Business Strategy Report: Analysis of Samsung's Mobile Phone Market

This report provides a comprehensive analysis of Samsung's business strategy, examining its macro-environmental factors through PESTLE analysis, including political, economic, social, technological, legal, and environmental aspects. It also employs Porter's Five Forces model to assess indust...Read More

Running Head: Business strategy
Business strategy

Business strategy
Table of Contents
Introduction.................................................................................................................................................1
Macro environment analysis.......................................................................................................................1
Political factor..........................................................................................................................................1
Economic factor.......................................................................................................................................1
Social factor.............................................................................................................................................2
Technological factor................................................................................................................................2
Legal factor..............................................................................................................................................2
Environmental factor...............................................................................................................................2
Five force model..........................................................................................................................................3
Industry Rivalry........................................................................................................................................3
Barriers to entry and exist.......................................................................................................................3
Power of Buyers......................................................................................................................................3
Power of the suppliers.............................................................................................................................3
Threat of Substitutes...............................................................................................................................3
Analysis of porter five force analysis...........................................................................................................4
Strategies considered by the organization..................................................................................................4
Limited growth strategy..........................................................................................................................4
Product life cycle of Samsung mobile phone...............................................................................................4
Introduction stage...................................................................................................................................5
Growth stage (2006 to 2011)...................................................................................................................5
Maturity (2011 and till now)....................................................................................................................5
Evaluation of the strategy...........................................................................................................................5
Recommendation........................................................................................................................................6
References...................................................................................................................................................7
Introduction
Samsung is one of the largest brands that are available in the market. The main aim of the
company is to safeguard the leadership in the industry and to earn the competitive strength by

Business strategy
taking into consideration manufacturing of product, design, marketing and sales. The name of
the company is popular in the market and it is known as one of the top brand that is also popular
among the customers. The meaning of the Samsung in Korean is “three stars”. Samsung also
gave focus on the trade exports. The company operates its activities in 58 countries and the
company has total 2,800 employees. The company offers products in the field of Tele
communication, digital equipment and also in the sector of digital media. The essential part of
the Samsung is the electronic segment. The company also wants to attain the top five positions in
the world by 2020 and the vision of the company is to enhance the revenue. The company gives
emphasis on exploring the other markets like health, medicine and bio technology. The
headquarter of the company is located in korea and Samsung has a sales network in 65 countries
globally. The major product of the company is mobile phones that have a large market share
globally. The company operates its function on the large scale (Woo-Seok et al., 2014).
Macro environment analysis
The macro analysis of Samsung consists of the PESTLE analysis that describes political,
economic, social, technological, legal and environmental factors of the organization.
Political factor
This factor has a proper control on the regulations of the organization that consist of the
regulations implemented by the government. The regulations that are implemented by the
government is important to be considered by the business. In United States it is seen that political
environment is stable to conduct the operations in effective manner. Policies that are given by the
government like taxation and also the rise in the petrol prices has given impact on the buying
pattern of the individual. The industrial policies that are related to korea also plays an important
role for guiding international competitiveness to transfer technology, so that the market can
easily operate its activities (Erguler,2015).
Economic factor
The economic factor plays a very significant role in marketing the products. The recession has
given negative impact on the spending power of the individual. The importing prices can be
enhanced when the sale continuously reduces and also the exchange rate of the mobile phones
declines. The micro environment in which the Samsung conduct the operations is uncertain and

Business strategy
it is important to reframe its strategies according the competitive environment. The saving grace
for the company is related to tap the consumer’s disposable income in the developed world by
enhancing into developed markets (Scholes, 2015).
Social factor
By considering the recent scenario, it is seen that people have strong passion and obsession for
the latest technology introduced in the market. Mobile phone plays a significant role to satisfy
the demand of the children. The interest of the children towards study reduces when they become
addicted of the mobile games. Samsung is considered as a family owned on a multinational
platform. This means that despite of the global recognition it still conduct the activities from
Korea. There are many aspects to its global operations and some consist of adapting itself to the
local conditions. Samsung has to give focus on the products so that the customer preferences can
be adopted by taking into consideration different markets. The importance is that the company
operates in the market niche that is influenced by the preferences of the consumers and also the
social factor is taken into consideration in various countries (Peppard and Ward, 2016).
Technological factor
The mobile industry has been considered as one of the popular growing. The company
introduces various mobile phones with different models in the market. Each model has a
different and new feature that induces customers to buy the product. Samsung is popular for
mobile phone. The customers purchase the product by taking into consideration innovative
features introduced by the company in the market. Samsung has a great advantage to harness the
power of technology and also drives innovation for sustainable business advantage that is
concerned with it (Wheelen and Hunger,2017).
Legal factor
Intellectual property is becoming an important aspect for the organization. There are huge
chances of the conflicts that can take place like in case of the apple conflict with the goggle
nexus one. The issue that arises is due to the patent. Samsung itself won a dispute with the
company and the dispute is related to the patent issue that was initiated in year 2007. The
company also has to face many penalties that are related to the imitation of the apple iPad and
this has given impact on the consumer perceptions. It is seen that how the company operates the
activities in developed markets by taking into consideration various laws and procedures

