“One plus one” is more than two.

Samsung, LG consider TV panel partnership

“One plus one” is more than two.

Summary

Samsung Electronics Co. and LG electronics controlled 38% of the global market in 2007, with exports topping $35.3 billion. They are Korean top electronics makers and bitter rivals in global market. They are positively considering a deal, that is that they buy each other’s products. The Ministry of knowledge Economy expects that this first deal is starting of collaboration. He thinks the compitition among Taiwan, Japan, Korea and some other countries in the region are getting fierce. Therefore Seoul has an opinion that the Korean display companies need to share their resource each other. Nowadays, Korean government will roll out programs to make Korea into a display powerhouse, with at least 45 percent of the global market share in 2017, and earlier in the week, Samsung and LG announced that they will jointly develop a mobile television technology aimed at the North American market.

Opinion

Samsung and LG are well known display companies in the world. This deal is big effect in the world. I think Sony may carefully watch this deal. It has a big meaning in the world market. Nowadays, the world is getting closer, and FTA supports this movement. It may be a new strategy for surviving in changing global market.
This deal has an effect not only world market but also national market. They are the most important companis in Korea. Korean GDP and exchange surplus of Korea are hanging on these two companies. Almost Korean has an interest in this deal, and following the result, Korean stock market will change. Samsung has a 10% effection in Korean stock market.
I expect a positive effective. Generally, as this deal contributes for each company’s benefits. These two companies have a more market power about price. They will develop better technology using cooperation. Especially, common resources will help reducing cost.
Surely, the benefits are good for making a company better than before, however I think it’s not enough. They will develop more things using this chance. They input a lot of resource and money marketing. However, it is not proper. Following the professor Lee, Korean company already has a good ability producing the best quality goods. On the other side, they are not good at creating brand value and new idea.
Last class, we learn about defference between developed nations’ industry and others. Developed nation’s industry is not just making products. They make an intangible value. Samsung and LG need to focus on this type of business. It is not just making products fixed resource, but creating an intangible value. I expect that they will be upgraded through this chance.

References;Author: By Lee Sun-young Title: Samsung, LG consider TV panel partnership The Korea Herald. May 16, 2008

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