A popular South Korean company, Samsung is the largest producer of electronic devices. The company is one of the main producers of electronic devices. Samsung focuses on the production of a wide variety of electronics that includes appliances, semiconductors, digital media devices, integrated systems, and memory chips. It has the most popular names in technology and produces about one-fifth of total South Korea’s exports.
Samsung was earlier founded during the year 1938 by Lee Byung Chull as a grocery transaction store. The business was established in Korea by trading noodles and other related goods to export to China. Over the years, Lee extended the business to the textile industry and opened a large woolen mill in Korea. Then slowly it went into chemical and petrochemical industries. During the year 1969, the company ventured into the electronics industry and its first product introduced was the black and white television. During the year 1970, Samsung started to export home electronic products globally. Then it slowly emerged into a technology company and it soon became a top leader in the information technology services.
The SWOT analysis of Samsung lists its strengths, weakness, opportunities, and threats that throws light on the company as where they need to focus to increase their revenue. After reading this article, you will know where Samsung stands in the technology industry.
Before we start the discussion on the SWOT analysis of Samsung, let us understand a bit of the background of the company Samsung.
The following points provide you a bit of Samsung’s background:
- The company is known with the name Samsung Electronics Co., Ltd.
- Samsung was established during the year 1969 and the company is headquartered in South Korea.
- The company logo is shown in Image 1.
- The various industries served by the company are the following:
- Telecoms Equipment
- Consumer Electronics
- Home Appliances
- The company serves about 79 countries worldwide.
The SWOT analysis of Samsung highlights the strengths that the company and its weaknesses where it could focus on more. It also mentions its threat the business can face and its various opportunities that are available for the brand in the international market.
For the brand to meet its long-term competitive advantage it must check and address its various concerns that are highlighted in the SWOT analysis of Samsung.
Let us discuss on the SWOT analysis of Samsung.
Strengths in the SWOT Analysis of Samsung
- Innovative Designs – Samsung has many provided many handsets with various design types. Each of its product’s designs is innovative and it is the best in the industry. Its innovative design is the brand’s main strength.
- World’s Top Electronics Manufacturer – Samsung is the world’s topmost successful manufacturer of electronic devices and this is one of its strengths. It is the world’s largest producer of TV sets, LCD panels, smartphones, and mobile phones.
- Software Integration in Mobile – One of the main strengths of the brand is its adaptation of open-source technology like the Android Operating System. As the current top technology used is the Android operating system, Samsung makes use of this operating system and provides many features, software, and options.
- World’s Largest Marketer – The brand is the world’s top marketer of mobile phones having about 21.4% of the world’s largest market share.
- Great Design and Design Capabilities – Samsung has inspiring capabilities for research and design. This is a huge strength for the brand where they have a great and innovative design. Samsung has been able to include many of the capabilities of both Google and Apple’s Android operating system for various mobile devices.
- Strong Connect with Retailers – Samsung has a great connection and a long-standing relationship with various retailers across Europe and the United States. These countries provide a steady sales channel for the brand’s products.
- Strong International Reach – The company has a wide business in the international market and hence has been able to reach to a great level. It is the most competitive brand in the international market mainly for consumer electronics. The brand has some of the biggest brands as its competitors like Google, Apple, and Sony. This is an important strength that makes Samsung grow and enhance its image against its competitors.
- Expert in Manufacturing Electronics and Semiconductors – The brand has its main strength from its design and production of the semiconductors and the electronic markets. This major strength is outstanding and is evident from the major technology that the brand makes use for its production of their finished products. It is also seen in its enormous usage of their products by the customers.
- Great Support from Divisions and Subsidiaries – Yet another strength of the brand is its synergistic support that involves the divisions and subsidiaries of the brand’s technology division. This is based on the organizational structure of the brand.
- Research and Development – Samsung has an excellent Research and Development wing that results in the strongest patent portfolio among the various technology companies. To succeed in the technology domain innovation is indeed important. When a company invests more in Research and Development, the more it tends to innovate. Samsung has about 34 Research and Development centers across the world and it spends a huge amount of money. Samsung’s spend on Research and Development has a strong correlation with the company’s revenue growth and its expansion to the new product markets. The brand’s spending in Research and Development has resulted in the brand developing many innovative products over the years.
Weaknesses of Samsung
- Great Dependency on the US Markets – It is assessed that the company has sold almost 70% of the smartphones in the US regions. Even though the company has seen its expansions in Asia and has diversified its resources, the brand is still dependent on the US markets. The US economy is impulsive, and any recessions would put the revenue of Samsung in danger and could damage its operational resources. Hence, Samsung should involve itself in the markets of Asia and Europe to ensure sustainability and to evade possible failures in case the US economy falls. This is a major weakness for the brand.
