Samsung Electronics: the Global Inc - Case Study Example

Samsung Electronics: the Global Inc. Introduction Samsung Company is a South Korean company whose founder was Lee Byung-chul. It is worth to note the company started as a vendor of fruits, vegetable and fish. As time progressed, it started trading in electronics and in 1974, it owed approximately half of all the semiconductors in Korea. Consequently, this made it to be a giant it electronic manufacture and distribution in the country (Pederson, 10). The main aim of this paper is to provide an analysis of Samsung, both the internal and external environment that has propelled it to where it is currently. SWOT Analysis Strengths Samsung Company follows Apple Company in design and manufacture of telecommunication devices, especially smart phone. In addition to that, Samsung market is extremely diversified, this is to say that, they have manufacture a wide range of products that range from television sets, mobile phone, computers and laptops, cameras and other home appliances (Chang, 3). This ensures that a consumer cannot miss what they want. On the other hand, Samsung products are appealing to the eye and therefore consumers will scramble for them. A good example is the slim designs of their phone. Samsung laptops are light weight and have high definition screen. In addition to that, it was the first company to make a phone that had two screens. As a result of this, it has really built its brand name (Michelle, 8). Weaknesses In Korea, Samsung products are very cheap. The company therefore cannot make the necessary profit to enable it handle all the operations (Woyke, 7). As a result, they have to manufacture a lot of products to raise profit enough to keep the manufacturing going. It also has the tendency of releasing products after products and it does this within a short period span. This kills the zeal of customers. This is because customers ends up wondering which product to buy. Recently, there has been a problem between Apple and Samsung pertaining to their products. It had been noted that Samsung stole software products from Apple (Giachetti, 13). As a result, Apple had to sue Samsung for the same. This clearly show that Samsung has inadequate capabilities in creating software that have pleasing user experience. In addition to that, Samsung has ended up spoiling the good reputation it had earned and this may have led to decline in sale. If one compares Samsung products to Nokia products, one realizes that Samsung products are not user friendly. The robust software that runs their products make it hard for consumers to use Samsung gadgets (Dhanaraj, Charles, and Young, 16). Threats China has recently dominated the market with its products which are selling at extremely low prices. Some of them are counterfeit of Samsung products while others are original Chinese products which offer consumers with experiences like that of Samsung products (Jeong, 14). With availability of such cheaper products, Samsung may lose market for if it will not strategies well. Rivalry between Samsung and Apple made Samsung and this has tarnishes the brand value of Samsung. In addition to that, Euro zones forbade Samsung from importing products to those zones hence tarnishing its name too (Cyhn, 12). Companies like Apple and Nokia have managed to establish a strong brand name in America and Africa respectively (Glowik, 9). Also, these two companies are also in the process of colluding meaning that Samsung will have less market for its products in the two continents. Google Nexus 7 and Samsung products have little difference. Given that this Google product has already dominated the markets of Australia, Samsung has lost that market too. Other companies like Sony also have brilliant products like television sets and cameras which strongly compete for markets with similar products from Samsung (Choi, 10). Apple has launched iTv, which is a threat to Samsung as far as television production is concerned. Technology on the other hand is rapidly changing, owing to the fact that Samsung does not get a lot of profit from its sale, it is difficult to cope up with this changing technological world. Opportunities It was noted earlier that Samsung products are too complicate to use especially when the market targeted is composed of many uneducated people (Ken, 3). In Africa, there is still hope for its products, however Samsung need to improve the user experience of these products else they provide manuals for reference. In nations like South Africa, they could launch stores that specializes on their products only, that is, selling, repair, accessories and customer care. The world now is going smart and Samsung has really invested on this (Mark, 11). It a wide range of smart products like phones tablets that are in real demand from countries like India. Television advertisement nowadays are occupied by Samsung product. This creates a lasting impact on consumers (Lee, 6). Also Samsung has sponsored big football teams like Chelsea which is a heavy consumer of their products. In less developed and developing countries, Samsung has partnered with school institution to support children get education. This is not only good charitable work but it is also a way of mending and adding value to its brand name. PESTEL analysis This is an analysis done to identify the external factors that affect the success and failure of a business. They are factors that, in most cases, the business has limited or no control over. The subsequent paragraphs will analyses these factor in relation to Samsung Company (Baloh, Peter, and Katharina, 5). Political environment Samsung has really come a long way. However, the scandal between Apple and Samsung led to tarnishing of Samsung’s brand name (Kim, 7). As a result, the American government is on the move to ensure that Samsung products do not find their way in to the Euro market and thwart Samsung efforts in having market in Europe. On the other hand, the German government compelled Samsung to take away the Galaxy tablet that was already in the market. Political difference that exists between the nation of Japan and South Korea, has made South Korea stop all the operations of Samsung in Japan (Peter, 23). Economic environment Statistics show that Samsung is now spread in more than 58 nations. One policy of Samsung is establish and conquer, this is to mean that they have a tendency of investing their infrastructure whenever they get an opportunity to do so. Currently, Samsung has the goal of establishing a plant is South Africa (Baloh, 12). This is a new dawn as they will be able to compete with their rivalries like Nokia. In addition to that, this plant is expected, after establishment, create employment opportunities to more than 3000 people. This is meant to solidify the brand name in that nation while boosting the economy of South Africa (Samuel, 10). Social environment Innovation and technology has brought change to the lives of people who live is South Africa (Arthur, 17). Research has shown that, many