Joe DavidSWOT analysis of Samsung
This detailed SWOT analysis of Samsung aims to examine the internal and the external environments of Samsung. It aims to examine the strengths and the weaknesses of the company. It also aims to examine the opportunities Samsung should explore and the likely threats it should keep an eye on. Samsung is a South Korean multinational conglomerate headquartered in Samsung Town, Seoul. It was founded by Lee Byung-Chul in 1938.
Strengths of Samsung
Samsung is a diversified company that has three core areas of business i.e. consumer electronics, IT & Mobile communications, and device solution. It is also one of the most innovative companies in the world. It has demonstrated its strengths and innovative capacities in the development of a number of products e.g. TV, smartphone, smartwatch, semiconductors, computer monitors, mobile payment service, and nanometre flash memory. Furthermore, Samsung holds significant market share in most of its product categories.
Samsung has taken on a number of gigantic challenges over the years and the results in most cases have been great. It has taken over a number of companies to enrich its portfolio. For instance, it acquired Medison in 2011, SmartThings in 2014, YESCO in 2015, Dacor, Joyent and Viva Labs in 2016, and HARMAN in 2017 (Samsung, 2019).
Samsung’s core competencies lie in the fact that it is a leading technology company in the world. In fact, it ranked the 2nd largest tech company and the 14th largest company in the world in 2018. In the same year, it made total sales of $225 billion and $41 billion profit (Stoller, 2018). Samsung ranked No.6 in Interbrand’s Best Global Brands 2017. It is worth mentioning that Samsung has been the top-selling global manufacturer of televisions since 2006.
Samsung is the global leader in the smartphone market. As of the first quarter of 2019, it has 23.1% global smartphone market share. Its main line of smartphone products is the Galaxy series, which was first released in April 2009. Samsung saw a rapid growth in smartphone sales from 2.4 million units at the start of 2010 to more than 292 million units in 2018 (Statista, 2019).
One of the biggest strengths of Samsung is its incredibly loyal customer base. These loyal customers trust the brand and are willing to pay the desired amount to purchase the products. Many of these customers are often seen defending the brand on social media debates. Particularly, many users of Samsung smartphones strenuously propagate the superiority of the brand over its competitors.
Samsung operates a number of research and development (R&D) centres across the world. It has established seven artificial intelligence (AI) centres in Korea, the United Kingdom, the United States, Russia, and Canada. Samsung’s research focus is on artificial intelligence, data intelligence, intelligent machines, next-generation communications and media, Tizen, and security (Samsung, 2019). It invests heavily in research to widen the research scope to explore new and promising products and services for its customers.
Weaknesses of Samsung
Samsung found itself mired in a number of controversies over the years. For instance, several complaints were raised concerning child labour, and violations of overtime rules for adult workers in its supply chain from 2012 to 2015. Samsung was also accused of price fixing and indeed was fined 35.1 million euros by the European Commission for fixing prices of chips used in smartphones (BBC, 2014).
Samsung does not have its own operating systems unlike Apple. It uses Google Android operating system for its devices which many customers regard as inferior to Apple’s iOS. Moreover, Google’s licensing of Android may put restrictions on Samsung’s devices.
There is no doubt that diversification strategies have certain advantages; however, they are the most risky strategies in theory. They are also very costly to implement as organisations must invest a lot of money in research and development, consultancy, and other activities. For instance, Samsung spent $14.857 billion in R&D in 2017, which was the 2nd largest amount spent in the world.
Opportunities for Samsung
Emerging markets such as India, South Africa and others have growing demands for consumer electronics, smartphones, tablets, and other tech devices. For instance, India is the second largest smartphone market in the world after China and has over 430 million smartphone users. The Indian smartphone market grow by 10% in 2018. Samsung had 24% market share in India in 2018 where the market leader is Xiaomi with 28% market share (News18, 2018). Smartphone sales grew by 7.2% in 2018 in South Africa where the market leader is Samsung with 43.84% market share as of April 2019.
Middle class is rapidly growing in many developing as well as poor countries. This rapid development will certainly increase demands for consumer electronics, smartphones, and other tech devices which offer Samsung opportunities for growth. As it is a digital time and age now, the demands for new tech products and services is certainly out there.
Threats to Samsung
Threat is the last element to address in the SWOT analysis of Samsung. Samsung faces a number of powerful competitors in many of its global markets. For instance, the main competitors of Samsung in smartphone market are Apple, Huawei, Xiaomi, OPPO, LG, Lenovo, ZTE, Vivo, Sony, RIM, HTC, & Nokia. The main competitors of Samsung in global consumer electronics market are HP Inc., Apple Inc., Sony Corporation, LG Electronics Inc., Panasonic Corporation, Hitachi Ltd., and Toshiba Corporation.
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Last update: 14 May 2019
References:
BBC (2014) Philips, Samsung and Infineon in 138m-euro cartel fine, available at: https://www.bbc.co.uk/news/business-29046449 (accessed 12 May 2019)
News18 (2018) India Smartphone Market Expands 10% in 2018, Fastest Among Major Markets: Report, available at: https://www.news18.com/news/business/india-smartphone-market-expands-10-in-2018-fastest-among-major-markets-report-2014017.html (accessed 12 May 2019)
Samsung (2019), About us, available at: https://www.samsung.com/uk/aboutsamsung/company/history/ (accessed 10 May 2019)
Stoller, K. (2018) The World’s Largest Tech Companies 2018: Apple, Samsung Take Top Spots Again, available at: https://www.forbes.com/sites/kristinstoller/2018/06/06/worlds-largest-tech-companies-2018-global-2000/#3f30d1ae4de6 (accessed 11 May 2018)
Statista (2019) Global market share held by leading smartphone vendors from 4th quarter 2009 to 1st quarter 2019, available at: https://www.statista.com/statistics/271496/global-market-share-held-by-smartphone-vendors-since-4th-quarter-2009/ (accessed 12 May 2019)
Photo credit: Pixabay
Author: Joe David
Joe David has years of teaching experience both in the UK and abroad. He writes regularly online on a variety of topics. He has a keen interest in business, hospitality, and tourism management. He holds a Postgraduate Diploma in Management Studies and a Post Graduate Diploma in Marketing Management.
M Rahman