Assignment Writing Help on Trade Policy

Trade Policy

TO: President of the United States (POTUS)

FROM:

DATE: November 25, 2014

SUBJECT: Merging Of Telecommunication Industries with China 

China is one of the most industrious countries in the world and it has ventured in various industries such as automotive and mobile industries. Telecommunication industry in china, particularly Samsung mobile, is robust and it is gaining global market share at a tremendous rate. According to the U.S. Trade and Development Agency (USTDA), Samsung is increasingly flooding the U.S. market with mobile phone products with 12% mobile imports from china in 2012. The increase in imports is declining the profits made by the domestic firms affecting the economy adversely. Continuous influx of these imports will lead to unemployment, revenue loss, and domestic firms’ closure. Significantly, the United States’ telecommunication firm, Apple, is a globally recognized firm in the mobile industry. Apple has been involved in a number of legal actions with Samsung in regards to the intellectual property rights. The court charges are leading to unhealthy competition at the expense of the United States economy given that Apple targets high end lifestyle. Therefore, a strategic trade policy is inevitable in solving this issue; hence, this memo propagates for a merger between Samsung and Apple as the most appropriate policy.

Market segmentation

As mentioned above, Apple targets the high-end lifestyle where its products are consumed by upper-class in the society. Samsung on the other hand caters for all consumers since it produces affordable products. The China’s firm is quite advanced technologically since it largely concentrates on research and development as their competitive advantage. The market segmentation between the two firms adversely affects each organization. Merging the two companies will mean that they will control the entire market share in mobile industry. It will be advantageous to the domestic market in both countries raising the national economic welfare of china and the United States. Combining the two firms will lead to more technological innovations at a subsidized price because the two firms will make financial contributions collectively. The merger will benefit the two firms because they will concentrate on distributing the products to the third country collectively sharing the logistic challenges, product promotion expenses among other expenditures. It will be considerably cheaper to make advertisements as a joint venture such as the Samsung sponsorship to the Chelsea Football Club in England. Similarly, Samsung does not produce its own operating system for their mobile products and they can benefit from Apple OS. The collaboration will increase Samsung popularity among the upper class people who have a negative attitude about its products.   

Memorandum of Understanding

The U.S-China Energy Cooperation Program (ECP) and China’s Institute of Electronics (CIE) signed a memorandum of understanding in 2013 under the U.S Department of Energy and the People’s Republic of China Ministry and Information Technology. The MOU aimed at strengthening IT-based solutions to promote communication and energy efficiency. A merger between Apple and Samsung will be a coherent and effective platform for enhancing the policies identified in the MOU. Information technology is increasingly getting global attention due to its demand in driving human activities. Based on the research and development devotion by the two firms, a partnership will aid in bringing solutions to the unilateral problems in the Information Technology field.

It is important to consider the collaboration based on the benefits it will bring to the two countries. There will be social integration and the issue of intellectual property rights will come into a halt. Both companies will reap benefits at a lower production cost among other benefits. Therefore, it will be a good move to consider the merger between Apple and Samsung.