International Expansion

A Study of Samsung Semi-Conductors in Hungarian Market

By:

Anwar ul haq Amir shehzad

A project report submitted to the department of marketing, faculty of management sciences, international Islamic university Islamabad, in partial

fulfillment of the requirements for the degree of

Bachelor of business administration

(Marketing)

Department of marketing

Faculty of management sciences

International Islamic university Islamabad

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International Expansion

A Study of Samsung Semi-Conductors in Hungarian

Market

By:

Anwar ul haq (Reg No.2892-FMS/BBA/S10) Amir shehzad (Reg No. 2896-FMS/BBA/S10)

BACHELOR OF BUSINESS ADMINISTRATION

(MARKETING)

Submitted To:

Mr. Kamran Maqbool

Department of Marketing

Faculty of Management Sciences

International Islamic University Islamabad

January 2014

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Copyright© 2014 by Amir Shehzad and Anwar ULhaq

All rights are reserves. No part of this project can be reproduced in any form or any means as photocopy of electronic media etc. without prior Approval of authors

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Supervisor’s Certificate

This is certified that Mr. Anwar ul haq (Reg No. 2892/FMS/BBA/S10) and Mr. Amir Shehzad (Reg no. 2896/FMS/BBA/S10) of BBA-S10 have completed their project report entitled “ under my supervision. I have checked this report and found it bona fide work of authors.

Mr. Kamran Maqbool

Supervisor

Lecturer of Marketing

Sayyed Adnan shabir

Assistant Professor

Head, department of marketing

Faculty of management sciences

International Islamic university, Islamabad

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Dedication

To our beloved parents and respected teachers

We dedicate this piece of work to our parents; with their help we are at this stage now, they provided us our physical and psychological needs. And to our teacher; who taught us in this academic program and facilitated us to think and act in new dimensions, polished our capabilities, and helped us in our academic life.

Thank You ALLAH Almighty!

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Table of contents

Acknowledgment …………………………………………………………….08

Country of Origin …………………………………………………………...09

Geographic and economic statistics……………………………………….. 11

Economy overview: ………………………………………………………….11

Country specific advantage (CSA)…………………………………………. 13

SAMSUNG ELECTRONICS (SEMI-CONDUCTORS) ………………….14

History ………………………………………………………………………16

Why Expanding?????? …………………………………………………….20

SWOT ANALYSIS ………………………………………………………….21

Strengths……………………………………………………………………21

Weakness…………………………………………………………..……….22

Opportunities……………………………………………………………….23

Threats……………………………………………………………………….23

DESTINATION…………………………………………………………….. 24

Background: ………………………………………………………………… 24

Hungry………………………………………………………………………24

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Economy - overview: ………………………………………………………..25

Hungarian Culture ………………………………………………………….27

PESTLE ANALYSIS……………………………………………………….. 39

Political………………………………………………………………………39

Economical……………………………………………………………………40

Social…………………………………………………………………………41

Technological………………………………………………………………..42

Legal………………………………………………………………………….43

Environmental………………………………………………………………..44

Why choose Hungary…………………………………………………….... 44

EXPANSION STRATEGY…………………………………………………. 47

MARKETING PLAN ……………………………………………………….48

RECOMMENDATION…………………………………………………….. 52

REFERENCES………….………..……………………………….…………53

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Acknowledgment

First and foremost, we would like to thank to our instructor of this project, Mr. Kamran

Makbool for the precious supervision and advice. He motivated us greatly to work on this

project. His enthusiasm to motivate us contributed tremendously to our task.

We also would like to thank him for showing us some model that related to the theme of our

project. Further, we would like to thank the authority of IIUI for providing us with a high-

quality environment and facilities to complete this project. It gave us a prospect to contribute

and learn how to expand business globally.

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Country of Origin

South Korea

Korea is an independent kingdom for much of its long history. It was occupied by Japan from

start in 1905 following the Russo-Japanese War. In 1910, it regained its freedom following

Japan's surrender to the United States in year 1945. After World War II, the Republic of

Korea (ROK) was set up in the southern part of the Korean Peninsula while a Communist-

style government was installed in the north. During the Korean War (1950-53), U.S forces

and UN forces fought alongside armed forces from the ROK to defend South Korea from

DPRK attacks supported by China and the Soviet Union.

A peace agreement was signed in 1953, splitting the peninsula along a demilitarized zone at

about the 38th parallel. Thereafter, South Korea achieved rapid financial growth with per

capita income rising to roughly 14 times the level of North Korea. South Korea today is a

fully functioning modern democratic state.

Chaebols: Korea is home of large firms in a set, called Chaebols, which can be classified as

multinational enterprises (MNEs) in the listing of the world’s largest 500 companies, ranked

by sales for 2001. In 2004, there were eleven Korean firms in the list of the world’s largest

500. These large firms are analyzed here as the basic set which will determine the success of

Korea in developing multinational enterprises.

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The starting point of this theory of the MNE is the suggestion that an MNE goes in a foreign

country to further expand on its firm-specific advantage (FSA).These can be technology

based, knowledge based, or they can reflect administrative and/or marketing skills.

The FSAs need to be notable from Korea’s country-specific advantages (CSAs) where the

latter are available to all firms situated in Korea; in contrast FSAs are the capabilities of each

specific firm. The presence of Korean firms is at least as stable as the other large 500

companies. Two Korean firms among Korea’s twelve largest firms in 2001, that is 17%, were

unlisted in 2004, while ninety-four firms among the world’s major 500 firms were unlisted in

2004, that is, 19%.

It is significant to note that four Korean trading firms, Samsung Corporation, Hyundai, LG

International and SK Global, were listed in the world’s largest 500 companies. These firms

make up to 34% of the Korea’s largest 12 firms’ profits in 2001.

Over the same time period, Korea’s worldwide trade had increased more than 60%: from US

$292 billion to US $478 billion. Rising from darkness 25 years ago, Korean electronics

companies have come to own a important share of the world electronics market today. They

are now the key DRAM suppliers in the world. They conduct state-of-the-art R&D projects,

establish overseas ventures, and support world-class university science and technology

programs.

Due to technology, manufacturing procedures, capabilities, and infrastructure have made

them so victorious. This information, attached with understanding of the future direction of

the Korean electronics industry, is vital to U.S. competitiveness, to help U.S. businesses

determine in which market sectors to compete and in which areas subcontracting,

outsourcing, and partnership agreements would be favorable.

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Geographic and economic statistics

Location: Eastern Asia, southern half of the Korean Peninsula neighboring the Sea of

Japan and the Yellow Sea.

Geographic coordinate: 37 00 N, 127 30 E

Area total: 99,720 sq. km.

Country comparison to the globe: 109

Land: 96,920 sq. km.

Water: 2,800 sq. km.

Terrain: mostly hills and mountains. Wide coastal plains in west and south.

Natural Resources: coal, tungsten, graphite, molybdenum, lead, hydropower

potential.

Languages: Korean. English

Religion: Christian (26.3%) (Protestant 19.7%, Roman Catholic 6.6%), Buddhist

(23.2%,) other or unknown 1.3%, none 49.3% (1995 census)

Population: (48,860,500) (July 2012 EST.)

Country comparison to the globe: 25

Economy overview: South Korea over the past four decades has demonstrated

incredible expansion and global incorporation to become a high-tech industrialized market. In

the 1960s, GDP per capita was similar with levels in the poorer countries of Africa and Asia.

In 2004, South Korea joined the trillion dollar club of globe economies, and at present is

among the world's 20 largest economies. Initially, a system of close government and business

ties, including directed credit and import limitations, made this achievement possible.

The government promotes the import of raw materials and technology at the cost of consumer

goods, and encouraged savings and investment over expenditure. The Asian economic crisis

of 1997-98 exposed longstanding weaknesses in South Korea's growth model including high

debt/equity ratios and massive short-term foreign borrowing. GDP plunged by 6.9% in 1998,

and then recovered by 9% in 1999-2000.

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Korea adopted various economic reforms following the crisis, including greater openness to

overseas investment and imports. Growth moderated to about 4% per annum between 2003

and 2007. With the global economic depression in late 2008, South Korean GDP growth

slowed to 0.3% in 2009.

In the third quarter of 2009, the financial system began to recover, in large part due to export

growth, little interest rates, and an expansionary fiscal policy, and growth was 3.6% in 2011.