- Smartphones Sales Decline – Ever since the year 2017, Samsung is facing a decline in the sale of smartphones. There was a similar trend that was seen in China because of the price sensitivity issues in the Chinese market. They have provided many products to the Indian market that has affected Samsung sales. When Samsung tried to shift its focus to the Indian market, the strategy did not beneficial results to the company.
- Android Operating System – Samsung’s devices make use of Google’s Android open-source operating system. Many customers feed Android as an inferior product as compared to Apple’s iOS. This is just the mindset of the people as they see Apple iOS more effective and class than the Android iOS. This is, in fact, a great weakness for the brand that might affect its sales to a huge extent.
- Inferior to Apple Products – Some of the customers view Apple products to be more advanced and dependable that the Samsung products. The marketing efforts of Samsung is also not that effective that the Apple brand. This is also a weak point for the brand that would affect its reputation to a greater extent.
Opportunities in the SWOT Analysis of Samsung
- Triple Protection Proposition – Samsung is getting into the launch of a new product called the Triple Protection Proposition. This product includes cutting-edge technology and perfect construction. The product is manufactured towards a target and large customer base that would make sure to enable maximum customer retention.
- HR Management – Samsung can build up an inspiring transformational happening in case it capitalizes in its HR management. It would do good for its sales but also be able to provide a competitive edge over its competitors. As the company’s brand value is high, it can make use of this to get experts and skilled people to enhance the productivity and performance of the brand.
- Acquisition and Diversification – It is indeed critical that Samsung should avoid the mistake of being partial to just one marketplace. It is not only impacting on the risk from the economic perspective but also fascinates any unwanted and negative media interference. Hence, there is a vacuum of its operations seen in the Asian and European countries. Samsung should thrive to focus and increase its visibility in these markets as well. It should also try to focus on having a strong customer base from these regions. As it is a popular brand, it can generate a good revenue once it enters into these markets.
- Going Online Sale – Samsung would get more opportunities in case it goes online like Amazon.com. Going online market would increase the brand’s sales to get more benefits.
Threats in the SWOT Analysis of Samsung
- Controversies – Samsung company has been involved in various debates that have threatened the brand’s business to a huge extent. It has entered into controversy with the brand Apple where the company had filed a lawsuit against the Samsung company for patent violation issues that has undergone a tough court battle for about seven years and then it had reached a settlement. But after this incident, the company had suffered a lot of consequences when the jury had decided that Samsung had in fact copied Apple’s patent. As a result, Samsung had to pay a huge fine for this damage. This lawsuit had damaged the reputation of the brand which in turn had affected the sales to a huge extent.
- More Competitors – Competitors are more in the technology field. Samsung faces huge competition from rivals especially from the brand that is from the smartphone, consumer electronics, and technology industries. It faces a huge threat from various technologies competitors like Apple, Huawei, Xiaomi, etc. These companies outperform each other are facing a tight competition to become the top technology company. This is a threat to the Samsung brand, and it increases the pressure in finance and competition as well.
- Regulatory and Legal Threats – While the world is more globalized these days and more of digital-oriented, there are various guidelines that are on the rise by the governmental authorities. Such governmental authorities tend to increase the legal and regulatory threats to many companies worldwide. Samsung also faces such threats. The laws laid by the government differs from market to market and these kinds of strict law would be hindrance for the business operations. In case if it fails to obey these laws and standards, it might also result in the shut down in the market that would be a major fall for the brand.
- Poor Marketing Strategy – Samsung has excellent research, design, and production abilities, but it fails and has lost its sight in marketing. The brand would require to face-lift its marketing strategies to maintain its market share. This must be taken care, otherwise, the brand would face a threat with marketing when it is overtaken by its competitors.
The SWOT analysis of Samsung mentioned in this article has highlighted the main strengths of the brand that comes up from its brand awareness, innovation in its various products, huge investment in its Research and Development, its strong international reach, and its various software integration in its product. Its unique features that are incorporated in its business model have made it stand apart from the rest of the technology company.
Its major weakness lies in its being so much dependent on the US market, the decline in the smartphone sale, and its dependency on the Android operating system. Samsung sees a huge opportunity in the industry if it tries to expand its operations to the Asian and European countries and trying to set up HR management in place.
The brand sees a threat in various controversies, from the various technology competitors, and the various government laws that follow in each market.