Steeltech Competing In Chinas Auto Market Harvard Case Study Solution

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Steeltech Competing In Chinas Auto Market Case Study Solution & Analysis


Steeltech Competing In Chinas Auto Market Case Study Solution is a popular international brand name in innovation market, established in 1938 by Lee Byung Chul, in South Korea. Steeltech Competing In Chinas Auto Market deals in a great deal of product classifications consisting of Semiconductors, Telecommunications, Digital Media, Digital Appliances and a lot more other electronic products. Historically, the company's core consumers include the Original Devices Manufacturers (OEMs), which utilized to offer Venture items withtheir own brand name. Till early 1990s, the core competency of Venture depend on its low rate offerings than its competitors by manufacturing existing items at economies of scale. Its client circle includes Original Equipment Manufacturers (OEMs), who utilized to sell Steeltech Competing In Chinas Auto Market Case Study Help items with their own trademark name. Org was not simply understood outside Korea. There were likewise no or little interest in developing the brand name globally. Marketing spending plan was controlled by production department with a prime focus on offering inexpensive products.During the 1997 Asian Financial Crisis the business practically got insolvent, however with the Vision of Chairman Lee it completely turn its fortune around and in 2002 was listed the leading 25 most valuable company worldwide. When Kim was hired as a Chief Marketing Officer in 2000 the company was not even listed. He rearranged Org as a global brand name and educated his divisional supervisors to understand marketing and its value. Now their goal is to arrive 10 by 2005.

Problem Statement

Business's shift from an item based to a marketing company is not going as efficiently as planned.Overcoming the unwillingness of divisional supervisors to incorporate marketing efficiently is still a major obstacle. Creating a constant brand identity across the entire world and utilizing marketing strategies that finest fits the regional culture is no easy job.
Executive Summary
Situational Analysis

Steeltech Competing In Chinas Auto Market Case Study Help efforts for constructing its brand throughout the world was begun after introducing the "brand-new management effort" by Chairman Lee in 1993. The objective was to change Enterprise from a cheap OEM to a high value-added item provider. To make the vision of Organization a truth, Chairman Lee appointed Yun as a vice chairman in 1997. Yun had a rather clear picture in his mind about how Company can change from a low end to a high-end item supplier. He understood that improvement can only be done through positioning Corporation as a business offering high-end products and this might just be done through high level of marketing.

In spite of having a clear vision about how to build Company brand name, with a possible assistance of its executives, Yun faced several marketing challenges in early years of its efforts.

Among the marketing challenges for Yun was the understandings of executives about the value of marketing. They considered marketing and selling as same tools and thought that quality products do not required marketing for increasing sales. As their focus towards marketing was rather low in their previous company practices, and the present marketing requirement was too much high, the space was too larger and to fill this gap with incorrect understandings about marketing was quite challenging for Yun.

As stated above, marketing focus was really low in previous practices, for that reason there were no appropriate marketing budget plans for each of the item on the portfolio. There was no marketing preparation done for the existing items. In addition to it the item range of the company was increasing with the ripening of new item ideas by the R&D sector of Corp. Yun had an obstacle to perform marketing planning and to develop marketing spending plans for existing as well as for brand-new items from the very start, and this would take a big time.

A substantial shift would be needed in present marketing expenses to construct the Steeltech Competing In Chinas Auto Market Case Study Help brand name. This would lead to increased marketing expenditures for Organization and might disturb the administration relating to increased expenditures, as they hesitated to marketing expenses previously and an abrupt big shiftwould make them interrupt. This could lead to decreasing executive assistance for international marketing. In this circumstance, Yun faces a difficulty for justifying increased marketing expenditures by demonstrating the long term value of huge marketing expenses.

Internal Analysis
SWOT Analysis

Steeltech Competing In Chinas Auto Market Case Study Help strengths lie in its huge item portfolio. Venture has largest number of patents in the market with total number of 15499 patents granted in United States( USP).

Another strength of Steeltech Competing In Chinas Auto Market Case Study Analysis is its capability to develop innovative products at a constant rate. It major proves for the innovation and item designing of Corporation is that the company has actually gotten many awards for its development and item style.

Unlike Apple and other rivals, Org is focused on producing gadgets which can be quickly incorporated with any kind of open source Os (OS) and software. This offers Org an edge over Apple gadgets.
Porter's 5 Forces Analysis
Org's capability to produce high end products at low expense of production is also among the significant strength of Corp as it allows the company to record more market by supplying quality products with cost control.