In 2011, the US-South Korea Free Trade contract was ratified by both governments and is

expected to go into effect in early 2012. The South Korean economy's long term challenges

include a swiftly aging population, inflexible labor market, and heavy dependence on exports,

which comprise half of GDP.

GDP: $1.554 trillion (2011 est.)

GDP growth rate: 3.6% (2011 est.)

Exports commodities: semiconductors, wireless telecommunications equipment,

motor vehicles, computers, steel, ships, and petrochemicals.

Imports commodities: machinery, electronics and electronic equipment, oil, steel,

transport equipment, organic chemicals, plastics.

Natural resource: Coal, tungsten, graphite, molybdenum, lead, hydropower

potential.

Industries: Electronics, telecommunications, automobile production, chemicals

shipbuilding, steel.

Export: Semiconductors, wireless telecommunications equipment, motor vehicles,

computers, steel, ships, petrochemicals.

Import: Machinery, electronics and electronic equipment, oil, steel, transport

equipment, organic chemicals, plastics.

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Country specific advantage (CSA)

Country specific advantage in;

Electronics: South Korea is a major manufacturer of electronics, producing color televisions,

videocassette recorders, microwave ovens, radios, watches, personal computers, and

technology products. In 2005 the electronics industry produced US$23 billion value of goods

(up 35 percent from 2000), to become the world's sixth major manufacturer. The total value

of parts and components (including semiconductors) created in 1988 totaled US$9.7 billion,

overtaking consumer electronics production (US$9.2 billion) for the first time. Manufacture

of industrial electronics also grew considerably and totaled US$4.6 billion (20 percent of total

production).

By 2003 important shifts were occurring within the electronics industry. In 2005 South Korea

had lost some of its cost advantage to newer customer electronics producers in Southeast

Asia. At the same time, demand of electronic components and of industrial electronics,

particularly computers and telecommunications tools, continued to increase.

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The company which we choose:

SAMSUNG ELECTRONICS (SEMI-CONDUCTORS)

The Samsung Group is a multinational corporation headquartered in Samsung Town, Seoul,

South Korea. It is the world's leading corporation by revenue with annual revenue of US

$178.4 billion in 2012 and is South Korea's main cabal.

The meaning of the Korean Hanja word Samsung is "Tri-Star" or "three stars". The Samsung

Group is composed of various international joined businesses, most of them united under the

Samsung brand including Samsung Electronics, the world's major electronics company,

Samsung Heavy Industries, the world's second largest shipbuilder and Samsung C&T, a

major global manufacture company.

Samsung was founded by Lee Bungan churl in year 1938. Over the next three decades the

group expands into areas including food processing, textiles, insurance, securities and retail.

Samsung entered the electronics market in the late 1960s and the construction and

shipbuilding industries in the mid of 1970s; these areas would drive its successive growth.

Following Lee's death in 1987, Samsung was divided into four business groups – Samsung

Group, Shinseki Group, CJ Group and Hansel Group. Since the 1990s Samsung has

progressively more globalized its activities, and electronics, particularly mobile phones and

semiconductors, have become its most significant source of income.

Important Samsung industrial subsidiaries include Samsung Electronics (the world's largest

information technology company measured by 2012 revenues, and 4th in market

value), Samsung Heavy Industries (the world's 2nd-largest ship builder measured by 2010

revenues), and Samsung Engineering and Samsung C&T (respectively the world's 13th and

36th-largest construction companies). Other important subsidiaries include Samsung Life

Insurance (the world's 14th-largest life insurance corporation),Samsung Ever land (operator

of Ever land Resort, the oldest theme park in South Korea),Samsung Tec win (an aerospace,

surveillance and defense corporation) and Ceil(the world's 16th-largest advertising agency

measured by 2011 revenues).

Samsung has a dominant influence on South Korea's economic development, politics, media

and culture, and has been a major driving force behind the "Miracle on the Han River".

Its associate companies produce around a fifth of South Korea's total exports. Samsung's

returns were equal to 17% of South Korea's $1,082 billion GDP.

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Samsung has been the world's most accepted consumer electronics brand since 2005 and is

the best known South Korean brand in the world. Samsung Group accounts for more than

20% of South Korea's total exports and is the principal in many domestic industries, such as

the financial, chemical, retail and entertainment industries. The company's strong authority in

South Korea is able to be seen throughout the country, which has been referred to as the

"Republic of Samsung.

From its foundation as a small export business in Taegu, Korea, Samsung has developed to

become one of the worlds leading electronics companies, specializing in digital appliances

and media, semiconductors, memory, and system assimilation. Today Samsung's modern and

top quality products and processes are globe recognized. This timeline captures the most

important milestones in Samsung's history, showing how the business expanded its product

lines and reach, grew its profits and market share, and has followed its mission of making life

better for customers around the world.

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History

1938 to 1970:

In 1938 Lee Byung-chull (1910–1987) of a large landowning family in the Uiryeong county

came to the close to Diego city and founded Samsung Sang hoe, a small trading corporation

with forty workers located in Su-dong . It deal in groceries produced in and around the city

and produced its own noodles. The corporation prospered and Lee moved its head office to

Seoul in year 1947. When the Korean War broke out, however, he was enforced to leave

Seoul and started a sugar refinery in Busannamed Ceil. After the war, in year 1954, Lee

founded Ceil Monika and built the factory in Chrisman-dong, Diego. It was the biggest

woolen mill ever in the country and the business took on the aspect of a major corporation.

Samsung diversified into various areas and Lee sought to help establish Samsung as an

industry leader in a wide range of enterprises, moving into businesses such as insurance,

securities, and retail. Lee placed great significance on industrialization, and focused his

financial development strategy on a handful of great domestic conglomerates, protecting

them from competition and assisting them economically.

In 1947, Cho Hong-jai (the Hyosung group’s founder) together invested in a new business

called Samsung Muslin Gongs a, or the Samsung Trading Corporation, with the Samsung

Group founder Lee Byng cull. The trading company grew to become the present-day

Samsung C&T Corporation. But after some years Cho and Lee separated due to differences

in administration between them. He required getting up to a 30% group share. After

agreement, Samsung Group was separated into Samsung Group and Hyosung Group, Han

kook Tire, and others.

In the late 1960s, Samsung Group entered into the electronics business. It formed numerous

electronics-related divisions, such as Samsung Electronics Devices Co., Samsung Electro-

Mechanics Co., Samsung Corning Co., and Samsung Semiconductor & Telecommunications

Co., and prepared the facility in Suwon. Its first creation was a black-and-white TV set.

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1970 to 1990:

In year 1980, Samsung acquired the Gumi-based Hangar Jenna Tongs in and entered the

telecommunications hardware business. Its first products were switchboards. The facility

was developed into the telephone and fax manufacturing systems and became the main

part of Samsung's mobile phone manufacturing. They have created over 800 million mobile

phones to date. The corporation grouped them together under Samsung Electronics Co.,

Ltd. in the 1980s.

After Lee, the founder's death in 1987, Samsung Group was divided into four business groups

– Samsung Group, Shinseki Group, CJ Group and Han solo Group. Shinseki (discount store,

department store) was at first part of Samsung Group, divided in the 1990s from the Samsung

Group along with CJ Group (Food/Chemicals/Entertainment/logistics) and the Han solo

Group (Paper/Telecom).

Today these separated businesses are independent and they are not part of or attached to the

Samsung Group. One Hansel Group representative said, "Only people ignorant of the laws

governing the company world could believe something so absurd," adding, "When Hanson

separated from the Samsung Group in year 1991, it severed all payment guarantees and

share-holding ties with Samsung affiliates." One Hanson Group source asserted, "Hanson,

Shinseki, and CJ have been under independent administration since their respective

separations from the Samsung Group." One Shinseki department store executive director

said, "Shinseki has no payment guarantees linked with the Samsung Group."

In the 1980s, Samsung Electronics began to invest a lot in research and development,

investments that were essential in pushing the company to the forefront of the international

electronics industry. In year 1982, it built a TV assembly plant in Portugal; in 1984, a plant in

New York; in 1985, a plant in Tokyo; in 1987, a facility in England; and another facility

in Austin, Texas in year 1996. As of 2012, Samsung has invested more than US$13 billion in

the Austin facility, which works under the name Samsung Austin Semiconductor LLC. This

makes the Austin location the major foreign investment in Texas and one of the main single

foreign in the United States.

