Report on Samsung's Business Environment, Microeconomics, and Audits

This report delves into the business environment of Samsung, a leading mobile phone company, examining both internal and external factors that influence its operations. It explores the application of microeconomic concepts and models within Samsung's context, emphasizing the significance of regular internal and external audits. The report utilizes SWOT and PESTLE analyses to assess Samsung's strengths, weaknesses, opportunities, and threats, as well as the political, economic, social, technological, legal, and environmental factors affecting the company. It highlights the dynamic nature of the business environment and the need for Samsung to adapt to market trends and consumer preferences. The report concludes by underscoring the importance of these audits in formulating effective strategies to navigate the competitive landscape and capitalize on emerging opportunities in the mobile phone industry. The report provides a comprehensive understanding of Samsung's business environment and its strategic considerations.

BUSINESS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Why company needs to audit the internal and external environment..........................................2
How to gain insight in a micro economic environment?.............................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business environment could be defined as collection or sum of all external and internal
factors like employees, expectations and needs of customers, demand and supply, clients,
management, supplier’s government activities, owners, technological innovation, market trends,
social trends, economic changes and many more. The factors influence functioning of company
and working style of company indirectly or directly. Aggregate of factors influence business
organisations or companies’ environments and situations. Business environment is an important
aspect of the businesses factors constituting business environment are competitors, suppliers,
government, media, economic conditions, customers, investors and various institutions that are
working externally.
There are different types of business organisations and their environment depends on the
type of industry. Form is dependent on nature, size, operations and scale. Businesses are required
to work with the trends of market to remain competitive. The present report is about the business
environment of a mobile phone company. This will reveal the business environment and micro
economic concepts and models of the SAMSUNG mobile company and the need for internal and
external audit of business environment.
MAIN BODY
Businesses are operating under an environment that is called business environment. The
business has to face several issues for effectively running its business operation smoothly.
Organisations have to consider both internal as well environment that could influence the
working of company. There are different concepts and models given under business environment
that are used by organisations for operating successfully.
Business Environment
IT is defined as aggregate of all the internal as well as external factors influencing the
business of company. Companies should be aware that internal factors and externals factors can
also influence one another and can work together for affecting the business of company. For
example, safety and health regulations are external factors influencing internal business
environment and operations. Some of the external factors are beyond the control of business
organisations that are known as external constraints.
Micro economics
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Microeconomics deals with economic actions and decisions and of individual firms and
companies. It refers to study of households, individuals and the behaviour of firm in decision
making and also allocation of the resources. Microeconomic is concerned with individual
business group so that behaviour of the individual firms could be understood. Microeconomics
factor that could affect the business environment like supply, demand, market size, supplier
relationships, distribution chains, retailers selling the product of company, number and strength
of competition.
These factors are considered very small but have significant importance for the business.
An organisation ignoring these factors can suffer in their business. Companies have to adopt for
various concepts and models of microeconomics for dealing with these factors effectively.
These economic models and concepts enable company to understand, observe and to make
predictions related to the economic behaviour. These models take the actual situation faced
companies that are complex and helps company to gain accurate results and outcomes.
Why company needs to audit the internal and external environment
It is very necessary for the company to audit its internal as well as the external business
environment. This is majorly because of the reason that the business exists in the external
environment which is very dynamic in nature and ever- changing. Thus, the company needs to
pay attention towards these changes taking place within the market (Gondek, Boessenkool and
Star, 2018). It is so because of the reason that these changes can have both the positive and
negative impact over the running and functioning of the business. Thus, for Samsung it is of top
priority to audit both the internal and external environment of the business. With this audit the
company will come to know that what are its strengths and weaknesses. And what are the
requirements within the business environment. This internal and external audit helps the business
in designing the strategies for combating with the changes taking place within the business
environment.
Internal environment analysis
The internal analysis can be done by using the SWOT analysis tool that helps in indentifying and
analysing the internal working policies of an organisation and concluding whether they are
efficient enough or not (Bismark and et.al., 2018).
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Strengths
 Samsung is one the most successful
companies in the entire world and has
the largest market share.
 The research and designs technology of
the company is supremely developed
and the cost efficiency of their mobile
phones is an added benefit making
company popular and preferred.
 The manufacturing and marketing
strategies of the company are also
extremely well developed thus giving
the company a competitive edge (Islam
and Mamun, 2017).
 The relationship of Samsung with
retailers is long standing especially in
UK and US which ensures that they get
easy sales channel of their products.
Weaknesses
 Samsung has not yet been able to beat
the reputation, customer satisfaction
and brand loyalty that Apple Inc. Has
been able to built with its products.
 The company still used Androids in
their Smartphone which is treated as
inferior software as compared to the
one used n Apple phones i.e. iOS.
 The growth of the company has become
limited or curbed due ot its heavy
dependence on the consumer electronic
sales in the market and the revenue
growth is limited in this sector.
