GUCCI GROUP 사례발표Contents1. Gucci Group 역사?2. 명품시장 분석3. 구찌의 새로운 도전4. 생각해볼 과제제 1 부Gucci Group의 약사GUCCI GROUPFRAGRANCES COSMETICSWATCHESJEWELRYACCESSORIES,RTW, SHOESGUCCIYves Saint LaurentSergio RossiIBottega VenetaAlexander McQueenStella McCartneyBalenciagaYSL BeauteLuxury Timepieces In'lBoucheronBedat CoLuxury Timepieces DesignGucci Group Divisions1차 경영권 분쟁(80년대) - 수익성 악화 및 극동아시아내 가짜 상표 남발 - 회사운영방식 차이에서 비롯된 2세와 3세간 경영권 분쟁전환점 - 89년 - 3세 Maurizio와 투자회사 Intergroup 경영권 인수 - 유능한 경영진 출범2차 경영권 분쟁(90년대초반) - 전 세계 50개국에서 벌어진 3세간의 특허권 분쟁 - Maurizio의 경영실패 및 이로인한 Intergroup간 2차 경영권 분쟁Gucci Group의 몰락Gucci Group의 부활부활(90년대 중반 이후) - 투자회사 Intergroup의 경영권 인수 - CEO : Domenico De Sole - Creative Desiner : Tom Ford 체제 출범 - 극적인 회생 * 매출액 기준 세계 2위 * 1996. 3 : New York, Amsterdam증시 이탈리아 패션업체 최초로 100%상장 * 1998 : “올해의 유럽 기업으로 선정”DE SOLE-Ford(1994~)스타일 대신 패션추구 경향(90 년대) WTO로 인한 자유무역 확대 90년대 미국의 경제성장브랜드 이미지 제고 노력 우수한 경영진 임명 - De sole / FordMaurizio-Mello(~1994)스타일 대신 패션추구 경향(90 년대) IMITATION상품범람 90년 초반 미국의 경기하락경영권 분쟁으로 이미지 실추 새로운 디자인 개발 등한시 경영자의 자질부족외부 환경내부 역량HOW TO?? - Background독점적 고객을 상대하므로 높다가격Maurizio-Mello(~1994)패션이 아닌 스타일이 중요 (고전적 이미지)방향부유한 보수적인 중년의 여성고객설정넓은 체인점 중심의 확장정책유통가족간 분쟁으로 이미지 실추촉진제품시대에 뒤쳐지는 디자인 조직적이지 못한 제품라인 많은 라이센스로 고가 이미지 훼손30%까지 내려 대중에게 다가감De sole-Ford(1994~)젊고 신선한 감각으로 어필 (현대적/도시적/섹시한 이미지)젊은 정신을 가지고 있고 나이에 상관하지 않는 현대적 도시여성체인점 축소, 직영점 확대와 고급화신선하고 자극적인 광고로 이미지 제고 광고에 대한 투자 증대다양한 아이템 생산 (패션 지향) 산만한 제품라인 배격 라이센스 축소로 고가이미지 재구축HOW TO?? - Change Strategy운영비절감생산과 배송시스템 향상으로 물류시간 단축글로벌화직영점 강화와 이를 통한 원료이동,생산 (95년 65개-83개-126개로 매년 50% 성장) 생산, 물류거점의 글로벌화(다양한 거점에서 생산)품질향상생산업자와 긴밀한 관계 (훈련,자금제공,품질검사,EDI 네트워크)기타10개 이상의 결제라인을 3단계로 축소 해외사업부의 통합으로 지휘/통제 강화De sole-Ford(1994~)HOW TO?? - Change Strategy구찌의 성과 (1994-2001)제 2 부명품시장의 전반적 현황 개관명품산업 시장현황A운용자산 100만불 이상 2600 만명(2001) 메릴린치는 고소득층이 50% 이상 증가예상(2005)B다양한 연령,소득계층으로 명품 대중화 현상C보통 여러 브랜드에서 구매하며 패션 지향적임D전반적으로 이윤이 높은 산업E1999년까지 매년 6% 성장하는 600억 달러 시장매출규모 세계 1위의 럭셔리 그룹 소속사 : 루이비통, 크리스챤 디오르, 지방시, 셀린, 로에베, 펜디, 겐조 - 브랜드의 독립성을 중시LVMHRichemontPrada- 매출 규모 세계 3위의 명품그룹 소속사 : 반클리프 아펠, 까르띠에, 보메 메르시에, 바쉐론 콘스탄틴등 - 경쟁기업군 중 비교적 고가정책소속사 : 프라다, 헬무트랭, 질샌더, 제니, 비블로스 - 전세계 133개의 직영매장을 가진 연 매출 7억규모의 패션그룹경쟁 기업 소개최근 명품 업체들의 전략브랜드 가치 제고 - Story Telling 광고, 품질향상, 직영매장 운영비 절감 노력 - 경기 침체에 대비한 운영비 절감 중요 - M A를 통한 규모의 경제로 시너지 효과 노림 글로벌화 - 루이비통 매출의 40%가 일본 및 일본관광객 9.11테러로 인한 유럽/미주시장에서의 손실을 아시아에서 만회명품 매출규모 1-3위 기업의 판매비중LVMHGucciRichemont제 3 부LVMH vs Gucci Group프랑스 출생 주요기업 인수실적 - 1971년 Hennessy Conac 인수후 Moet Hennessy 설립 - 1984년 Christian Dior 향수부분 인수 - 1987년 Louis Vuitton 인수 - 1999년~2001년 Gucci 적대적 인수 시도 가족기업형태의 주먹구구식 경영이던 Brand를 공격적주식인수를 통해 매수 인수당한 기업은 이후 시너지 효과로 수십배의 가치를 지니고 다시 태어남 (세계 패션의 교황)명품기업의 개혁가/사냥꾼–Bernard ArnaultBernard ArnaultLouis Vuitton Moet Hennessy50여개의 Brand소지 세계 최대의 명품 그룹 - 패션/가죽 : 루이비통,지방시,펜디,겐조.. - 향수/화장품 :크리스찬 디올,겔랑.. - 주류 : 헤네시,에르시에,샤토 디크엠 - 시계/보석 : 태그호이어,쇼메 - 고가품 소매 : DFS,세포라,Eluxury 2000년 전세계 680억$ 매출액을 올림 가죽제품(Louis Vuitton)이 주수입원1999. 1LVMH는 14억$을 들여 Gucci의 최대주주로 됨 - Gucci의 지분 34.4%확보 - 우리사주 제도를 통해 긴급 대응1999. 329억$로 지분 40%를 프랑스의 유럽최대 유통업체 PPR(Pinault-Printemps-Redoute)이 사들임 - LVMH의 지분율 19.6%로 축소2001. 9PPR은 8억 6천만$로 11.2% 지분추가 매집하여 53.2% 지분 확보 - LVMH는 보유 주식은 전량 금융기관에 매각LVMH와 Gucci Group간 경영권 분쟁LVMHGUCCIM A를 통한 브랜드 가치 제고Gucci, Yves Saint Laurent 두가지의 Main Brand 축을 유지하는 Portpolio 구축 Creative Desiner Tom Ford의 통합 Brand 발전 방향을 총 지휘개별 Brand 창의성위해 자율성 보장 Creative Designer의 권한이 약함 모회사의 규모의 경제를 이용한 협상력발휘의의차이LVMH에 대한 대응전략 – Brand 인수합병Gucci의 Brand 인수 합병1999. 11 : Sanofi Beaute 인수 1999. 11 : Sergio Rossi 인수 2001. 