Running head: SWOT ANALYSIS FOR SAMSUNG 1

SWOT Analysis for Samsung

Mary Bridget Phiri

University of Zambia

Graduate School of Business

Introduction

Samsung Company defines their vision for the future of Samsung Electronics is “Inspire the world,

create the future.” This vision is at the very core of Samsung commitment to lead innovations in

technology, products and solutions that inspire communities around the world to join Samsung

Company aspiration for creating a better world full of richer digital experiences. As they recognise

themselves responsibility as a creative leader in the global society. They also dedicate their efforts and

resources to offering new values to the industry and customers while fulfilling share value of their

employees and partners. At Samsung Electronics, they want to create a future that is exciting and

promising for all together.

A SWOT analysis is a structure planning method used to evaluate the Strengths, Weaknesses,

Opportunities and Threats involved in a company. A SWOT analysis can be carried out for a product,

place, company or person. It involves specifying the objective of company or planning, SWOT

analysis aims to identify the key internal and external factors seen as important to achieving an

objective. SWOT analysis are groups into two main categories Internal and External factor. The

Internal factors are the strengths and weaknesses internal to the organization. The external factor is

the opportunities and threats presented by the environment external to the organization.

SWOT Analysis for Samsung

Strengths

Strength is the characteristics of the business or project that give it an advantage over other.

The Strengths of Samsung Company:Hardware integration with many open source OS and

software. Samsung is focused on producing devices which can be integrated with most of the

software and OS. This gives Samsung products an edge over Apple’s devices, especially as android

and other OS are gaining market share when iOS and OS X are losing it.
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Excellence in engineering and producing hardware parts and consumer electronics. Samsung is

the number 1 by market share in televisions and mobile phones sales and some of the hardware parts

like processors, memory chips. This was largely achieved due to excellence in engineering and both

efficient and effective production.

Innovation and design. In 2001, Samsung ranked second on the list of US top patent assignees. More

patents strengthen Samsung position among its competitors, is the best in terms of design features and

technology. It was the first introduced dual screen mobiles, 65k TFT/LCD color phone, first phone

with polyphonic ringtones, phones with rotating lens, thinnest and lightest note pad etc. The firm also

won many award for the design of its products.

First mover advantage. In terms of introducing advance features in India’s first 17” TFT-LCD- TV

monitor, the world’s smallest MP3 player, refrigerator, air conditioner etc. it can get the more larger

share of market at the first time period of sales until the other competitor come out.

Low production costs. The company has set up production facilities in lower cost counties like India,

this allows producing goods with low production cost and benefit Samsung as it can offer lower price

and earn higher margins.

Weaknesses

Weaknesses characteristics are that place or area of the company or planning at a disadvantages

relative to other competitors. The weaknesses of Samsung Company: Main competitors are also

largest buyers. The competitors like Apple, Sony, Dell, HP are the main buyers of Samsung

Electronics products as well as the firm’s main competitors, such situation would be favorable to

Samsung, like the competitors could not find complementary products and would form a relatively

low share Samsung’s revenues, Because of it could use its bargaining power over competitors. Due to

reverse conditions like competitors can find complements and they form a relatively high share of

firm’s revenues, the Samsung cannot use its bargaining power over competitors as it can easily lose

its customer and sales.

Lack its own OS and software: Software and OS production has a high profit margin, can increase

integration of company’s products and brand loyalty. Samsung is a hardware leader but has too much

of dependence for software from other parties, Without strong software and OS Samsung is at

disadvantage over its competitors.

Focus on too many products: Samsung electronics serves 4 different industries with many different

product in them. Samsung is at disadvantage over its competitors because it loses a focus when

competing in too many company and too many area of product. It lead Samsung company become get

the share of market at many area but not much at the share of market compare with others.

Chinese low price product: Chinese products focus on economies of scale and dump into Indian

Market for lesser cost. This results Samsung Company get a reduction of sales and lose the market

share.

Too low profit margin: Samsung Electronics is the largest technology company in the world in terms

of revenues but it has low gross profit and net profit margins. Although its smartphones business is

quite profitable, Samsung’s profit margin is low due to its semiconductors sales and aggressive price

cut.

Opportunities

Opportunities are elements that the planning could exploit to and improve its performance and

competitive advantage in a market. Opportunities for Samsung Company:

Growing demand for quality application processors: Samsung is one of the key manufacturers of

application processors for smartphones and tablets. The growing demand for these products requires

best quality application processors that only Samsung provide. This can let the Samsung get a

bargaining power to their competitors.

Product variation: by introducing the unique product and existing product with variety, it can

compete for higher market share in difference area. Beside that when designing for variety product, it

can increases flexibility in design and manufacturing through separation of subparts of product.
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Samsung new product: Samsung is planning to make the air-condition product category more strong

with unique technology called “triple protection proposition”, try to attract more customer and profit.

Growing India’s smartphone market: India’s smartphone market is one of the least penetrated

among Asia/pacific countries. Samsung has a strong presence in India’s market and could use this

opportunity to expand its sales, beside that Samsung is the India’s official ‘Olympic partner’ for the

2012 London Olympic and recently launched ‘Olympic Ratna Programs’. This will result the

Samsung brand awareness in and the sales in India’s.

Growth of tablets market: tablets market is expected to grow in double digits over the next few

years. Samsung company has a strong position in tablets market and could expand it by introducing

newer, better quality tablet models, such as its current galaxy line.

Threats

Threats are element in the environment that could cause failure for the business or the plan. Threats

for Samsung Company: Saturated smartphone markets in developed countries: smartphone

market in the developed economies is saturated and the sales will not be growing at a high rate.

Samsung company main product in the developed countries is smartphone, cause of it their sale are

not going grows fast, will slow down Samsung company expand.

Rapid technological change: the serious threat that Samsung and the other technology companies

like Sony, Apple Company. They are facing a rapid technology changes. Companies are under the

pressure to release the new products faster and faster. The one that cannot keep up with the

competition soon fails. This is especially hard when the business wants to introduce something new,

innovative and successful.

Wide variety product line: Samsung has wide variety of product line, failure of one product line will

have impact on other and will result in brand dilution. Samsung company has at least 6 area need to

focus, e.g.: mobile phone, Tablet, TV/audio/camera, home appliance, pc/laptop, software/memory

chip. It is too much to focus, and some product are related, if one of these failure, will influence other

product.
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Price wars. Samsung has a very low gross margin on many of its products and is already selling some

of them with significant price cuts. Competitors could follow price cutting strategy too and induce

price wars, which would erode Samsung’s profit margin to 0%.

Treat from Chinese product. Samsung is facing threat from many other low cost companies from

china, for example Hua Wei Company. While Samsung busy to competing with other, Hua Wei

Company which is focusing in low cost product, now the leader in fixed-line networks, mobile-

telecommunication networks and budget smart phones. Especially the smart phone. From the record

in 2010 the numbers of emulation mobile phone imported from china to India has reached 38 million.

It take over high market share from Samsung.

Conclusion

Samsung Company should review and check their marketing strategy, the chairman of Samsung

should manage to incorporate the company’s objective to their business strategy and maximise

stockholder value by maintaining a balance of three key financial metrics the liquidity, profitability

and growth.

Reference

http://www.strategicmanagementinsight.com/swot-analyses/samsung-swot-analysis.html

http://prezi.com/bvamar3tj-zy/copy-of-marketing-plan-samsung-electronics/

http://www.slideshare.net/ramtinreza/samsung-swot-analysis