Business Strategy: Samsung's Competitive Forces and Strategic Planning

This report provides a comprehensive analysis of Samsung Electronics' business strategy. It begins with an introduction to business strategy and then delves into the influence of the macro environment on Samsung, utilizing PESTLE analysis to examine political, economic, social, technological, legal, and environmental factors. The report then analyzes Samsung's internal environment using SWOT analysis to identify strengths, weaknesses, opportunities, and threats. Subsequently, it applies Porter's Five Forces model to evaluate the competitive forces within the market. Finally, the report explores strategic planning for Samsung, applying various theories, concepts, and models to interpret and devise effective strategies. The report concludes with a summary of findings and a list of references.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1. Influence of macro environment on Samsung Electronics Organization..............................3
TASK 2............................................................................................................................................5
P2. Analysis of the internal environment of Samsung Electronics Company.............................5
TASK 3............................................................................................................................................6
P3. Using Porter’s Five forces model evaluate the competitive forces of the market served by
Samsung.......................................................................................................................................6
TASK 4 ...........................................................................................................................................8
P4) Applying a range of theories, concepts and models, interpret and devise strategic planning
for Samsung.................................................................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business strategy can be defined as the course of action which helps the entrepreneurs in
accomplishing specific organization objectives. In this assignment the company which has been
taken into consideration is Samsung electronics limited(Rothaermel, 2015.). It is one the South
Korean multinational electronics company. This presented report gives the brief analysis of the
impact and influence which the macro environment has on an organization and its business
strategy. In addition to this brief analysis of an organization internal environment has also been
done in this project. Apart from this Porter’s Five Forces is being applied in order to evaluate the
competitive forces of a given market sector for an organization. Lastly, this assignment will
explains about the different range of theories, concept and models are being applied in order to
interpret and device strategic planning for a given organization.
TASK 1
P1. Influence of macro environment on Samsung Electronics Organization
To ,
The line manger
Business strategy can be defined as set of decisions which assist the manager of the
company in achieving specific business aims and objectives. In addition to this it is refers to as a
master plan which is used by the Samsung electronics company to secure the competitive
position in a market place and to achieve desired target of an organization. In order to carry out
business effectively manager of Samsung Electronics Company uses PESTLE analysis so as to
analysis influence of external macro environment of an organization.
Political: The macro environment factors such as political and its other aspects can put
negative emphasizes on the business and manufacturing process of the Samsung. In some
countries where politics have big influence, various multinational companies are suffering a lot
such as process function, production aspects, supplies and other distribution aspects. Samsung
has been operating in different countries such as UK, USA, Australia etc. Different nation have
critical and typical environmental influence or negative forces which can affect the financial
suitability and their customer image and loyalty. This has affected Samsung to take away their
business or has suffered with financial losses. The impact on strategic formulation is that severe

losses from nation such as African countries has put burden on formulation of the further
strategies and plans to rebuild market attractiveness and suitability for in-future manufacturing
process.
Economical: One of the economic factors that have proved to be detrimental impact on
Samsung revenue is strong Korean currency. It was founded that main reason for the decrease of
second quarterly profit by 25% of Samsung Electronics Company was Won appreciation. In
addition to this, other economic factor which can influence Samsung includes interest rates,
inflation rate, level of taxation and change in cost of labour. Tax rate have direct effect on the
financial performance of Samsung Company. The effect of same is that financial support has
affected, which may lead to reduction in the strategic formulation, till company could gain their
financial necessities. If the economic conditions of the country is good enough then it will be
beneficial for the Samsung organization in the form of financial performance of the company.
Social: In South Africa social trends environment is constantly changing due to the
advancement in technology and services which have impacted on the needs and the wants of
South African society. It was founded that there is an increase attraction towards updated
technology especially in a means of communication. One of the challenge is that individuals
living in a society do not even know how to use Samsung products in a proper way specifically
the new tablets phone. If the Samsung company will take into consideration the changes taking
places in the needs and preferences of the society toward the types of standard phone they are
use then they will helps in attracting large number of customers toward their products and
services. Thus, it will helps in increasing the profitability ratio of the company.
Technological: It has been founded that advancement and rapid growth of technology is
taking place in the applications in UK. This has brought a great impact on Samsung Company. In
addition to this advancement in technology has also changed the way business is carried out as
social media is one of the essential technology which plays crucial role in developing
sustainability business strategy. So, Samsung Company has founded to carry out business out of
the building structure. If the Samsung company will mould its strategy as per the advancement
taking place in the technology like introduction of galaxy note 2 which is more like a tablet then
it will helps in achieving maximum profitability for the company(Hart, 2015).
Legal: The government of South African has brought up the consumer protection act. 68,
into operation which have negatively Influences on the strategy formulation of the Samsung

