Samsung Case Study

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Samsung Introduction

Samsung is predominantly a South Korean Company selling electronics goods as well as operating in the IT market. The company has aimed to operate in the global market and is currently one of the leading sellers of smart phones. Global market share of Samsung has been neatly 23% up to the first quarter of 2019 (statista.com, 2019). Samsung has a range of threats in the market operating which comprises of companies like Apple, Sony and many more. The current study deals with the internal as well as external market conditions of Samsung with the help of the SWOT and PESTEL analysis.

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Company Name

Samsung

Type of industry

Multinational electronics and information technologies

Headquarters

Seoul, South Korea

Sales/Revenue

Quarterly revenue of Samsung in 2018 was $221.6 billion

Area served

Samsung operates in six to seven continents

Number of stores

More than 500 stores in the world

Competition

Apple, Sony, Microsoft

USP

Wide range of products

Target Group

Consumers aged between 25 to 50

Products

Televisions, smart phones, smart watches

Website

www.samsung.com/uk

Samsung Swot Analysis

Strength

  • Most widespread portfolio
  • Significant market share in the global market which is 23% till the first quarter of 2019 (statista.com, 2019)
  • Significant innovation power in the operating market.
  • Best technologies and features in the operating market
  • Reduction of supply chain costs
  • Brand value of Samsung has increased up to $60 billion in the global market (samsung.com, 2018)

Weakness

  • Recent launches of Samsung electronics has resulted in the cannibalization
  • Predicted decline in the market of LCD Panels
  • Regional preferences for the Samsung products is still lying behind especially in the Asian market
  • The eastern market is flooded with the lower priced Chinese products
  • Overdependence on other companies for software support
  • Samsung stores are failing to attract the customers

Opportunities

  • Shift towards strengthening the household gadgets like air conditioners, washing machines and many more
  • Huge chances of increasing the brand awareness through famous partnerships
  • Aiming at launching the customized Home appliances
  • Scope of leading to a market of diversification

Threats

  • Market failure of a single product can affect the entire market of Samsung
  • Potential competitors are doing the best in a fixed market
  • Market capture of Chinese products
  • Strategy of low cost of the retail market chains

Samsung Analysis

Samsung operates in the market with a huge portfolio range including a lot of smart phones, tablets, huge range of home appliances, SD cards and accessories for supporting a lot of electric gadgets. The market share of Samsung has reached a great height in the current financial year. As per the case study of Samsung recent market reports have stated that Samsung has effectively captured the market of Nokia in terms of innovations in the market of smart phones. Technology inclusions and the designing features of Samsung have been quite developed in recent years which have effectively gained about a huge customer base. Features like the dual screened phones, polyphonic ringtones as well as the rotating lenses for the phones were brought in the market by Samsung (Khan et al 2015). The brand has acquired huge market shares with the innovation of developed home appliances as well. As per the case study of Samsung lowering of the Supply chain costs have also resulted to be quite effective for the operating market of Samsung in the recent past.

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The market share of Samsung has been lowered by somewhat 4% with the cannibalization of the latest range of smart phones. Moreover, as per the case study of Samsung the company has been facing tough competition from the Chinese products which are available at a very low price in the Asian Market. As per the case study of Samsung, current trend of digital market has brought upon immense threat on the company because of the lightning deals they offer. Samsung can gain quite competence in the operating market with the development of the Home Appliances and their customization in the long run. As per the case study of Samsung, with the increase in the youth population there is a huge chance of increase in the demand of smart phones in the market. The wide product line can bring upon easy threats on the company. This is because with the decline in any product the entire market can be affected. Samsung is facing a lot of threats from the market which is flooded with cheap Chinese products along with the availability of huge ranges of product through the retail markets (samsung.com, 2018).

Samsung Pestle Analysis

Political

  • Political instability in the operating market
  • Inter Political conflicts on Korea
  • Encouraging in market expansion

Economic

  • Contributing about 20% to 40% of GDP share (statista.com, 2019)
  • Increasing profit up to 23% (statista.com, 2019)
  • Global Economic crisis
  • Inflation rate 1.9% (statista.com, 2018)
  • Interest rate 1.6% (tradingeconomics.com, 2019)

Social

  • Local beliefs
  • Culture
  • Market Demand
  • Flexibility

Technological

  • Innovation
  • Customization
  • Product management

Legal

  • Pirated Issues
  • Consumer protection
  • Data Protection Acts

Environmental

  • Social Responsibilities
  • Carbon footprint reduction

Samsung Analysis

The range of factors operating in the external markets has rendered positive as well as negative effects in the market of Samsung. As per the case study of Samsung, the Korean Political Issues have hugely affected the market operation of Samsung. However, the market expansion of the Samsung brand has been due to the support of the Government support which has resulted in the opening of more than 500 stores globally. The contribution in the shares of GDP has enabled the company to open new stores all over the world (statista.com, 2019). The increase in the disposable income of the people has enabled the company to develop the better chances in the target market (statista.com, 2019).

Electronics industry is mostly preferred by the youth population of the nation. Target market of Samsung has been the population ageing from the group of 25 to 50 year old who are having a constant increase in the demands of smart phones (Peric, M. and Vitezic, 2016). With the increase in the demand of smart phones the sales of Samsung is going on elevating in the operating market. However, losses have also occurred with the advent of the Global Economic Crisis (tradingeconomics.com, 2019). Social beliefs affect the development of the Samsung industry in the contemporary market. Cultural issues and the trends affect the consumer demands which in turn affect the trade and business outcome of the company. As per the case study of the Samsung Company the market demand has shifted towards the technological inclusion and Samsung has successfully done that in the operating market. Legal issues of Piracy, data protection as well as consumer support are very vital for the market of Information Technology and Samsung has played a vital role in the protection of the innovations made in the market. As per the case study of Samsung the company has played a significant role in the controlling of the carbon footprint as well as controlling the social responsibilities.

References

Khan, U.A., Alam, M.N. and Alam, S., (2015). A critical analysis of internal and external environment of Apple Inc. International Journal of Economics, Commerce and Management3(6), pp.955-961.

Peric, M. and Vitezic, V., (2016). Impact of global economic crisis on firm growth. Small business economics46(1), pp.1-12.

samsung.com, (2018) Samsung Electronics Ranks 6th in Interbrand’s Best Global Brands 2018. Available at: https://news.samsung.com/global/samsung-electronics-ranks-6th-in-interbrands-best-global-brands-2018. [Accessed on 8 August, 2019]

statista.com, (2018) Inflation rate in South Korea. Available at: https://www.statista.com/statistics/377275/inflation-rate-in-south-korea/ [Accessed on 3 August, 2019]

statista.com, (2019) Samsung's market share of global smartphone shipments 2009-2019, by quarter. Available at: https://www.statista.com/statistics/276477/global-market-share-held-by-samsung-smartphones/. [Accessed on 3 August, 2019]

statista.com, (2019) Samsung's operating profit 2009-2019. Available at: https://www.statista.com/statistics/237093/samsungs-operating-profit-quarterly-figures/. [Accessed on 5 August, 2019]

tradingeconomics.com, (2019) Korea Interest Rate. Available at: https://tradingeconomics.com/south-korea/interest-rate?continent=europe. [Accessed on 5 August, 2019]

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