Analysis of Contemporary Business Environment: Samsung Corporation

This report provides a comprehensive analysis of Samsung's contemporary business environment. It begins with an overview of the company and its global operations, followed by an examination of relevant microeconomic concepts such as demand, supply, and elasticity, and their impact on Samsung's business. The report then delves into an external audit of the business environment using PESTLE analysis, assessing the political, economic, social, technological, legal, and environmental factors influencing Samsung. An internal audit is conducted through SWOT analysis, identifying the company's strengths, weaknesses, opportunities, and threats. The report also highlights the limitations of microeconomics in the context of Samsung's operations, offering recommendations for improvement and concluding with a summary of key findings. The analysis considers the dynamic nature of the business environment and its influence on consumer preferences and market dynamics, providing a critical evaluation of both internal and external environmental factors affecting Samsung's performance.

Contemporary Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Overview of company.................................................................................................................1
Business Environment and Micro Economic concepts and models ...........................................1
External audit of business environment through PESTLE analysis............................................5
Internal audit of business environment through SWOT analysis................................................6
Limitation of Micro Economics..................................................................................................7
RECOMMENDATION...................................................................................................................8
CONCLUSION ...............................................................................................................................8
REFERENCERS............................................................................................................................10

INTRODUCTION
Business environment is a marketing term that includes all factors that affects business
operations through internal and external factors. Business environment includes all the factors
that affects business operations. As per the present market scenario business environment is
complex and dynamic as it involves number of factors that influence taste and preference of
consumers through which demand and supply in the market keeps on fluctuating. In the external
business environment factors like level of competition, current marketing trends, availability of
finances and performance of competitors affects business operations. In order to analyse external
business environment relation among demand and supply needs to be identify to calculate
elasticity of the products and services offered (Albescu, 2015). In order to analyse contemporary
business environment Samsung organisation is considered. It is a Korean organisation which was
established in the year 1938 and serves its mobile phones all over the world.
In this project report business environment factors influence will be provided through
demand and supply curve and estimation of elasticity of the products served. Together with this
SWOT and PESTLE analysis will be done to make a critical evaluation of internal and external
environmental factors.
MAIN BODY
Overview of company
Samsung is a South Korean multinational organisation and deals in number of electronic
devices. In terms of mobile phones Samsung has topped the list in global smartphones
shipments. This organisation acquires largest market share of mobile phone industry and perform
its operations through Lee Kun hee and Lee Jae Youg. This organisation is operating its
functions through a large number of human resource with approximately 350000 employees
working world wide (ARIKAN and ENGİNOĞLU, 2016). Its revenues are growing
continuously and amount of total assets in the organisation has reached to 365 billion US dollar.
Business Environment and Micro Economic concepts and models
The terms of Morden business environment it is seen that effect of external
environmental factors has grown so far and possess a external pressure on business
organisations. Micro economy concepts that possess considerable effected on business are as-
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Demand: It is termed as willingness of an individual to purchase a goods and services
offered by business through paying a specific amount of money. Price and demand of a product
possess a inverse relationship. This means movement of price and demand takes place in
opposite directions.
Supply: It is the amount of goods and services that are available in the market for
consumption for demand made by consumers. Supply and price possess positive relationship i.e.
higher the price more supply will be available in the market for consumption. On the contrary
low prices leads to reduction in the amount of supply products (Baporikar, 2015).
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Elasticity: It is defined as an sensitivity of a variable in relation to change in another
variable. In terms of business and economics it is termed as the degree to which an individual
consumer or producer changes their demand or amount of funds invested on goods and services
due to change in income and price of products. When elasticity of the product is more then 1
then in that case demand of the product is affected through price (Blahová, Pálka and Zelený,
2014). When it is less then 1 then in that case change in the price do not affect demand of the
product. Different types of elasticity are as follows-
Cross Elasticity: It is applicable on two substitute products through which change in
price of one product affects demand of other product and visa versa. For example – tea and
coffee.