2 : Bottega Veneta 인수 2001. 5 : Stella McCartney 출시TREND : 명품업계의 M A를 통한 다각화진입장벽을 단기간에 해소 고급 이미지를 유지하며 확장가능 규모의 경제로 시너지효과 가능 - 브랜드 이미지 제고, 운영비용 절감, 글로벌화장점경쟁과정중 지나친 인수비용 향후 업무조율비미시 인수기업과 기존기업간 업무영역 충돌가능단점제 4 부생각해볼 과제TREND : 명품업계의 M A를 통한 다각화GUCCI가 LVMH의 각 Brand별 특성 강화 전략 GUCCI의 고유Brand 고수 중간단계위치토의과제 1GUCCI가 LVMH의 각 브랜드별 특성 강화 전략 GUCCI의 고유Brand 고수 중간단계위치1. GUCCI Brand에 기업역량을 집중시켜 성장할 것인가? 2. GUCCI의 고유Brand 고수 중간단계위치LVMH는 각 Brand별 자율성을 더 중시 GUCCI는 GUCCI Brand를 중심으로 한 통합이미지 관리TREND : 명품업계의 M A를 통한 다각화GUCCI가 LVMH에 비해 기계화의 비중이 GUCCI에 비해 낮음토의과제 2GUCCI가 LVMH의 각 브랜드별 특성 강화 전략 GUCCI의 고유Brand 고수 중간단계위치1. 효율성을 중시하여, 핸드메이드 상품의 일부 자동화를 추진할 것인가? 2. 효율성을 희생하더라도 전통적인 생산라인 운영방식대로 상품 제작하여 희소성 및 ALL-HANDYMADE를 통한 가치극대화를 꽤할 것인가?GUCCI 공장은 14세기 가내수공업을 보는 것 같았다. LVMH는 기계화와 수공업의 절묘한 조화{nameOfApplication=Show}
*Corporate Strategy (Wall-mart case)DATE 2007. 07. 10*Introduction of Wal-MartSuccess Factors in U.S., International and ChinaExternal Internal AnalysisAction PlanWal-Mart Value Key Challenging Factors5Forces SWOTStrategic OptionsScenarios Possible optionsAgendaQ/A Session*From Backwater Retailer to the World's Number One1960s ~ 80sFirst Wal-Mart in Ark.,USA (1962) Moved outside Arkansas (1968) Listed on NYSE (1972) First Company to reach $1bn in such a short time (1979) First Sam's Club (1983) 882 stores total $8.4bn in sales (1985)1990s2000sNation's No.1 retailer (1990) Int'l division formed (1991) Sales reached $93.6bn (1995) Neighborhood market introduced (1997) Largest private employer in the world (1999)Lee Scott named president and CEO (2000) Ranked #1 on the Fortune 5000 Listing (2003) Named by Fortune as most admired company in US (2003-2004) Sales reached $312.4bn (2005)*Current StatusThe Largest retailer in the world – $ 345 billion in salesFiscal Year ended in Jan 31(Dollarres: 525 Number of Associates: 250~350 Items: more than 135,000 Sales: $ 31,702 millionStatusYear of StartDescription1962The flagship retail division of Wal-Mart Stores offering a wide variety of general merchandise in a Pharmacy Department, Tire Lube Express, garden center, snack bar, Vision center and One-hour Photo Processing.Sam's ClubStatusYear of StartDescription1983The largest membership warehouse club in the US, focusing on serving small business owners. Each Club has 1,500 core business items consistently and offers “members only” prices.*Store Formats at Wal-Mart StoresSuper centersStatusYear of StartDescription1988Combining a full line of groceries and general merchandise department. Including Wal-Mart Specialty Shops such as the Vision Center, Tire Lube Express and One-Hour photo processing.Size: 187,000 sq. ft. Number of stores: 1,900 Number of Associates: 220~550 Items: more than 142,000(full) Sales: $ 90,419 millionsNeighborhood MarketsStatusYear of StartDescription1998G 2007JapanCanadaCosta Rica El Salvador Guatemala Honduras NicaraguaMexicoUKChinaBrazilArgentina2,700 Units in 13 Countries*Wal-Mart International22.5%18.6%18.5%SalesAssociates■ Total 1.8 million ▶ 550, 000 international (30%)Units■ Total 6,700 ▶ 2,700 international (40%)*Wal-Mart InternationalSuccessStruggleFailure▶ Cultural similarity and geographical closeness ▶ Successful application to Wal-mart's business model▶ Only EDLP strategy not attractive ▶ Difficulty in making full use of Wal-mart value ▶ Low brand recognition▶ Making little of market characteristics ▶ Failure of Localization ▶ Retreat from Germany in 2006, Korea in 2006*Wal-Mart in China*Key