PM303 Strategic Management: Strategic Analysis of Samsung Report

This report provides a strategic analysis of Samsung, a multinational electronics company, using internal and external analysis frameworks. The internal analysis is based on the SWOT framework, examining Samsung's strengths, weaknesses, opportunities, and threats. The external analysis utilizes the PESTLE framework, evaluating political, economic, social, technological, legal, and environmental factors impacting Samsung's operations. The report discusses the benefits of strategic planning for Samsung, the role of environmental analysis in strategy formulation, and provides recommendations for the company's future direction, considering the competitive landscape and evolving market dynamics. This analysis helps to understand Samsung's strategic position and potential pathways for sustainable growth. The document is available on Desklib, where students can find a wealth of study resources.

Running head: STRATEGIC ANALYSIS OF SAMSUNG
STRATEGIC ANALYSIS OF SAMSUNG
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Author Note

1STRATEGIC ANALYSIS OF SAMSUNG
Executive Summary
The report is based on the internal and external analysis of an organization and the effects of
this analysis on the strategic planning. The organization that is taken into consideration for
analysis is Samsung, which is a multinational electronics company of South Korean origin.
The internal analysis is done with the help of SWOT framework and the external analysis is
mainly based on the PESTLE framework. The effects of SWOT or internal analysis on the
strategy making process of the organization is also analysed in the report. The report is
concluded by providing recommendations to the company for its forward planning in the
industry.

2STRATEGIC ANALYSIS OF SAMSUNG
Table of Contents
Introduction....................................................................................................................3
Section 1.........................................................................................................................3
Benefits of strategic planning to Samsung Electronics..............................................3
Discussion related to the role of environmental analysis as a process of strategic
planning..................................................................................................................................5
Environmental analysis..............................................................................................6
Internal analysis – SWOT framework....................................................................6
External analysis – PESTLE framework................................................................8
Section 2.......................................................................................................................10
Evaluation of the SWOT analysis............................................................................10
Section 3.......................................................................................................................10
Recommendations related to future direction of Samsung......................................10
References....................................................................................................................12

3STRATEGIC ANALYSIS OF SAMSUNG
Introduction
Samsung, which was formerly known as the Samsung Electric Industries is a
multinational electronics organization of South Korean origin. The headquarters of the
organization is located in Suwon, South Korea. Samsung is considered to be the flagship
organization of the entire Samsung Group. The company accounts for more than 70% of the
total revenues of the group. The organization has sales networks and assembly plants in more
than 70 countries in the world and it employs more than 300,000 people in its various
locations. Samsung is considered to be the largest information technology in the world with
respect to the revenues that is generated by the organization (Samsung com. 2018). The
company is the largest manufacturer of electronic components like, semiconductors, lithium-
ion batteries, flash memory, hard drive and chips. The products that are manufactured by the
organization include, LED and LCD panels, semiconductors, televisions, digital cinema and
many more. Samsung makes the largest number of memory chips in the world. Televisions,
mobile phones, digital or DSLR cameras are major products of the entire line of the
organization. The management system of the organization has changed in the entire course of
its operations in the industry (Samsung com. 2018).
Section 1
Benefits of strategic planning to Samsung Electronics
The business strategy of Samsung has shown high levels of flexibility in the ways by
which the organization is always determined to change the strategies according to the
changes that take place in the external environment. The company initially started its business
operations as a grocery related store in Korea in the year 1938. Later it engaged its operations
in various other businesses which include, insurance and securities, woollen mill and many

4STRATEGIC ANALYSIS OF SAMSUNG
more. The organization mainly believes in then changing of business directions as and when
required according to the business environment (Adams et al. 2016).
The three major pillars that support the business strategy of Samsung are as follows,
Effective readership of the market – The Samsung company has proved to be
an effective market reader, which relates to the organizations which are able to
observe and read the market and further makes changes to the services and the
products that they offer. The organization has been effective in replicating the
features that are provided by its competitors to the customers. Samsung also
organises presentations for the employees so that they are able to follow the
step by step process of replicating the products (Carayannis, Sindakis and
Walter 2015).
Utilising and scanning the opportunities that are present in the market – The
business strategy of Samsung is known for integrating the gaps that are present
in the market. The company also exploits the opportunities which have
positive implications on the bottom line of the business.
Development of new products – The wide range of products of the
organization includes hundreds of product types which are divided into three
divisions namely, mobile communications, device solutions and consumer
electronics. The organization mainly owns 36 centres which are related to the
activities of research and development. The capabilities of product
development of the organization are considered to be one of the strong
characteristics of the competitive advantage that has been established by
Samsung (Clegg, Kornberger and Pitsis 2015).