Cross Price Elasticity of Demand = (Q1X – Q0X) / (Q1X + Q0X) ÷ (P1Y – P0Y) / (P1Y + P0Y)
Price-elasticity: When change in price of the product leads to change in demand offered
then in that case it leads to price elasticity.
Price Elasticity of Demand = % change in quantity / % change in price
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Income elasticity: This concept is related to income earned by an individual and demand
made for a product offered. Income and demand possess positive relationship i.e. rise in income
leads to generation of more and more demand and visa-versa is also applicable (Botha, Kourie
and Snyman, 2014).
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Oligopoly: It is termed as a market structure in which small amount of firms dealing in
the similar products are services are present. All the organisations possess their own influence
and non of them can keep other aside form having an influence. As cell phone industry is
dominated through small number of large organisations and provides goods that are identical to
each other. Together with this cell phone industry is available with significant amount of barriers
to entry so this form of market satisfied all the characteristics oligopoly market.
External audit of business environment through PESTLE analysis
Political: Samsung operates at global level and in order to analyse various external
factors that influence business operations, political stability must be considered of all the
countries where Samsung operates. As per current situations this organisation is facing political
distraction in its own home country and through in-stable political business environment
operations are affected all over the world (DesJardins and McCall, 2014).
Economic: This dimension is critical for Samsung organisation, as Samsung is operating
at global level and crises that are ongoing in the economies of several countries has affected
purchasing power of targeted consumers. This situation has negatively influences profitability of
business organisation. Uncertainties in the economic environments all over the world drives
Samsung organisation to generate its policies accordingly.
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Social: Samsung is a family owned organisation and despite of serving at global level it
still operates as Korean company form its core. Samsung being a global organisation needs to
adopt some global strategies to enhance level of competence in the emerging markets. Samsung
has tailored its products as per preference of the fast changing consumer preference. This
organisation follows market niche strategy which is based on lifestyle of the targeted consumers
and needs to provide different products as per demand of different markets.
Technological: Samsung is one of the worlds leading organisation in terms of application
of innovation. Technological improvement and innovation are termed as a tool to enjoy
sustainability in competitive business environment at global level. Through effective innovation
this organisation is efficient to achieve its vision and mission and provides a good amount of
competition to several competitors present in the industry. Samsung works on the key that
providing basic services to consumers in best manner is the key to success in long and this acts
as a tool to achieve grate success in the competitive market (Grant, 2016).
Legal: Operating at international level leads to adoption of various rules and regulations
applicable in different countries. Form employment to environmental tax related law prevailing
in the different countries affects level of profits of Samsung organisation. This organisation also
ensures that rules and regulations in relation to workplace is also followed to avoid legal
compliances.
Environmental: Sustainability is not just a trend and emerges as a main focused area so
that business organisation can create their footprint for making contribution towards
environmental protection. Samsung in order to contribute towards environment protection has
reduced its energy consumption and leads to managing water resources risk. Together with this
chemical substance management policies and pollution control programs are initiated by
Samsung so that good image can be created in the market for brand.
Internal audit of business environment through SWOT analysis
Strength (Internal) Weakness (Internal)
 It is world's most successful and largest
electronics manufacturer and gets
benefited through its scale of operation
 In some countries Samsung is not able
to match marketing capabilities of its
biggest competitors and that leads to
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in cost management.
 It acquires largest market share in
mobile industry and turns out to be the
biggest competitor.
 It impressive design and innovation
leads to attract more and more
consumers (SWOT Analysis, 2019).
 Long standing relationship with
retailers helps in serving large number
of consumers in most efficient manner.
reduction of market share.
 Samsung is facing huge amount of
competition through Chinese
competitors and that is distracting
market share of Samsung in many
countries.
 Samsung for its same is heavily
depended on American markets as 70%
of the products are sole their and a
small change in the market conditions
have a grate impact on sales.
Opportunity (Weaknesses) Threat (Weaknesses)
 A effective investment in HR
management will give Samsung
organisation a impressive
transformational change and also
provide competitive advantage in
future.
