INTRODUCTION

Samsung electronics Industry Corporation was created in 1969 as a division

of Samsung group, and the name of corporation was changed to the current
name which Samsung electronics in 1984. Mainly it manufacture and exported
electronics products, which include color TV, electronic calculator, electronic
watch, electronic cash registers, as well as electronic home appliances such as
refrigerators, air conditioners, washing machines, an also telecommunication
devices. Especially, it recorded the outstanding number of manufacturing black
and white TVs which was going up above 10 million and took top of the world in
terms of export of black and white TVs. It succeeded to develop super mini VTR
(8mm) in 1983, started to export VTR in 1985, and merged Samsung
semiconductors and telecommunication cooperation in 1988.

Since then Samsung electronics has dramatically grown as one of the world’s
leading electronic giant with branches all over the world. Now millions of
Samsung electronic products are being manufactured and sold every day and its
product is seen in almost every house around the world. Samsung electronics has
one of the best inventory management systems, supply and distribution chain in
the world and its products are unique and durable with dedicated, efficient work
force. Also, its research and development department is second to none in the
electronic industry hence we decided to carry out this in-depth analysis to access
the various strategies they have being applying since their existence and to advise
them on the possible strategic options available to them now and in the future.
An Overview of Samsung

Company: Samsung

CEO : Koh Dong Jin, Kim Ki Nam, and Kim Hyun Suk

Year founded : 1938

Headquarter : Samsung Town, South Korea

Number of Employees (2018): 320,671

Public or Private: Public

Ticker Symbol: SSNLF

Market Cap (2018): $326 Billion

Annual Revenue (2018) : $225 Billion

Profit | Net income (2018): $41 Billion

Fun Fact:

Did you know that the total resources of the Samsung group in 2017 made up
about 15% of South Korea’s GDP?

Samsung Electronics Co., Ltd stands today as the world’s second-largest

technology company that produces electronic devices. It is a South Korean
conglomerate business. Samsung was also titled as the number one in
consumer electronics brand worldwide and is recognized for its evolutionary
advancements in digital technology. The company is known to produce
equipment that includes telecommunications, electronics, home appliances, and
semiconductors.

Initially being launched as an analog driven product line, it transitioned into a

universally acclaimed pioneer in technological innovation. The tech industry is
currently the world’s largest Smartphone and mobile phone manufacturer.
Currently, it sells over a hundred products of different varieties and models. Its
operational branches are present in about 79 countries.

Lee Byung-Chul founded Samsung in 1938. It initially started as a trading company

until it gradually evolved into an electronics manufacturer in the late
1960s. It employees about 320,671 workers in December of 2017.

Its current CEOs are Koh Dong Jin, Kim Ki Nam and Kim Hyun Suk who assumed
their positions in March 2018.
SWOT Analysis of Samsung

The following is the SWOT analysis of Samsung:

Samsung’s Strengths – Internal Strategic Factors

1. Research and Development

The foundation of Samsung has always been on Innovative research and

development. Expenditure in these departments resulted in the company having
a wide range of product portfolio among its competitors. These include tablet,
camcorder, mobile phone, camera, TV/video/audio, Memory Cards, PC, and other
accessories. They have 34 R&D (research and development) centers operating
worldwide. It spent US$14.857 billion in 2017 on

2. Award Winning Brand

Samsung’s position as a pioneer for innovation is backed with credibility. Samsung

has won many awards for its offerings. Samsung has been awarded the CES
(Consumer Electronics Show) owing to its designs and products for 14 consecutive
years. It went on to receive 36 CES awards in 2018 along with 400 more awards
within a period of 14 years. It also secured 7 wins at the (IDEA) International
Design Excellence Awards.

3. Ecologically Friendly Innovations

Samsung has enhanced its brand reputation through its environmentally friendly
innovations. It secured its ranking at 9th position in the Top 30 Tech and Telecom
companies of the EPA’s 2016 Green Power Partner list. It also received the
Environmental Protection Agency’s (EPA) annual ENERGY STAR Partner of the
Year Excellence Award for five consecutive years. Other companies do not share
this achievement and hence increases Samsung’s appeal across all business lines.

4. Stronghold in the Asian Markets

Samsung retains a stronghold in the Asian markets, particularly India and China.
Both India’s and China’s business markets are growing substantially which is why
Samsung has taken advantage of the opportunity and incentivize in these
countries accordingly.

Samsung’s Weaknesses

 Most of Samsung electronics designs are not user friendly.