5STRATEGIC ANALYSIS OF SAMSUNG
The strategies that have been established by Samsung in the years of its operations
have been the major reason behind its success in the industry.
Discussion related to the role of environmental analysis as a process of strategic
planning
The strategy formulation related process of the organizations need to be based in
extensive research and information collected about the company. The strategists need to
understand the information that is related to the internal and the external operations of the
organization. This will help the companies in effectively formulating and implementing the
various policies (Cusumano, Kahl and Suarez 2015).
The environment of the organizations consists of two parts internal analysis and
external analysis. The environmental analysis of Samsung will be also based on the internal
environment of the organization and the external factors that affect the revenues in the
industry. The internal analysis will be based on the strengths of the organization, the
weaknesses, the opportunities that company has in the industry and the threats posed towards
the operations of the organization. The external analysis is however based on the political
factors of the country where it operates, the social conditions of the country, the economic
condition of the country, the technological capabilities of the country and the legal factors
that affect the operations of Samsung (Donate and de Pablo 2015).
The analysis of the internal and the external environment of Samsung have helped the
strategists of the company in the formulation of effective strategies that can be profitable for
its operations.

6STRATEGIC ANALYSIS OF SAMSUNG
Environmental analysis
Internal analysis – SWOT framework
Samsung Electronics is a major part of the Samsung, a South Korean conglomerate
which is based in Suwon, South Korea. Samsung is the largest manufacturer of LCD panels
and televisions in the world.
Strengths – Samsung is considered to be the most successful manufacturer of
electronic products in the world. It has established the position of the largest of manufacturer
of television sets and many other consumer products. The organization has also gained the
number one position as the manufacturer of smartphones and it acquires around 21.4% of the
entire mobile market share in the world. The research and development related capabilities of
Samsung are also quite impressive in nature. The company has always tried to compete
against its rivals by manufacturing and providing products that are similar or better than those
manufactured by its rivals (Elmes and Barry 2017). The manufacturing and the marketing
related capabilities of the organization is also quite strong in nature. The relationship that the
organization has established with the retailers in various of its operations have helped
Samsung in gaining a unique position in the market.
Weaknesses – Samsung has been able to replicate the features that are offered in the
products of its competitors. However, the organization has not been able to match up with the
quality and capabilities that are available in the products of Apple. The Chinese competitors
of Samsung have been another major cause behind the lack of revenues of the organization in
the industry. The shares of the rivals of the organization have increased in comparison to that
of Samsung. The Samsung is highly dependent on the sales of this division for most of the
revenues (Helfat and Martin 2015). This has decreased the potential for growth of the
organization in the different industries. The operating system that is used in the phones

7STRATEGIC ANALYSIS OF SAMSUNG
manufactured by Samsung are considered to be inferior as compared to those of its biggest
competitor in the mobile phone division Apple. The marketing related efforts of the
organization have also not been able to capture the interest of the consumers in the market
(Hill, Jones and Schilling 2014).
Opportunities – The industry related to electronics and smartphones have been
growing in the countries like, India and Africa. The sales of the various products that are
manufactured by Samsung, like, television sets, mobile phones are in huge demand in the
market and this has can be used as an opportunity by Samsung to further grow in the market.
The new technologies are capturing and the market and Samsung can plan for the
manufacture of products like, wearable tech, payment services. The growth of middle class
people in the various developing countries have increased the market for electronic products.
The huge growth of the online market can also be a major opportunity for Samsung (Jackson,
Schuler and Jiang 2014).
Threats – The rivals of Samsung have emerged in the market and the organization
has been unsuccessful in gaining reliable position in the market. The decline in the income of
middle class people have further reduced the buying power of the consumers. This has
affected the key market of Samsung. The Chinese organizations have posed major
competition to Samsung and have acquired a huge portion of the entire market of consumer
electronics and mobile phones. The rivals of the organization have entered the various
markets where Samsung has its major operations and has the key market for its products
(Luthans and Doh 2018). This has increased competition of the company and further have
affected the revenues in an adverse manner.

