Company: Samsung
CEO : Koh Dong Jin, Kim Ki Nam, and Kim Hyun Suk
Year founded : 1938
Headquarter : Samsung Town, South Korea
Number of Employees (2018): 320,671
Public or Private: Public
Ticker Symbol: SSNLF
Market Cap (2018): $326 Billion
Annual Revenue (2018) : $225 Billion
Profit | Net income (2018): $41 Billion

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 320,671workers in December of 2017.

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

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. It spent US$14.857 billion in 2017 on
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.
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.
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

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.
The 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 shift more focus in India, but that strategy did not produce substantial results for the company.

Samsung’s Opportunities

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.
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.
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.

Samsung’s Threats

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.
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.
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.

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 marketsand 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.