Challenging Factors in China▶ 1978 : China's Economic Reform Began ▶ GDP per cap : US$1,709 in 2002 ▶ Costal region US$2,117, Interior region US$765, Western region US$773Income Disparity▶ Infrastructural Deficiency - underdeveloped highway network ▶ Lack of IT NetworkDistribution▶ Many Trips, Little purchase ▶ Fresh means alive ▶ Shop, Small purchase Fresh food preference ShopliftingCost ControlArea limitation Distribution inefficiency Lack of IT NetworkBig Income disparity Local Gov't protection SOEs Infra deficiencyMarketProblem Definition5 Forces AnalysisSWOTStrategic OptionsAction Plan*▶ no many other retail market style▶No switching cost ▶Unique consumer needs▶ Imperative market to every retail Giants ▶ Fierce price service competition▶ Buying power▶ Economies of scale (mass distribution) ▶ High capital cost to enterThreat of new entrantsMedium PressureBargaining Power of CustomersHigh PressureThreats of SubstitutesMiddle PressureBargaining Power of SuppliersLow PressureIntensity of RivalryHigh PressureProblem Definition5 Forces AnalysisSWOTStrategic OptionsAction Plan*INTERNAL ANALYSISEXTERNAL ANALYSISUncertaintySWOT AnalysisSWOTBig MarketFast Growing MarketIntensifying CompetitionStrong LiquidityManagement ExpertiseTechnical ProwessToo much stubbornLack of understanding ChineseLow Market ShareProblem Definitct LocallyFast follower Spin-off and Listing in China M A Raise Chinese Capital (Reduce Risk)Economy of Scale : Be no. 1 in M/SHub. Chan : Multi-Hub and Spoke Hyper + Super (Quality, Freshness) STP : Multi-positioning (High income, City area)Multi-Hub, Distribution / Multi-Positioning, Beyond EDLP*Problem Definition5 Forces AnalysisSWOTStrategic OptionsAction PlanEconomy of ScaleWal-MartM/SCarrefourLocal Chain (Chinese)ProfitWal-MartTrust Mart Consolidation*`Problem Definition5 Forces AnalysisSWOTStrategic OptionsAction PlanMulti-Hub and Spoke*Problem Definition5 Forces AnalysisSWOTStrategic OptionsAction PlanINCOMEAREA$2,000 ~$1,000$2,000~~$500Big city Urban/Coastal areaSmall city Rural Area2nd tier CityHypermarketSupermarket (Fresh foods Necessity goods)Multi-Distribution ChannelHypermarket (Value-added Services)*Problem Definition5 Forces AnalysisSWOTStrategic OptionsAction PlanBig city Middle incomeINCOMEAREA$2,000 ~$1,000$2,000~~$500Big city Urban/Coastal areaSmall city Rural Areaow}
SCHOOL OF PUBLIC POLICY AND MANAGEMENTSpring 2007Quantitative Methods (Section 3)Final Exam (Take Home)1. Consider the random variable X with population mean and variance. What is the variance of ? (10 points)=i) Mean of = (++…+) / n == - = 0ii) Variance of = = = 1Numerator = + +…+ = ∑ = = n2.(25 points)The data set Literacy.xls contains data on GDP per capita and literacy rates (% of population older than 15 who can read and write) for a sample of 46 countries in 2003. Using this data, I want you to estimate the impact of literacy rates on GDP per capita using a simple linear regression model.a.State the equation for your simple model, which should include an error term .Y = + X + uX : Literacy Y: GDP/caperror term : education level, employment rate, export/importb. Compute the OLS estimate of the slope corresponding to the impact of the explanatory variable. You may use the Excel/MegaStat regression function. I want you to include the Excel printout in your answer.