User:Alex Winetrout/Consumer electronics

Business Competition:
The consumer electronics industry faces consumers with unpredictable tastes on the demand side, supplier-related delays or disruptions on the supply side, and production challenges occurring in the process. The high rate of technology evolution or revolution requires large investments without any guarantee of profitable returns. As a result, the big players rely on global markets to achieve economies of scale. Even these companies sometimes have to cooperate with each other, for instance on standards, to reduce the risk of their investments. In supply chain management, there is much discussion on risks related to such aspects of supply chains as short product life cycles, high competition combined with cooperation, and globalization. The consumer electronics industry is the very embodiment of these aspects of supply chain management and related risks. While some of the supply and demand related risks are similar to such industries as the toy industry, the consumer electronics industry faces additional risks due to its vertically integrated supply chains. There are also numerous supply-chain-wide contextual risks that cut across the supply chain especially impacting companies with global supply chains. These include cultural differences in multinational operations, environmental risk, regulations risk, and exchange rate risk across multiple countries. Whether or not demand is comparable across countries affects the extent of the gains from international integration. In addition, consumer preferences change over time to disturb existing patterns of behavior. A feature of some industries is that demand for variety increases as the market moves from first-time buying to replacement demand. A resource to further understand this idea of consumer preferences can be observed through Lizabeth Cohen's book titled, "A Consumers' Republic", "Only if we have large demands can we expect large production".

Samsung Electronics:
In 2004, the consumer electronics industry was worth US$240 billion annually worldwide comprising visual equipment, audio equipment, and games consoles. It was truly global with Asia Pacific having 35% market share, Europe having 31.5%, the US having 23%, and the rest of the world having the rest. Major players in this industry are household names like Sony, Samsung, Philips, Sanyo, and Sharp. Samsung Electronics is part of the Samsung Group. In 2003, combined revenues for Samsung Electronics were $55 billion. Samsung Electronics UK is a subsidiary of Samsung Electronics contributing $1.2 billion in revenues. Samsung Electronics has one of the highest R&D expenditure as a proportion of revenues in the industry and spent about $2.9 billion in 2003. Along with its competitors, Samsung Electronics is global and employs 88,000 people in 89 offices in 46 countries. Not including facilities in Korea, it has 24 manufacturing complexes, 40 distribution bases and 15 branches spread over all continents except Antarctica. Countries with manufacturing facilities include the US, Malaysia, China, India, and Hungary.

White Goods:
The increase in popularity of such domestic appliances as 'white goods' is a characteristic element of consumption patterns during the golden age of the Western economy. Europe's White Goods industry has evolved over the past 40 years, first by changing tariff barriers, and later by technical and demand shifts. The spending on domestic appliances has claimed only a tiny fraction of disposable income, rising from 0.5 percent in the US in 1920, to about 2 percent in 1980. Yet the sequence of electrical and mechanical durables have altered the activities and experiences of households in America and Britain in the twentieth century. With the expansion of cookers, vacuum cleaners, refrigerators, washing machines, radios, televisions, air conditioning, and microwave ovens, households have gained an escalating number of appliances. Despite the ubiquity of these goods, their diffusion is not well understood. Some types of appliances diffuse more frequently than others. In particular, home entertainment appliances such as radio and television have diffused much faster than household and kitchen machines."