8STRATEGIC ANALYSIS OF SAMSUNG
External analysis – PESTLE framework
Samsung is mainly global conglomerate which has its operations in the “White
Goods” market which is related to the consumer appliances and gadgets. The company has its
operations in many countries of the world and PESTLE assists the strategists and the
marketers of Samsung to understand the environment in which it plans to operate.
Political factors – The majority of the markets in which Samsung has its operations is
conducive in nature however, there are disturbances in some of the countries as well. The
organization therefore mainly operates in the countries where the political conditions are
sovereign in nature. In the recent times the organization had to face major political issues in
its home country. The reasons behind these issues were the relationships of the country with
North Korea. The organization had to therefore take into account the political instability that
was created in the Korean market (Schaltegger and Wagner 2017). Samsung also has to face
many political pressures in the Latin American countries and the African countries as well.
This is mainly related to the frequent changes that have occurred in the structure of the
government.
Economic factors – The economic dimension of the countries in which the
organization operates has been the critical for the operations of Samsung. The major reason
being the opening up of many new markets in developing world. This can further lead to the
expansion of the global footprint of Samsung. The global crisis in the economy has however
been a issue for the operations and profitability of Samsung. This decreased the purchasing
power of the consumers belonging to the developed markets (Schnackenberg and Tomlinson
2016). This compels the strategists of the organization to formulate strategies for entering
into the emerging markets. The macroeconomic environment related to the operations of
Samsung is full of uncertainties which leads to changes in the strategy of the organization in a

9STRATEGIC ANALYSIS OF SAMSUNG
frequent manner. The organization has been able to adjust to the various changes that have
been occurring in the external economic environment.
Social factors – Samsung belongs to the Korean origin and is a family owned
business organization. This implies that in spite of being a global organization, the core
values of the company are still related to its home country. The major aspect for the
organization in this case will be to adapt to the local conditions and culture of the country in
which it is operating or planning to further expand. The strategists of the organization need to
formulate a glocal strategy which can helpful for its operations in the various countries. The
niche market in which Samsung operates is affected by the local preferences and choices of
people (Smith 2014).
Technological factors – Samsung has acquired the position of one of the world’s
largest and leading innovative organizations. The company has a major advantage of
harnessing the technological power that is provided by the countries. This has further
formulated an obsessive mission of the company to be technologically ahead from its
competitors in the market. The organization has however gone too far in this process by
imitating the products that have been manufactured by its rivals. Samsung has still been able
to reach the customers quite fast in this competitive market. The strategists of the
organization are major reason behind this capability of Samsung (Spieth, Schneckenberg and
Ricart 2014).
Legal factors – The legal factors are related to the various boundaries that are faced
by Samsung in the various countries. The organization also had to face many legal issues in
the past due to imitation of the products of other organizations. Legal factors also include the
approval of strategies that are formulated by Samsung.

10STRATEGIC ANALYSIS OF SAMSUNG
Environmental factors – The ethical consumers have increased in the market and
they are demanding for products which are made in an environmentally and socially
responsible way. Samsung therefore has to be aware of the needs of these ethical buyers, by
ensuring the high levels of working condition in their factories and other facilities (Wirtz et
al. 2016).
Section 2
Evaluation of the SWOT analysis
The global reach of Samsung has been the major strength of the organization in the
industry. The South Korean organization was able to become a global name within a short
time due to the strategies that were implemented and the changes that were made in the
strategies according to the needs of the consumers. The research and development related
capabilities have proved to be another major strength in the operations of the organization
which has helped Samsung in maintaining its competitive advantage (Wright, Coff and
Moliterno 2014). The other factors which have proved to be beneficial for the organization
are the marketing and the manufacturing capabilities and the long-standing relationships with
its retailers. The major reason behind the issues faced by the company was the dependency of
the organization on one part of the conglomerate for its revenues. The company has many
opportunities related to growth in the industry which can be utilised to increase its revenues.
The high growth the electronics industry and increasing demands can be profitable for the
organization and its operations in various countries. Samsung is also facing major threats in
the market which is related to its tendency to imitate the products of its rivals (Wu, Straub
and Liang 2015). The lack of proper quality has further affected the reputation of the
organization in the market. The sales and revenue of Samsung has reduced due to these
mistakes made by the organization.

11STRATEGIC ANALYSIS OF SAMSUNG
Section 3
Recommendations related to future direction of Samsung
Samsung needs to bring innovation in the products which they offer to the
consumers.
Samsung has great research and development facilities and the technological
capabilities of the organization are also quite high. These capabilities of the
company can be used in the future to improve their products and bring
uniqueness in its operations.
The growing and emerging markets need to be targeted by the company and
the strategists can formulate effective strategies for the next five years if
operations of the organization in the industry.
The company can also expand its operations in the developing markets so that
they are able to tap the potential of these markets in a better manner as
compared to its rivals.
The strategists of the company also need to formulate successful marketing
strategies to increase the reach of various products manufactured by Samsung.

12STRATEGIC ANALYSIS OF SAMSUNG
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