Business Environment Analysis of Samsung: PESTLE and SWOT

This study analyzes the internal and external environmental factors of Samsung company using PESTLE and SWOT analysis. It discusses the impact of political, economic, social, technological, legal, and environmental factors on Samsung's operations. The study also highlights the strengths, weaknesses, opportunities, and threats faced by Samsung.

Contemporary Business
Environment

Abstract
This study includes business environment and its analysis. Business environment is
concerned with and made up of all those factors that can affect functioning and operation of a
business organisation. This environment is divided in two parts one in internal and other is
external, external environment is further divided in two parts micro environment and macro
environment. These environments were analysed by using tools like PESTLE and SWOT. These
tools respectively analyse external and internal environment of business. This analysis is useful
for business in order to make decisions that bring the best result and can avoid those factors that
tend to harm business and its operations.

Table of Contents
Abstract............................................................................................................................................2
INTRODUCTION...........................................................................................................................4
DISCUSSION.................................................................................................................................4
CONCLUSION..............................................................................................................................11

INTRODUCTION
Business environment consist of all those factors which have power to affect operations
and functions of a business organisation. These factors are divided in two types one is internal
environment and other one is external environment. Internal environment is concerned with all
those factors that exist within business organisation. External factors are those which remain
outside business and impact its decisions. Factors that are covered by internal environment are
controllable but factors that are covered by external environment which are again divided in two
types. From which micro environment and macro environment, micro environment whereas is
partially controllable and factors of macro environment are totally uncontrollable. These factors
are culture, values, system of organisation and in external environment which is divided in two
parts micro environment consist of customers, competitors and macro environment consist of
economic, technological and demographic factors (Prajogo, 2016). This study analyses internal
and external environmental factors of Samsung company, which is a South Korean multinational
mobile company.
DISCUSSION
This study discuss about external and internal environment analysis of Samsung
company. To discuss about environment and its effects firstly it is important to understand WHY
audit is performed. Environment audit is a tool that to measure environment effects on business
activities. Environment audit investigate, understand and identify factors that affect business
activities (Bah and Fang, 2015). This is concerned with improving human activities with an aim
to reduce negative effects of the factors that affect business.
The main reason behind performing environment audit are,
To forecast the changes of internal and external environment, Samsung being a mobile
company have to deal with changes in environment on a very frequent basis and that is why it is
very essential that Samsung audit their external and internal environment to reduce its negative
effect and prepare its internal environment to align with external environment.
To stay ahead in competition, in a highly competitive environment especially in mobile
industry (Eling and Schaper, 2017). Environmental audit is very important as to stay ahead in
competition. Audit allows identifying factors that can affect organisational performance and that
also covers identifying moves of competitors.

To identify opportunities in environment, environment not always have threats in itself.
Environmental audit is also important as it allows identifying opportunities that are available in
external and internal environment.
To save company from threats, environment audit is important as it helps company to
save and reduce its threats (Saleem, 2015). Environment is full of threats and its audit can help
company to know about then in advance and this way company can save itself from those threats
by preparing internal environment.
To improve internal functioning, external and internal audit helps the company to look at
their internal functioning and that enable themselves to identify strong and weak factors they
have company can improve its strength and reduce weaknesses (Gavurova and et.al., 2017). This
way company can grow and increase its productivity and profitability.
All these reasons make it necessary for Samsung company to audit its internal and
external environment.
The next important consideration is that how Samsung audit and analyse its internal and
external factors (Hansen and et.al., 2018). To analyse and audit external environment, most
effective tools is PESTLE analysis.
To use this tool by Samsung, first step is to understand what this PESTLE is all about. This is
concerned with analysing 6 main factors in external environment that affects business operations.
These 6 factors that can affect Samsung company are
 political factoFerdyn-Grygierek and Baranowski, 2015rs
 economic factors
 social factors
 technological factors
 legal factor and
 environmental factor
Political environment- Political environment of Samsung is not only concerned with its native
company that is South Korea but being a multinational company politics of all those companies
where Samsung operates its business (Šoltés and Štofková, 2016). Samsung while operating
itself in UK is affected by the values and norms of government of UK. There are various factors
concerned with UK government that can affect operations of Samsung that are, trade control,
tariffs, competition regulation, stability of government, rules regarding consumer protection,

