practices, policies etc. accordingly in order to achieve success.


With a yearly expense of 2.4 billion dollars in Research study & Advancement, and with constant ingenious product launches, Steeltech Competing In Chinas Auto Market Case Study Solution is among the leading ingenious business of the world. With a clear objective to be ahead of the rest when it pertains to technological advancements, Business has actually risen to the no 25 of the top effective companies of the world.


Each nation has their own laws and policies, being a multinational business Corporation need to strictly follow those laws in their jurisdictions. Failure to do so, will result in major legal effects. It has to study or hire a local law specialist before beginning its operations in a specific country.


With the rising awareness amongst consumers about the ecological & ethical violations of business, Corp has to make sure that it follows all the security guidelines. Ecological damages, ethical misbehaviors are not appropriate and in some countries the repercussions can be extremely extreme. On the other hand it has to do some Corporate Social Obligation practices to reveal the residents that it cares about their environment and people.

Porter's Five Forces

Risk of Substitution

Threat of substitution for Corp's each product category is quite considerable. Running in an extremely dynamic industry lead the company to deal with a high danger of substitution. Elements for high danger of replacement for Steeltech Competing In Chinas Auto Market Case Study Analysis Mobile phone consist of the existence of high number of providers and Market saturation in industrialized countries, that make the cost of changing for consumers nearly zero. Substitution dangers for Enterprise visual screen depend on the changing lifestyle of customers. Customers can change to watching visuals at home towards outside activities. Along with it, Business printing options items are threatened by the increasing destination of customers towards cloud storage.

Competition Amongst Existing Firms:

The rivaly among Company and its close rivals is extreme. The major reason behind this is the technique of market saturation in numerous number of product categories, forcing Enterprise to present more ingenious features in existing items and brand-new innovative items to preserve its growth. The significant competitors for Steeltech Competing In Chinas Auto Market Case Study Analysis samrtphones include Apple, Motorola, LG, Nokia, Huawei, OPPO and so on.

( Organization Sustainability Report, 2016) Provider's bargaining power for Organization is low as Enterprise runs economies of scale and its orders are of potential size and worth. Due to incapability of Steeltech Competing In Chinas Auto Market Case Study Analysis to construct its own software application, it has to outsource its software development to Google, which becomes a potential supplier of software for Corporation, resulting in high bargaining power of Google.

Bargaining Power of Buyers:

Bargaining power of buyers for various number of product classifications of Corp is extreme. One of the factor resulting in the intense bargaining power is the accessibility of a great deal of rivals in almost each product category i.e. competitors of Venture Smart device, with a really little differentiation. The high schedule of suppliers of Smartphones with minimum differentiation, make the changing cost for buyers nearly no, for this reason increasing the bargaining power of purchasers. Market saturation in the majority of the product classifications also make the bargaining power of buyers more intense in for Steeltech Competing In Chinas Auto Market Case Study Help. In spite of igh bargaining power Venture is quite capable of offering its items at a greater cost than much of its rivals, due to luxury quality item and a fair brand image.

Threat of New Entrants:

Threat of brand-new entrants for Steeltech Competing In Chinas Auto Market Case Study Solution is quite low. Along with it, requirement of huge proficiency and research and development expenditures for survival in the industry also make new entrants hesitant to enter in the market. Market saturation is likewise one of the barrier of entry in technology market.

Competitive Analysis

Company's high item diversity provides it distinction from its rivals. It is one of the three top brands by market share. Unlikely to its close competitors consisting of Sony, Intel and Nokia, who focus bulk on a single item category with Sony focusing on consumer electronic devices, Nokia on cell phones and Intel on chips, Organization had a substantial R&D spending on all of its item categories which enable the company to earn prospective earnings from sales of practically all of its items. (See Display) However, due to the large product range the company deals with high variety of competitors.

The business ranks initially in 4 product classifications i.e. DRAM Chips, LCD Displays, Big Screen Televisions and Microwave ovens, in terms of international market share, amongst 8 various product categories. Corp was the international leader in producing DRAM, SRAM and NAND flash chips. Corporation profits from chips was less than Intel however its revenues from chips was growing much faster than Intel and has actually grown close to the earnings levels of Intel, as provided in the case Exhibit 2.

