Internal and External Environment Analysis

Running head: INTERNAL AND EXTERNAL ENVIRONMENT ANALYSIS
INTERNAL AND EXTERNAL ENVIRONMENT ANALYSIS
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1INTERNAL AND EXTERNAL ENVIRONMENT ANALYSIS
Table of Contents
1. Introduction to the firm and the generic business strategy........................................1
2. Internal Environmental Analysis................................................................................3
2.1 Values and company culture................................................................................3
2.2 Organizational divisions and organizational structure.........................................3
2.3 Value chain analysis.............................................................................................4
3. External Environmental Analysis..............................................................................5
3.1 PEST analysis.......................................................................................................5
3.1.1 Political and legal factors affecting the company.........................................5
3.1.2 Economic factors affecting the company......................................................5
3.1.3 Social cultural factors affecting the company...............................................6
3.1.4 Technological factors affecting the company...............................................6
3.1.5 Any other relevant factors.............................................................................6
3.2 SWOT Analysis...................................................................................................7
3.2.1 Strengths of the company..............................................................................7
3.2.2 Weaknesses of the company.........................................................................7
3.2.3 Opportunities in the environment..................................................................7
3.2.4 Threats in the environment............................................................................7
3.2.5 Summary of SWOT.......................................................................................8
3.3 Porter’s Five Forces Analysis..............................................................................8
3.3.1 Threats of New Entrants................................................................................8
3.3.2 Threat of New Substitutes.............................................................................8
3.3.3 Bargaining Power of Suppliers.....................................................................8
3.3.4 Bargaining Power of Buyers.........................................................................9
3.3.5 Rivalry among existing competitors.............................................................9
4. Conclusions and Influences........................................................................................9
5. References................................................................................................................10
6. Appendices...............................................................................................................14
Appendix 1...............................................................................................................14
Appendix 2...............................................................................................................14

2INTERNAL AND EXTERNAL ENVIRONMENT ANALYSIS
1. Introduction to the firm and the generic business strategy
Samsung is a global conglomerate that has its origins in South Korea and the
headquarter of the organization is located in Samsung Town, Seoul. Samsung company
comprises of different types of affiliated businesses that are united under brand of Samsung.
Samsung was established in the year 1938 by Lee Byung-chul. The operations of the
company had started with trading business and in the next few years Samsung had been able
to diversify its operations in different areas like, textiles, food processing, insurance, retail,
securities. The organization has also entered the electronics based industry in the later part of
1960s. Samsung further started expanding its operations in the construction based industry in
1970s. The company has been able to develop the sixth highest position in terms of the global
value of brand of Samsung (Samsung.com., 2019).
Generic strategy of Samsung - Samsung has implemented a mixed strategy of the
differentiation and cost leadership based strategy. Low cost strategy - The low cost strategy is
implemented with the help of proper development if the lower cost based structure that is
based on the ways by which research and development facilities are formed in single
locations. This is helpful for solving the issues within a short period of time that has a major
impact on the costs. The levels of yield of the organization are also higher as compared to its
competitors in the industry. The core design of the products developed by Samsung are
shared by the organizations (Barros, Hernangómez & Martin-Cruz, 2016). Differentiation
strategy - Samsung is leading the industry based on the technologies that are developed and
implemented in the products of the company. The company has made high levels of
investment on the research and development in order to develop innovative products. The
high value which has been developed by the brand of Samsung is considered to be a
significant aspect that is able to influence the levels of reliability of the products. The margins
that are gained by the organization based on its products are high due to the differentiation
from products offered by its competitors in the same industry (Daspit, Chrisman, Sharma,
Pearson & Long, 2017). The overall cost based structure of the company has not been
affected in a negative manner by the differentiation of products.
2. Internal Environmental Analysis
2.1 Values and company culture
Mission statement – The mission statement of Samsung is based on the simple
business based philosophy related to the devotion of technology and talent in order to create

3INTERNAL AND EXTERNAL ENVIRONMENT ANALYSIS
the superior products and the services which can contribute to a better society on a global
basis.
Vision statement – The vision that has been set by Samsung for the year 2020 is
based on the methods by which the organization is able to create a new future and inspire the
world as well. This vision is considered to be a major part of the commitment that has been
made by the company in order to develop a better world.
Values – Samsung mainly aims at becoming the leading organization in the world
with the help of proper use of the human resources and the technologies for development of
new services and products. The most important factors that are a part of the values of
Samsung are excellence, people, integrity, change and co-prosperity.
Company culture – The organizational culture of Samsung is highly seniority-
oriented in nature that is able to reflect national culture of the home country, South Korea.
The levels of employee loyalty are high and the speed of decision making is also fast (Demir,
Wennberg & McKelvie, 2017).
2.2 Organizational divisions and organizational structure
A divisional organizational structure has been implemented by the Samsung
company. The three major divisions of the company mainly include, Consumer electronics,
IT and mobile communications and device solutions. A mechanistic structure has been
developed by the organization which is based on a huge number of rigid hierarchies. The
relationships that are developed between the employees and their managers or supervisors are
highly rigid in nature (Durand, Grant & Madsen, 2017).