Company. It is so because the company has the tendency of dumping their low quality product so
as to maximize their profit. In addition to this one of the other legal factor which have negatively
impacted to the Samsung Company operating in South Africa is strong labour law. It is so
because the company has intended to carry out big factory as a distribution centre for Africa
which is a challenge for the company if they want to exploit people in South Africa. Thus, if the
Samsung company carry out its different operational activities legally them it will helps in
achieving a successful and competitive edge in the market place(Spender, 2014).
Environmental: Samsung Company takes into consideration safety of environment and
accordingly uses the returned phones by sorting and transporting it to the recycling facility for
scrapping. Main aim of this Company is to develop environmental friendly product and
according formulate its strategies so as to minimize the impact to environment through whole
process from acquiring raw material till disposal of the product. Thus, if the line manager of the
company will not take environment factors into consideration then it will negatively result in
generating poor image of the company.
From the discussion about the macro environmental factors such as PESTLE, it is
advisable that tech giant like Samsung needs to realize their actual potential to gain competitive
advantage and customer loyalty over their products. Mobile industry has become competitive
and challenging because of growing number of mobile manufacturing has led tough and severe
competition (Blackburn, 2016).
TASK 2
P2. Analysis of the internal environment of Samsung Electronics Company
In order to carry out business strategy successfully manager of Samsung Company has
taken into consideration to conduct an internal environment analysis thorough SWOT which will
help to investigate the environment in which Samsung Company operates in.
Strength(S): The major strength of the Samsung electronics is their top position in
technology sector includes electronics and smartphone products. In this scenario, Samsung has
achieved their customer attention and loyalty towards their brand. They have comes up with new
innovation and development such as pen-stylus technology and 4K display in their LED TV.
In addition to this Samsung Company has large range of products like tables, home appliances,
cell phones, laptops, etc. Moreover, the past three to four year it has been founded that there is an

increase in brand value of Samsung Company. Other major strength of the company is that it is
leading in design features. For example, Samsung Company was the first to innovate dual screen
phones, lightest and thinnest notepad ever.
Weakness (W): One of the weaknesses of the Samsung Company is that their prices are
low because of which their product loss value in the market place. In addition to this company
has poor creativity in terms of software because sometimes they try to copy Apple’s software
ideas. For example, Real case with Galaxy S7 which was exploded due to major technical
failure, it has effected the brand image of the Samsung Apart from this one of the other major
weakness is that Samsung does not have its own operating system and software as it is totally
depending upon externally operating system like notably android. (Verbeke, 2013).
Opportunities (O): Samsung is required to find suitable and reliable opportunity and
scope for future success and market expansion. They have scope to provide cheap and affordable
smartphones and other electrical equipments with an equal innovation and advancement. Not
every people have high per capita income and budget range, This can affect Samsung is near
future and might be their productive capacity could comes down. Company needs to understand
and realize this opportunity for gear in their business processes.
Threat (T): One of the threats for the Samsung Company is low cost competitor from
China. As all Samsung competitor have brought up their parts to china which can lead to future
fall to Samsung. In addition to this image of Samsung Company might contaminate due to the
war between the apple and the Samsung Company. Apart from this Samsung Company were also
banned to import their product in the euro zone which can be a major threat to the Samsung
Company. More over amalgamation of Nokia and Apples Company could also be a threat to
Samsung Company (Peng, 2017).
TASK 3
P3. Using Porter’s Five forces model evaluate the competitive forces of the market served
by Samsung
To,
The line manager
Porter's five force model will be used to make analyse of the market attractiveness and
business strategies for premium electronic products and smartphone of the Samsung. This tool is

