Chapter 11 Samsung VS Sony: China's contest between the old and the new aristocrats

Like Volkswagen's rise in China, Sony's hesitation in dealing with China also gave another company enough room to grow, that is, South Korea's Samsung Group. History is always strikingly similar. In the mid-1980s, there were few cars on the roads in China at that time, but the spacious roads (compared to that time) heralded China's next steps-it was the harbinger of opening up the automobile industry.At that time, China first gave the opportunity to Japan, which is separated from us by water: the Chinese government sent an invitation to Toyota Motor Corporation of Japan, and proposed a cooperation plan of "technology for market".Toyota refused, arguing that exporting technology to a lagging market like China would be suicidal.Afterwards, China threw an olive branch to German Volkswagen, who came to China without hesitation and opened two production bases in Shanghai and Changchun in one go.In the next 20 years, China has become the most important source of profit for Volkswagen in the world. Until 2002, Volkswagen's share in the Chinese auto market has been as high as more than 50%. In 2002, the arrogant Toyota Motor had to admit that it had made a stupid mistake. In June of that year, it established its first joint venture in China - FAW Toyota. Not what it used to be - Toyota missed the best historical opportunity in its history.

The same experience also happened to Sony, another "Japanese symbol".This electronic company, founded in 1946, is famous for its vision. Therefore, in the development of more than 50 years, it has always been at the forefront of technology, making it grow from a small company founded by two people to a world-renowned electronic benchmark. company.In the long years of nearly half a century, Sony has been a leader in the electronics industry.But no matter how great a company is, it will make low-level mistakes.On the issue of entering the Chinese market, Sony, which has always been far-sighted, is hesitant. It thinks that the Chinese market may be huge, but at the same time it is more worried that its technology will be lost in China.Therefore, throughout the 1980s and 1990s, Sony's attitude towards China has been "only exporting second-rate and third-rate obsolete technologies". a company.

Like Volkswagen's rise in China, Sony's hesitation in dealing with China also gave another company enough room to grow, that is, South Korea's Samsung Group. In 1992, China and South Korea formally established diplomatic relations. Not long after the establishment of diplomatic relations, Samsung Group announced that it would enter China.Regarding this rare move, a vice president of Samsung Group later explained: "Samsung has been fighting for survival throughout the 1970s and 1980s, but when the door of China opened, we found that China was too important. The opportunity has come."

In fact, many researchers have been reminded of two backgrounds: First, Samsung in 1992 was still in the early stages of development.Throughout the 1970s, Samsung was desperately learning the technology of Japan's Sanyo Corporation; in 1988, Li Jianxi, who had just taken over as Samsung's president, had just begun to have the idea of ​​​​"a second business venture", and it was not until 1993 that Samsung began to open its doors. The curtain of "new management reform" was lifted, and the goal of "a world-class company in the 21st century" began to move forward.

The second background is China. In 1992, when Deng Xiaoping delivered the Southern Talks, China entered a period of vigorous development: this year, China set off a "office fever" for the first time. When applying for a license, many Beijingers were told that the inventory license had been issued and was being dispatched. ; And this year, China officially decided to develop Pudong, and at the same time launched the Three Gorges Project, which is rare in the world... China is accelerating. In this context, Samsung came to China.It is said that before officially entering China, Samsung sent 3,061 people to 58 countries around the world to explore overseas markets, but most of them came to China, and China also wears the "country with the largest number of Samsung stationed abroad". laurels".

Of course, this is not the most successful part of China's Samsung.The most subtle part of Samsung's rise in China lies in its grasp of "people".At the beginning of entering China, Samsung valued China's cheap labor force and outstanding manufacturing capabilities, and wanted to use China as a manufacturing base.However, with the continuous, stable, high-speed development and rapid changes of the Chinese economy, Samsung not only regards China as a strategic market and an important partner, but also as a business base and brand center of Samsung. The highlight here is the cultivation of talents.