 As Samsung prefers to get diverse in
several markets present all over the
globe. This provides an opportunity to
Samsung to grow in some different
market where large market is available
to grab an serve.
 Level of competition is increasing in
the cell phone industry and consumers
are shifting towards other brands and
this is a threat for Samsung by
reduction in the present market share.
 As Samsung has expanded its business
to international markets and this leads
to generation of more and more amount
of legal and regulatory threats for non
compliance with any of rules and
regulations required to be followed in a
particular nation.
Limitation of Micro Economics
In the Micro-environment in which Samsung operates there are number of limitation
available that hinders operations of business and have a negative impact on sustainability of
business operations. Some of the factors that are affecting businesses are as follows-
Lower price of goods: In the present business environment level of competition has
increased and different competitors are emerging in the industry by offering low price of similar
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products (Jurina, Vrecko and Barilovic, 2014). As Oppo, Vivo and Hwai are the biggest
competitors when considered in terms of price for Samsung organisation. Providing quality
product with latest technology involves high cost and that affects operations of Samsung
organisation in negative manner.
Ignorance of government rules: Government in different countries possess separate
rules and regulations and each business needs to follow these rules to avoid any legal
compliances. Negligence of government policies leads to generation of hurdles for business and
through this a negative image is created for Samsung organisation.
Breach of contracts: Multinational organisations in order to operate at certain place
enters into contracts with local businesses and they breaches contracts (Rosenbach, 2018). This
hinders operations of business organisations to perform as set targets are not achieved through
this.
Potential Benefits for the Company
 Products served by Samsung are available with latest technological innovation and also in
affordable pricing.
 Updated feature provides more and more amount of satisfaction to consumers.
 Effective cost management through scale of operations leads to generation of targeted
amount of profits.
RECOMMENDATION
 Samsung needs to focus on more efficient marketing strategy to compete effectively.
 Management of HR needs to be done so that highly skilled employees can be employed
for providing quality services.
 Introduction to new markets needs to be made on conscious basis to achieve targets.
CONCLUSION
From the above project report it has been concluded that business is affected through
number of factors available in its internal and external business environment. Several economic
factors such as demand, supply, elasticity are some economic concepts that needs to be
understood so that establishment of company in the economy can be made in effective manner.
Through understand the market scenario and elasticity of the product served demand and supply
of the product offered can be maintained so that price can be charged to earn desired amount of
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profits. In order to analyse external and internal market audit is performed through SWOT and
PESTLE analysis. Effective influence of these factors are analysed so that efficiency of business
can be improved through implementing effective strategy.
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REFERENCERS
Books and Journals
Albescu, O. M., 2015. Business ethics. The relevance of value-creating teachings in the
contemporary business environment. Knowledge Horizons. Economics. 7(4). p.75.
ARIKAN, C. L. and ENGİNOĞLU, D., 2016. A contemporary Approach to Strategic leadership.
International Journal of Information Technology and Business Management, pp.1-4.
Baporikar, N. ed., 2015. Handbook of research on entrepreneurship in the contemporary
knowledge-based global economy. IGI Global.
Blahová, M., Pálka, P. and Zelený, M., 2014. Contemporary trends in Japanese business
environment: A review of existing empirical evidence. Human Systems Management.
33(3). pp.57-70.
Botha, A., Kourie, D. and Snyman, R., 2014. Coping with continuous change in the business
environment: Knowledge management and knowledge management technology.
Elsevier.
DesJardins, J. R. and McCall, J. J., 2014. Contemporary issues in business ethics. Cengage
Learning.
Grant, R. M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley &
Sons.\
Jurina, K., Vrecko, I. and Barilovic, Z., 2014. Web Technologies Development Supporting
ContRaziq, A. and Maulabakhsh, R., 2015. Impact of working environment on job
satisfaction. Procedia Economics and Finance. 23. pp.717-725.
Rosenbach, W. E., 2018. Contemporary issues in leadership. Routledge.
Online
SWOT Analysis. 2019. [Online]. Available through:
<https://pestleanalysis.com/swot-analysis-of-samsung/>
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