MAN133: International Business Issues and Practice Report for Samsung

This report provides a comprehensive analysis of Samsung's international business operations. It begins with an executive summary and an overview of the Global Risks Report, followed by an introduction to Samsung's business. The core of the report includes internal and external analyses, utilizing PESTEL and SWOT frameworks to evaluate political, economic, social, technological, and legal factors, as well as Samsung's strengths, weaknesses, opportunities, and threats. The report also examines competitive strategies, including generic strategies and their link to the World Economic Forum's challenges. Strategic decisions to tackle these challenges are discussed, and recommendations are provided. The report concludes with a summary of findings and includes appendices with key facts, financial data, and market share information. The report focuses on Samsung's efforts to navigate societal, political, and economic vulnerabilities, as outlined by the World Economic Forum, and analyzes Samsung's strategic responses within a highly competitive global market.

Name of student:
Student ID:
Word Count:
4000
Unit Title:
International Business issues and practice
Unit Code:
MAN133
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TABLE OF CONTENTS
Executive Summary..............................................................................4
Global Risks Report...........................................................................4
Introduction..........................................................................................6
Internal and External Analysis for Samsung.........................................7
PESTEL Analysis for Samsung...............................................................7
Political Factors.................................................................................8
Economic Factors..............................................................................8
Social Factors....................................................................................9
Technological Factors......................................................................10
Economic Factors............................................................................10
Legal Factors...................................................................................11
PESTLE link to WEF Report.................................................................11
Competitive Analysis..........................................................................12
Sources of Competitive advantage.................................................13
Samsung Generic Strategy for Competitive Advantage..................14
Competitive strategies linked to the World Economic Forum.............16
SWOT analysis for Samsung...............................................................17
Strengths.........................................................................................18
Weaknesses....................................................................................20
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Opportunities...................................................................................21
Threats............................................................................................21
Strategic decisions to tackle World economic forum challenges.....22
Recommendations..............................................................................24
Conclusion..........................................................................................24
References.........................................................................................25
Appendix............................................................................................28
Appendix 1 – Key Facts About Samsung.........................................28
Appendix 2 – Corporate Tax For Samsung......................................28
Appendix 3 – Samsung Revenue from Diversification.....................29
Appendix 4 – Samsung expenditure on Research and development
for marketing and sales growth......................................................30
Appendix 5 – Brand Loyalty Samsung.............................................31
Appendix 6- The diversification of Samsung Products....................31
Appendix 7: Market share for Samsung leading along with its
biggest competitor Apple................................................................32
Appendix 9 – Samsung Electronics Sales Dip in Semiconductors
against its competitors-Intel............................................................33
Appendix 10- Decline of sales for smartphone industry due to
Coronavirus Pandemic effect...........................................................34
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Executive Summary
Samsung Company has its origin in South Korea. The headquarters is
located in Samsung Town, Seoul, which is found by Lee Byung Chull.
Samsung initially started as a trading company in the year 1938
(Chang., Zhang and Xiong 2019). It deals primarily with designing,
manufacturing, and marketing of tablets, smartphones, laptops,
washing machines, television, and microchips. Its immense success
and market domination over the years has helped Samsung gain a big
business empire. Samsung holds various subsidiaries, which include
Samsung heavy industry and Samsung Electronics, among others. It is
one of the leading electronic dealers ranking at the 5th position on
the global scale.
Samsung operates in more than 73 countries globally, including the
U.K, China and U.S.A Its primary computers is Apple, which holds
significant shares in the electronics market, giving a fierce
competition to Samsung. As per 2017 statists, Samsung electronics
recorded a global revenue increment from $187.74 billion to $222.82
billion.
Global Risks Report
The global risks report (2019) was drafted to analyze the risks that
global decision-makers view, which influences national and
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organizational strategy. The clear risks which emerged from the
analysis are:
Geopolitical breakdown
The co-operation between the countries shows a decline from wars in
trade to the dissolution of the weapon treaties. The primary concern
of worry is the different geographical climate, which will hinder the
progress of critical global changes (Guisan 2019).
