Samsung, Sony to build a new LCD line

Mon Apr 10, 2006 4:27 AM ET

Sony Corp. of Japan has agreed with there South Korean counterpart Samsung Electronics Co. Ltd. to invest $2 billion in an expansion of liquid crystal (LCD) display plant in South Korea. This will help them in securing a big chunk of the booming LCD market.

Let us analyze it using the Barney’s Framework.

Þ Is this valuable? Definitely. The fact that both brands have teamed up together in the first place shows that they detected an opportunity to partner up and finalize this LCD plant expansion deal. The question now depends on if their combined resources be a strength or weakness in this new deal? I would say it’s a valuable resource. This expansion would allow Samsung the second largest maker of LCD’s last to take advantage of the brand power of Sony to expand into other markets were they are not well known.

"Samsung and Sony have seen lots of benefits by cooperating, creating the market together and enjoying higher margins in 40-inch TV panels," Lee Min-hee, an analyst at CJ Investment & Securities. "They want to do it again for the bigger sized panels through the new deal."

Hence with this deal not only Samsung but Sony will also benefit. They will be able to share the profits and also increase there own brand name.

Þ Is this rare? These kinds of partnerships are not rare in the industry. Earlier this month Taiwan's AU Optronics Corp., the third-biggest LCD maker, announced it would acquire smaller local rival Quanta Display Inc. But companies of the size of Sony and Samsung joining hands are not seen very often.

Þ Is this imitable? It is not easy for an electronic company to build a brand power such as those possessed by Samsung and Sony. They have worked very hard to build such a huge customer base. Firms face a cost disadvantage if they do not possess the same share of the market.

Samsung and Sony using each others expertise will help strengthen there market share. It will assist them to take a great stride forward over there competitors. With this partnership they have gained a competitive advantage over the competitors.

Virgin Atlantic launches first services to the Middle East with flights to Dubai

Dubai, the fastest growing city in the Middle East has finally attracted the Virgin Airlines to start its operations in Dubai. This will be the longest route on which Virgin Atlantic will be operating. Virgin Atlantic will be fighting with other luxury carriers in the Gulf such as Emirates, Qatar Airways, British Airway, etc. For example Emirates has a group has a big share in the air travel from Dubai. Over the years it has been very successful in building consumer loyalty.

Virgin Airlines will be facing immense rivalry among the industry as there are many similar airlines companies already present. This could also lead to price cutting and other incentives to make them more attractive to the customers. But compared to the US the airline industry in the Gulf is still doing well. There is still room for expansion as with the exponential growth in the population of Dubai which is mostly made up of expatriates the services of the airline industry are very vital.

Virgin Atlantic has done has made use of the customer interface of Hamel’s framework very effectively and knows that there is a great demand for luxury travel. Hence, it is offering the maximum luxury for its new Upper Class with fully recline able leather seat and other such luxury amenities. Not only that as most upper class passengers highly valued time they also have devised a system ‘Drive Thru Check In’ to save on time.

While at the same time Virgin Atlantic is also offering more effective and better services to the economy class passenger such as wider, more comfortable seat with more leg room, a glass of champagne prior to take off, a choice of liqueurs to follow dinner and a state-of-the-art in-flight entertainment system. This will lead to greater competition among the existing airline industry.

With both the growing number of tourists to Dubai and the exponential increase in the expatriate population in the Middle East. Virgin Airlines is all posed to take full advantage of the conditions in the Middle East.

AOL video service to debut with Intel, Kraft ads

AOL video service to debut with Intel, Kraft ads
By Kenneth Li

AOL and Intel have formed a coalition to expand into a new line of business i.e. of streaming free video shows online. To achieve this they have formed a new company, In2TV. Well than how will they be earning from streaming free shows? Four companies namely Intel Corp., Kia Motors Corp., Kraft Foods Inc., and Hershey Co. have promised to advertise through their service. Both companies are leaders in there respective core businesses.

Through this coalition Time Warner the parent company of AOL will compete against the other big giants such as Microsoft and Yahoo.

When both the companies combine they can take advantage of each others brand name to form a “strategic asset”. This will further help strengthen its position in the new business line.

AOL realizes that more of its customers want shows online as statistics show that, “online presentation of the Live 8 global concerts last year were watched by more viewers than those on TV.” This applies to “fulfillment and support of the customer interface” as they are reaching its customers through online streaming and not the regular television channels.

In2TV will not only host shows from its parent subsidiary, Time Warner. But also from Warner Bros., which owns the rights to shows that include "Welcome Back Kotter," "Kung Fu" and "Growing Pains."

EITC unveils logo and strategy to win 30% of telecom market

EITC unveils logo and strategy to win 30% of telecom market
By David Westley, Business Features Editor

This news brought relief to many people in the UAE who were tired with the service of the previous telecom operator, Etisalat. Etisalat enjoyed the monopolistic position in the UAE as it was the sole telecom operator. It also offered very high prices for the services it offered compared on international standards, keeping in mind that there are no explicit taxes in UAE as yet. Emirates Integrated Telecommunications Company (EITC) will be the second telecom company in the UAE.

It wants to take advantage of high growth of development in the economy as it realizes that it is easier attracting new people coming into the country and new businesses setting up than converting old Etisalat Customers. EITC has already stepped in the market by buying out Tecom, which had been the operator for Dubai's free zones for Dh1.2 billion last month.

