Technological Capabilities and Samsung's International Production Strategies in East Asia [article]

Young-Soo Kim, University, The Australian National, University, The Australian National
Between the late 1980s and the early 1990s, the international competitiveness of the Korean electronics end-product industry declined markedly. This occurred during a period of transition when there was a shift from export to international production. Major Korean electronics firms, newly established as MNCs, were under challenge. The new MNCs had to build technological capability to compete with established MNCs. New MNCs were under challenge in both domestic and global markets and they were
more » ... nfronted by increasing globalisation of production and research and development activities. No new Korean MNC felt the challenge more keenly than Samsung Electronics. This study uses a case study approach to pose questions about which strategies were relevant to success in the international operations of new MNCs. Of particular interest is the way in which the subsidiaries of Samsung Electronics in the ASEAN region and China maintained their international competitive advantage, and whether their competitiveness can be sustained in the long run. A longitudinal case study approach is used to assess the strategic management, organisational and technology acquisition questions that arise in the establishment and expansion of international operations of new MNC in the electronics industry. The first part of the study provides description of the relationship between the learning and development of Samsung' s technological capabilities and the nature of its foreign direct investment and competitive advantage during the 1970s, 80s and 90s. During the 1970s and 80s, Samsung mostly emphasised the development of 'easy-to-imitate capabilities' such as mass production capability, rather than 'difficult-to-imitate capabilities' such as design and product development and international management. Its mass production capability was the main motivation for foreign direct investment, but this is a temporary ownership advantage. The second part of the analysis assesses how Samsung' s subsidiaries in the ASEAN region and China established the [...]
doi:10.25911/5d78dc00ab0ff fatcat:g6duw2wqkvcaxcmxhmw3wgufgu