WhiteGoodspetitorAssessment–某著名企業(yè)SamsungElectronicsChina(SECChina)August,2001Thisreportissolelyfortheuseofclientpersonnel.Nopartofitmaybecirculated,quoted,orreproducedfordistributionoutsidetheclientorganizationwithoutpriorwrittenapprovalfrom某著名企業(yè)&pany.Thismaterialwasusedby某著名企業(yè)&panyduringanoralpresentation;itisnotapleterecordofthediscussion.CONTENTS1.BackgroundinformationLocationStartingyearIPOdateNumberof

employeesBrandvalueMarketshareSalesrevenueEquitystructureEraanalysis4.Valuechainstrategy5.Organizationandownership6.FinancialperformanceFocusonMarketing,

advertisingand

promotionDistribution(channel

andsalesforce)OrganizationstructureSalesProfit2.Strategy3.Product/marketCorporatestrategyKeyproductofferingsMarketpositionKeycustomersValuepropositionGeographicfocusPricingCONTENTS1.BackgroundinformationLocationStartingyearIPOdateNumberof

employeesBrandvalueMarketshareSalesrevenueEquitystructureEraanalysis4.Valuechainstrategy5.Organizationandownership6.FinancialperformanceFocusonMarketing,

advertisingand

promotionDistribution(channel

andsalesforce)OrganizationstructureSalesProfit2.Strategy3.Product/marketCorporatestrategyKeyproductofferingsMarketpositionKeycustomersValuepropositionGeographicfocusPricingBACKGROUNDINFORMATION

Source: Annualreport;analystreports;website;YuegangInformationDaily Location:QingdaoStartingyear:1984IPOdate:ListedrefrigeratorbusinessinNovember,1993Brandvalue(2000):~RMB30billionMarketshare:Refrigerator:31%;Washingmachine:29%;AirConditioner:20%;Microwave:2%Numberofemployees:30,000Equitystructure:KeyshareholdersPercentage某著名企業(yè)Group某著名企業(yè)ElectronicInternationalCo,.Ltd31.44%17.93%SalesRevenue(2000):RMB40.6billion某著名企業(yè)'sDEVELOPMENTWENTTHROUGHTHREESTAGESBrandingDiversification

andexpansionGlobalization1984-19911992-19981998-KeyinitiativeBuiltastrongbrandnameinrefrigeratorsthroughawelldeve-lopedTQCsystemDiversifiedtheproductportfolioto"avoidhavingallthe-pany'seggsinonebasket"throughmer-gersandacquisitionsTobuildaninternationalbrandnameAspirestobefortune500KeyresultsWonthefirstprizein"themostfavoritelightindustryproductsrefrigerators”5yearsinarowWonthestateprizeforqualitymanagementPresentedwiththecustomersatisfactioncupbyChina'scustomersatisfactionmovementcongressAcquired14enterprisesunderthe"eatingdormantfish"strategy.Successfullyturnedthesebusinessesaroundbyleveraging某著名企業(yè)'sbrandandintroducing某著名企業(yè)'sOECmanagementExpandedproductportfoliofrom1producttoover9,000productsin42categoriesSoldproductstoover160countriesandregionsandestablishedmorethan38,000salesoutletsacrosstheworld某著名企業(yè)'sbrand

valuein2000:

~RMB30billion某著名企業(yè)'sBRANDBECAMETREMENDOUSINTANGIBLEASSETExamplesof某著名企業(yè)'ssuccessfulinvestmentwithitsbrandAcquiredQingdaoRedStarElectronicpanyandchangeditswashingmachine'sbrandinto"某著名企業(yè)".WiththehelpofOECmanagement,quicklyturnedthepanyintoaprofitablebusiness.某著名企業(yè)becametheNo.1brandforwashingmachinethenextyearandenjoyedthehighestmarketshareAcquiredcontrollingsharesofShundeWashingMachineFactorywith某著名企業(yè)brandandquicklyturnedaroundthebusinessTookcontrollingsharesofHangzhou某著名企業(yè)Electronicpanywith某著名企業(yè)brandanddeveloped某著名企業(yè)seriesofcolorTVKitchenappliancesRefrigeratorFreezerMicrowaveGasrangeSmallappliancesElectricironVacuumcleanerVentilatingappliancesAirconditionerRangehoodAirpurifierCleaningappliancesWashingmachineElectricwaterheater某著名企業(yè)OFFERSBROADRANGEOFPRODUCTS某著名企業(yè)'skeyproductofferingsMobilehandsetTelmunicationsBrowngoodsColorTVVCDTelephonePCPDAIT某著名企業(yè)HASSUCCESSFULLYEXPANDEDINTOGLOBALMARKETDevelopglobaldistributionnetwork62distributorsandaround38,000outletsacrosstheworldSetupproductionfacilitiesoverseasSetupplantsinIndonesia,Philippines,Malaysia,EastEurope,US1999exportsRefrigerator:568,000unitsAirconditioner:200,000unitsWashingmachine:190,000unitsRefrigeratormarketshare