concern of government regarding home country businesses and foreign country businesses, level
of support and threats to foreign businesses have in UK. Under this environmental factor one
more thing that affects Samsung is relation of the country from where Samsung is operating with
country which is Samsung's native country (Kurian and Cismas, 2016).
Economic environment- this is concerned with local and global economy. Type of economy of
the country Samsung is operating itself. For instance it is easy to operate in a market economy as
there are fewer rules and regulations for business organisation on the other hand social
economies have many regulations for business organisation operating with profit motive in their
country (Barr and et.al., 2018). Other factors that are covered in economic environment are GDP,
per capita income, economic and social status of people, spending habits of the people of a
country. UK is a mixed economy that allows businesses to earn profit and grow and being a
developed country it is easy for Samsung to operate in UK and also very profitable.
Social environment- an environment that consist of custom, belief, practices of a society on a
large scale it is concerned with population of a country. Samsung being a Mobile company is
affected by this factor in a way that what is outlook and orientation of a country towards
technology and technological development. UK is a developed country and like other developed
countries its also very concerned with technology and technological development. This make it
possible for Samsung to grow and develop in UK.
Technological Environment- what can be more important for a company that is engaged in
producing and selling mobiles, it is technological environment (Namvar and et.al., 2018).
Changes that occur in technological environment make a direct impact on Samsung's
functioning. This technology not only includes what company is producing but also technology
that company is using to produce its products.
Legal environment- It is concerned with rules and regulation of a country. Samsung is affected
by the rules and regulations that are related to business operation. Samsung company being
multinational gets affected from the legal environment of many countries or those where it is
operating and willing to expand its functioning in that country (Nikitina and Lapiņa, 2019).
These rules and regulations have a very strong impact as these are essential to be followed by
Samsung and company can not avoid these rules and regulations.
Environmental factor- This is concerned with physical environment that a country have. This
impact business in such away that natural resources being used by the company affect of the

product company is making on environment and pollution that a product can contribute to
environment (Domanović and Janjić, 2018). At present environmental factor has been very
important to consider and evaluate as this has become prime concern of all the citizens around
the globe.
Once, all these factors have been understood next step of the process of external
environment audit is to research about these factors. In Samsung team of experts is always
engaged in research and analysis of external environment.
This process is quite lengthy and requires assistance from various people. Research includes
gathering information about all these factors. Information gathered should be relevant to any of
these factors and should be based on facts and needs to be accurate. The sources from which this
information can be gathered are many but most important are data available on internet, news
and government reports (Rastogi and Trivedi, 2016). Data available and gathered from these
sources have the highest chances of being accurate. Along with these Samsung also engage itself
in primary research and fact finding.
Put all the data together, it is not possible to collect all the data from a single source.
There are various sources from which data is collected. This data needs to be put together with
their respective category in order to know correct and adequate information about al these factors
(Zahari and Romli, 2019). Accuracy and completeness of data is very important otherwise
actions taken on the basis of data will become meaningless.
Understand the data being collected, once data is put together with their respective
categories, this data requires to be understand. In order to understand the data reason behind its
existence, impact of the data, how important the data is all these are very important
considerations.
Identify opportunities from the data, from the data being gathered next step includes
finding out opportunities available in external environment. In which most of the opportunities
are available in social and technological environment. This is because these two environment
changes more frequently (Fozer and et.al., 2017). Samsung also have most opportunities from
these environments. Social environment is referred as choice and preferences of people and
technological environment under which Samsung operates itself.

Identify threats from the data, this step is concerned with identifying threats from the
environment. For Samsung most of the threats are also from social and technological
environment.
Samsung has done this analysis very efficiently and still is doing. Success and innovation
of Samsung is result of this analysis (Sammut‐Bonnici and Galea, 2015). Samsung is one of the
biggest Mobile phone company and has always won over competition and this is the analysis that
aware Samsung about the threats and opportunities available in the external environment.
Threats are meant to be reduces and opportunities are meant to be effectively utilised in order to
grow and develop.
The above discussion was concerned with external environmental analysis of Samsung.
To analyse its internal environment Samsung uses SWOT analysis is most effective and simple
technique (Gürel and Tat, 2017). Internal environment which is concerned with factors that are
available inside of the Samsung and affects its operation.
This is used by Samsung in following manner,
to start with the analysis firstly it is important to understand what it really is,
SWOT, which refers to Strength, Weakness, Opportunity and Threats. These factors explain that
Strength are there within an organisation which can be used by it in order to get better
results and more productivity (Nash, Manning and Heiser, 2019). These strengths are main
factors that drive success in organisation and that is why every business organisation is focusing
on increasing its strength and its utility.
Weaknesses are also there within the organisation and these weaknesses are required to
be reduced and eliminated by organisation in order to save organisation from any kind of loss
and harm (Madsen, 2016). Weaknesses are tended to cause failure of the event and this is why
businesses try to overcome and eliminate it.
Opportunities exist outside organisation are utilised by organisation to improve its
functioning and increase productivity and profitability (Tang and et.al., 2018). Companies are
also interested in opportunities as these allows companies to realise their goals more effectively
and efficiently.
Threats also exist outside organisation and can impose any kind of harm on organisation.
These are required to be faced properly or reduced to avoid possible harm of these threats.
The process that answers how to perform SWOT is as follows,

