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Samsung SWOT Analysis 2020 | SWOT Analysis of Samsung Brianna Parker 3 years ago

Last updated: Sept 07, 2020 Company: Samsung CEO : Koh Dong Jin, Kim Ki Nam, and Kim Hyun Suk Year founded : 1938 Headquarter : Samsung Town, South Korea Number of Employees (Dec 2019): 287,439 Public or Private: Public Ticker Symbol: SSNLF Market Cap (Sept 2020): 387 KRW Trillion Annual Revenue (FY2019) : 230 KRW Trillion Profit | Net income (FY2019): 21.7 KRW Trillion Products & Services: Camera | Smart Phones | Memory Cards | Camcorder | TV/LEDs | PC | Stove | Refrigerator | Bulb | Home Appliances Competitors: Apple | Huawei | Xiaomi | Oppo | Vivo | Lenovo | Sony | HTC | Motorola | Microsoft | Google Pixel | Micromax | Asus | Gionee | Iball | Intex | Nokia Fun Fact: Did you know that the total resources of the Samsung group in 2017 made up about 15% of South Korea’s GDP?

An Overview of Samsung Samsung Electronics Co., Ltd stands today as the world’s second-largest technology company that produces electronic devices. It is a South Korean conglomerate business. Samsung was also titled as the number one in consumer electronics brand worldwide and is recognized for its evolutionary advancements in digital technology. The company is known to produce equipment that includes telecommunications, electronics, home appliances, and semiconductors. Initially being launched as an analog driven product line, it transitioned into a universally acclaimed pioneer in technological innovation. The tech industry is currently the world’s largest smartphone and mobile phone manufacturer. Currently, it sells over a hundred products of different varieties and models. Its operational branches are present in about 79 countries. Lee Byung-Chul founded Samsung in 1938. It initially started as a trading company until it gradually evolved into an electronics manufacturer in the late 1960s. It employees about 287,439 employees as of December of 2019. Its current CEOs are Koh Dong Jin, Kim Ki Nam and Kim Hyun Suk who assumed their positions in March 2018. Key facts about Samsung

SWOT Analysis of Samsung The following is the SWOT analysis of Samsung:

Samsung’s Strengths – Internal Strategic Factors 1. Dominates the Smartphone Market – Samsung has dominated the smartphone market for years. According to Gartner, in Q1 of 2020, Samsung has maintained the No. 1 spot globally with a 18.5% market share, where as Apple is at 13.7% market share. 2. Research and Development – The foundation of Samsung has always been on Innovative research and development. Expenditure in these departments resulted in the company having a wide range of product portfolio among its competitors. These include tablet, camcorder, mobile phone, camera, TV/video/audio, Memory Cards, PC, and other accessories. They have 34 R&D (research and development) centers operating worldwide. 3. Award Winning Brand – Samsung’s position as a pioneer for innovation is backed with credibility. Samsung has won many awards for its offerings. Samsung has been awarded the CES (Consumer Electronics Show) owing to its designs and products for 14 consecutive years. It went on to receive 36 CES awards in 2018 along with 400 more awards within a period of 14 years. It also secured 7 wins at the (IDEA) International Design Excellence Awards. 4. Ecologically Friendly Innovations – Samsung has enhanced its brand reputation through its environmentally friendly innovations. It secured its ranking at 9th position in the Top 30 Tech and Telecom companies of the EPA’s 2016 Green Power Partner list. It also received the Environmental Protection Agency’s (EPA) annual ENERGY STAR Partner of the Year Excellence Award for five consecutive years. Other companies do not share this achievement and hence increases Samsung’s appeal across all business lines. 5. Stronghold in the Asian Markets – Samsung retains a stronghold in the Asian markets, particularly India and China. Both India’s and China’s business markets are growing substantially which is why Samsung has taken advantage of the opportunity and incentivize in these countries accordingly.

Samsung’s Weaknesses 1. Heavily dependent on the American Markets – It is estimated that both Apple and Samsung sold at least 70.8% of smartphones in the USA. While Samsung has diversified its resources and expanded its operations in Asia, it is still heavily dependent on the American markets. The American economy is very unpredictable and another recession could put Samsung’s revenues in jeopardy and can damage its operational resources. That’s why Samsung needs to involve itself into the Asian and European markets to ensure sustainability and avoid potential failures if the US economy ever collapses. 2. Decline in Smartphone Sales – Samsung has been experiencing a decline in smartphone sales since 2017. A similar trend was seen in China due to the price sensitivity of the Chinese market. They dump a lot of those products in the Indian market at a lower cost which harms the Samsung sales. Samsung has tried to shif more focus in India, but that strategy did not produce substantial results for the company.