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1990 to 2000:

Samsung started to rise as an global corporation in the 1990s. Samsung's construction

branch was awarded a contract to build one of the two Petronas Towers in Malaysia,

Taipei in Taiwan and the Burg Khalifa in UAE. In 1993, Lee Kun-he sold off ten of Samsung

Group's subsidiaries, downsized the corporation, and merged other operations to focus on

three industries: electronics, engineering, and chemicals. In 1996, the Samsung Group

reacquired the Sungkyunkwan University foundation.

Samsung became the major producer of memory chips in the world in year 1992, and is the

world's second-largest chipmaker after Intel . In year 1995, it formed its first liquid screen.

Ten years later, Samsung grew to be the world's leading manufacturer of liquid-crystal

display panels. Sony, which had not invested in large-size TFT-LCDs, contacted Samsung to

work together, and, in 2006, S-LCD was established as a joint venture between Samsung and

Sony in order to present a stable supply of LCD panels for both manufacturers. S-LCD was

owned by Samsung (50% plus 1 share) and Sony (50% minus 1 share) and operates its

factories and services in Tangjung, South Korea. As on 26 December year 2011 it was

announced that Samsung had acquired the stake of Sony in this joint venture.

Compared to other major Korean businesses, Samsung survived the 1997 Asian financial

crisis relatively undamaged. On the other hand, Samsung Motor was sold to Renault at a

significant loss. As of year 2010, Renault Samsung is 80.1 percent owned by Renault and

19.9 percent owned by the Samsung. Additionally, Samsung manufactured a range

of aircraft from the year 1980s to year 1990s. The corporation was founded in 1999 as Korea

Aerospace Industries (KAI), the outcome of merger between then three domestic

major aerospace divisions of Samsung Aerospace, Daewoo Heavy Industries, and Hyundai

Space and Aircraft Corporation. However, Samsung still make aircraft engines and gas

turbines.

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2000 to 2013:

In Year 2000, Samsung opened a programming laboratory in Warsaw, Poland. Its work began

with set-top-box technology before getting into digital TV and smart phones. As of 2011, the

Warsaw base is Samsung's most significant R&D center in Europe, estimate to be recruiting

400 new-hires per year by the end of 2013.

In 2001 Samsung Techwin became the exclusive supplier of a combustor module for

the Rolls-Royce Trent 900 used by the Airbus A380, the world's major passenger

airliner. Samsung Techwin is also a revenue-sharing contributor in the Boeing's 787 Dream

liner GEnx engine program.

In 2010, Samsung announced a 10-year expansion strategy centered around five

businesses. One of these businesses was to be focused on bio pharmaceuticals, to which the

corporation has committed ₩2.1 trillion.

In December 2011, Samsung Electronics sold its hard disk drive (HDD) company to Seagate.

In the first quarter of 2012, Samsung Electronics became the world's largest mobile phone

maker by unit sales, overtaking Nokia, which had been the market leader since year 1998. In

the August 21 edition of the Austin, Samsung confirmed policy to spend 3 to 4 billion dollars

converting half of its Austin chip manufacturing plant to a more beneficial chip.  The

conversion should start in early 2013 with manufacture on line by the end of 2013. On March

14, 2013, Samsung unveiled the Galaxy S4 mobile.

On 24 August 2012, 9 U.S jurors ruled that Samsung had to pay Apple Inc. US$1.05 billion

in compensation for violating six of its patents on Smartphone technology.

The award was still less than the US$2.5 billion requested by Apple. The decision also ruled

that Apple didn't breach five Samsung patents cited in the case. Samsung decried the decision

saying that the move could damage innovation in the sector. It also followed a South Korean

ruling stating that both corporations were guilty of infringing on each other's intellectual

property. In the first trading after the ruling, Samsung shares on the Kospi index fell 7.7%,

the major fall since October 24, 2008, to 1,177,000 Korean won. Apple then wanted to ban

the sales of eight Samsung phones (Galaxy S 4G, Galaxy S2 AT&T, Galaxy S2 Skyrocket,

Galaxy S2 T-Mobile, Galaxy S2 Epic 4G, Galaxy S Showcase, Droid Charge and Galaxy

Prevail) in the United States which has been denied by the court.

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On 4 September 2012, Samsung announced that it plans to observe all of its Chinese

suppliers for possible breach of labor policies. The corporation said it will carry out audits of

250 Chinese companies that are its private suppliers to see if kids under the age of 16 are

being used in their factories.

In 2013 news outlets in Australia and New Zealand reported a number of Samsung washing

machines unexpectedly catching on flames.

Why Expanding??????

Because Shipments of dynamic random access memory (DRAM) for use in smart phones is

set for extraordinary triple-digit growth , outpacing the expansion of the entire DRAM market

by a factor of three, according to an IHS supply DRAM Market Brief from information and

study provider HIS.

DRAM shipments in Smartphone handsets, as measured in 1 gigabit-equivalent units, are

projected to rise to 1.7 billion in 2011, up 157.2 percent from 672.0 million in 2010. By 2015,

shipments will enhance to 13.9 billion units, up 700 percent from 2011.

“DRAM usage in smart phones is raising at a swift clip, as a result of high memory densities

in these devices, along with ever-rising sales to consumers,” said Clifford Leimbach, analyst

for memory demand forecasting at IHS. “Contrast to this year’s stunning DRAM growth in

smart phones, a shipment growth amounting to a much less spectacular 50 percent is

expected for the total DRAM market, which is dominated by sales to the PC production. The

major growth difference between the two sectors explains why DRAM manufacturers are

aggressively vying for a bigger piece of the cell phone DRAM marketplace. While DRAM

also is used in devices like tablets and PCs, smart phones will continue to control an

increasing portion of the DRAM market.”

Smartphone’s’ share of total DRAM use will grow to 7.6 percent this year, up from 4.4

percent in 2014. This will expand to 10.6 percent next year and then climb to 13.4 percent in

2015, 14.9 percent in 2016 and 16.0 percent in 2017.

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INTERNAL ENVIORNMENT EXTERNAL ENVIORNMENT

STRENTH WEAKNESS OPPERTUNITY THREAT

SWOT ANALYSIS

Strengths:

Samsung has a huge market for selling television which have innovative features such as

internet based function and recommendations on programmers based on user views. The

company has been able to make marvelous strides over the years, and the goods for the

television division have a wide range of price points to provide accommodation different

consumer groups.

Samsung is one of the major and the most dominant Smartphone manufacturer worldwide.

The corporation has sold more phones internationally compared to its closest competitor,

Apple which is the second main manufacturer. The Samsung Galaxy S series phones are the

key reason for gaining a large market share over a 4 year time period. The most recent

handset had sold millions of units within one quarter of release which prove that the business

can shift millions of units through innovation.

The camera division of Samsung is also building impressive changes to the overall

marketplace. The corporation has produced a camera which has the Android operating

method by Google which is a first in the business.

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The camera allows the user to control images and be able to share their photos instantly to

fashionable social networking sites via its built in 4G and Wi-Fi functionality.

Samsung is viewed prestigiously in the world.

Healthy organizational culture for the workers to learn.

Skilled and capable employees are working to meet competitively in the surroundings.

Significant attitude towards the customers.

Aggressive marketing promotion.

Timely service.

Diversity in the services, which make easy almost each and every segment of the world.

Weaknesses

The laptop division & the tablet division of Samsung is somewhat missing compared to the

overall market and its competitors. The business is trying to release fresh products within this

area but global sales of laptops have declined for a few years now and tablet sales have

improved. The company has yet to monopolies on this modified in technology as the tablets

they have released are not that eye-catching to consumers.

The fact that the corporation is selling millions of units of mobile phones is a big

achievement, however the main problem with this is that the corporation is not making a

good margin on the those sales. The manufacturing of their goods is highly fragmented as

well, where Samsung has made dozens of different types of handsets to accommodate various

price points. This may be creating mixed message to sponsors who may find that a smooth

product offering would better in the long term.

Marketing tactics are weak as compare to apple.

Usually try to recruit internally.

Pay roll problems.

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Opportunities

Samsung said that they will announce a smart watch in the month of January 2014, but this is

not confirmed. If Samsung were to discharge a smart watch, then they would the first

corporation to release a product like this to the market. Although there are other smaller start-

up corporation planning to release their own smart watches, Samsung would be the first big

corporation to produce them on a global scale.