Opportunities
 The market share is regularly growing
for various electronic items such as
tablets, smart phones especially in
countries like India and Africa where
consumers are becoming smart and
demand is growing.
 Increasing the share of middle class
consumers would automatically give a
boost to the company.
 The online market has also developed
very much and this is the best medium
Threats
 Apple and its dominant position it the
smart phones and tablets is
unchallenged and consumers find the
services of Apple to be much more
reliable and sophisticated thus making
the shares of Apple go up (Kotler,
Keller, 2018).
 The Samsung brand is still perceived
by many as a replica company of Apple
that provides the same services as apple
at a cheaper price which is a major
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to increase the reach of product in
different companies.
factor that plummets down the
reputation of company in the market.
External environment analysis
This is the most important audit which Samsung needs to perform for managing its
business successfully. The major reason underlying this fact is that business operates in the
environment where every second there are changes in the market. And if the business does not
adapt to these changes then the business may suffer loss. For analysing the external environment
Samsung uses the tool of PESTLE analysis. The PESTLE analysis is a tool which helps in
analysing the changes taking place in the external environment. The external environment
includes many different types of factors such as political, social, legal and many other factors.
Thus, the PESTLE analysis of Samsung is discussed in the following points connected below-
Political factors- the political factors are the factors which analyses the degree to which
the government of the country intervenes in the business of the company (Wulff and et.al. 2019).
this is majorly because of the reason that if the company do not take into consideration the
changes in the political and governmental impact on business then the company will not be
successful in their business. Thus, it is very necessary for Samsung to time- to- time analyse the
changes within the political state and whether there is any impact or not. This includes many
changes like changes in government policy, instability, taxes, trade restrictions and many other.
The major change in the political sector is the changes and fluctuation in the tax policy.
The tax is the amount charged by the government of UK on the profits earned by the company.
The tax on the mobile companies is very high and the companies need to pay these taxes to the
government. Now if the tax rate on these company drop down then Samsung needs to pay less of
the taxes. This is majorly because of the reason that now the company has to pay less of the
amount as the tax rate has decreased. Instead the company can use this amount in some other
useful things. This is an opportunity for the company because of the reason that now the
company can use this money in some other productive use.
Economic factors- these are the factors pertaining to the economic environment and the
changes taking place in the economic factors of the country. These includes factors like inflation,
foreign exchange rates, interest rates, disposable income of the consumers, employment and
unemployment and many other factors relating to the economy. The economic environment of
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the country is very good for the mobile company. This is majorly because of the reason that the
disposable income of the consumers is increasing and this is an opportunity for Samsung. This is
majorly because of the reason that the trend of using the high- tech mobile phones is increasing.
And if the disposable income of the consumers will increase then this is an opportunity for the
company.
This is mainly because of the reason that if the income of the consumer will increase then
their demand for high quality and advanced goods will increase. And this is an opportunity for
Samsung because of the reason that now the consumers will demand more for the high and
superior quality of the mobile phones (Zahari and Romli, 2019). And because of this reason this
is an opportunity for the company due to rise in disposable income of the consumers.
Social factors- this is the major factor which impacts the business and its operations. This
is majorly because of the reason that the social factors include the behaviour, attitude, values and
the preferences of the consumers in the market (Singh, Garg and Luthra, 2018). This is the major
factor which the company needs to analyse in the external environment audit. This is mainly
because of the reason that if the consumers within the society does not like the products of
Samsung then the company will face loss because the consumers do not like the products of the
company. Thus, they will not use and purchase the products of the company.
But in accordance to the modern world the consumer is more in favour of the latest tools
and applications relating to the mobile phones. This is majorly because of the reason that the
consumers are getting interest in the new and advance technology and thus, this is an opportunity
for Samsung to develop more advance phones and other electronic items. And this is the only
reason that the social factors impact the working of the company to a great extent. This is so
because the consumers are the end users of the product and services and if the consumers only
not like the goods and services then it is a waste for the company.
Technological factors- this is also an important part in the analysis of the external
environment. This is majorly because of the reason that if there are much technological
advancement within the business environment and if Samsung does not take these changes into
consideration then the company products will become obsolete and the consumers will not like
this fact. Thus, it is very necessary for the company to timely evaluate all the necessary changes
taking place in the business environment.
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In the modern and advanced world there are many new technologies coming for the
mobile phones and it is very necessary for the company to adopt to all these changes so that the
consumers are attracted form these new and latest advancement brought in the product of the
company. Like for instance, the latest mobile handset is of the foldable phones which are
currently the latest technological advancement in the field of mobile phones (5 innovations to
expect from smartphones in 2019, 2018). Thus, it is very necessary for Samsung to take these
advancements in consideration. This is majorly because of the reason that if the company uses
this advancement then this will attract more of the consumers and the sales and revenue of the
company will increase.