3. Product Failures – Any product that threatens the life of consumers erodes confidence and trust in the company. Samsung has delivered several faulty products to the market from the exploding Samsung Galaxy A20e to a faulty foldable phone. 4. Dependence on Low-end Smartphones – A large portion of Samsung revenues come from low-end smartphone sales. Recent events have impacted this segment more than the high-end smartphone segment, which played a role in Samsung’s decline from 71 million smartphone sales and 19.1% of market share in Q1 2019 to 55 million smartphones sold in Q1 2020 with 18.5% of market share (as per Gartner Report).

5. Hereditary Leadership – Since its founding, Samsung has always been under the leadership of the family for three generations. Even though keeping the leadership within the family has offered Samsung immense stability, the company can stagnate due to a lack of fresh ideas. After being dogged by several scandals, Samsung heir Jay Lee has vowed to end dynastic succession. 6. Bribery Scandal – In 2015, Samsung’s reputation was tainted by the revelation that the president of the company bribed the government of South Korea to facilitate a merger. He was found guilty and jailed for about one year until Feb. 2018, which eroded trust bestowed by consumers in South Korea and the world over.

Samsung’s Opportunities 1. Triple Protection Proposition – Samsung is preparing to launch its new air conditioning product called the ‘Triple Protection Proposition’ that incorporates cutting edge technology and impeccable construction. The product is geared towards a target customer base that would ensure maximum customer retention. 2. HR Management – Samsung can make impressive transformational accomplishments if it invest in its HR management. Not only would it be good for its sales but it will also give it competitive leverage over its rival. The company can utilize its brand image and hire highly qualified and skilled employees to improve employee performance and productivity. 3. Diversification and Acquisitions – It is critical that Samsung avoids the mistake of being limited to just one marketplace. It not only invites risks from an economic perspective, but it also attracts unwanted political polarization and negative media publicity. That’s why there is a business vacuum present in the Asian and European economies in which Samsung can thrive. It needs to expand its customer base as well. It can only be achieved through diversification and acquisitions of other businesses. Samsung is a popular brand and can generate impressive revenues thanks to its financial standing. 4. Introduce Innovative Products – The smartphone sector is highly dynamic, with the latest trends going out of style in an instant. Samsung can attain immense growth by setting the trend with great and innovative products like the foldable phone. 5. 5G Technology – As the world moves to 5G, Samsung has the capacity and know-how to exploit this opportunity. The company is already in active commercial discussions with operators in the EU to supply 5G and 6G network equipment. Samsung is one of the top companies in the UK’s list of potential 5G providers.

Samsung’s Threats 1. Patent Infringement Controversies – Samsung has been involved in controversies that have threatened its business. Its rival Apple filed a lawsuit against Samsung for patent infringement which underwent a heated court battle for seven long years until finally reaching a settlement. However, the company suffered consequences when a jury decided that Samsung had indeed copied Apple and was to pay $1.049 billion in damages. This suit damaged the company’s reputation and its sales. 2. Increased Competition – Competition from opponents especially from those within the consumer electronics, smartphone products, and computing industries has reached a record high. Whether it’s Xiaomi, Apple, or Huawei, all the technological competitors are outmaneuvering and outperforming each other to become the best technology company. This only increases the pressure for Samsung in both competition and finances. 3. Legal and Regulatory Threats – With the world becoming more globalized and digitally oriented, governmental authorities have begun issuing their guidelines which are increasing legal and regulatory threats to companies around the globe. Samsung is no

exception to these rules. Laws differ from market to market, and these strict regulations cause a hindrance in operations. Failure to comply could even result in a complete shutdown in the respective market which may be fatal for Samsung. 4. Economic Uncertainty – Recent events have catalyzed uncertainty in the global market and led to a decline in new smartphone sales by 20.2% in Q1 of 2020. Financial struggles have forced many consumers to seek recycled or refurbished phones, which has increased by 24%. Samsung has already experienced a decline in sales, and it can drop further if uncertainty persists. 5. Rise of Counterfeiting – According to numerous research studies, Samsung is by far the most counterfeited phone brand. Statistics from mobile benchmarking site AnTuTu highlight that over 36% of all counterfeit smartphones are Samsung copies. Also, Samsung Galaxy S7 Edge holds the record of the most counterfeited smartphone model. 6. Impending Court Cases – Any disruption in leadership can affect performance. A South Korean court is debating whether to send Samsung’s leader and heir Jay Lee back to jail. New allegations of stock-price manipulation and audit-rule violations have dogged the executive and threaten to throw the company into another tumultuous period without leadership. SWOT analysis of Samsung

Conclusion Through the SWOT analysis of Samsung, it is clear that the company is still a global leader in chip making and smartphone brands. It has always sustained sufficient revenue and profits as it progresses into the future. The primary challenge it has to face is cutting back on its overreliance on the American markets and explore the potential to operate in other markets. It needs to focus mainly on the Asian continent that is developing at an exceeding rate. Its limited customer base in the US is not reliable enough and may lead to limited revenue and profits. That can become a persistent issue for the company. They need to expand internationally and incorporate a new consumer demographic to thrive....