Another part Samsung could look into is having health applications and products, much like

the Nike Fuel band or Nike+. Samsung could try and partner with Adidas to generate a

similar product which would allow both companies to enter a marketplace which they do not

operate in at the moment. Creating a product which would be package with similar health

wristbands with a compatible Smartphone would permit the companies to attract various

consumer bases. Adidas could use celebrities such as ROJER FEDERAL to promote the

products in advertisements as well as be endorsed by Samsung itself.

It can sponsor the events, teams and conduct activity shows.

They can improve their HR practices so that the workers retain in the company.

They can prefer outsiders for the job on the vacancy.

Threats

Apple releasing latest flagship mobile devices is the major threat to Samsung at the moment,

especially the release of a budget I-Phone product. The fact that a budget I-Phone would

allow Apple to sell to developing markets such as India can cut Samsung’s market share. The

popularity of the I-Phone is evident as consumers are loyal to the corporation they buy from

and can make it hard to transfer to a different handset.

Other areas which can be threat to Samsung are the fact that the manufacturing factories of

the corporation can be hit by natural disasters. The supply chain can be disrupted which can

cause key problems especially if new products were to be released soon. The corporation

would need to act fast in making sure that the supply can meet the prerequisite of consumers,

as well as ensure that the factories are well maintained properly during and after the natural

disasters happens.

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DESTINATION

Hungary

Background:

Hungary is a landlocked country in Central Europe. It is situated in the Carpathian Basin and

is bordered by Slovakia to the north, Ukraine, and Romania to the east, Serbia, and Croatia to

the south, Slovenia to the southwest and Austria to the west. The country's capital, and largest

city, is Budapest. Hungary is a member of the European Union, NATO, the OECD,

the Visegrád Group, and is a Schengen state.

Following a Celtic  and a Roman period, the foundation of Hungary was laid in the late 9th

century by the Hungarian prince Arpad, whose great-grandson Saint Stephen I was crowned

with a crown sent by the pope from Rome in 1000 AD. The Kingdom of Hungary existed for

946 years and at various points was regarded as one of the cultural centers of the Western

world. 

After about 150 years of partial Ottoman occupation (1541–1699), Hungary was integrated

into the Habsburg Monarchy, and later constituted half of the Austro-Hungarian dual

monarchy (1867–1918).

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A great power until the end of World War I, Hungary has lost about 70 percent of its

territory, along with one third of its ethnically Hungarian population, and all its sea ports

under the Treaty of Trianon, the terms of which have been considered excessively harsh by

many in Hungary. The kingdom was succeeded by an authoritarian regime, and then a

Communist era (1947–1989) during which Hungary gained widespread international

attention during the Revolution of 1956 and the seminal opening of its border with Austria in

1989, thus accelerating the collapse of the Eastern Bloc. The present form of government is

a parliamentary republic, which was established in 1989. Today, Hungary is a high-income

economy.

Hungary is one of the thirty most popular tourist destinations in the world, attracting

10.2 million tourists a year (2011). The country is home to the largest thermal water cave

system and the second largest thermal lake in the world (Lake Heinz), the largest lake in

Central Europe (Lake Balaton), and the largest natural grasslands in Europe.

Location: Central Europe, northwest of Romania

Area: total: 93,028 sq km

country comparison to the world: 110

Natural resources: bauxite, coal, natural gas, fertile soils, arable land

Economy - overview: Hungary has made the transition from a centrally planned to a market

economy, with a per capita income nearly two-thirds that of the EU-25 average. The private

sector accounts for more than 80% of GDP. Foreign ownership of and investment in

Hungarian firms are widespread, with cumulative foreign direct investment worth more than

$70 billion. In late 2008, Hungary's impending inability to service its short-term debt -

brought on by the global financial crisis - led Budapest to obtain an IMF/EU/World Bank-

arranged financial assistance package worth over $25 billion. The global economic downturn,

declining exports, and low domestic consumption and fixed asset accumulation, dampened by

government austerity measures, resulted in an economic contraction of 6.8% in 2009. In 2010

the new government implemented a number of changes including cutting business and

personal income taxes, but imposed "crisis taxes" on financial institutions, energy and

telecom companies, and retailers.

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The IMF/EU bail-out program lapsed at the end of the year and was replaced by Post

Program Monitoring and Article IV Consultations on overall economic and fiscal processes.

The economy began to recover in 2010 with a big boost from exports, especially to Germany,

and achieved growth of approximately 1.4% in 2011. At the end of 2011 the government

turned to the IMF and the EU to obtain a new loan for foreign currency debt and bond

obligations in 2012 and beyond. Whether negotiations result in a loan depend on Hungary

meeting EU and IMF requirements for ensuring the independence of monetary, judicial, and

data privacy institutions. The EU also launched an Excessive Deficit Procedure and requested

that the government outline measures to sustainably reduce the budget deficit to fewer than

3% of GDP. Unemployment remained high, at nearly 11% in 2011. Ongoing economic

weakness in Western Europe is likely to further constrain growth in 2012.

GDP (purchasing power parity) : $4.421 trillion

GDP (purchasing power parity) : $195.6 billion

Country comparison to the world : 55

GDP (official exchange rate) : $138.1 billion

GDP - real growth rate : 1.7%

GDP - per capita (PPP ): $19,600

GDP - composition by sector :

Agriculture: 4.1%

Industry: 29.1%

Services: 66.7%

Industries : mining, metallurgy, construction materials, processed foods, textiles, chemicals

(especially pharmaceuticals), motor vehicles

Exports – commodities : machinery and equipment 55.3%, other manufactures 30.6%, food

products 7.4%, raw materials 3.2%, fuels and electricity 3.3%

Exports – partners : Germany 25%, Romania 5.7%, Austria 5.4%, Slovakia 5.4%, Italy 5%,

France 4.8%, UK 4.6%

Imports : $101.5 billion

Imports - commodities: machinery and equipment 44.7%, other manufactures 41.3%, fuels

and electricity 5.1%, food products, raw materials 6.7%

Imports - partners: Germany 24.7%, Russia 8.6%, China 8.4%, Austria 6.2%, Slovakia

4.9%, Poland 4.7%, Netherlands 4.4%, Italy 4.3%

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Hungarian Culture

Identification: Hungarian come from Onega, A Bulgarian-Turkish tribe's self-name. In the

sixth and eight centuries both the Hungarian tribes and the angers lived just northeast of the

Black Sea. Location and Geography: Hungary landlocked country in central Europe. Its area

is 35,934 square miles (93,030 square kilometers). The country is in the Carpathian Basin

that is surrounded by the Carpathian Mountains, the Alps, and Dinaric Alps. Hungary is

divided and bisects the capital by the Danube River. Hungary has four distinct seasons.

Demography: the population of Hungary decreased since 1980s. The population of Hungary

was 10,065,000 in the end 1999, but 48,000 decreases than a year earlier. We know that the

elderly population of the European countries is increasing and the children population is at

down fall.

The minorities are recognized officially which are Armenians, and Bulgarians, the Croats,

Germans, Greeks, the Poles, Romanians, Roma, Serbs, Slovaks, Slovenes, and Ukrainians.

The biggest minority is the Roma, who consist of up to 5 percent of the population, it is

approximately 500,000. The 2nd largest minority is the Germans, which are about 170,000.

There are 80,000 to 110,000 Slovaks and as well as about 35,000 Croatians, there are 15,000

to 25,000 Romanians, there are 80,000 to 100,000 Jews, and about 5,000 Serbs.

Language Affiliation: Hungarian belongs to the Igor bough of the Finno-Ugric language

family. German was very important and frequently used second language before the World

War II. Russian was obligatory in schools and universities during the era of social. English

became the most valued second language, predominantly for younger people with

commercial aims and in academia, the sciences, and different businesses and services.

Symbolism: The Hungarian language constitutes is one of the most important national

symbols. History has also a central meaning in national attentiveness and uniqueness. Related

to this history is the national coat of arms, which shows the House of Arpad’s. Arpad led the

Hungarian defeat in 896 C.E. and his progeny founded the state, and was ruled until the male

line died out in the fourteenth century. On this family crown is the crown that national

custom connects with King Is van.

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This crest, normally called holy Crown or blessed Crown, has always been gifted with a

spiritual and magnificent meaning. As we see, the crown validated the ruler. Although the

kingdom of Hungary ceases to exist in 1918, the holy crest continues to hold deeply

meaningful national importance.