Li Jianxi has a famous saying: "A genius can support 100,000 to 200,000 people." He knew the importance of talents from the very beginning.In China, what Lee Kun-hee follows is the cultivation of localized talents.In just a few years after entering China, China has changed from the destination of talent flow to the "brain bank" of this large-scale high-speed operation.At present, Samsung has successively established 4 research institutions in China, including Beijing Communications Research Institute, Nanjing Software Research Institute, Shanghai Design Research Institute, and Suzhou/Hangzhou Semiconductor Research Institute. In 2004, Samsung Electronics China Communications Research Institute was listed in Zhongguancun, which is Samsung's largest overseas R&D base so far.At the same time, Samsung Communications also opened post-doctoral workstations to Beijing, joining the ranks of a small number of foreign-funded enterprises with post-doctoral workstations, becoming the first Korean company to have post-doctoral workstations in China.Supplemented by its scholarships in 17 famous institutions of higher learning across the country, including Tsinghua University, Peking University, and Fudan University, Samsung is digging China's "smart gold mines" at full speed.

Publicly available information shows that Samsung currently has more than 50,000 employees in China, and less than 1,000 Korean employees.The entry of a large number of local senior talents has become an important measure for Samsung to develop the Chinese market and develop more products that embody Samsung's advanced technology and meet the needs of the Chinese market. Li Jianxi said: "It is a decision to regard China as a strategic market and realize the goal of building a second Samsung in China." In order to achieve this goal, Samsung has proposed four goals: 1. To become the favorite of the Chinese people and contribute to Chinese society Second, implement the business model with the goal of customer satisfaction; third, commit to having the best talents and best technology; fourth, actively respond to changes in China's business environment.

The ancients said: Throw me papaya and return it with Qiongju.Samsung's favor for China has brought fruitful results. So far, China has become Samsung's largest overseas investment destination, with a cumulative investment of more than 4 billion US dollars, accounting for 22% of South Korea's total investment in China.Samsung's business in China is growing at a rate of more than 50% every year, and its total sales in China exceeded US$16 billion last year.Among the more than 30 companies under Samsung, 16 have invested in China, including Samsung Electronics, Samsung SDI, Samsung Electro-Mechanics, Samsung Corning, Samsung Internet, Samsung Life, Samsung Fire, Samsung Securities, Samsung C&T, etc.

Behind the rise of Samsung China is essentially the rise of the entire Samsung Group. On April 2, 2002, a piece of news caused an earthquake in the electronic world: the stock market value of South Korea’s Samsung Electronics surpassed Sony, the “proud of Japan” for the first time, with a total of 65.6 trillion won, more than 2 trillion more than Sony won. On June 5, 2003, on the occasion of the 10th anniversary of the "new management" concept, Samsung presented another report card in front of the world: in the ten years of "new management", Samsung's annual business The average turnover increased by 3.4 times, and the profit increased by 28 times. In 2002, the value of Samsung’s exported goods totaled US$31.2 billion, accounting for 20% of South Korea’s total exports that year; its turnover reached 141 trillion won (approximately US$119 billion at the then exchange rate), accounting for 25% of South Korea’s GDP.