Technological instability
As the influence of technology grows into the modern era, there is an
increased risk of cyber-attacks and technological safety, which is a
grave matter of concern.
Economic vulnerabilities
There have been increased debts in corporate work, along with
increased financial risks. The creditworthiness of borrowers has also
declined. Tightened financial conditions is a matter of great concern.
Societal and political strains
Political instabilities is a significant concern for the world economic
forum. The increased polarization of societies is a significant driver of
developments in the global risk landscape. Polarisation and weak
governance raise serious questions and concerns about the political
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health of various governments. A vicious circle develops, diminishing
social cohesion, straining the political institutions, and responding to
changes in society.
Environmental Fragilities
The environmental risks dominate the global risk perception as top
priorities to be taken into account as a risk factor. There is increased
worry and concern about environmental, political failure and its
potential impact.
The report will focus on how the World economic forum's challenges,
especially societal and political concerns, and economic challenges
will affect Samsung and its efforts to combat these strategies with an
in-depth analysis of the various strategies that Samsung has
implemented to for sustaining itself in the fierce competition that
exists.
Introduction
Samsung Electronics ranks in the second position as the largest
technology company that designs, manufactures, and markets
electronic equipment, including electronics, home appliances,
telecommunications, and semiconductors. The Samsung tech industry
is the world’s largest smartphone and mobile phone manufacturers. It
offers its consumers over a hundred products of a different variety.
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Samsung has its operation branches in more than 79 countries
around the globe.
Samsung has been able to sustain its brand status till date in the
world of technology. It possesses skilled, talented and experienced
workforce who strives to attain excellence and constant improvement
to gain a competitive edge (Bajaj 2017).
The aim of the report focuses on Samsung's efforts to deal with the
main issues drafted by the World Economic Forum report (2019) on
societal and political strains and economic vulnerabilities. There has
been increasing concern over the political and social conditions, along
with tightened financial circumstances affecting not only national
objectives but also organizational goals. An external and internal
analysis of Samsung is also a part of the report to understand the
strategies which Samsung uses to survive strongly in the highly
competitive domain.
Internal and External Analysis for Samsung
Samsung is a technological amalagam which has gained immense
popularity and brand loyalty among a large consumer base for its
products. A PESTLE analysis Samsung is used to analyze and study
the external factors for Samsung. The SWOT analysis is useful to
study the internal analysis of the company. It identifies the strengths
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and weaknesses of Samsung which has an effect on the business
development and standing of the company in comparison to its
competitors (Strategy and Verma 2016). The internal and external
factors analysis relates to Samsung's strategies to stay on top of the
competitors and gain a significant market share in the multinational
industry environment.
PESTEL Analysis for Samsung
PESTEL stands for Political, Economic, Social, and Technological,
Economic factors and Legal Factors. The PESTEL analysis divulges into
the external factors that influence the organization and not within its
control. PESTLE analysis helps the companies to pertain to various
issues in the political and legal domain, which changes at a rapid
pace. Companies use PESTE analysis to avail of the opportunities and
deal suitable with the threats to its existence and sustainability.
Political Factors
Politics is a substantial and primary driver of any business. Most of
the market domains where Samsung is operational, the political
environment plays a crucial role in its business operations (Buchanan
and Badham 2020). However, minor irritants have emerged in foreign
markets like India, where political factors are friendly and conducive
to business growth. Political pressures from Africa and Latin America
due to instability and frequent changes in government structures also
affected Samsung operations.
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Countries like the U.S.A and U.K have cut down on their corporate
taxes to stimulate growth. Trump’s tax and cut jobs Act, enforced
corporate taxes to be reduced from 35% to 21%. The UK federal
government also proposed a decrease in corporate taxes drops 19%
to 17%. The president of South Korea adopted a different approach.