The red, green and white flag also is a strong national symbol. The national song of praise

was written in 1823, is symbol of the eastern beginning and history of the Hungarians which

is in the form of a prayer that begs God to assist the nation.

The huge painting entitled "The entrance of the Hungarians" is also another national symbol.

Aggressive originally painted it for the happily celebration (1896).

The most valuable sign of national unity is the sense of language and cultural connection that

includes the national language, prose, folk culture, folk literature, folk traditions, and also

history.

A deep, permeate awareness is another essential part of national identity. It can be

summarized as "we are all alone" and it is based upon the historical logics and the

"otherness" of the language. While the realization of "we are all alone" was undeveloped

during the communist period, it still remained a familiar and vital part of the national identity.

History and Ethnic Relations:

Emergence of the Hungarian Nation: There is proof that the Hungarian nation was a unit in

the middle Ages. In Latin records dating back to the tenth century, there are colorful source

tradition of the Hungarians "glorious" and occupying the Carpathian Basin and their

conversion to Christianity under King Stephen. Many Hungarians are considering their nation

"the final fortress of Western Christianity and civilized Europe."

National Identity: groups and nationalities that were not ethnically Hungarian were lived in

the nation in the middle ages. Dual national awareness is comprehensible after the middle

ages.

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On the one side, there was a state that ethnic Hungarians and non-Hungarians could share. On

the other side, there was a short sense of belonging to the Hungarian language, cultural, and

ethnical groups.

In 1526, a young Hungarian king fought battle with the Turks. The Habsburgs claimed the

Hungarian throne on the base of marriage contract. After conquering the Turks in 1686 and

1712, the Habsburgs ruled overall the Hungary. The population of Hungary accepted their

right to rule but they kept and observed their own laws, governmental powers, parliament,

and managerial division. From time to time there were anti-Habsburg revolts, issues, and

political instability.

In 1848, a revolution led by Lagos Kossuth demanded independent reforms and more

independence from Austria. However, Austria conquered the uprising. That was the first time

that the common population, including the peasantry, knowledgeable a sense of national

unity. Therefore some of the nationalities mutual that experience most crooked against the

Hungarians.

The Austrian oppression that followed the revolution of 1848 ended which was ended the

1867 Austrian-Hungarian cooperate. With this accord, the Austro-Hungarian kingdom was

established. That Austro-Hungarian republic ended after World War I. The Trion Treaty of

1920 ended the protective uprightness of Hungary. About 70 % of its historical territory and

58% of its former population were ceding to adjacent countries. One-third of ethnic

Hungarians came under rule of foreign. With the consent of the Western powers, Hungary

came under Soviet activity after World War II. Under the leadership of Moscow and the

Hungarian Communist Party, the "building of socialism" was begun. The nation stands up

against the Communist rule and occupation by the Soviet Union in 1956. The uprising was

defeated and around two hundred thousand Hungarians, mostly young citizens, expert

workers, executive workers, professionals, and intellectual, runaway to the West.

By the start of 1968 Hungary had become the "happiest barrack in the lager" as the result of

the economic reforms of the New Economic structure and with some social liberalization.

Hungary was the first Socialist Block country to open the "Iron Curtain," in 1989 provided

that a transportation route for thousands people emigrating from East Germany towards West

Germany.

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The "softer" system under Janos Kadar was victorious in declining traditional national

awareness; along with formerly closely bind community networks and religious views and

values. After 40 years of socialism, the general trend among the population is to be personal,

survival-oriented, and like to work out strategies of give and take.

Ethnic Relations: After the 1989 change of system, the Hungarian government supposed

responsibility for the ethnic and language of ethnic Hungarians living outside the nation's

boundaries. The government tries to launch and sustain fair and friendly relations with the

governments of adjacent countries. There are common complaints, though, that the

Hungarian minorities' cultural and artistic preservation is made difficult by the host countries.

Hungary continues to struggle for friendly relations with the neighboring countries. Ethnic

and national minorities are positive to set up their own independent councils, and their

cultural and educational institutions receive state hold.

Between the minorities, the Roma are in a very difficult situation. Their high birth rate,

damaging economic position and social status, and the weakness to injustice have worsened

their economic conditions and social combination.

The use of space, Urbanism and Architecture:

In the middle of the nineteenth century, Hungary was a mainly rural agrarian civilization.

And the Hungarian villages had large populations. The church is always in the center of the

village. Most settlements were "two-church villages" shows that two groups settled there at

different periods.

There was a weak network of large agro towns that were located very far from one another,

each consist of a population from 20,000 to 100,000. Most Hungarians busy in agriculture.

The large agro towns were handled as villages, with most of their residents living like

peasants. In the early eighteenth century, person, isolated homesteads blow up. Only

seasonally engaged at first, they finally became stable residences of mostly extensive

families. However, even though about 50 % of the people in the agro towns lived and worked

apart towns on these homesteads, they still measured themselves townspeople.

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As a result of industrialization after the founding of the Austro-Hungarian republic in 19 th

century, a number of industrial-commercial-traders cities sprang up. In 1867 and the

beginning of World War I, Budapest grew into a large metropolis with a population of over a

million.

In the center of cities there are city halls and public buildings and churches, shopping

districts, and leftovers of traditional marketplaces. Some churchyards still have small

cemetery.

Until now, it was usual to have a Tisza sober (clean room) in peasant houses that were used

for special visits and particular rituals and occasion such as births, weddings, and funerals.

There were also "sacred corners" which were decorated with pictures of various saints and

pictures and statues brought back from pilgrimages. In Protestant households, the walls of

those rooms depict religious reformers and the heroes of the 1848 revolt.

Food and Economy

Food in Daily Life: Magyar Kenner remains very important in the rural and urban cooking.

For the last one hundred fifty years, wheat has been one of the most important crops both for

household use and exportation. Pig breeding became the most important type of animal

reproduction in the 1870s, and since then the meat and by-product of pigs have predominate

in the national diet.

Food Customs at Ceremonial Occasion: The food at most village weddings includes

chicken soup with special cosign noodles that were traditionally believed to have fertility-

inducing property, gully’s , stuffed cabbage, sweet millet, sweet rice and other rice dishes,

and butter-cream tortes and other parched goods.

According to the national self-image, Hungarians are beer drinkers, but beer drinking is more

common. Since the early 1990s there has been an attempt to make famous the population

with regional wines.

Basic Economy: Before World War II, Hungary was a farming country. During the socialist

rule, forced industrialization took place. However, more than half the population does some

farming work for household use and supplemental income.

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Major Industries. Tourism continues to be a huge Hungarian success. The making of barley,

corn, potatoes, wheat and sugar beets, and sunflower seeds, beside with grapes and wine

making, is important. Mines are no longer subsidized by the government, and many mines

have closed.

Trade: Imports include metal ores and rough petroleum, while exports include agricultural

products and consumer goods, leather shoes and machinery, transport tools, chemicals,

textiles, and wines, iron, and steel.

In 1948 and 1989, more than half of overseas trade was with the Soviet Union and other

socialist countries. Since the early 1990s, distant

Trading partners have been Germany, Italy, the United States, Australia and some of the

previously socialist countries.

Social Stratification:

Classes and Castes: near the beginning of the socialist period, the nationalization of

industries, business, and most services, beside with the forced collectivization of agrarian

landholding, bring about the end of private property. Communist Party leaders, secretaries,

and members lived better and had access to more goods than did the rest of the inhabitants.

Privatization of industry, commerce, and some services took place after 1990s as Western

capital flowed into Hungary. As a result of a multifaceted and divisive system of property

reimbursement, most arable land and real properties were re privatized after more than 4

decades. The income gap then widened between the rich and the poor. It was high in 1998 as

38 percent of the population earned below the minimum annual wage. In compare, the rich

seem to have increased their wealth at a quick rate. Rising social mobility still depends on the

channeling of students into enlightening institutes. An unequal number of students in high

schools, colleges, and universities come from intellectual, upper administration, or otherwise

"elite" families.

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Symbols of Social Stratification: Western-style clothes, particularly American jeans, are

worn by the bulk of the younger inhabitants in both urban and rural areas. New clothes are

very expensive and brand names such as Levi-Strauss can be bought only by a small section

of the population. Shiny polyester or nylon free time suits worn with expensive, name-brand

sports shoes are signs of new and victorious entrepreneurs. Most of the new rich drive

luxurious foreign cars. The number of cell phones and their common and public uses are

salient. There are numerous lush new or richly remodel villas in Budapest that are owned by

the new economic elite. Foreign travel has become symbol of wealth and status.