people are falling in love with Samsung products. Applications like, calendars, memos among others, found in Samsung products have made the lives of people easier. On the other hand, the complex user interface of Samsung tablets phones, gives people hard time to use. Samsung should therefore come up with an initiative establishing centers or customer care shops, where people who have problems using the products, can be assisted (Song, Chae, and Kyungmook, 9). Technological environment The economy of South Africa is dominated by business and for them to thrive, communication with customers is very fundamental. Social media technology has currently risen to higher levels and majority are found on them (Yang, 6). On the other hand, Samsung has taken this a notch higher. The invention and introduction of Galaxy note means that businessmen can now operate their business everywhere and at any time. This gadget has all the necessary features to allow business people take business operation to their pockets, away from the business premises (Mirza, 8). In addition to that, the gadget is small and convenient to carry as opposed to laptops. Ecological environment Samsung recycles mobile phones. How then does it achieve this? It has an outlet for collecting old mobile phone (Chien, Willie, and Zhenrong, 5). People bring the old phones to the outlet. Samsung operators then pick them, for free or sometimes they give rewards to them who have submitted these old phone. The phones are undergo a sorting process and are then taken for recycle. All the process involving manufacture, acquisition of raw materials, selling of their products, transportation, is environmental friendly (Day, 13). Legal environment Most of manufacturing industries like Samsung produce good quality and poor quality product. The good quality products are sold in countries like America and other oversees countries (Gilbert, 9). On the other hand, the poor quality products are dumped in Africa and nations like India. South Africa has now come up with a policy meant to protect its citizen against poor quality products and this might bring negative impact to Samsung. The current goal of Samsung is to open up a distributions center in South Africa through which they will be distributing their products to Africa (Cartwright, 8). This however will have challenges because South Africa has implemented Acts meant to protect the labor force and if Samsung had thought of exploiting the South African labor force then this will be a demerit to them. In addition to that following cases of companies copying other companies smart phone features, like in the case of Samsung and Apple, companies have now tighten their patent portfolio to hinder other companies from attaining market shares. Some of the lawsuits cases a genuine while others false (Lippold, 6). However, whichever the case the law and patents make firm fear producing smart phones and this makes industry uncompetitive. Michael Porter’s five forces This is an analysis of the industry in which the business is operating in the strategies which it has laid to enable it operate in that industry (Davis, 12). It is important to note that a profitable business is one which successively combines these five factors, threat of new entrants, bargaining power of consumers and suppliers, product differentiation and threat of substitute. Case study is Samsung Company and the product of focus is new Samsung tablet (Arnell, Peter, and Steve, 23). Threat of potential entrants Competition is the component that makes business thrive and the mother of innovation. Moreover, for any business to compete with another it must have necessary capital and other resources to conduct marketing campaigns (Hughes, 10). Samsung’s new tablet will soon be facing stiff competition from Microsoft upcoming tablet. Microsoft Company is known for its Windows operating system and therefore people will opt to go for its new tablet. Product differentiation Product differentiation gives market for a given product (Mattera, 22). This differentiation can easily be seen on the hardware and not on the software part of a product. Therefore, for Microsoft to sell it Tablet and compete well Samsung’s Tablet, it must satisfy curiosity in this way else, it will fail. It can be concluded that Samsung will not suffer much if Microsoft will fail to make its new Table more pleasant to consumers as possible (Conklin, 2). Threats of substitutes Samsung is the mother of tablets. It is for this reason that it has less competition to this. Other companies are simply reinventing what Samsung did and are therefore not giving consumers new experience with their products (Mullins, John and Orville, 13). In order to offset this, the new Samsung galaxy note has all the features of a tablet and a smart phone. This is to say that, other firms will have to work hard to attain the level Samsung is (Jane, 21). The bargaining power of buyers Customers are the pillars of a business. It is in this regard that companies must ensure that the customer is satisfied. Customers want to see what they pay for and they are very sensitive to prices (Hsu, Cheng, and Somendra, 9). They can easily move to another vendor when the current vendor fails to please them. In the case of mobile industry, they can go for other cheaper and better phones if there is no product differentiation. To be on the safer side, Samsung has maximized on this. It manufactures products with cool designs (Kotler, Philip and Gary, 8). Reliable stats show that its tablet is the cheapest in the market as compared to tablets from other companies like Apple. The bargaining power of supplier Apparently, Samsung makes its own designs and it is also supplies for itself raw materials. In addition to that, Samsung supplies components to Apple (Koo, 13). This explains the reason why Samsung products are cheap in the market as compared to Apple’s products. As to conclusion, Samsung is doing well in the market and even though other products are emertging. It has succeded because its products are affordable as compared to other products, especially those from Apple company (Michael, 3). The current televisions advertisements have also made it possible to reach out to many people. Finally, Samsung has been is on the cutting edge of technology with it new inventions like galaxy note and tablets giving consumers new experience and variety. References 1. Pederson, Jay P.. (2010). International directories of company histories. New York: St. James. Press. 2. Chang, Se.. (2003). Sony vs Samsung: the inside story of the electronic giants’ battle for global supremacy. New York: Wiley. 3. Michelle, T. (2010). Samsung Electronics and the struggle for leadership of the electronics industry. Singapore: Wiley. 4. Woyke, E. (2008). The smartphone: anatomy of an industry. New York: Oxford. 5. Giachetti, C. (2013). Competitive dynamics in the mobile phone industry. New York: Palgrave Macmillan. 6. Dhanaraj, Charles, and Young S. K.. (2006). 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