Legal factors- these are the factor which involves the different types of laws and rules
and regulation which are applied on the business. There are many different types of rules and
regulations and guidance which the companies need to follow for the smooth functioning of the
business. However, the major reason for which the company needs to follow all the rules and
regulation is that the consumers will have faith and trust in the company (Kirby and Young,
2018). This is pertaining to the fact that the compliance of company with the laws ensures the
consumers that the product of the company is safe and will not harm them. Hence, it is very
crucial for the company to follow all the rules and regulation and laws applicable on the working
of the company.
There are many different laws which are applicable on company such as intellectual
property rights, the trademark act to protect the logo of the company, data protection act and
many other different types of act. If the company abides by all these laws then it will have a
profitable business and will have goodwill in the market.
Environmental factors- these are the factors which relates to the changes taking places in
the environment and related issues. These can have both the positive as well as the negative
impact on the business. Thus, it is very necessary for the company to have the positive impact of
the activities of the business over the environment. In the modern time, the consumers have
become more active towards the protection and safeguarding of the environment. Hence, to have
the attention of the consumers company needs to take measures for the development and
protection of the environment to a great extent.
For this firstly Samsung needs to fulfil its corporate social responsibility towards the
environment. This will develop the positive interest of the consumers towards the company and
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also the sales of the company will increase as more consumer swill buy the products of Samsung.
Also, the protection of the external environment is not enough rather the company also needs to
maintain a better and congenial environment within the company (Onyusheva and
Seenalasataporn, 2018). This is ensured to expect better working conditions for the employees
and to have proficiency and profitability for the company.
How to gain insight in a micro economic environment?
The insights in a micro environment symbolises that all the factors that are present in a micro
economic environment must be adequately analysed or studied so that their impact, advantages
and disadvantages can be ascertained. These help in developing proper strategies and measures
for the company that will assist them in expanding their market share and attract more
consumers. Every business has a particular life cycle which they follow at their own defined pace
and it contains four major stages i.e. incorporation, growth, expansion and maturity and lastly
decline. The business succeed when they develop the practice of regularly analysing the market
trends and identifying that are causing ups and downs in the market so that these factors can be
incorporated (Brug, Lenthe, and Kremers, 2016). Further, it is necessary for a business to not just
depend on one core business and develop numerous side businesses so that they can develop
income sources.
The micro economics and its study basically helps the firms in determining what are the
price, demand and supply factors in a market and the limited availability of the resources can be
distributed in the company. It also analyses the possibility of market failure and the chances that
the results or yields of the market might not be as efficient is also taken into consideration while
gaining insight into the micro economic environment.
The models that are used to gain insight in to micro economics are supply and demand models
and the theories that are used are consumer demand theory, production theory, cost of production
theory of value and opportunity cost. All these theories and models help in observing the
behaviour of an individual or a limited number of consumers in a particular market segment and
then analyse their habits to draw relevant conclusions (Tabrizi and et.al., 2014). These
conclusions are then used as a base for analysing the dynamics of macro environment which
ultimately assists in the decision making process for the companies and appropriate strategies are
formulated by the companies for placing themselves and their products in the consumer market,
based on this data i.e. insights developed using microeconomic models and theories, the
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company is able to progress and operate at a wider level or in a wider context. Therefore using
appropriate models and theories, the businesses can gain insight into the how s and whys of the
microeconomic environment in which they are operating.
CONCLUSION
The research conducted in the above report helps in concluding that in order to conduct a
business successfully, it is extremely necessary to analyse the micro and macro environment of a
company and therefore, tools like SWOT, PESTLE etc. were used in the report to analyse the
current market scenario in UK. After analysing the concept of business environment and
microeconomics, the necessity of studying the internal and external in which a company operates
was done in this report. Samsung was taken as the mobile company and SWOT analysis was
done in order to analyse the microeconomic factors and PESTLE analysis was done in order to
analyse the macro economic factors for the company in the business environment of UK. After
analysing the importance of both the business environments, finally in this report, the measures
though which an insight can be developed in the microeconomic environment was analysed and
appropriate models, theories and methods were recommended for developing such insight.
Additionally the need to develop insight was also identified and elaborated upon in the report
summing up all the facts with appropriate conclusion.
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Press.
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63.
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Wulff, E., and et.al. 2019. An Analysis on How Samsung Can Improve Their Environmental
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energy in the light of PESTLE & SWOT analyses for island countries. In Smart Energy
Grid Design for Island Countries (pp. 1-19). Springer, Cham.
Bismark, O. And et.al., 2018. Utilizing Mckinsey 7s Model, SWOT Analysis, PESTLE and
Balance Scorecard to Foster Efficient Implementation of Organizational Strategy.
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Research in Business, Economics and Management, pp.94-113.
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into environmental correlates of obesogenic behaviors. American Journal of Preventive
Medicine, 31(6). pp.525-529.
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Tabrizi, A.B. and et.al., 2014. Performance and safety of rooftop wind turbines: Use of CFD to
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