= 0.4624c. Based on interval = 0.4624 +/- 2.0154*0.07 =〔0.6144, 0.3103〕TINV(0.05, 44) = 2.0154If the null hypothesis is correct, then the true population = 0. Since 0 falls outside of 95% confidence interval, we can reject the null hypothesis that a one-percent increase in the literacy rate will have no impact on GDP per capita. Therefore, the evidence suggests that a one-percent increase in the literacy rate will have an impact on GDP per capita.g.Based on your hypothesis testing, what would be your policy recommendation?Based on our hypothesis testing, we can know Literacy and GDP/ cap have a relationship. Therefore, I will recommend raising Literacy. High Literacy will function as a factor increasing our GDP/cap.3. (25 points)You as a policy analyst have been asked to investigate the relationship between unemployment rates (% unemployment) and GDP per capita. Use the data contained in the file international.xls as your random sample of countries.a. Compute the Correlation Coefficient between these twoddition, means that when X is 0, how much Y will be.=> Y = -0.7158X + 24.08 +The direction of causality is negative. We can write the predicted change in GDP/cap as a function of the change in unemployment: = -0.72 (). This means that if the unemployment increases by one percentage point, =1, then tax is predicted to change by about -0.72.c. Compute the OLS slope corresponding to the impact of the explanatory variable. You may use the Excel/ MegaStat regression function.= -0.7158d. Compute the standard error of the OLS Slope. Show all your calculations. Given the standard error, what test statistic is appropriate for hypotheses testing? Explain.= Var() = = 2145.214 / 41-2 = 55s.e() = = = 0.1522e. Given your answer in part (d), show the one-tailed 99% confidence interval for OLS slope.99% confidence interval = -0.7158 +/- 2.4258*0.1522 =〔-1.0851, -0.3465, 〕TINV(0.02, 39) = 2.4258f. What is the R-squared from this regression? Explain the meaning of the coefficient of determination for thin class.Step 1: State the null hypothesis and the alternative hypothesis.The null hypothesis is “The mean distance is not larger than 500,000” The alternate hypothesis is “The mean distance is larger than 500,000” These two hypotheses are written:This is a one-tailed test because the alternate hypothesis states a direction.Step 2: Select the level of significance.In this case, I will assume the level of confidence is .01.Step3: Select the test statistic.The larger sample test statistic for a mean is z.In this case, we use z. The value of the test statistic is computed by formula:z =Step 4: Formulate the decision rule.Significance level: .01Critical Value: 2.33Since this is one-sided test and the rejection region is in the right tail, the critical value is positive. The decision rule is to reject H0 if the value of z is larger than 2.33.Step 5: Make a decision and interpret the result.z = = = 8.16Because 8.16 lies in the region to the right of the critical value of 2.33, the null hypotiven Information:i) P (high-quality) = .28 ii) P (Indonesian | high) = .18 iii) P (Indonesian | low) = .11a. Find the probability that rice sold in a Seoul market was imported from Indonesia.P (low-quality) = 1- P (high-quality) = .72P (Indonesian) = P (Indonesian and high) + P (Indonesian and low)= P (Indonesian | high)*P (high) + P (Indonesian | low)*P (low)= (.18*.28) + (.11*.72) = .1296 or 12.96%b. Consider the event in which the rice was imported from Indonesia. What is the probability that the rice was of the low-quality type?P (low | Indonesian) = P (low and Indonesian) / P (Indonesian)= (.11*.72) / 0.1296 = .6111 or 61.1%6. Provide an example from the field of public policy (if you are an MPP student) or business/management (if you are an MBA student) in which it is actually desirable to introduce systematic variation (such as stratified sampling) in the sampling procedure. (10 points)A famous institute surveyed workers’ annual salaries of Samsung Electronics which have the hig