In addition to the chips Business mobile market was also thriving at a high rate than its rivals i.e. Motorola and Nokia. Org's cell phone's sales growth was 51% as compare to Motorola with just 4% and Nokia with no sales development. The major reson behind Organization's high growth despite of greater prices than Nokia and Motorola was the company's high-end quality cell phones.

Enterprise was likewise profiting from increasing market share of high-end LCDs as given in case Display 3. The major reason, making the company make it possible for to avail the opportunity is its mass production at low expense. Sony was the greatest competitor for Steeltech Competing In Chinas Auto Market Case Study Solution in LCD market, however, it had actually likewise started joint endeavor with Corporation in 2003 for LCD making, reducing the competition for Org.

Porter's Competitive Strategy

Low Cost Leadership method of porter is totally carried out by Business the way they achieve economies of scale by enhancing their core competencies of production. Even to the point that their rival SONY decided to form an alliance with them to produce for them, because they were not able to compete with them on low cost. Differentiation is another technique well carried out by Company by continuous investment in the R&D and remaining ahead of the competition. They always bring something innovative and new whether it's a service or a product.


Alternative Solution 1

The Chief Marketing Officer (CMO) of Steeltech Competing In Chinas Auto Market Case Study Solution would develop a new brand name image by targeting the more youthful generation of the specific nation. As, especially mobile phones of Corporation are preferred among the more youthful demographic.


1. It is the very best strategy to build Consumer Lifetime Value (CLV) by developing a long-lasting relationship with customers. Construct loyalty through providing value and reap the benefits for long-lasting, as research study has actually showed it is much cheaper to retain current consumers than to bring in new ones.
2. Another pro of this alternative is that word of mouth spread more quickly amongst more youthful people and which in turn will bring in brand-new clients for my products.


1. Old customers who were associated with Org prior to may not like this new image the business is trying to represent.
2 It will sustain more expenditures to rearrange some items and it might not even bring success as the patterns change extremely rapidly among the more youthful market.

Alternative service 2.

It would be done by arranging training workshops throughout which significance of marketing will be taught and numbers will be given. Marketing environment must be produced internally first as real marketing starts inside the corporation.


1. Its pro will be that all the marketing approach fans will come out and also the opposite ones.


2. Its con can create an extremely unhealthy environment in the workplace, as people frequently withstand change because they fear it.

Determine the very best option

Alternative is the finest as it plainly has more pros because as soon as a Consumer Life time Worth is developed the company will profit from it till that consumer is alive and has buying power. Plus, our target clients are the more youthful generation which are bound to live longer than the current old age people. Corp's main goal is to create loyalty among its customers and make them bought it from them and even purchase their various items.

Application Plan

• Targeting younger generation through social marketing, creating a relate to them like Pepsi do with music. And set the expectations achievable and reasonable.
• A group consisting of best marketing and sales professionals must be assemble, and both views ought to be considered prior to securing the resources required to carry out the strategy.
• Thorough interaction of the strategy should be done as it is very essential for everyone to be on the very same page to make it work.
• Tasks and timelines must be build and communicated appropriately to each person accountable.
• The supervisor need to use a control panel which shows the progress of all the tasks which have been done or about to be done and by whom.
• The supervisor must keep an eye on and keep a constant check on the private and total performance.
• Everybody need to want to adapt midway since any new trend or policy might be available in due to which all the important things already prepared have to be changed. It's better to have contingency plans currently prepared.
• At the end of the campaign the supervisor must interact the results and if successful should commemorate with the group.


This change the budget allowance of many managers and various countries were unhappy and argued however the analysis done by the program was precise and showed figures like North America and Russia growth potential merited a 35% allocation while they were getting 45%. It really assisted to relatively disperse the resources and catch more customers by investing more on advertisements on the high development potential areas of the world.

Its continuous investment in R&D and innovative practices have propelled them to brand-new heights but for them its' just the start and they desire to be among the top 3 brand names in the world. Their marketing efforts need to be directed towards younger group in the middle of the internal arguments about marketing and should create Client Life time Value as it will not just give them benefits now but will continue to reap it till the customer lifetime. As the cost of maintaining the consumer is much cheaper than bring in a new one.