Weak points

Steeltech Competing In Chinas Auto Market Case Study Analysis weak points are concealed in the business's reliance on outsourcing software for its devices due to company's inability in developing software, unlike Sony. Company also has low revenue margins as compare to Apple due to substantial difference in the prices of Apple and Company with a much lower distinction in quality. The diverse focus of the business due to a great deal of products in its portfolio, result in the less efficient production and make the company not able to charge greater costs like Apple. The business is likewise inefficient in handling its patents and regularly deals with the problem of patent offense.


Opportunities for Corporation depend on the growing Smartphone market and the business's effectiveness in the market. It can increase its market share and revenues from mobile phone as the business is quite effective in mobile phone market. Business currently runs in about 80 countries and the company has a chance to increase its geographical growth by moving towards more emerging markets outside Asia. Enterprise can move towards acquisitions to get patents. It would make it possible for the company to increase its item portfolio with an increase in its wealth.


The vibrant industry environment of technology industry present an extreme threat on Company's survival and require the business to invest much of its profits share on R&D in order to survive in the long run. The market saturation in industrialized nations i.e. saturation of mobile company is likewise a huge risk for the company's development in the existence of strong competitors like Apple.

4 P's of Marketing
Swot Analysis

Steeltech Competing In Chinas Auto Market Case Study Solution provides quality products and has a rather abundant portfolio which accommodates various segments. Most of the products remain in the top three of their particular industries. LCD and smart phones are the greatest items of Enterprise, whereas DRAM is likewise not far behind in contrast of them. Following is the line of product of Corp:

• Laptops.
• Mobile phones.
• A/c.
• Computer.
• Hard disks.
• Washing machines.
• Refrigerators.
• Cams.
• Microwaves.
• Flash memory.


Steeltech Competing In Chinas Auto Market Case Study Help utilizes both market competitive and market skimming rates methods for its wide range of items. In competitive pricing it changes the cost according to the competition in order to gain advantage, whereas, it utilizes market skimming strategy where the product has an included value and by offering a couple of items it can reach break-even.


It has among the best supply chain networks, with retail distributors, their own sole distributors, E commerce channels like Amazon and so on. All its items are prompt supplied to the selling location/ delivered to the consumers straight in case of online order.

Vrio Analysis
It utilizes both offline & online channels of promotion to market their products. Paid product advertisements, social promo and digital advertisements are uses to create awareness about Business items.

Value Chain Analysis.

It's an analytical framework for identifying company activities that include value or competitive benefit for the business.

Incoming Logistics.

It has one of the most efficient and reliable supply chain network and has over 2700 suppliers throughout numerous industries around the globe. Almost 80% of which is based in Asia and the staying all over the world. For its incoming logistics it owns various logistics companies as it subsidiaries. It takes care of its suppliers and produces an unified relationship with them and even lowered their payment cycles to boost this relationship even more which adds value to their chain network.


Corp's core proficiency is its mass manufacturing it produces 90% of its items internal. Divided into 3 various departments its operations are namely IT & Mobile Communications, Device Solutions and Customer Electronics. It is maintaining operation centers worldwide to even more add worth to its worth chain network.

Outbound Logistics.

Its outgoing logistics system efficiency is one of the main factors Steeltech Competing In Chinas Auto Market Case Study Solution has the ability to take on Apple. Business's own Electronic Logitec system plays a major function in the outbound logistics operations. It even carries out the tasks of collection of payment, settling insurance coverage claims, etc. on behalf of Venture.

Marketing and Sales.

Attracting target consumer attention towards the item is done through marketing and sales to communicate with them the worth and competitive advantage the item uses. Steeltech Competing In Chinas Auto Market Case Study Solution advertising spending plan is constantly growing since they started their repositioning globally and will continue to do so as they are constantly looking to invest and expand in high potential growth markets. The budget is spent on occasions, print and media advertisements, public relations etc.

Corporation Service. Corporation put their customers on top and constantly strive to deliver unmatchable customer service standards. As after sales service is ending up being very crucial to keep consumers happy and engaged, they even perform surveys through 3rd parties to learn their consumer's feedback and implement it in the positive way to lower or if possible completely remove their customer problems. By including a direct assistance line to contact them 24 hours they have actually further increased the added worth of Steeltech Competing In Chinas Auto Market Case Study Solution service.


