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Independent University Bangladesh

Department of Business Administration.

Title: “Improvement assignment-SWOT analysis and porters five forces analysis”

Course Details:
Course code : MGT-201
Course Title : Principles of Managements
Semester : Spring 2020
Section : 02

Submitted to:
Ms. Farzana Chowdhury
(lecturer, school of business, IUB)

Submitted by:
NAME: Ahsanur Hossain
ID: 1921450
Date of submission: 8th April ,2020
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Table of content

 An Overview of Samsung
 Swot Analysis of Samsung
 Porter’s Five Forces Analysis of Samsung
 Is it an attractive industry for potential investor?

An Overview of Samsung
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.

SWOT Analysis of Samsung

Samsung’s Strengths

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
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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

1. Heavily dependent on the American Markets – It is estimated that both Apple and
Samsung sold at least 70.8% of smartphones 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
invests 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,
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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.

Porter’s Five Forces Analysis of Samsung

Introduction

Porter’s Five Forces methodology is used in this article to analyze the business strategies
of white goods makers like Samsung. This tool is a handy method to assess how each of
the market drivers impact the companies like Samsung and then based on the analysis,
suitable business strategies can be devised. Further, companies like Samsung are known
to study the markets they want to approach thoroughly and deeply before they make a
move and it is in this perspective that this analysis is undertaken.

Industry Rivalry
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This element is especially significant for Samsung as the other White Goods
multinationals like LG, Nokia, and Motorola not to mention Apple are engaged in fierce
competitive rivalry. Indeed, Samsung cannot take its position in the market for granted as
all these and other domestic white goods players operate in a market where margins are
tight and the competition is intense. Apart from this, Samsung faces the equivalent of the
“Cola Wars” (the legendary fight for dominance between Coke and Pepsi) in emerging
markets like India where Samsung has to contend and compete with a multitude of
players domestic and global. This has made the impact of this dimension especially
strong for Samsung.

Barriers to Entry and Exit

The White Goods industry is characterized by high barriers to entry and low barriers to
exit especially where global conglomerates like Samsung are concerned. Indeed, it is
often very difficult to enter emerging markets because a host of factors have to be taken
into consideration such as setting up the distribution network and the supply chain.
However, global conglomerates can exit the emerging markets easily as all it takes is to
handover and sell the business to a domestic or a foreign player in the case of declining
or falling sales. This means that Samsung has entered many emerging markets through a
step-by-step approach and has also exited the markets that have been found to be
unprofitable. This is the reason why white goods multinationals like Samsung often do
their due diligence before entering emerging markets.

Power of Buyers

The power of buyers for white goods makers like Samsung is somewhat of a mixed bag
where though the buyers have a multitude of options to choose from and at the same time
have to stick with the product since they cannot just dump the product, as it is a high
value item. Further, the buyers would have to necessarily approach the companies for
after sales service and for spare parts. Of course, this does not mean that the buyers are at
the mercy of the companies. Far from that, they do have power over the companies, as
most emerging market consumers are known to be finicky when deciding on the product
to buy and explore all the options before reaching a decision. This means that both the
buyers and the companies need each other just like the suppliers and the companies, as
we shall discuss next.

Power of Suppliers

In many markets in which Samsung operates, there are many suppliers who are willing to
offer their services at a discount since the ancillary sectors are very deep. However, this
does not mean that the companies can exert undue force over the suppliers as once the
supply chain is established; it takes a lot to undo it and build a new supply chain afresh.
This is the reason why white goods makers like Samsung invariably study the markets
before setting up shop and also take the help of consultancies in arriving at their decision.
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Threat of Substitutes

This element is indeed high as the markets for white goods are flooded with many
substitutes and given the fact that consumer durables are often longer-term purchases,
companies like Samsung have to be careful in deciding on the appropriate marketing
strategy. This is also the reason why many multinationals like Samsung often adopt
differential pricing so as to attract consumers from across the income pyramid to wean
them away from cheaper substitutes. Further, this element also means that many
emerging market consumers are yet to deepen their dependence on white goods and
instead, prefer to the traditional forms of housework wherein they rely less on gadgets
and appliances. However, this is rapidly changing as more women enter the workforce in
these markets making it necessary for them to use gadgets and appliances.

Stakeholders

This is an added element for analysis as the increasing concern over social and
environmentally conscious business practices means that companies like Samsung have
to be careful in how they do business as well as project themselves to the consumers. For
instance, white goods makers are known to decide after due deliberation on everything
from choosing their brand ambassadors to publicizing their CSR (Corporate Social
Responsibility) initiatives.

Is it an attractive industry for potential investor?

In this generation Samsung industry is a very popular in the world, more than 40% people
use Samsung device or electronics. because it’s a better product and provided their
service to other company or industry very well. That’s why people are buy their product
any kind of think, so I think as a potential investor Samsung is the best choice able
industry their company background and their other side of company is very well for any
kind of investor.

Reference:
https://bstrategyhub.com/swot-analysis-of-samsung-2019-samsung-swot-analysis/
https://www.managementstudyguide.com/porters-five-forces-analysis-of-samsung.htm