More Than Steel : POSCO1. POSCO & world steel industry overview1.1. Development Symbol of Korean Steel Industry; POSCOIn the 1960s, Korean government concluded that self-sufficiency in steel and the construction of an integrated steelworks were essential to economic development. Since Korea had not had a modern steel plant at that time, many foreign and domestic businesses were skeptical of Korean government’s decision to invest heavily in construction of a steel plant. Despite the skepticism, however, POSCO began production in 1972, just four years after the company’s inauguration in April 1968 with on 39 employees.POSCO first began to sell plate products in 1972 and focused its sales policies on the domestic market to improve steel self-sufficiency. Special efforts were made to supply quality iron and steel to Korean companies at below export price resulted in enhancement of their international competitiveness.Figure 1.1 POSCO Production Capability and Domestic Demand of Steel Producrials directly to and from the plants. POSCO’s harbor facilities give tremendous cost advantage.In addition to full utilization of its location, POSCO was able to start fresh, so they could tightly interconnect every process, from the deliver of coke and ore, to the blast furnace. POSCO was able to eliminate inefficiency because POSCO made every process to be condensed.2.1.4. Efforts for sustaining cost efficiency(1) FINEXIron making technology without coking and sintering process has been a long-wishing subject to realize in the steel industry for decades. POSCO has remained firmly committed to the technological innovation, undertaking a R&D activity since 1992 to develop the FINEX process – an innovative iron making process to use cheaper untreated fine ore and non-coking coal without preprocessing.The operational results successfully proved the process feasibility, satisfying the technical targets for developing materials such as hot metal production without coking and sintering prondustry, we have concluded that POSCO’s plant design is modular because significant portion of the plant design and each steelmaking process were furnished by specialized outside suppliers, and there are many steel plant design and equipment suppliers collaborating with POSCO. We have observed it is common in steel industry that specialized suppliers provide steel producers with plant design work.The following table shows major suppliers which have helped and provided plant design and equipment to POSCO.2.3.2. Product DesignWe presume that entire POSCO’s product design is done within the organization with secretive ways except some joint product development with strategic partners. If most of POSCO’s product design were done by many outside providers, it would be sold to POSCO’s competitors also by the same providers, and that would not differentiate POSCO from any other steelmaking companies. And we have not found any clue that product design is furnished by specialized providers excein inventory is attributed to the introduction of PI (Process