Porter in his article on Structural Analysis of Industries talks about new entrants saying, “Prices can be bid down or costs inflated as a result, reducing profitability.” Similarly, Sultan Oman CEO of EITC while talking to Gulf News stated that price competition will be used.

Strategic asset a component of Strategic Resources from Hamel’s framework talks what the firm owns including infrastructure. EITC has promised to use the latest technology i.e. the 3G and the 4G to help them take some of the market from Etisalat. As a result EITC’s position will strengthen against Etisalat.

Moving on, making use of product/market scope EITC is especially targeting the expatriates of UAE as they realize they make a big chunk of the population by offering better roaming packages.

Not only that EITC is also recruiting young staff to give their company in a new and energetic outlook this is one of the ways it is differentiating from Etisalat. It also believes in good strong partnerships with the customers.

EITC still needs to go a long way but brings good news for people in the UAE waiting for another telecom operator.

Biggest sukuk issue attracts huge demand

Biggest sukuk issue attracts huge demand
By Arif Sharif, Staff Reporter

Islamic Finance is one of the fastest growing sectors in the financial sector today. This phenomenon caught strength in the late 1990’s. Hundreds of new companies were set up lately to cater to this fast growing sector of the economy. In the article leading the revolution by Gary Hamel he talks about core strategy. One of the components of it is Product and Market Scope, where the firm competes including which customers, which geographies and what product segments. After doing a careful of analysis of the customers.. Many of the old conventional financial institutions either abandoned their old form of business or increased their product line to include the Islamic products in the Middle East region. This has also lead to strengthening the “Relationship dynamics” between these companies and the customers as the customers feel these companies are more responsive to their needs.

Since then all these companies have experience a high growth in revenues regardless of their size. The $2.8 billion sukuk of Dubai's Ports Customs and Free Zone Corporation (PCFC), the joint book runner to the issue attracted great demand from both the local and foreign investors. Before I go on let me explain what sukuk is? Sukuk is the Arabic name for a financial certificate. It complies with the Islamic law. It is an Islamic Bond.

But this Sukuk issue was a different from the rest. The innovative structure of the Sukuk was the first in the Islamic finance world. “We were confident of the success of the transaction but we are pleasantly surprised by the market's interest in the issue from across the board," Faisal Mikou, a director at Barclays Capital told Gulf News. Great interest was shown not only from the Middle East but also from Europe and Asia. Where these type of bonds are not available.

Hamel also talks about information and insight an element of Customer Interface. Dubai's Ports Customs and Free Zone Corporation have been very effective at using this strategy seeing there is a growing demand of Islamic products in this region they were successful in creating a huge demand for the biggest ever Islamic bond issue.

Effect of Danish Boycott Patchy

The article, “Effect of Danish products in patchy,” talks about that many Muslims have boycotted Danish products due to a Danish newspaper printing some offensive caricatures of Prophet Muhammad (PBUH). I think the Europeans knew that these caricatures would ignite the Muslim world, but they did not imagine to this extent. When they were first published in September last year many Muslims condemned it but still they reprinted in January this year. This is like teasing the Muslims. What else would they expect? It’s uniting the entire Muslim world to fight against them. What we have seen as yet is nothing I think there is more to come. A French newspaper argued that there are so many caricatures of God also. In Islam the Muslims belief that everyone has the same God, hence if a person makes fun of him it’s between him and God. But Prophet Muhammad (PBUH) is only the Prophet of the Muslims and non Muslims or Muslims don’t have to right of making fun of him.

The Europeans have forgotten there history that in the 11th and 12th century before industrialization they were also ready to die for the sake of their religion. If there is a misrepresentation or an attack against the Prophet Muslims are still ready to give up there lives. The caricatures also misrepresented the teachings of Islam. The Prophet was the opposite of what is shown in the caricatures.

The boycott has not been imposed by any government but it’s been done voluntarily by the people. Don’t they have the freedom to choose what they want to boycott?

Due to reprinting of these cartoons the Muslims are getting annoyed with anything related to Europe especially Denmark. If even the boycott is lifted it will be very difficult for the Danish companies to survive in the Muslim world as hatred is filled for them in the deep down in the hearts of the Muslims. Basically due to a few in Danes the entire Danish economy is going to suffer the consequences. They have lost their Muslim customers. The Danish companies will have to strive very hard to come back. Muslims have boycotted any company that it associated with Denmark. If a company owns any strategic assets with any link to Denmark it is facing a bad time. Although SADAFCO was not any more related to Denmark but still it was affected badly.

Google- Assignment 5

In the article “The Real Cost of Google’s Sellout in China”, proves the fact that the top most priority of a company is making money. Corporate social responsibilities, fighting for freedom for its users, etc are all marketing gimmicks and nothing else. Google has teamed up with Chinese government because it is looking at the future which many do not realize. It sees China as its biggest market and knows that the government of China has a very tight hold on businesses there. In order to build up a good healthy business in China it is developing good terms with the government. Many debate why does Google has this dual image that is because people in US highly value freedom and to keep them happy so they not move to its rivals. Hence, these are all marketing channels to retain its customers.
The second part of the Porter’s article “Structural Analysis and Competitive Strategy”, explains some of the reasons for the actions of Google. Google wants to position itself different from its rivals in US by fighting for privacy for its customers while at the same time wants to strengthen its position in China by developing a good relationship with the Chinese government as it has no doubt about its future goal which is to exploit the Chinese market.