Decide the Objective, to start with to actual process organisation first need to decide the
objective for which it is doing SWOT analysis (Hasaneen and El-Halwagi, 2017). SWOT is not
done without any objective or reason. Samsung must be having plans for which they are doing
this analysis.
Once objective is decided next come as research, research in this analysis is concerned
with gathering information. To gather information various methods are there like,
 Asking concerned people about strength and weakness, most important people for this
purpose are leaders and managers of the company and then employees who working for
and in company (Flachenecker and Kornejew, 2019). Asking them what they think and
consider are strength and weakness of the company. Expected results can be employees
of the company, resources of the company.
 Using past data for information, this is very feasible and reliable source to collect data.
 Asking external people who are somehow related with company about its strength and
weaknesses, asking people like stakeholders about strength and weaknesses they are also
very reliable source as they are not really into the company and are also related to it
which makes then to see clearly what are the strength and weakness of the company.
 Finding reasons behind success and failure of events in company, to know about the
strength look at the factors that drive success in the organisation and to find out weakness
look at the reasons that cause failure.
Analyse data, data gathered needs to be analysed to ensure that the facts and data
collected are completely accurate and reliable (Harcourt, 2019). This is done by experts of the
Samsung. This is very important for success of analysis.
List Strength- once data is gathered and analysed, strengths are listed because while
collecting data it is not really possible to record everything differently (Idsø, 2017). In this stage
of analysis strengths are identified and recorded in list format so that they are easily understood
by everyone. Later these strengths become basis for important decisions.
List weaknesses- those factors which tend to cause failure and loss are listed under the
heading of weaknesses (Moreira, 2016). These are also important just as strength because when
company is aware of weaknesses it can take decisions which do not get affected by the
weaknesses.

One important thing to consider here is that strengths and weaknesses are fact based and
real. They are reliable and base for decisions but when it comes to opportunities and threats both
of these are potential and not real and assured (Medina Munro and Belanger, 2017). Strengths
and weaknesses are inside the company and opportunities and threats are outside the company.
List opportunities- On the basis of strengths and weaknesses company assumes opportunities
they can have in external environment. These opportunities are those which help Samsung to
increase its productivity and profitability (Li and Li, 2016). These are concerned with both
factors which are already available and those which company can generate in external
environment on the basis of strengths they have.
List threats- threats are those factors that impact organisation in a negative manner. These can
cause loss and company may have to face difficulties because of these threats. Company to avoid
these threats often make strategies and many times prepare its internal environment in such a
way that it can face the threat effectively and without causing any kind of loss to the company.
Making strategies, Though not really a part of the SWOT analysis but as a result of can
be said that to do this the whole process is carried on by Samsung company. Strategies are
created by the Samsung company so that they can take advantage of the strengths they have
without letting then affected by the weaknesses that exist in the company. Strategies are also
made to grab the opportunities so that they can increase their profit and productivity and achieve
their objectives in a more efficient manner. Strategies to avoid effect of threats are also made by
Samsung so that they can avoid potential harm and work without any hindrance.
This environment analysis is very effective for the Samsung to get insights in its Micro
economic environment. Micro economic environment which is concerned with decision making
of firms related to their individual actions and consumers' decision. This economy is concerned
with decision of individual related to production and consumption. Here discussion is being
about Samsung which a company engaged in production and distribution of goods/mobile
(Ferdyn-Grygierek and Baranowski, 2015). This company can get many insights for its micro
economic environment from environment analysis done through PESTLE and SWOT. Through
pestle analysis company can decide its production strategy on various basis,
On the basis of economic factor in analysis Samsung can understand what kind of product
company should produce and sell in that particular country. Country which is developed and

where per capita income of people is comparatively high company can sell expensive products
and luxurious products.
According to social environment analysis company can understand taste and preference of the
people of a country. Company can decide and produce mobiles which can fulfil requirements of
that country's population. Samsung is mobile producer and people can be interested in having
different features in their mobile which is important for Samsung company to ensure adequate
sell of their products.
Technological Environment allows knowing about what kind of technology people in a given
country are upto (Indris and Primiana, 2015). In developed country people like to have advanced
technology and latest mobiles whereas in developed countries people generally use older version
of technology. This is important when company sells products that come in the category of
technical products. In this case Samsung can choose to distribute its latest product with upgraded
technology in a developed country. This is very important while taking decision regarding
distribution.
These were concerned with external factors that can provide insight about microeconomic
environment but more important factors are internal these factors,
Strength and weakness, company can only produce as per their capacity in terms of resources.
Resources when available as strength of the company they can produce as per market demand
and increase their productivity (Zhao, 2016). These resources include both human resources and
material resources. On the other hand if company does not have enough resources to produce in
plenty they will have to make strategies to compete with less production capacity and effective
distribution channel to remain in competition.
Opportunity and threats, these are also important for micro economic decisions if company find
out that sell of their product is likely to fall in the future company can take appropriate decision
regarding productivity. On the other hand if company find out that there is an opportunity for it
in diverse market company will increase its sell and will strengthen its distribution channel.
CONCLUSION
On the basis of this study it can be concluded that business environment play an
important role in functioning of a business. This environment also important for a company to
find out opportunities and threats which company can use and be aware of. PESTLE and SWOT

analysis were performed in this study. These techniques are considered as most effective and
efficient to use for analysis of environment where PESTLE analysis is used to analyse external
environment and factors available in external environment like political, economical etc.
SWOT analysis is used to analyse internal environment of the organisation which is concerned
with values and belief of company and their objectives and other internal factors. Lastly study
also discusses about micro economic environment and its insights that can be gained from
environment analysis.

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