Political Life

Government: All levels of government were under the control of the socialist Party between

1948 and 1989. The change of government in 1989 brought in a dual government and a

parliamentary democracy with elected council. At the end of the 20th century, there were 182

officially registered political parties.

Leadership and Political Officials: There is a president, who is the head of the state and

may be chosen for two five-year terms. The prime minister is the leader of the party with the

majority seats. The parliament is called the National Assembly, with 386 deputies who are

nominated for four-year terms. The legitimate Court was established in 1990. There is a legal

Supreme Court that is fundamentally a final court of appeal.

Social Problems and Control: Alcoholism is a extensive and important problem. In

addition, drug abuse has rise since the end of the socialist rule. After the eruption of the war

in the former Yugoslavia in 1991, Hungary became a favorite place for international

organized crime organizations that connect in drug, arms, and people smuggling; prostitution

rings; and money laundering. The crime rate is rapidly rising. The population fears about the

lack of public safety and usually blames crimes on the Roma as well as refugees and other

foreigner. Psychological harms, particularly sadness, increased notably between 1988 and

1996, and, although the number of suicides has been decreasing, Hungary continues to have

the peak rate of suicide in the world.

Military Activity: upgrading of the army began in the early shift period (1990–1994) and has

continued since the country has become part of the North Atlantic Treaty Organization

(NATO). There is a continuing process of integrating the Hungarian armed forces with

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NATO organizations and the satisfying of alliance posts. The army is being transformed to a

mixed structure that is composed of volunteers and conscripts. All males between ages 18

and 55 are necessary to serve in the armed forces, but recruitment is selective. For example,

students in universities serve for a very short time or not at all and careful objectors are given

civilian jobs. There are 80,000 people serving in the army, air force, border security, and the

small navy guarding the Danube River.

Gender Roles and Statuses

Division of Labor by Gender: Men are likely to work, earn, and provide for their families,

while women are likely to take care of the children and the home tasks. These ideal roles are

rarely achieved today. In the last couple of generations, the rate of separation and remarriage

has increased noticeably. Since the change of rule (in 1989) cohabitation of single couples

and the number of children born outside of marriage have grown. These patterns are more

common among those with less formal learning, money, and social status.

Many Hungarian men do not assist with the housework, and few women object to this

agreement. Only among a small proportion of young, mostly urban couples and an even

smaller section of middle-aged intellectuals and professionals is there proof of a changing

pattern in the gendered division of labor in the home area.

The Relative Status of Women and Men: The descriptions of the mother and homeland are

expressed in the national writing and culture. Since the early 19th century, the centrality of

the mother-son association has been idealized in text and the public awareness. The mother is

frequently hailed as the center of the national identity, the protector and farmer of a "real"

culture that is unaffected by foreign influences.

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Marriage, Family, and Kinship

Marriage: Marriages are no longer set. Young people normally marry for love or to have

kids. The continuous lack of apartments is a issue for married couples. Young married

couples mostly move into the little apartment of either set of parents. While culturally a

young married couple lived near the parents of the doula, today, if a couple cannot set up a

self-governing new house, they move in with the set of parents who will warmly welcome

them and has the most room. Most households consist of a married or spinster couple and

their children.

Although when a couple lives in a split household, great value is placed on having the help of

grandfather or grandmother.

Kin Groups: Kin groups are frequently large in villages and lesser in urban centers. God

paternity is still much valued. Comprehensive families living in the same household are very

uncommon.

Socialization

Infant Care: conventionally, newborns were very care; today they are wrapped in warm

blankets when they are very childish, but swaddling is no longer experienced. Infants and

teenagers are normally put into a split space to sleep and play. Parents try to calm an

energetic baby rather than arouse it. There seems to be a growing child centre that is manifest

in focusing on children and often giving them more matter goods and human rights than the

family can afford. Good children are compliant, watchful, hard-working, polite, productive,

calm, and good students. In rural areas, more highlighting is placed on respect and hard-

working behavior. The actual behavior of children rarely approximates this prospect.

Child education and learning: official education is obligatory between 6 and sixteen years

of age. The rate of literacy is 98%. Traditionally, most people measured a high school

diploma as the final formal instructive goal.

Higher Education: Since the 1980s extra value has been placed on college or university

teaching. This is illustrated by a to some extent better enrollment in colleges and universities

and in a development of educational opportunities in institutes of higher education.

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Etiquette

Generosity entails a surprising attempt to nourish and care for guests. Guests are always

expectant to step into one's home first.

On the streets, it is usual for men to walk on the left side of women, apparently because in the

past gentlemen kept their swords on the left side and women had to be on the differing side of

the sword. A Hungarian man enters first into a bar, eating place, coffeehouse, or other public

institution.

Friends, family members, and close connections that have not seen one another for a while

welcome and part from one another with pecks on both sides of cheeks. Touching the hands,

arms, shoulders of buddies in conversation is common. It is normal for a woman to offer her

hand first both to men of all ages and to younger women.

Differentiated proper terms of address are rarely used among younger people. Relaxed styles

of welcome and terms of address are used from the instant of initial gathering. Significantly

less time is spent visiting and socializing in coffee houses and on the streets.

Religion

Religious Beliefs: According to surveys in the early 1990s, 72% of Hungarians are Roman

Catholic, 21% are Calvinist reformed, 4% are Lutherans, nearly 1% is Jewish, and After

Russia, Hungary has the largest Jewish inhabitants in its area. About 80% of Hungarian Jews

live in the capital city. About half the Jewish residents is over the age of 65

There was an authorized movement against all religions during the socialist system. Those

who openly experienced a religion were discriminated against often punished. The state

closed most narrow-minded schools and dissolved or disbanded religious orders and

institutions. During the periods of privatization, many schools and other formerly narrow-

minded buildings were returned to the churches. As reward for the confiscate property, the

state economically supports provincial schools and other religious institutions.

Between large segments of the population, religious unresponsiveness and often openly

antireligious attitudes prevail. This is an outcome of the lax, nonconformist, atomizing

policies of the last decade of collectivism. Beside the major denominations, there are an

increasing number of small sects, religious activities.

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Many Hungarians do not officially belong to or regularly practice any religion, but weddings,

and funerals tie them easily to churches.

Rituals and Holy Places: Among the holy places of the Hungarian Roman Catholic Church

are the city of Ester, where Saint Stephen was born; Pannonia, where the first Benedictine

Order was founded in 996. Calvinists in eastern Hungary think Debrecen the "Calvinist

Rome." The religious centers are Budapest and Sopron. Budapest is the largest synagogue in

Europe.

Death and the Afterlife: In adding to traditional in-ground committal, money with special

places to put funerary urn has been experienced since before World War II. Because of be

short of graveyard space in the cities and the great expense of traditional funeral, burial is

widely practiced.

Medicine and Health Care

Western medicine is practiced, though many persons have turned to option medicine such as

acupuncture and herbal remedies. In adding to Western medical action, frequent medicinal

spas, getting professional profound tissue and other types of rub, and drinking mineral water

continue to be very accepted.

Secular Celebrations

Main national holidays consist of 20 August; commemorate the death of King Stephen. This

day is also a religious spread day. Throughout the socialist rule, 20 August was renamed the

Day of the foundation and the Day of New Bread. One more major national holiday is 15

March, which commemorates the bloodless self-governing civil revolution that broke out in

1848. Since the change of era in 1989, 23 October is a day of remembrance of the revolution

of 1956, when Hungarians rise against the Soviet occupation. Although it is not official

holiday

In adding, there are different local memorable celebrations, art festivals, and folk festivals.

Among the many occasions and fairs are the southern Folklore Festival with the Danube, the

northern region's yearly Palos Festival, and the annual Bridge Fair.

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The Arts and Humanities

Support for the Arts. Sustain for the arts during the socialist era was provided basically by

the State. Since 1989, there has been much little governmental assist and more private,

individual, and corporate helpers for artists.

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PESTLE ANALYSIS

Political: The foreign policy of the country focuses on strengthening its incorporation into

the European Union and various Euro-Atlantic organizations, and it has maintained strong

relations with its neighbor countries cover the years. However, dishonesty at the

organizational level has traditionally slowed down potential investments.