Business strategy
implemented by the government. The company has major threats of the legal factors (Jung,
2014).
Environmental factor
Now a day’s consumers are aware towards the enhancement in the energy efficiency and also
with the dangerous radiation. There are many cases that take place in other mobile companies.
The mobile phones blast due to some technical problem. With the enhancement in the ethical
consumer needs, the company gives focus to be aware of the need to make its products ethical
for the consumers. It is related to the pay given to the labors who are engaged in making the final
products. The pay should be given according to the performance of the employees who are
working in the organization (Grant, 2016).
Analysis based on the PESTLE analysis
By analyzing the macro environment of the Samsung it clearly indicates that Samsung has its
own strategies to navigate and attract the consumers towards the product. The company prepares
to enhance its global footprint. The company can easily compete with the other companies by
introducing more innovative products in the market (Kanonov and Wool, 2016).
Five force model
The Porter five force model is used to evaluate the business strategies related to the Samsung.
This tool is used to access the market drivers. The company like Samsung should take into
consideration the proper research of the markets they want to approach and should also conduct
the activities accordingly. Five forces are industry rivalry, barriers to entry and exist, power of
the buyers, power of suppliers, and threat to substitutes (Ramkumar and Sharma, 2017).
Industry Rivalry
This element plays a great role by taking into consideration the Samsung Company. There are
many competitors like Nokia, Motorola and apple in the market. It is difficult for the
organization to take a proper stand by taking into consideration all the competitors. Also there
are many cold wars faced by the company in the competitive environment. This has given direct
impact on the dimensions that are strong for the Samsung (Bharadwaj et al., 2013).

Business strategy
Barriers to entry and exist
The white goods industry is considered as a high barrier to entry and also the low barriers to exist
the market. It is very difficult for many organizations to enter into the market as the distribution
network and supply chain is not maintained easily. It is also evaluated that the company entered
into many market but existed the markets that are not profitable. This is only the reason that the
companies like Samsung often consider the diligence before entering into the emerging markets
(Choong et al.,2014).
Power of Buyers
The power of buyers by taking into consideration the Samsung Company is a mixed bag. It is
seen that the buyer has many options and also there are many companies that provide the same
features at low cost. Also the buyers approach to the companies for after sale service and also
for the spare parts. The power of the buyers is on the companies, as at the time of purchasing the
item it is seen that the buyers have many options to choose from before reaching to the final
decision. This simply elaborates that both the buyer and companies need each other to conduct
the activities in a smooth manner.
Power of the suppliers
In many markets in which the Samsung conduct its activities has many suppliers who are
offering the services and products at discounts. This does not mean that the companies can give
pressure on the suppliers as it is seen that if the supply chain is established, then it takes a lot of
time to create a new supply chain. This is only the reason why the companies like Samsung
analyze the market before setting up the shop and also take help of the consultancies in arriving
to the decisions (Verbeke, 2013).
Threat of Substitutes
This element is considered as high as there are many companies in the market. The buyers can
easily substitute the products as there are many substitutes flooded in the market. Samsung has to
remain careful to decide the marketing strategy that can be beneficial for the organization.
Samsung takes into consideration differential pricing so that the customers get attracted towards
the company. This also gives focus on many companies that offers products at low cost
(Teimouri, Fanae et al., 2016).

Business strategy
Analysis of porter five force analysis
By conducting the analysis it is seen that as the global economy and more merging markets open
up the companies like Samsung attain the advantage because they have already established the
operations in the new market. It is also analyzed that every market is unique and the company
should not adopt one strategy for all the market (Bhushan, 2016).
Strategies considered by the organization
Limited growth strategy
This strategy helps the organization to gives emphasis on the current products that are produced
and are supplied in the current market. Innovative ideas are taken into consideration to enhance
the growth of the organization. Samsung basically depends on four growth strategy like market
penetration, market development, product development and innovation.
a.) Market penetration: The Company maintains its market share in a proper manner and
also the organization innovates and attracts customers towards the product. In this way
the satisfaction level of the customer is enhanced and the company attain large market
share (Kumar, 2017).
b.) Product development: Samsung gives targets to the old customers with a new product. By
launching a new product it will attract more customers and also enhance the market
share. The advertisements are also given that enhance the awareness about the product
between the customers. Example: launching of s5 mobile phone in the market (Chen and
Ann, 2016).
c.) Market development: Samsung enters into a new market that enhances the market growth
and also the market share. By taking into consideration this strategy they can easily enter
into a new market by targeting the customers in areas. The new market for samusng can
be a new country like for example: the company introduces its products in a village or a
new country (Blackburn et al.,2013).
Product life cycle of Samsung mobile phone
By giving focus on the figure it is seen that there are 3 stages of the Samsung mobile phones.
The three stages are introduction, growth and maturity.