the best suitable to understand how each of the components and market driver has put impact on
the tech giants like Samsung and then analysis suitable business strategy to devise in order to
enhance success for this tech giant (Scholes, 2015).
From the recent time, Samsung has remained in the new headlines for several reasons.
This brand is well known for its high and drastic increase in its market share for both electronic
and mobile based products. Apart from an increased sale, this brand is known for its
technological innovation and application. From last one year, it has been noticed that mobile
phone industry has become competitive as a result of increased number of mobile manufacturer
such as Xiaomi, Foxconn, Panasonic etc. But Samsung has retained its focus innovation and
customer satisfaction. Recent competition has created tough race for this tech giant to tackle.
Hence, Porter's five force model will be perfect to analyse critical factors and market forces for
the Samsung products are as follows:
Bargaining power of suppliers: The various sources from which firms purchase
materials for the purpose of production are known as suppliers. In case of suppliers, Samsung
can easily shift to another supplier, because they have strong brand image and commitment
towards their suppliers. Samsung electronics is the largest manufacturer of the premium
smartphone, electronic products and other accessories. It was also noticed that other
manufacturers such as Xiaomi and Foxconn etc. are competing to cross Samsung to get cost
advantage and price leadership from their supplier and distributors. Hence, in this condition,
bargaining power of the suppliers are high, as they can shift to other manufacturer for saving
maximum cost and earn large profits.
Bargaining power of buyers: Increased access for quality information has given
customer to wider their choice of buying products and services. The bargaining power of
customer in case of Samsung mobile phones are moderately high. This is why because switching
cost for other brand of smartphone are now cheaper and of low cost. Brands like Xiaomi, Huawei
and Oneplus etc. are offering multi feature smartphone to customer at very reasonable price.
Feedback, review and opinions of other customer are now creating shift in the mind of Samsung
user's, which will be threat for them. For tackling such consequences, Samsung needs to offer
premium features either at lower price or add specification at existing price.
Threat of new entrants: Threat of new entry in case of Samsung is low. This is because
of investing huge amount of money in building such brand image. Samsung has put their major

investment for building their manufacturing units in various countries such as UK, France etc.
for both mobile and their electronic products. This tech giant continuously spends their money in
effective quality to the customer and hiring skilled talent for creating loyalty of their customer by
effective and strong marketing. Still, Samsung has competitive advantage over the market and
will never lose top position in largest manufacturer of the mobile phones.
Threat of substitutes: Threat of substitutes in case of Samsung is moderately high.
There are various competitors such as Apple, Oneplus, Xiaomi, LG etc. who are offering similar
premium features to their customer relatively at most affordable price. Almost 2 years back,
when customers were spending high budget for more specification, but gradually low budget
ends mobile phone has arrived and capture the market. But still, these brand are facing tough
competition from Samsung because of high brand equity and customer loyalty.
Industry rivalries: Competitive rivalries between existing players have been increased
period of time. This is because of other competitive brand such as Apple, LG, Oneplus, Xiaomi
etc. As Samsung is the major player in manufacturing smartphone along with building
accessories and outsourcing it. As, it is observed that mobile industry has become competitive as
a result several major manufacturer of the smartphone. Hence, it has been observed that Samsung
is still growing with increased competition and rivalries. This shows that accurate and strong
power and customer prolonged support for this tech giant(Oestreicher-Singer, 2015).
Illustration 1: Porter’s Five Forces of Competitive Analysis