inUS(2000)<124L:30.1%183-266L:35.88%CONTENTS1.BackgroundinformationLocationStartingyearIPOdateNumberof

employeesBrandvalueMarketshareSalesrevenueEquitystructureEraanalysis4.Valuechainstrategy5.Organizationandownership6.FinancialperformanceFocusonMarketing,

advertisingand

promotionDistribution(channel

andsalesforce)OrganizationstructureSalesProfit2.Strategy3.Product/marketCorporatestrategyKeyproductofferingsMarketpositionKeycustomersValuepropositionGeographicfocusPricing某著名企業(yè)'sSTRATEGICFOCUSIN2001"Valuewar"insteadof"pricewar"FocusonimprovingtechnicalcontentsinproductsProduce"individualized"productsGlobalpetitiveadvantageArrangeallbusinessprocessesaroundorderflowBuildpetitiveadvantageinquality,costandleadtimethrough"OEC"managementProductdevelopmentDevelopproductsthataretailoredfordifferentcountriesandregionsImprovetechnologyinlargecapacityrefrigeratorsandnetworkrefrigeratorsImproveproductioncapabilityforspecialrefrigeratorsHumanresourceProviderigoroustrainingstoemployeesanddevelopthemintoindustryexpertsandmanagementexpertsServiceBuildextensiveandexclusiveservicenetworktoensurestrongreputationofbeingaserviceleaderCONTENTS1.BackgroundinformationLocationStartingyearIPOdateNumberof

employeesBrandvalueMarketshareSalesrevenueEquitystructureEraanalysis4.Valuechainstrategy5.Organizationandownership6.FinancialperformanceFocusonMarketing,

advertisingand

promotionDistribution(channel

andsalesforce)OrganizationstructureSalesProfit2.Strategy3.Product/marketCorporatestrategyKeyproductofferingsMarketpositionKeycustomersValuepropositionGeographicfocusPricing某著名企業(yè)S'sKEYWHITEGOODSOFFERINGWhitegoodsWiderangeoftypesSide-by-sideRefrigeratorWashingmachineAirconditionerMicrowaveProducttypeDoublechamberDrumPulsatorWindowSplitPackagedCentralairGrillandnon-grillMechanicandelectronic某著名企業(yè)WHITEGOODSMARKETSHARE,2000RefrigeratorWashingmachineAirconditionerPercentMicrowave100%=1998Others1999200037.415.58.72.732.435.713.88.25.95.728.030.912.38.610.08.826.1Samsung

ElectroluxMeilingKelon*某著名企業(yè)Siemens8.69.19.4某著名企業(yè)andKelonaretheleadingplayers.However,theirmarketsharesaredecreasingAlthoughlaterstothemarket,ElectroluxandSiemensarequicklybuildinguptheirpositionsbyfocusingonmid-tohigh-endandhigh-endmarketsparedtootherMNCplayers,Samsung'sgrowthinthemarketisratherslowMillionsunits,percentRefrigeratormarketshareofmajorplayersinmajorcities4.5-6.215.6270.7101.23.9-6.9-5.0CAGR(98-00)

PercentSamsung某著名企業(yè)/Kelon/MeilingSiemens/Electrolux2.63.32.70.7某著名企業(yè)ISALEADINGPLAYERINMOSTOFWHITEGOODSMARKETSREFRIGERATOREXAMPLE100%=North