Innovation) such as the improvement in delivery compliance ratio and the shortening of delivery time.Following its inventory reduction, POSCO has seen the decrease in the number of personnel and equipment, and reduction in financial expenses, which are parts of inventory maintenance. In addition, through POSCO's PI activities, the client companies are able to place orders for just the needed amount of materials for a specific date and receive the orders in a short period of time, which will lead to the reduction in their inventory and financial expenses.The product orders that were previously taken in a cluster of ten days are now taken daily to move up production and shorten the shipment and transportation time. For example, the time period from order placement to delivery of hot rolled products has been shortened from 30 days to 14 days following the PI.4. SUPPLY CHAIN MANAGEMENTAccording to recent research Supply Managemee nature of Korean Logistics System and origins of POSCO’s suppliers and customers. POSCO terminals are playing an important role as such facilities from one hand serve as an inventory function for POSCO and from another hand as additional profits and tool to reduce the costs of raw material.(1) Lucrative businessFigure 4.5 POSCO Terminal Value-added chain[Source: POSCO Terminal Official Data http://POSCOterminal.co.kr]Combined Shipment of individual small sized-cargoes on large vessels cuts down the freight cost.The timely partial shipment in small volumes saves the inventory cost.POSCO customers may not need to own warehouse facilities.(2) Cost ReductionIn general, steel companies are interested in combined cargoes of iron ore in order to save freight by 2 port discharging. Moreover, coastal transportation and demurrage in the discharging port re inevitably result in increasing costs. Taking into consideration, POSCO by providing efficient services can leverage its transportation cos
Competitive Priority and strategy- Samsung Electronics Semi-conductor -Professor : Yu sang ChangKDI SCHOOL OF PUBLIC POLICY AND MANAGEMENTSpring 2007I. IntroductionSamsung electronics is very well known company not only in Korea, but also in the World. From the luxury type of refrigerator to the tiny high tech cellular phone, their business areas are very wide. However, most of us remember the No.1 Samsung, not for refrigerator, not for the cellular phone (even though they had been almost near). No 1 myth in ‘Semi Conductor’ business makes us to remember the Samsung as the real No 1 in the world.As you know well, not many Korean companies achieve and stay in No 1 in the world. Even though some could be No 1, but many of those performances were base on the low cost linked with cheap labor. (Now those days were gone. Korean could not be a supplier of cheap labor any more.) However semi conductor business is very different. It is based on the high intensity of capital and high technology.h in early stage.[Figure 4]This huge cash flow would be more and more important as the chip integration increase.[Figure 5]These rapid huge investments are possible Samsung is owner governing company. That could me possible ‘Rapid Trigger point’ in their investment.2. Blockbuster (Level 5/7)As Figure 5 showing, huge revenue is required continuously, and Samsung satisfy this through the ‘Blockbuster’. More than 50% of their sales come from one item based on very strong and big demand of market. (Figure 6) In the initial stage their blockbuster was 128M or 256 M dram and in these days it is Nand flash memory. Through these 1 or 2 main products they could get the huge amount cash.