 Samsung electronics diversifies the product it manufactures. This
diversification poses a threat as they are other larger companies with
products peculiar to the industry.
 Samsung electronics promotional activities cost it dearly.
 The lack of innovation and fresh ideas in the electronic market is also a
disadvantage as it courses the demand for products to drop.
1. Heavily dependent on the American Markets

It is estimated that both Apple and Samsung sold at least 70.8% of smart
phones in the USA. While Samsung has diversified its resources and expanded
its operations in Asia, it is still heavily dependent on the American markets.
The American economy is very unpredictable and another recession could put
Samsung’s revenues in jeopardy and can damage its operational resources.
That’s why Samsung needs to involve itself into the Asian and European
markets to ensure sustainability and avoid potential failures if the US economy
ever collapses.

2. The decline in Smartphone Sales

Samsung has been experiencing a decline in Smartphone sales since 2017. A
similar trend was seen in China due to the price sensitivity of the Chinese
market. They dump a lot of those products in the Indian market at a lower cost
which harms the Samsung sales. Samsung has tried to shift more focus in India,
but that strategy did not produce substantial results for the company.
Samsung’s Opportunities

1. Triple Protection Proposition

Samsung is preparing to launch its new air conditioning product called the
‘Triple Protection Proposition’ that incorporates cutting edge technology and
impeccable construction. The product is geared towards a target customer
base that would ensure maximum customer retention.

2. HR Management
Samsung can make impressive transformational accomplishments if it invest in
its HR management. Not only would it be good for its sales but it will also give
it competitive leverage over its rival. The company can utilize its brand image
and hire highly qualified and skilled employees to improve employee
performance and productivity.

3. Diversification and Acquisitions

It is critical that Samsung avoids the mistake of being limited to just one
marketplace. It not only invites risks from an economic perspective, but it also
attracts unwanted political polarization and negative media publicity. That’s
why there is a business vacuum present in the Asian and European economies
in which Samsung can thrive. It needs to expand its customer base as well. It
can only be achieved through diversification and acquisitions of other
 businesses. Samsung is a popular brand and can generate impressive revenues
thanks to its financial standing

Samsung’s Threats

1. Controversies
Samsung has been involved in controversies that have threatened its business.
Its rival Apple filed a lawsuit against Samsung for patent infringement which
underwent a heated court battle for seven long years until finally reaching
a settlement. However, the company suffered consequences when a
jury decided that Samsung had indeed copied Apple and was to pay $1.049
billion in damages. This suit damaged the company’s reputation and its sales.

2. Increased Competition
Competition from opponents especially from those within the consumer
electronics, Smartphone products, and computing industries has reached a
record high. Whether it’s Xiaomi, Apple, or Huawei, all the technological
competitors are outmaneuvering and outperforming each other to become
the best technology company. This only increases the pressure for Samsung in
both competition and finances.
3. Legal and Regulatory Threats
With the world becoming more globalized and digitally oriented,
governmental authorities have begun issuing their guidelines which are
increasing legal and regulatory threats to companies around the globe.
Samsung is no exception to these rules. Laws differ from market to market,
and these strict regulations cause a hindrance in operations. Failure to comply
could even result in a complete shutdown in the respective market which may
be fatal for Samsung.
 Tows Matrix
Strength
1. Research and development
2. Award Winning Brand
3. Ecologically Friendly Innovations
4. Stronghold in the Asian Markets
5. Wide rate of electronic product
6. Merger with other companies
7. One of the world’s leading electronic
giant
Always left blank
8. Branches all over the world
9. Its product is seen in almost every
house around the world
10. One of the best inventory
management systems, supply and
distribution chain in the world
11. Products are unique and durable
12. Dedicated, efficient work force
13. Financial position
Opportunity SO
1. Triple Protection Proposition S1 O1, S2 O3, S5 O6
2. HR Management S7 O2 (Headhunt)
3. Diversification and Acquisitions S8 O5,
4. Unique Products S10 O7 (On time delivery at least cost)
5. Market Penetration S12 O1
6. Untapped Market S13 O3 (Acquire business rivals)
7. Online Company Store
Threat ST
1. Controversies S2 T1 ( Consumer trust on Brand)
2. Increased Competition S4 T2 ( Keep the Competitor out of the
3. Legal and Regulatory Threats market)
S5 T2
S6 T2
S9 T1 (Product quality retain customer)
S12 O2 (Hold quality edge on
competitor)
S13 T3
Weakness
1. Most of Samsung electronics designs
are not user friendly.
2. Samsung electronics diversifies the
product it manufactures. This
diversification poses a threat as they
are other larger companies with
products peculiar to the industry.
3. Samsung electronics promotional
activities cost it dearly.
4. The lack of innovation and fresh
ideas in the electronic market is also a
disadvantage as it courses the demand
for products to drop.
5. Heavily dependent on the American
Markets
6. The decline in Smartphone Sales
WO
W1 O4 (Market as band difference)
W2 O2 (Hire best talent)
W3 O5
W3 O6
W4 O7 (Increase online sale)
W6 O3 (Cash Cow)
WT
W1 T2
W2 T2
W4 T1