ChinaOthersSamsungElectroluxMeilingKelon*某著名企業(yè)Siemens2.33.50.5ElectroluxandSiemensaredoingparticularlywellinSouthwestApartfromSouthwest,MNCplayersaredoingbetterineastChinaandSouthChina,relativelymoreaffluentareasSamsungisrelativelystronginEastChinaandSouthChinaNorth

EastEastChinaCentral

SouthSouth

WestNorth

West0.90.71.432.011.68.59.85.31.730.836.616.111.57.65.90.421.926.06.29.79.48.210.130.331.014.36.99.710.53.324.420.411.09.819.218.50.320.833.818.29.68.60.124.15.6Refrigeratormarketshareinmajorcitiesbygeography,2000Millionunits,percentSamsung某著名企業(yè)/Kelon/MeilingSiemens/Electrolux某著名企業(yè)HASDEMONSTRATEDSTRENGTHINMOSTGEOGRAPHICREGIONSREFRIGERATOREXAMPLE100%=<1,500OthersSamsungElectroluxMeilingKelon某著名企業(yè)Siemens0.92.30.3Siemensisfocusingonveryhigh-endmarketwhileElectroluxisfocusingonmid-to-highendmarketSamsungdemonstratedstrengthinlow-pricemarketKelonusesmulti-brandstrategytotargetbothlow-to-midendmarketandmid-to-highendmarket1,500-

2,5002,000-

2,5002,500-

3,0003,000-

4,000>4,0002.01.92.024.112.51.217.819.624.80016.012.60.17.74.145.713.828.316.50.18.510.031.51.93.447.39.71.15.98.87.21.318.736.32.03.82.919.326.09.40.429.80.14.34.70.348.10.312.5Rongsheng*0Refrigeratormarketshareinmajorcitiesbypriceband,2000Millionunits,percentElectroluxKelon/RongshengSiemensSamsung某著名企業(yè)’SPRODUCTSCOVERALMOSTALLPRICESEGMENTSREFRIGERATOREXAMPLE100%=<100LOthersSamsungElectroluxMeilingKelon*某著名企業(yè)Siemens0.21.00.7某著名企業(yè)isleadinginmostmarketsElectroluxandSiemenshavestrongpositioninmid-to-largecapacitymarketsSamsungisverystronginsmallcapacity

(<100L)marketandisrelativelystronginmidcapacitymarket100-

150L150-

180L0.61.23.1180-200L200-

225L225-

250L250-

300L>300L2.60.03Rongsheng*40.47.8036.90.119.851.213.401.49.602.821.424.823.30.59.07.76.51.127.129.89.10.813.75.27.54.229.735.511.70.85.911.010.12.922.123.45.41.17.824.12.61.234.417.28.55.25.013.730.419.90.125.1019.02.61.152.00.20Refrigeratormarketshareinmajorcitiesbyproducttype,2000Samsung某著名企業(yè)/Rongsheng/KelonSiemens/Electrolux某著名企業(yè)’SPRODUCTSCOVERBROADRANGEOFTYPESREFRIGERATOREXAMPLECONTENTS1.BackgroundinformationLocationStartingyearIPOdateNumberof

employeesBrandvalueMarketshareSalesrevenueEquitystructureEraanalysis4.Valuechainstrategy5.Organizationandownership6.FinancialperformanceFocusonMarketing,

advertisingand

promotionDistribution(channel

andsalesforce)OrganizationstructureSalesProfit2.Strategy3.Product/marketCorporatestrategyKeyproductofferingsMarketpositionKeycustomersValuepropositionGeographicfocusPricingAPARTFROMSTRONGBRAND,某著名企業(yè)’SKEYSTRENGTHSLIEINSTRONGATTENTIONTOR&D,SUCCESSFULSUPPLYCHAINANDLOGISTICSMANAGEMENT,WIDEDISTRIBUTIONNETWORKSANDQUALITYAFTER-SALESSERVICESKeystrengthsR&DLeadingtechnologiesinhighefficiency,inverter,energy-saving,environmentalprotection,etc.StrongR&Dresource(R&Dspendingaccountsfor45%ofrevenue)Quickmercializationofnewtechnologies(75%mercializationrate)ProductdesignreflectingindividualizationFounded某著名企業(yè)CentralInstituteofResearchwithpartnersfromUS,Japan,Germany,etc.Setup48R&DentitiesworldwideSetupnewproductexperimentcenterineachkeybusinessunitBuildtechnologyalliancewith15researchinstitutesincludingPhilips,C-MoldandNetscreenRecentdevelopmentLogisticsSophisticatedsupplychainmanagementandhighlyefficientlogisticsmanagementLaunched“Idesignmyownrefrigerator"marketingstrategyBuiltERP,BPPandCRMsystemsBuiltChina’slargestandmostadvancedlogisticscenterinQingdaoSalesandmarketingStrongbrandrecognitionInvestedRMB0.5billioninA&PDistributionHighlyefficientdistributionnetwork