This achievement is still continuing. In 2004, Samsung won the title of global sponsor of the Olympic Games and successfully entered the high-end product market.And Samsung's brand value has reached 12.6 billion US dollars, almost equal to Sony. Compared with Samsung's achievements in China, Sony's brilliance belongs more outside China and belongs to the past. In fact, if you put aside realistic factors and only use historical standards, the most proud company is Japan's Sony Corporation.Since its birth in 1946, Sony has been associated with words such as "leading" and "imagination". For more than half a century, Sony has been leading the development direction of electronic technology.On Sony's report card, these achievements are unmatched: In 1963, Sony launched the world's first transistor video recorder; In 1968, Sony released a TV picture tube called "Trinitron", and the Trinitron CRT monitor also came out in 1983.Trinitron was hailed as Sony's masterpiece. At that time, it adopted the breakthrough single-shot three-beam technology. It has won worldwide acclaim for its extraordinary bright colors and ultra-high definition since the day it was born. On July 1, 1979, Sony Corporation launched the world's first stereo tape player, WalkmanTPS-L2. Total sales reached 340 million units; In 1981, Sony invented the 3.5-inch floppy disk drive, which is still a standard accessory for PCs until now; In 1982, Sony launched the Betacam, a 1/2-inch camcorder for broadcasting. Under the impetus of Norio Ohga, it also cooperated with Philips to launch the world's first CD record; In December 1994, Sony launched the 32-bit home game console Playstation (PS); In 2000, Sony launched the second-generation home game console PS2; ... From the above major inventions and achievements of Sony, we can easily see that the 1980s and 1990s were the most glorious period for Sony. During this period of time, the two most influential products in Sony's history were produced: the walkman and the special Lilong picture tube.The former has almost created a sales myth that is impossible to break, while the latter has established Sony's unparalleled honor in the field of crystal picture tubes. Undoubtedly, these achievements have established Sony's leading position in the electronic audio-visual world, but on the other hand, they have also nourished the arrogance of Sony people.An interesting story goes like this: A few years ago, South Korea's Samsung Company was a boy who produced accessories for Sony.At that time, a Sony executive once commented arrogantly that Sony had no real competitors in Asia, and what Sony should do was focus on shaping the "Sony Dream".Perhaps this is also the common thinking of most Sony people. In their eyes, any opponent is not enough to attract attention, and any market is insignificant.This also includes the Chinese market. For a long time, Japanese companies have had the same nuance in their approach to China.For them, although China is close at hand and has a huge market, they always feel that Japan's technology is superior to China's, and arrogant people disdain to deal with people who are inferior to them.At this point, Toyota is like this, Sony is like this, and many other Japanese companies have had this idea.Therefore, Japanese companies often choose to bypass China and Asia and go to Europe and the United States to develop markets.They put the most cutting-edge products developed by themselves on the European and American markets, and dump the second- and third-rate products that have been eliminated to China. The consequence of this is that when Japan’s domestic economy is stagnant and the competition in the European and American markets is becoming increasingly fierce, it is difficult for them to find new development points. This is also regarded by many Japanese economists as an important reason for “Japan’s lost decade”. one.Here are two sets of comparative data that can illustrate the huge difference between Sony and Samsung in their treatment of China: Behind the contrast are two completely different results. According to relevant data, after Samsung established a company in China, its business has developed rapidly, with an average annual growth rate of more than 50%. In 2004, Samsung China's turnover reached 16 billion US dollars.In contrast, Sony has barely been able to compete with Samsung in China.In order to make up for the loss caused by arrogance, the former CEO of Sony Nobuyuki Idei repeatedly emphasized the need to increase production and R&D investment in China to make China the second largest market for Sony in the world.Even so, Sony's goal is: in 2008, the turnover in China can reach 8 billion US dollars, which is only half of Samsung's cumulative investment in China as of 2004. And things may be worse than this. In March 2005, Sony CEO Nobuyuki Idei resigned from his current position, and the new CEO will historically be held by an Englishman.For Sony, this may be an important decision for reform, because from the perspective of Sony's original organizational structure, the company's bureaucracy is entangled, each department is in its own way, and there is even a phenomenon of fighting between left and right hands; and "Business Weekly" even more. Nobuyuki rated as the worst manager: "Insufficient determination to reform, and implementation is too slow."But in any case, changes at the top will inevitably bring about a new round of adjustments, and the future direction is still unknown.The more important reason is that the current Samsung is no longer the boy who studied with the class back then. Today's Samsung is the largest LCD panel manufacturer, the largest semiconductor memory manufacturer, and the third largest mobile phone manufacturer.Samsung not only manufactures various consumer electronics products, but also controls the supply of upstream components, gaining a cost advantage in the increasingly fierce market competition.Only by establishing a joint venture with Samsung can Sony ensure its future supply of LCD panels.The reason why Samsung agreed to join Sony is because Sony can absorb half of its LCD panel production capacity and prevent these panels from flowing into Chinese companies. From the transistor