Steeltech Competing In Chinas Auto Market Case Study Analysis has diversified market division, based upon its arrangement of vast array of products to large number of consumers. Corporation target customer segments can be divided into 3 categories i.e. Steeltech Competing In Chinas Auto Market Case Study Help IT and Mobile Communications, Company Customer Electronics and Company Gadget options.


Steeltech Competing In Chinas Auto Market Case Study Analysis geographical segmentation is based upon two criteria i.e. region and density. Venture serves about 80 countries worldwide with its products offered to Urban in addition to Rural areas of the nation. The Corp is also growing its worldwide presence and the business's flexibility in locating its plants encourages worldwide expansion of Company.


Venture produces products that can be utilized by both males and women. The target clients for Corporation IT and mobile communication items have an age variety of 18-65 with bulk at a young or freshly wed life cycle phase. Apart from it, Corp Consumer Electronic devices are targeted to a client segment with an age range of 25-65.


The psychographic segmentation of Steeltech Competing In Chinas Auto Market Case Study Help s based upon the social class and the lifestyle of the customer. Organization target clients on the basis of social class are generally upper middle, middle and working class consumers, as Org sell items like cell phones very little more affordable i.e. Motorola in addition to not much costly i.e. Apple. It offers quality products to middle level consumers at a slightly high price than others targeting the same section.


Steeltech Competing In Chinas Auto Market Case Study Solution majority target clients have unique behavioural attributes. They are drawn in towards Corporation because of its moderate prices with a degree of quality.

Quantitative analysis.

Sales of Org has increased remarkably from 16 billion $ in 1997 to 44.6 billion $ in 2002, and the net earnings of.48 billion $ to 5.9 billion $. It has also minimized its debt from 15 billion $ to 4.6 billion $. Digital media is the biggest selling category of Business with sales of 13.9 billion $, whereas, Telecommunication and Semiconductors sectors both reached 11 billion $ in sales. Because of the high overhead cost, profits/ sales are increasing but net revenue is not increasing appropriately. New expansions and hiring's were the primary reason of the boost in the overhead expenses, with china currently not supplying any revenue to Corp, but there is so much potential in the existing market with 75 % yet to be checked out.

Qualitative analysis.

Whereas, the core strength of the business is presently producing however long gone are those days when good items were offering themselves. Kim has actually already started to reinforce the marketing activities of Business and really quickly it will become one of its core strength like producing if not better.



Org runs designs, produces and sell a large portfolio of consumer electronic devices. It operates in an exceptionally competitive environment and has effectively placed itself as the maker of quality products. The response is yes.


As, said previously that Steeltech Competing In Chinas Auto Market Case Study Help operates in a highly competitive environment, which suggests all the business have similar products. The answer for rarity is no.


Due to the nature of the market, it is very simple for rivals to comprehend the functionality of the items and quickly make their own models. Yes, Business is just behind IBM in signing up brand-new patents yearly, however the benefit is very short-term in this industry.


Chairman Lee has entirely turn-around Venture, from going almost bankrupt during the Asian monetary crisis of 1997 to the top 25 company in the world. Definitely yes there is proper organization in the company and the results promote themselves.

External Ecological Analysis

PESTLE Analysis


Being a multinational brand spread practically in every nation worldwide, majority of the environments like U.S.A., Europe, China and so on, are extremely conductive for its operations. Nevertheless, it faces some political pressures in less developed countries where order situation is bad. Latin American, African and some Asian countries fall in this classification, where political instability do have a result on Steeltech Competing In Chinas Auto Market Case Study Help operations.


Buying power of consumers is vital for business like Corp to grow and succeed. Emerging markets like India, middle-eastern countries etc. supply growth opportunities, whereas, due to recession even the clients of industrialized nations suffer badly. Hence it is extremely crucial for the company to watch on the continuous economic situation of the country prior to entering the market.


International business need to face different social and cultural concerns throughout its operations in a foreign country. Business has actually likewise dealt with numerous concerns but have actually adopted to the regional environments of the majority of the nations exceptionally well. It has customized its products, practices, policies and so on appropriately in order to be successful.


With a yearly expense of 2.4 billion dollars in Research study & Advancement, and with consistent innovative product launches, Steeltech Competing In Chinas Auto Market Case Study Analysis is one of the top innovative business of the world. With a clear mission to be ahead of the rest when it pertains to technological advancements, Corp has increased to the no 25 of the leading successful business of the world.