President Moon-Jae increased the corporate taxes by 3% on taxable
incomes. The tax increment affected its home brand Samsung, which
had to pay an additional $1.19 billion corporate taxed in 2018,
affecting its profit margins largely.
Economic Factors
Economics is a vital factor that affects Samsung's performance in the
market and profit margins. The economic driver of all countries seems
uncertain due to the continuing global economic crisis, which
negatively influences the purchasing power of buyers (Choi 2016).
The economic domain is vital for Samsung as it has stepped into
marketing in developing countries to make a global footprint. The
global economic crisis lowers the consumption power of consumers.
Samsung has adjusted well to the crisis by expanding and emerging
in developing markets. Samsung has taken suitable steps to enter
emerging markets to make up for the lost revenues due to the global
economic crisis.
The U.S fostered an economic growth in 2017, gave rise to Samsung a
chance for growth and increased profit margins. The 4.1% annual
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economic growth gives boost to more employment. The consequence
of more employment meant an increment by 4% in purchasing for
Samsung products giving it higher sales, thereby more revenue and
increased profit margins.
Social Factors
Samsung needs to adjust its products in the prevailing market to
cater to the needs of the consumers in various niches in which it
operates. The socio-cultural influence of different markets influences
Samsung products (Jamali and Khan 2018). Hence, it needs to adapt
stages as per the societal conditions.
There is an approximate 17% British population above 55 year old
who prefer to use smartphone apps while 62$ prefer to use only call
features that do not require a high-grade smartphone. 58% of the UK
population are aged 16 to 34 who make extensive use of
smartphones. Hence the increasing number of millennial for
smartphones creates a positive market condition for Samsung to sell
tablets and smartphones. The increasing demand for smartphones in
the U.S is also increasing, which provides Samsung an increased sales
and higher profits.
Technological Factors
Technological advancements such as augmented reality and artificial
intelligence are extensively in use by companies to enhance the
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performance of its smartphones and tablets. For instance, in its new
iPhone model, Apple empowers Siri technology for a highly
personalized experience and faster operations (Chun., Nhung and Lee
2019).
To revolutionize the products and keep up with its significant
competitors, Samsung also adopted Bixby digital assistant for the
Artificial intelligence system to be available on all connected devices
such as TV, smartphones, tablets, and refrigerators. It maximizes
efficiency and improves the performance of the devices. Samsung
plans to incorporate AI in all its products by 2020 to enhance product
performance.
Economic Factors
Smartphone production and disposal have been significantly
impacting the planet negatively. Hence, it is a notification from the
Environmental protection department to design phones which are
easy to repair, recycle, and reuse. Samsung unfortunate has no clear
strategies to deal with 4.3 million phones, which have exploded
batteries. It plans to recycle its following productions following the
environmental notifications.
Legal Factors
Samsung has to face various lawsuits and hefty penalties for alleged
imitations of its competitors IPad and IPhone. The company’s legal
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maze creates a bad image in the consumer market (Margulis and Galli
2018).
The above PESTEL analysis indicates that Samsung needs to navigate
a way through these global concerns to expand its global footprint.
PESTLE link to WEF Report
The world economic forum points out that societal and political strains
and economic vulnerability are significant causes of concern. The
above PESTEL analysis links to how Samsung can deal with these
challenges.
Political and social strains
The political environment affects Samsung globally. American
government tries to stop Samsung's influence on Eurozone, which
blocks Samsung market expansion across Europe. South Korea barred
Samsung from operations to Japan due to political differences
between South Korea and Japan. These political concerns have a close
connection to Samsung operations and marketing in different
countries. It can boost company expansion and also hinder its growth.
Samsung is a multinational company that aims to make a global
footprint. The factors associated to the local conditions influence
Samsung products and strategies. Samsung needs to tailor-make its
products as per consumer markets in various markets where it
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