radio to the Trinitron tube, Sony's ideas have changed our lives.But now, Sony has repeatedly missed market opportunities. As the inventor of the Walkman, it has ceded this market to Apple; Not exactly a cash cow for Microsoft.Even if it doesn't make money, Microsoft has enough financial resources and patience to play with its opponents. The "creative factory" of the past has died out, and Sony is lying in the pile of old papers and watching the rise of its opponents.The most conspicuous among the opponents is undoubtedly Samsung, because it is like Sony ten years ago, full of vigor and creativity. Now, Samsung and Sony are engaged in an unprecedented war. An interesting story is this: not long ago, Columbia Pictures, one of Sony's series companies, officially released the film "Spider-Man".In the film, the Samsung Electronics advertisement in the Times Square building in the United States was replaced by the "USA TODAY" advertisement.This building appeared three times in the film. The advertisements of other companies were not specially arranged, but Samsung's advertisements were specially replaced.Not only that, but in the TV commercials promoted by the film, Samsung Electronics’ commercials were changed to other companies’ mobile phone commercials—these are almost the most subtle things a company can think of, and what is reflected in it is the fierceness of this war degree. But who will be the final victor? Carl.W.Stern, chairman of the global board of directors of Boston Consulting Group, gave us this answer: it is often not the strength of the battle that determines the outcome of this war, but what they have done before.Because from the perspective of the birth of Samsung and Sony, these two companies were founded in the 1930s and 1940s, and both took full advantage of the historic opportunities of post-war economic take-off and economic globalization. It is just their external environment. What really plays a decisive role lies in their ability to comprehend the future and their ability to predict trends. One day in September 1982, Norio Ohga, then vice president of Sony, made a decision when listening to "Beethoven's Ninth Symphony". He determined the capacity of the CD that the company had just developed as Beethoven's Ninth Symphony , or 74 minutes and 42 seconds. Since then, the time of all CDs in the world cannot exceed this time-this is the portrayal of Sony's glory in the last century.Throughout the 1980s and 1990s, they had the supreme glory of setting the rules for the future. After the rules, Sony's portable CD players, Trinitron TVs and other products almost became the undefeated myths of that era. The same story continues in the new century, but the protagonist has been replaced by Samsung. In 2003, CEBITASIA, the global electronic product event, came as scheduled. Perhaps it was a coincidence that both Samsung and Sony were arranged to exhibit at the No. 2 venue.At the exhibition, the "DNle" (Digital Natural Camera Technology) banner presented by Samsung became the most dazzling star. This cutting-edge image processing technology, which took 6 years to develop, has just won 85 patents and has become the flagship of flat-panel TVs. Leader.Compared with the brilliance of "DNle", Sony's booth has never been deserted—this has almost become a vivid portrayal of the status of Samsung and Sony in the new era.At present, Samsung Electronics is the number one manufacturer of six series of products including televisions, video recorders, LCD displays, computer monitors, PC memory and flash memory in the world.In the mobile phone market, Samsung Electronics has risen from the sixth place in the world in 2000 to the third place at present, ranking only after Nokia and Motorola. In 2004, the global sales volume reached 86 million units. Regarding this, Samsung Electronics Marketing Director Han Changho can best summarize the current competition. He said: "The analog era is the era of Sony, but the digital age is the era of Samsung." "The winner"-this is not so much an ambition as a self-confidence or pride, and before that, it belonged only to Sony. Behind this huge contrast, it actually reflects Sony's huge mistake in judging the future, because for an industry, a giant that has been leading for half a century has been surpassed in just a few years. The only explanation is that in this way. For decades, Sony has dominated the market for portable music devices, as evidenced by the cumulative sales of 340 million units of the popular Walkman.With the launch of one new product after another, Sony has achieved great success, from the cassette Walkman to the CD player, and without exception, it has led the trend in the field of portable music equipment.Sony has been so successful here that it built a product that towered over all of its competitors.But when Sony reached the top of the highest peak, it failed to find the next peak. It just stayed on the top of the original mountain narcissistically, but it didn't know that the competitors who were charging towards it had bypassed it. , climbed to other higher peaks. In May 2004, Sony launched the first hard disk version of the media player, VaioPocket. However, at this time, Apple Computer's iPod MP3 had sold 807,000 iPods, and it was two and a half years before Apple Computer launched the iPod music player.According to market sources, such a long lag is enough to prove how difficult it is for Sony to adapt to new competitors and competition rules in the new digital age.At the same time, Ken Kutaragi, president and CEO of Sony's computer entertainment department, said "very frankly" that Sony has long been reluctant to develop products similar to Apple's iPod that support the MP3 file format because Sony's headquarters are worried about Sony's music and video content. Copyright Infringed.For a long time, the music players produced by the company only support the Atrac music file format designed by the company alone, and do not support the MP3 format. It is this attitude that violates Sony's technological innovation spirit, leaving enough room for latecomers to survive, and giving up its own country to others, and Sony also provides us with a failure case of "from leading to lagging behind".