Each country has their own laws and policies, being a multinational business Company need to strictly follow those laws in their jurisdictions. Failure to do so, will result in serious legal repercussions. So, it needs to study or hire a local law expert before starting its operations in a particular nation.


With the rising awareness amongst consumers about the ethical & ecological offenses of business, Corp has to guarantee that it follows all the security standards. Ecological damages, ethical misbehaviors are not acceptable and in some nations the repercussions can be extremely serious. On the other hand it needs to do some Corporate Social Obligation practices to show the locals that it appreciates their environment and people.

Porter's Five Forces

Danger of Alternative

Threat of replacement for Corp's each item classification is quite substantial. Elements for high threat of substitution for Steeltech Competing In Chinas Auto Market Case Study Solution Smartphone include the existence of high number of suppliers and Market saturation in industrialized nations, which make the cost of changing for consumers almost zero. Along with it, Organization printing solutions items are threatened by the increasing attraction of consumers towards cloud storage.

Rivalry Among Existing Companies:

The rivaly amongst Enterprise and its close rivals is extreme. The significant reason behind this is the technique of market saturation in various variety of product classifications, requiring Business to introduce more innovative features in existing products and brand-new ingenious products to maintain its development. Other aspect for the extreme rivalry amongst the competitors is the little product distinction among the items. The popular players in the innovation market are quite aware of the significance of R&D costs for their survival and are facing a race of marketing and R&D costs, to capture the marketplace. The major competitors for Steeltech Competing In Chinas Auto Market Case Study Help samrtphones include Apple, Motorola, LG, Nokia, Huawei, OPPO and so on. High competition rivalry results in the varying market shares which can be seen in Exhibition F.

Bargaining Power of Providers:

Steeltech Competing In Chinas Auto Market Case Study Solution has a vast supply chain including about 2700 suppliers throughout the world.( Venture Sustainability Report, 2016) Provider's bargaining power for Venture is low as Org runs economies of scale and its orders are of possible size and worth. These substantial orders allow Business to negotiate prices with its suppliers. However, due to incapability of Steeltech Competing In Chinas Auto Market Case Study Solution to build its own software application, it has to outsource its software advancement to Google, which ends up being a possible supplier of software for Enterprise, leading to high bargaining power of Google. Although, in most of cases Enterprise has a power to negotiate costs, but it offer significant prices to its providers to build a strong supply chain and to have strong relationships with its suppliers.

Bargaining Power of Buyers:

Haggling power of purchasers for various number of product classifications of Business is extreme. One of the factor causing the extreme bargaining power is the availability of large number of rivals in practically each product classification i.e. rivals of Corp Smartphone, with an extremely little differentiation. The high availability of providers of Smartphones with minimum distinction, make the switching expense for buyers almost zero, hence increasing the bargaining power of purchasers. Market saturation in the majority of the product classifications likewise make the bargaining power of buyers more extreme in for Steeltech Competing In Chinas Auto Market Case Study Solution. In spite of igh bargaining power Corporation is rather efficient in offering its products at a greater price than much of its rivals, due to luxury quality item and a reasonable brand name image.

Threat of New Entrants:

Danger of new entrants for Steeltech Competing In Chinas Auto Market Case Study Solution is rather low. Along with it, requirement of substantial know-how and research study and advancement expenditures for survival in the market also make brand-new entrants reluctant to enter in the market. Market saturation is likewise one of the barrier of entry in innovation industry.

Competitive Analysis

Enterprise's high product diversity offers it distinction from its rivals. It is one of the three top brand names by market share. Unlikely to its close rivals including Sony, Intel and Nokia, who focus bulk on a single product classification with Sony focusing on consumer electronic devices, Nokia on mobile phone and Intel on chips, Company had a big R&D costs on all of its product classifications which make it possible for the business to make prospective earnings from sales of nearly all of its products. (See Exhibition) However, due to the broad product range the business deals with high number of rivals.

The business ranks first in 4 item categories i.e. DRAM Chips, LCD Displays, Cinema Televisions and Microwave, in terms of international market share, among 8 various product categories. Enterprise was the worldwide leader in manufacturing DRAM, SRAM and NAND flash chips. Business incomes from chips was less than Intel however its earnings from chips was growing much faster than Intel and has grown close to the revenue levels of Intel, as provided in the case Display 2.