Political Conditions:

President is Pal Schmitt

Prime Minister is Viktor Urban

Minister of Foreign Affairs is Janos Martini

Ambassador to the United States is Gorgy Szapary

Ambassador to the United Nations is Casaba Morose

Form of government is Parliamentary Republic

A new structure was adopted on 18 April 2012, which will enter into force on 1 January 2013

upon its sign by President Schmitt on 25 April 2012.

Political Stability - Hungary political system is very good and very stable. Hungary

is a democratic nation, where elections are held democratically after five years. All

political parties strongly trust in democracy.

Relations with major powers – Hungarian government maintains good relations

with all big powers and power blocks of the world. This leads to Hungary companies

not getting excluded in the tender process.

Government Policy - The Hungary government as well as the government owned

companies have decided to honor more IT Projects to Hungary Information

technology companies.

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Economic: Hungary had been facing serious structural issues for several years before

the global economic crisis in 2008. Short-term economic policies (e.g. government

wastefulness and real wage growth exceeding productivity growth), followed since 2001,

have led to ever increasing macroeconomic pressures. Hungary is a strongly export economy.

The hugely declining demand in the most important export markets, most particularly

Germany, therefore, clearly inhibits a quick recovery.

Hungary GDP: according to the World Bank Hungary Gross Domestic Product is worth 130

billion dollars or 0.21 percent of the world economy.

Hungary GDP Growth Rate: The Gross Domestic Product in Hungary expanded 0.5% in

the third quarter of 2011.

Sector wise GDP:

Agriculture: 2.4 percent

Industry: 37.3percent

Services: 60.3percent

Hungary Interest Rate: The standard interest rate in Hungary is 7 percent. In Hungary,

interest rates decisions are taken by the financial Council of the Hungarian National Bank.

Hungary Inflation Rate: The inflation rate in Hungary was 4.1% in December of 2012.

From 1992 until 2010, the average inflation rate in Hungary was 12.01%

Hungary GDP per capita: The GDP per capita in Hungary was 5629 US dollars in

December of 2011.

Hungary Industrial Production: Industrial Production in Hungary increased 3.5% in

November of 2012.

Hungary Unemployment Rate: The joblessness rate in Hungary was 10.6% in September of

2011 to November of 2011. From 1999 until 2010, Hungary’s Unemployment Rate averaged

7.13%

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Social: Hungary’s educated people rate is one of the highest in the world. The

government has also taken many initiatives to improve education in the country, that’s why

increasing productivity and the employment views of its citizens. Therefore, Hungary’s

ageing population presents an important challenge to the government as it could control

economic development and raise social security outflow.

Education – many technical institutes, colleges and universities all over the country provide

IT teachings.

Hungary Population: The total population of Hungary was about 10.0 million people in

2011 from 10.0 million in 1960, changing 0% during the last 50 years.

Ethnic groups: Hungary include Magyar nearly 90percent, Romany, and German, Serb, NS

Slovak, and others

Religion: Most of the Hungary people are Roman Catholic; other religions shows are

Calvinist, Lutheran, Jewish, Baptist, and Adventist, and Pentecostal, and Unitarian.

Language: Hungarian & Magyar are the main language.

Age structure:

0-14 years: 14.6 percent (male 767824/female 721242)

15-64 years: 68.7percent (male 3,361538/female 3444,450)

65 years and over: 16.7 percent (male 622426/female 1,058582)

Festivals: In January and February Budapest International Circus Festival catches thousands

of overseas visitors. March or April, Budapest’s own Titanic International Film Festival

comes to town .The Spring Festival is held at the end of March, The Autumn Festival of

music, held over 10 October days. The country also has a big tradition of enjoying Christmas

during December.

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Technological: Hungary’s ICT market has witnessed important betterment and

growth over the years. The Hungarian internet access market grew by 8.3 percent in 2011 to

reach a value of $460 million. The total size of the information technology market rise from

$3.1 billion in 2009, to $4 billion in 2012 and is consider stabilizing to around $5 billion by

2015. However, in terms of modernism, Hungary lag considerably behind the EU25 average

and is also far behind the industrial EU nations in terms of patents per million people. Also,

the country faces important risk due to the lack of ICT skills, which remains a considerable

barrier to growth.

National Office for Research and Technology is a government office accountable for the

Hungarian Government science, technology and improvement policy. NKTH has the

following responsibilities and missions which are follows

Describe the government strategy in the field of research, technology development,

and improvement.

Making the means and tools for the R&D and advance policy at government level,

Making documents regarding the national science and technology policy.

Represent Hungarian benefit in international and EU S&T affairs.

Helping the activity of the Research and Technology improvement Fund.

Look after the Agency for Research Fund Management and Research misuse.

Increase public understanding and wakefulness in research and innovation.

Current technological developments in Hungary The new technology developed by Cilium

allows using mobile telephones as MasterCard and bank cards in Hungary. Hungary is the

first country in Europe to put into practice the new technology. Development in the field of

renewable capital: The Hungarian National Renewable Action Plan has targeted to increase

the share of renewable energy source to 147 percent until 2021.

LEGAL:

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Hungary has a inclusive legal and authoritarian framework, with a lawful Court for ensuring

the constitutionality of laws, and a regular legal system headed by the Supreme Court for

adjudicate on civil, unlawful and organizational cases. The sovereignty of the judiciary was

strengthened by the institution of the National Council for Justice in 1998. In-between courts

of appeal were recognized in 2003 to rise up the system but it is still overburden. There are

also important problems related to loopholes, which are oppressed by people aiming to avoid

the system.

Taxation Corporate income tax: business tax is set at 19 percent and tax payable may be

decrease by various tax incentives. Commercial tax can be reduced to 10 percent for the sum

of a company’s tax base that does not exceed HUF 50 million.

Labor Law in Hungary Contract of work: The contract should be set out in writing

necessary contents of the contract of employment:

1. Name and title of the parties

2. Agreement on the employee’s job explanation on his/her basic salary.

3. on the site at which work is to be passed out

Working hours: In Hungary full-time work is eight hours, work a day, and 40 hours per

week. Policy on employment or the agreement of the parties may begin longer working

hours, though not exceeding 12 hours a day and no more than 60 hours a week.

ENVIORNMENTAL: Hungary has been largely flourishing in managing

its ecological concerns and has a strong green record among the developed countries. It has a

strong ecological policy structure in place, and focus on implementing environmental

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policies. Additionally, as a member of the EU, Hungary also has to meet the condition with

respect to GHG emissions, mainly those regarding the decrease of pollutants causing weather

change. Still, the country's ecological record is under constant inspection due to the amount

of dangerous waste that it generates.

Environment Regulations: In Hungary ecological safety matters have been managed by the

Ministry of Environmental Protection and Water (Ministry) since 1989. The Ministry is

responsible for the development of green policies and for global co- operation. The effective

day-to-day supervision of environment-related matters is mostly accepted out by the regional

organization.

The major, general environmental safety rules are laid down in Act LIII of 1996 on the

General Rules of Environmental Protection. According to section 68 of the Environment

Act, prior to the initiation of activities that has or may have a important affect on the

environment; an environmental affect evaluation must be carried out.

Why choose Hungary?

Because:

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well educated skilled young people

Information technology and software superpower

A VERY EXCELLENT DEMOCRACY

Its central position.

The accessibility of cheap and skilled labor.

Improved infrastructure.

Tax incentives.

Comparatively clear investment environment.

Good living conditions.

The per capita capital inflow is the maximum in the central and eastern European

areas. Many multi-national companies have played an important role in the upgrading

of the economy, causal to the addition of jobs and GDP growth.

Automobiles, high-tech electronics, light industrialized, and chemicals are more

recently, the service sector, have paying attention most of foreign money have played

a leading role in Hungary’s fast expansion and have been a pushing force of its

economic growth engine.

main part of the FDI came from Austria, the US, the UK, Germany, France, China,

and Japan, the Netherlands, and Sweden, Finland, Norway, and Hong Kong,

Switzerland, Italy, Canada and Belgium.

From many years, the production base of electronic machinery and semiconductors

has shifted from the developing countries to the rising markets.

Hungary is home to many of the main electronics tools manufacturers and has

expected considerable investment from main end users of semiconductors.

Low manual labor costs and unsaturated markets, joint with stable economic growth

have made the Hungarian market eye-catching for the semiconductors manufacturers.