[Figure 6](The portion of Sales in Semi Conductor department in 1998)(The portion of Sales in Semi Conductor department in 2006)3. Cost (Level 6/7)As mentioned above, semi-conductor industry has the special characteristic of rapid price decrease in the mature stage of short life cycle, thus cost reduction is essever supply. That was the limit of Dram industry, thus Japan companies change to order-made-business to avoid that situation. Samsung tries to overcome that with high end Dram and the memory chips related mobile.In 1997 Samsung produce 64M DDR SD and in 1999 they produce 1 G DDR SD. Due to these kinds of high end dram product, average price of Samsung is higher than other competitor.[Figure 8]However considering the PC market’s growth opportunity (growth rate decrease), there were some limitations in dram market[Figure9]Fortunately (some people said it’s not based on luck, it’s based on Samsung’s excellent strategy) totally new market-mobile- was open. They made the decision to develop flash memory, different type with Intel. Nand memory is easier to mass production and more suitable for high volume data processing in mobile. Currently Nand memory market share is more than 50 %.[Figure 10]For the memory business for mobile, Samsung has better position other than competitor due to variouvestment can be followed by technical improvement. (System push: Samsung’s culture)* Comparing with one of recent trend of semi conductor business ; De-coupling (chip design performed in the design specialized company and production performed by another co.).For more detail with the value chain;1. Product : Vertically integrated, Horizontally ModularThe task team for each product is set up separately. This team is highly integrated vertically; horizontally very independent (their compensation system is also independent). With this system Samsung can develop more than 3 generation product at the same time and possible to be first in the market..2. Production : Highly IntegratedAs like Intel and other competitor, their production is very integrated. Physical collocation (Ki-heong complex) and a part of big conglomerate are the merit of this strategy.3. Supply and DistributionConcerning Semi conductor, many type of material and equipments are required. In those, silicon wafer is the main ccess in their new priority with continuing old priority, they have chance not only to maintain current position but also to over the Intel. This is current Samsung’s strategy.Intel also expect future market will be partially controlled by mobile business, and they start to develop new product more suitable for mobile (as like note book). Their strategy is ‘Platform’; not only CPU, they also package the memory chip and others for the customer. The one of this type is ‘Centrino’, made big success. In the CPU business Intel’s best competitive priority is ‘time to market’, but in the whole semi conductor business, when comparing with Samsung their definite priority the cumulative technology, especially memory chip designing.Thus to win in this competition Samsung continuous create new mobile related market related memory, and also improve their non-memory business. (Recently they invest 40 % of total investment to system LSI)Until now unfortunately, it is not so much successful. As recenty