Along with the chips Business mobile market was likewise flourishing at a high rate than its rivals i.e. Motorola and Nokia. Org's mobile phone's sales development was 51% as compare to Motorola with just 4% and Nokia with no sales growth. The significant reson behind Business's high growth despite of greater rates than Nokia and Motorola was the company's high-end quality cellular phone.

Company was also profiting from increasing market share of luxury LCDs as given up case Exhibition 3. The significant reason, making the business allow to obtain the opportunity is its mass production at low expense. Sony was the greatest rival for Steeltech Competing In Chinas Auto Market Case Study Solution in LCD market, however, it had actually likewise started joint endeavor with Organization in 2003 for LCD making, decreasing the competition for Corporation.

Porter's Competitive Strategy

Low Expense Management method of porter is fully implemented by Venture the way they achieve economies of scale by enhancing their core competencies of production. Even to the point that their competitor SONY chose to form an alliance with them to manufacture for them, due to the fact that they were not able to compete with them on low expense. Distinction is another strategy well executed by Corporation by continuous financial investment in the R&D and staying ahead of the competition. They constantly bring something innovative and brand-new whether it's a service or an item.


Alternative Solution 1

The Chief Marketing Officer (CMO) of Steeltech Competing In Chinas Auto Market Case Study Help would develop a brand-new brand image by targeting the more youthful generation of the specific country. As, specifically mobile phones of Company are very popular amongst the younger demographic.


1. It is the best method to construct Client Life time Value (CLV) by creating a long-lasting relationship with clients. Build commitment through delivering value and reap the benefits for long-term, as research has actually revealed it is much cheaper to keep present consumers than to bring in new ones.
2. Another pro of this option is that word of mouth spread quicker among younger people and which in turn will bring in brand-new clients for my products.


1. Old clients who were connected with Business prior to may not like this new image the business is trying to represent.
2 It will incur more expenses to rearrange some items and it may not even bring success as the trends change really quickly among the more youthful market.

Alternative solution 2.

It would be done by setting up training workshops during which value of marketing will be taught and numbers will be offered. Marketing environment ought to be created internally initially as real marketing starts inside the corporation.


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


2. Its con can create a really unhealthy environment in the workplace, as individuals typically withstand change due to the fact that they fear it.

Recognize the best option

Option is the best as it plainly has more pros due to the fact that once a Client Life time Worth is built the business will profit from it till that client is alive and has buying power. Plus, our target clients are the more youthful generation which are bound to live longer than the current aging individuals. Company's main objective is to develop commitment among its consumers and make them redeemed it from them and even buy their various products.

Execution Strategy

• Targeting more youthful generation through social marketing, developing a link with them like Pepsi finish with music. And set the expectations achievable and practical.
• A group including best marketing and sales specialists should be assemble, and both views need to be considered prior to protecting the resources needed to carry out the plan.
• Thorough communication of the plan must be done as it is very crucial for everyone to be on the same page to make it work.
• Jobs and timelines should be develop and interacted appropriately to each individual responsible.
• The manager must use a control panel which shows the development of all the tasks which have actually been done or about to be done and by whom.
• The manager need to keep an eye on and keep a consistent look at the private and total performance.
Since any new pattern or policy might come in due to which all the things already planned have to be changed, • Everybody need to be prepared to adapt midway. It's much better to have contingency strategies already prepared.
• At the end of the campaign the manager should interact the outcomes and if effective must celebrate with the group.


The M-net program revealed engaging analysis about the low and high growth possible locations and how much advertising budget must be assigned appropriately. This modification the budget plan allocation of many supervisors and various nations were unhappy and argued but the analysis done by the program was precise and revealed figures like The United States and Canada and Russia development prospective merited a 35% allocation while they were receiving 45%. Whereas, China and Europe need to be getting 42% but were rather offered 31%. It truly helped to fairly distribute the resources and catch more consumers by investing more on advertisements on the high development capacity areas of the world.

Its constant financial investment in R&D and innovative practices have propelled them to new heights but for them its' only the start and they desire to be amongst the leading 3 brand names in the world. Their marketing efforts must be directed towards more youthful group in the middle of the internal arguments about marketing and should produce Customer Life time Value as it will not just offer them advantages now but will continue to enjoy it till the consumer lifetime. As the expense of maintaining the customer is much more affordable than attracting a new one.