(42distributioncenters,andover

9,000salesoutlets)Improveddeliverytimeto8hoursinhubcities,24hoursinsurroundingareas,4daysanywhereinthecountryAfter-salesserviceStrongreputationinofferingexcellent

after-salesserviceContinuepromotetheconcept"customersarealwaysright"某著名企業(yè)LOGISTICSHASGAINEDRICHEXPERIENCEINSOPHISTICATEDSUPPLYCHAINMANAGEMENTOptimizedsupplychainmanagement某著名企業(yè)’soperatingobjectiveZeroinventoryZerodistanceZeroworkingcapital某著名企業(yè)logisticsmanagementmodel:“one-flowandthree-net”O(jiān)neflow:orderinformationflowThreenetGlobalsupplierresourcenetworkGlobalcustomerresourcenetworkITnetworkCurrentcapabilities某著名企業(yè)’sorderflow~6,000orders/month~15,000sourcingpartsSupplierbase978supplier(58%lowerthanbefore)20%internationalsuppliersincludeGE,Emmerson,etc.Internetusage100%purchasingordersonline20%onlinepaymentPurchasingleadtime3daysparingwith10daysbefore某著名企業(yè)’sDISTRIBUTIONCENTERHASALARGEGEOGRAPHYCOVERAGEINCHINA某著名企業(yè)’sdistributionnetwork某著名企業(yè)logisticscenter(Qingdao)42distribu-tioncenters1,550specialtystoresand~9,000salesoutletsDistributionnetworkinChinaInternationalpresence:DGforair-conrelatedproductsatHamburgerHarbor,Germany,partneringwithHHLAShanghaiBeijingWithestablishednetwork,某著名企業(yè)haspromisedapetitivetimeofdelivery8hourswithincorecities24hoursinadjacentareasofcorecities4daysfornationwidedistributionTransportationequipment:over10,000trucksinChina某著名企業(yè)’sfacilities某著名企業(yè)HASADISTINCTIVEDISTRIBUTIONAPPROACHWHICHISHEAVILYFOCUSINGONDIRECTRETAILSALESFORBASEAND

HUBCITIESSpecialtyshoresFirsttiercitySecondtiercityThirdtiercity某著名企業(yè)shop-in-shopsRetailersinfirsttiercitiesRetailersinsomelargesecondtiercitiesSpecialtystore某著名企業(yè)shopinshopsRetailersinsecondtiercitiesSpecialtystore某著名企業(yè)shopinshopsRetailersinthirdtiercitiesSpecialtystores某著名企業(yè)A/CsalesCo.某著名企業(yè)salesbranchesinsmallsecondtiercitiesWholesalesinsomethirdtiercities某著名企業(yè)salescenterinfirsttiercities某著名企業(yè)salescenterinsomelargesecondtiercities某著名企業(yè)salescentersinfirstandsecondtiercities某著名企業(yè)salesbranchesinbigthirdtiercitiesEastregionNorthregionWestregionSouthregionCONTENTS1.BackgroundinformationLocationStartingyearIPOdateNumberof

employeesBrandvalueMarketshareSalesrevenueEquitystructureEraanalysis4.Valuechainstrategy5.Organizationandownership6.FinancialperformanceFocusonMarketing,

advertisingand

promotionDistribution(channel

andsalesforce)OrganizationstructureSalesProfit2.Strategy3.Product/marketCorporatestrategyKeyproductofferingsMarketpositionKeycustomersValuepropositionGeographicfocusPricing某著名企業(yè)’SORGANIZATIONSTRUCTUREBOD