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China Briefings

Reports on China issued by Samsung Economic Research Institute

Strategic Technological Shifts for Corporations in China

Strategic Technological Shifts for Corporations in China

Samsung Economic Research Institute Beijing Office

Aug. 1, 2007

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Corporations frequently update their products to keep pace with changes in technology. Portable music technology, for example, has undergone multiple transformations, from bulky Sony Walkmans to more petite CD players, and then finally to ultra-light MP3 players. Television technology has likewise evolved from cathode ray tubes to plasma display panels and liquid crystal displays. All of these technologies coexist in China.

As technology changes, new markets can be tapped with timely product offerings. Chinese companies such as Huaqui were quite successful in doing this by accurately gauging when to release MP3 players in a market dominated by portable CD players.

Other companies have been less adept at managing technological transitions. China’s UT Starcom earned handsome profits by providing customers with its low-cost Personal Handy-phone System, but declining telecommunication fees and mobile phone prices eroded the company’s price competitiveness and sales sagged.

This paper examines ways in which Chinese companies dealt with technology shifts to gain a strong foothold in a market where they had previously been weak, as well as the consequences of relying on obsolete technology.

The final analysis of this report suggests appropriate management strategies for exploiting opportunities in the Chinese market by adapting technologies in product lineups.

For full text (13 pages), click the PDF icon on top.
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