Business strategy
Introduction stage
In the introduction stage the company introduced Samsung R220 in 2001 and it is available
in the market till 2006. The company Launched very less models due to the less demand and
innovation. The first model launched by the company is R220 with blue display. The
company competed with the competitors like nokia and Motorola (Mithas et al., 2013).
Growth stage (2006 to 2011)
In this stage the company launched mobile phones without the external antenna and also has
better features like games, alarm and color display. Wide range of simple and dual sim
mobile marked beginning of the growth stage. The touch screen mobile phones are also
launched. The company followed price penetration strategy at the beginning of the growth
stage. Launch mobile phones with the price of 2000 and 4000. In this stage the pre-paid
connections were given free with select of any model of Samsung (Choi, 2013).

Business strategy
Maturity (2011 and till now)
Android smartphones were launched and also with the galaxy series. The launched of the
windows phones to give tough competition to nokia window mobile. The main focus is also
given on the galaxy s series phones so that the organization can compete effectively.
Evaluation of the strategy
It is evaluated that the company takes into consideration limited growth strategy. It is the
strategy that helps the organization to sustain in the competitive environment and also to
accomplish the goals and objectives of the organization. By relating the strategy with the
pestle analysis and by taking into consideration environment factor it is seen that the
company can easily enhances and offered effective products to the society. It has enhanced
the lifestyle of the people. The market development is also done by taking into consideration
legal and economic factor of the market in which the company is conducting the day to
activities of the organization (Fan et al., 2015).
Core Competencies
The competencies of Samsung are: Creative people, technology and innovative culture. If
the focus is given on big companies, then it is seen that they are like big trees and also there
are some branches that are related to the final product. Tree offer nutrients and also
support fixation of the root is the main competency of the organization. The design of
Samsung products are very orientation and also it meet the demand of the consumers. The
product of the company has a good quality and also introduces new and latest technologies
and new products. The competitive advantage of the company is that it reduces cost and it
has the ability of innovation.
Recommendation
Samsung should take into consideration effective tools so that it can easy to accomplish the
goals and targets. Also to grow in the market it is important to keep the prices low and offer
effective features. It will give direct impact on the sale of the product. Samsung should give
focus on advertisement, so that the customers can easily get knowledge about the product
available or launched in the market. The company should also prepare to provide

Business strategy
information technology as it is used to reduce the competition level in the market. If proper
marketing and distribution channel is conducted then it can possible for the organization to
attain the goals and objectives of the organization. Samsung should also analyze the market
before setting up the shop and also take help of the consultancies in arriving to the decisions.
To create a proper management it is important to locate the outlet at every place so that the
customers feel satisfied at the time of purchasing product.
References

Business strategy
Bharadwaj, A., El Sawy, O.A., Pavlou, P.A. and Venkatraman, N.V., 2013. Digital business
strategy: toward a next generation of insights.
Bhushan, A., 2016. A Comparative Analysis of Consumer Behavior of Nokia and Samsung
Mobile Users.
Blackburn, R.A., Hart, M. and Wainwright, T., 2013. Small business performance: business,
strategy and owner-manager characteristics. Journal of small business and enterprise
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Chen, C.M. and Ann, B.Y., 2016. Efficiencies vs. importance-performance analysis for the
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Excellence, 27(3-4), pp.227-249.
Choi, H.S., Samsung Electronics Co., Ltd., 2013. Mobile communication terminal. U.S. Patent
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Choong, C.L., Shim, M.B., Lee, B.S., Jeon, S., Ko, D.S., Kang, T.H., Bae, J., Lee, S.H., Byun,
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Erguler, I., 2015. A potential weakness in RFID-based Internet-of-things systems. Pervasive and
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Fan, G., Peddireddy, S.K. and Budhati, V., Samsung Electronics Co., Ltd., 2015. Pseudo-remote
terminal IOTA mobile diagnostics and electronic customer care. U.S. Patent 8,977,968.

Business strategy
Grant, R.M., 2016. Contemporary Strategy Analysis Text Only. John Wiley & Sons.
Jung, Y.C., Samsung Electronics Co., Ltd., 2014. Display screen or portion thereof with
graphical user interface. U.S. Patent D701,226.
Kanonov, U. and Wool, A., 2016, October. Secure containers in Android: the Samsung KNOX
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Kumar, V., 2017. Statistical Evaluation of Customers Satisfaction on the Uses of Samsung
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Mithas, S., Tafti, A. and Mitchell, W., 2013. How a Firm's Competitive Environment and Digital
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Ramkumar, T.S. and Sharma, D., Samsung Electronics Co., Ltd, 2017. Optimization of power
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Scholes, M.S., 2015. Taxes and business strategy. Prentice Hall.
Teimouri, H., Fanae, N., Jenab, K., Khoury, S. and Moslehpour, S., 2016. Studying the
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Wheelen, T.L. and Hunger, J.D., 2017. Strategic management and business policy. pearson.
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Samsung Electronics Co., Ltd., 2014. Display screen or portion thereof with animated graphical
user interface. U.S. Patent D697,924.