Strategic Management Report: Samsung's PESTEL and Industry Analysis

This report provides a strategic analysis of Samsung, examining its macro-environment through a PESTEL analysis, which covers political, economic, social, technological, environmental, and legal factors. It explores the consumer electronics industry in which Samsung operates, identifying key competitors like Apple, LG, and Huawei, and discusses the industry's growth drivers such as increasing demand for digitally compatible devices and rising disposable incomes. The report analyzes Samsung's resources and capabilities, emphasizing its resource-based view, including financial, human, and material resources, and its brand building and pricing management capabilities. The analysis highlights Samsung's strategic positioning in the smartphone market and its use of marketing to maintain its brand image and customer value perceptions. The report references relevant sources to support its findings.

Strategic Management

Strategic Management 1
Analysis of the macro environment
The macro-environment of Samsung can be analyzed through the PESTEL analysis.
Political factors: The strong rivalry of Samsung with Apple has resulted in linking
government in other nations. For instance, the US government is trying to stop Samsung to
influence Eurozone to block Samsung in order to maintain the market in Europe.
Economic environment: Samsung has prolonged its operations to over 58 nations. The
company invests heavily in the infrastructure where they have settled business. The Korean
currency is one of the key economic factors which has been proved to have a negative
influence on the revenues of the company. The profits of the company were majorly affected
by the economic crisis in 2007-2009.
(Research Methodology, 2017)
Social factors: The company changes its products in order to match the changes taking place
in the consumer preferences the cultural factors vary in each nation and has to reorient itself
consequently.
Technological factors: Samsung has attained popularity in driving innovation for the sake of
sustainable business advantage. The company has been successful in dominating by offering
new products to the company.
Environmental factors: The increasing population has made people more ethical and ethics
oriented. The company does not comprise when it comes to offering ease working conditions
along with the wages.

Strategic Management 2
Legal factors: Samsung has faced heavy penalties for the alleged imitation of the products of
Apple. The company has been blamed several times for copying the design and features of
Apple. Samsung has been also the defendant for not appropriate wages to the employees as
compared to the competitors (Rothaermel, 2017).
Industry structure in which Samsung operates
Samsung operates in the consumer electronics industry. This industry has become a
significant part of the daily life of consumers. Samsung is engaged in the manufacturing and
distribution of electronic products. Samsung is having several competitors in the concerned
industry such as Apple, LG, Electrolux, Huawei, Sony, HTC and GoPro. Samsung has
acquired twenty-two companies and most recent is TeleWorld Solutions in January 2020.
There has been increasing demand in the consumer electronics industry for the
digitally compatible in order to work with computers and additional devices. The customers
also demand an extensive range of products with more capabilities and enhanced services and
installations. Add on, increase in disposable incomes, developing middle-class, growing life-
style preferences and diffusion of smart devices has contributed to the inclusive growth of the
international consumer electronics market. The positioning of Samsung in the case of
smartphones has been presented in the diagram.
(Statista, 2018)

Strategic Management 3
Analysis of the resources and capabilities
Samsung depends majorly on the assets leveraged for strategy design and execution.
Samsung makes use of a resource-based view in attaining higher organizational performance.
The resources used by the company are money, human resources, materials and machinery to
maintain position and stay on the top in the international market. Samsung identifies the need
for the workers to work in a conducive working environment. So, the company has provided
a friendly working environment.
When it comes to capabilities, Samsung has maintained brand building capability. It
has assisted the company in informing and managing customer value perceptions in order to
create a high level of brand equity. In order to maintain the brand image, the company makes
use of the position in the market through advertisements and fully integrated marketing
communications. Along with this, Samsung is having the capability to manage prices. The
company is effective in pricing management. The company is having the capability to extract
optimum revenue and profit from the customers by the different pricing tactics.

Strategic Management 4
References
Research Methodology (2017). Samsung PESTEL Analysis. Available from https://research-
methodology.net/samsung-pestel-analysis-2-2/ [ Accessed on 14/01/2020]
Rothaermel, F. T. (2017). Strategic management. New York, NY: McGraw-Hill Education.
Statista (2018). Apple and Samsung Dominate Smartphone Market. Available from
https://www.statista.com/chart/15655/apple-and-samsung-dominate-smartphone-market/
[ Accessed on 14/01/2020]