TASK 4
P4) Applying a range of theories, concepts and models, interpret and devise strategic planning
for Samsung
For improving the organisational performance and competitiveness in an industry, porter
generic strategy is the best suitable to suggest and analyse strategic plan to ensure the success of
the company. In context with Samsung, porter generic strategies are effective ways of gaining
the competitive advantage and market share. According to Michael porter, there are four
different generic strategies which are as follow:
Cost leadership: It is the strategy which develops the edge to get more sales and take
away the competitors business. In this, either company needs to lower down the price of the
product or capture the market share with an average pricing. In context with Samsung, which is
basically deals in high price end products with premium features. As the Samsung is the tech
giant, so cost leadership will not be beneficial for the industry as well as customer. It is because
high end pricing always suits with the premium features (Rothaermel, 2015).
Differentiation: This is very unique and advantageous strategy for every industry.
Suppose, in case of Samsung, where target market is broad and wide and company's products has
unique features, With the help of this strategy, Samsung can make their products or services as
more exclusive as possible and making it attractive than the comparable brands and their
products is offered by the competition. Actually this strategy required good and effective
research h & development, high innovation and potential to deliver high quality to the customers.
By this approach, brands mostly focus on delivering the high and premium rather than focusing
on one particular variables.
Cost focus: In this strategic planning, generally focus lies on niche market, in which
more emphasizes is given to lowest possible pricing. In this strategy, company generally chooses
strategy to eliminate niche market, understand the market dynamic and mainly focus on ensuring
the price to be low and relevant (Phillips, 2015).
Differentiation focus: In this company generally targets niche market and if your
products also has unique features, it would be easy to generate strong brand loyalty among
customer. It is the task of Samsung to remain their product unique and premium, in order to
remain in the competition. For Samsung, there are fair chances that Samsung senior executives
could adopt this strategic planning for their unique products and services.

In context with Samsung electronics, company is currently operating their business using
differentiation strategic planning in which their main focus is lies on the providing the unique
features and quality to their customer apart from focusing only on one variables. As mobile
industry is becoming competitive because of several mobile manufacturing units by different
brands (Omer, 2017).
Diversification: This is the important and diverse stage of the Ansoff model. As the
Samsung is currently focus on their market in which they are looking for customer with high
price ends products. Samsung has decided to diversify their strategies to introduce new product
by capturing new customer base by doing effective sales promotion and marketing. As it is
noticed that mobile industry has become competitive because of increased mobile manufacturer
such as Samsung, Xiaomi, Foxconn etc. For tackling and eliminating such competition, Samsung
can diversify their business by new mobile product long with identifying new market for the
higher sales. This includes two parts such as:
Related diversification: It is the condition when particular company stays in the market
of which they are complete aware of.
Unrelated diversification: This is the organisation moves when an organisation moves
into the new market or industry to sell their products, where they have no experience. Hence, this
is the high risk taking strategy(Higgins, 2017).
Apart from diversification, Samsung can choose product development strategy to retain
their existing customer. If existing customer's would be motivated to use Word of Mouth, it
would be beneficial to gain new customers. This strategy focus retaining the existing customers
through new product development For achieving the maximum sales along with competitive
advantage of leading position of the mobile segment and manufacturing, Samsung needs to
attract new customer by using diversification strategy to continue their business.

CONCLUSION
From the above report, it is concluded that Business strategies are important to expand
and capture the customer and market share in any industry. It is important and crucial to
understand various macro business environment factors such as political, environmental, social,
technological etc. which is useful to analyse any kind of external forces to any kind of forces on
the products or services of the company. It is also concluded that effective and proper analysis of
strength and weakness along with opportunities and threats is necessary and important to find out
the growth for an organisation. For understanding the market and growth opportunity, porter's
model will be proven best suitable in the risen the business sustainability and growth motivation
for the company. Growing scenario of business has led various opportunities and growth for an
organisation. Lastly, it is concluded that strategic planning is very important and significant in an
organisation to achieve the business objectives.

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