Top Semiconductor buyer in Hungarian

market (2012) Ranked by purchasing revenue.

(Revenue in $M)

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Ranking Company 2011 2012 Growth

1 Apple 486 559.4 15.1%

2 Hewlett-Packard 292 273 -6.5%

3 Dell 212 220.9 4.2%

4 Sony 184 188.9 2.7%

5 Panasonic 182 174.8 -3.9%

6 Nokia 179 193.5 8.1%

7 Cisco system 176 184.3 4.7%

8 Canon 146 150.5 3.1%

9 Toshiba 112 114.2 1.8%

10 Fujitsu 116 111.8 -3.6%

EXPANSION STRATEGY

Exporting: Although Samsung have done the PEST analysis but still it’s very risky to

directly invest in Hungary and build a manufacturing business. Because it is always been the

strategy of the Samsung not to go directly in the market by the foreign direct investment.

Because in foreign direct investment Samsung have to expand its company directly in the

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Hungary and Samsung have to build its own buildings, its own machinery and all

infrastructures. It’s a big risk for Samsung that’s why to avoid this big risk, in start Samsung

will enter in Hungarian market by using exporting as medium of entering. When Samsung

start by exporting medium then after few times Samsung will see either the Hungarian market

is suitable for their foreign direct investment or not. Then it will have a experience and on the

basis of the personal experience Samsung will decide either it should make a foreign direct

investment of not.

Direct exports

It stand for the most basic mode of exporting made by Samsung, capitalizing on economies

of scale in production determined in the home country and affording better control over

distribution. As in starting we have told that Samsung has made a pest analysis of Hungary

and it’s suitable for the direct investment but still Samsung will use the basic mode of

exporting that is direct exporting.

Sales representatives

Sales representatives represent us in Hungarian markets for an established commission on

sales. They will also provide us support services regarding local advertising, local sales

presentations, customs clearance official procedure, legal necessities and demand conditions.

Advantages

power over selection of foreign markets and choice of foreign agent companies

Good information advice from target market

Better defense of trademarks, patents, concern, and other indescribable property

Potentially better sales than with indirect exporting.

Disadvantages

Higher start-up costs and higher risks as different to indirect exporting

larger information necessities

Longer time-to-market as opposed to indirect exporting.

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MARKETING PLAN

SEGMENTATION STRATEGY:

As we know that Segmentation variables can be used to divide the product-market into

different segments. Demographic and psychographic which is lifestyle and personality

distinctiveness of buyers is of importance. Variables measuring buyer wants and preferences

consist of brand awareness, and product preferences. Demographic is often more useful to

explain segments after they have been made rather than to identify them. Geographic location

can be useful for segmenting product markets. Demographic knowledge helps to explain

groups of buyers such as heavy users of a product. Demographic variables show what people

do, their interests, their concerns and their buying pattern. Lifestyles distinctiveness expands

outside demographics and offers a more sharp description of the customer.

The main theory of product segmentation is that a company can make a single product with

comparatively small variations, market it to different consumer groups. Sometimes under

different brand names, and can increase market share while decreasing the cost of developing

completely different products. Segmentation depends on market research to clarify the

product specifications that vibrate with target markets. Product expansion engineers then

provide special iterations of the same basic model that get together the favored qualities for

each market segment.

Market targeting is the 2nd step of a market plan. When the market has been segmented, the

perfect segment needs to be chosen. The first thing to do is to examine the segment

magnetism. Some of the uniqueness for an ideal segment size of the segment, increase rate of

the segment,

The following market targeting strategies can be followed:

Single segment strategy: A single segment is targeted with the whole product mix. This

strategy is generally followed by small firms with narrow capital. This allows the company to

focus fully on the segment and step by step expand.

Product specialty strategy – The firm specializes in an exacting product and targets

different segments using different market strategies. This strategy is supportive if the

company has a flagship product.

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Market specialization strategy: The Company specializes in a specific market and provides

different product combination for this market. This strategy is supportive if the firm has an

established presence in a specific market, but no product leverage.

Mass marketing strategy – The Company targets all the market segments to the entire

product mix. There is huge investment in market and advertising strategies because of

competition levels are very large.

Niche strategy: This is a specific case of single segment strategy, when the segment is highly

small and non-conventional. This is the exact differing of mass marketing where in the

company focuses on its main strengths which may have little or no different appeal. Though,

if winning, this can be the most winning of all strategies, with high enlargement rates and

brand loyalty.

POSITIONING STRATEGY:

Positioning is what the consumer believes about your product's value, features, and profit; it

is a relationship to the other available alternatives offered by the competition.

Usually, there are 6 basic strategies for product positioning:

1. By characteristic or benefit, this is the most often used positioning strategy.

2. By use or application, the users of Apple computers can drawing and use graphics more

easily than with Windows.

4. by product or service.

5. by competitor.

6. by price or quality.

Here we see thoroughly all the strategies, now we will choose the positioning strategy

because our customers believes about our product value, features, and benefits; it is a

comparison to the other available alternatives offered by our competitors. We know that we

are specialized in semiconductor manufacturing, so we will use this positioning strategy. This

will help to understand about our product.

PRODUCT STRATEGY:

SAMSUNG has segmented their products into six categories.

Semiconductors

TV, AUDIO OR RADIO

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CAMERA OR CAM RECORDER

MOBILE PHONE

HOME APPLIANCES

PC, PERIPHERALS OR PRINTERS

Reposition of its products. In early 1990th Samsung was still apparent as a traditional

manufacturer and always linked its brand with bargain. Samsung felt that low price is just a

main means to compete in the lower market while in upper market technology and brand are

aggressive means. Samsung determined to focus the upscale market and gave up lower

market in order to praise its brand image. It repositioned all series of its products such as

mobile phone, memory flash and consumer electronics to upscale market. Write to

Samsung’s new position in the market it has comparatively higher price in its category. To

Samsung higher price would bring more profit and at the same time it is the improved entail

of good excellence. The strategy of relocate helps Samsung starting to build its noblest

picture.

Samsung launched an industry plan revolt in order to get free of its image of impersonator.

It’s working world top designers to expand their thought and keep path on the world highest

level. It got most of the Award of American Industry Design which is the most important

award in industry plan area on the global foundation. Its brand was documented by the

customer and specialists. The technology breakthroughs improved Samsung’s brand image of

young, smart and strong function. So in product strategy we will be focus on brand, our

product quality, technology and better performance.

PRICING STRATEGY:

Price is one of the standards “4 Ps” of marketing which are product, price, place, and

promotion. There is special strategy made for retailer which is different from the pricing

strategy of dealer because company buy product in mass amount as weigh against to the

dealer so they get the discount in purchase of mass quantity.

As the dealer is suitable more prices perceptive so they want a good excellence product in

low or in a sensible price.

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PROMOTION STRATEGY:

There are different type of promotional mix will be used in order to endorse classic brand.

Customary media is used to promote the brand also the non traditional media is also used.

A successful product or service way nothing except the benefit of such a service can be

communicated clearly to the target market. An organizations promotional mix strategy can

consist of:

ADVERTISING:

The company will use any non personal paid form of message using any form of collection

media to endorse the new brand.

PUBLIC RELATIONS:

It involves increasing positive relationships with the association media public. The art of

good public affairs is not only to obtain positive publicity within the media, but it is also

involves being able to handle productively negative attention.

PERSONAL SELLING:

It involves selling a product service one to one foundation and make consumer conscious

about the new brand.

SALES PROMOTION:

This is normally used to gain an increase in sales in short term. It could involve using money

off coupons or special offers. The company provides special offers and reduction for the new

brand.

DIRECT MAIL:

Direct mail allows an association to use their capital more efficiently by allowing them to

send publicity material to a named person inside their target segment and its collection to

attract more customers.

INTERNET MARKETING:

By internet advertising the company will endorse and sell company services online to their

customers.

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RECOMMENDATION TO MANAGEMENT

We would like to recommend that Samsung should use its strengths to overcome its

weaknesses and use different strategies to catch opportunities and resist the threats coming

from its competitors by hiring well experienced and talented marketing executives, officers,

and managers.

References

Books & Magazines

Principle of marketing By Philip Kotler

World Trade Organization By Misuo Matsushita

Daily Hungarian(newspaper)

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Websites:

www.samsungpakistan.com

www.kormany.hu/

www.ciafactbook.com

www.Samsungelectronics.com

www.everyculture.com

The End

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