Samsung is a multinational company based in South Korea. It is one of the biggest companies globally. It deals with various products such as fashion, advanced technology, medicine, petrochemical, hotels, semiconductors, skyscrapers, and plant construction. Currently, it is known for manufacturing world class LCD, smartphones, cameras, TVs, and videos. The essay will conduct a SWOT analysis of Samsung Electronics Company.
Strengths
Innovative designs
The company produces different products that have different designs. Its innovativeness has allowed the company to have a strong brand reputation (Paksi & Gunawan, 2017). It is one of the most respected brands globally. It has more competitive designs than its main competitor, Apple Inc.
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Cost and Quality Focused
Due to the high demand for its products, the company has attained economies of scale. Furthermore, it has outsourced some of its production to other countries that have a competitive edge in producing certain components at smaller costs. Economies of scale have allowed the company to produce equipment at lower costs than most of their competitors.
Product Diversity
The company has a large number of products in their portfolio. They offer different types of products to its customers. Therefore, the company makes very stable profits. When the sale of one product reduces, sales in other products increase. It has the largest smartphone market in the world (Paksi & Gunawan, 2017). In fact, it has 40% of the smartphone market in some European countries such and the Netherlands.
Environmental Focus
The company fulfills its environmental responsibilities by producing sufficient energy products. The chemicals used in manufacturing their products do not harm their users. Currently, it operates take back and global recycling programs in over 60 countries.
Strong at R&D Department
The firm has a very strong R&D department that comes up with various innovative products. Furthermore, they have over 489000 skilled employees.
Weakness
Low-Profit Margin
The company keeps a low-profit market because of the stiff competition in the market. They offer lower prices to retain their customers.
Damaging Image by infringement
Due to copyright infringement, the few incidents have adversely affected its image. They have attempted to make their products of higher quality, but they still fall behind some of its competitors its market share in the US dropped by about 2.3% (Paksi & Gunawan, 2017). It has made many consumers believe that Apple's products are better than Samsung's.
Too Large Product Diversity
The company has a large portfolio and has not focused on specific products. Therefore, the company cannot focus on its main products with uttermost importance. It has made the company to be heavily reliant on consumer electronics. Its reliance on consumer electronics is higher than its competitors (Wang et al., 2016). Their marketing efforts are less sophisticated in comparison to their competitors.
The Company does not have an Operating System
Unlike the iPhone, the company does not have their own operating system. Therefore, its products have less quality than Apple’s. When it comes to laptops and handsets, Apple has the upper hand regarding quality (Wang et al., 2016). The company cannot entirely depend on itself to produce software.
Opportunities
Acquisition of New Companies
To ensure its future growth, the company has been acquiring companies. For instance, they acquired giant audio Harman for about $8 billion. They have also acquired NewNet Communication technologies from Canada and Viv, an artificial intelligence company (Paksi & Gunawan, 2017).
Growing Smartphone Market in India
As the society is becoming more dependent on technology, the demand for smartphones increased tremendously especially in India and Africa (Wang et al., 2016). More people are spending time on smartphones. Also, the company has gained patents through achievement is the smartphone industry.
Strong Financial Position
The company has been operational for many years, and it has had stable profits for over a decade. The company has acquired a strong financial position in the global market (Paksi & Gunawan, 2017). Therefore, the company has great potential to invest in various projects in the future.
The Growth of Tablet Market
The tablet market has immense potential for growth because people can switch to smartphones. Higher sales will improve the financial position of the company. Furthermore, there is a growing demand for smartphones and tablets that are technologically advanced.
Threats
Increased Competition
The smartphone industry is saturated with various companies. Samsung has many competitors in the industry, and the number is still increasing. Some of its competitors are very strong such as HTC, Lenovo, Apple, and Xiaomi Mobile (Wang et al., 2016). Furthermore, the Chinese competitors have made immense strides in improving their market share. Furthermore, the company produces many high-quality products at lower prices.
Increased Demand for Quality Products
Due to copyright infringement, their quality is questioned. There are many customers who switch to other companies who are believed to produce higher quality products. Furthermore, the company has a high-risk portfolio made of many products (Wang et al., 2016). If one product has a negative impact on its consumers, it will negatively affect other products. It has made the company to experience threats from many Indian, Chinese, and Taiwanese Products in the global market.
Conclusion
The essay has given a SWOT analysis of Samsung. It has shown that the company has strengths in comparison to its weaknesses. It has also shown that they have immense opportunities and threat as well. The company should make adequate steps to improve the quality of their products so that they may become a stronger firm in the future while keeping up with the stiff competition in the global marketplace (Paksi & Gunawan, 2017). The SWOT analysis can guide the overall business strategy of the company.
References
Paksi, T., & Gunawan, S. (2017). The Concept of the Luxury Branding In Samsung Galaxy S6 Edge Series through Triadic Modes of Sign K@ Ta Kita , 5 (1), 142-148.
Wang, X. S., Xie, Y., Jagpal, H. S., & Yeniyurt, S. (2016). Coordinating R&D, product positioning, and pricing strategy: A duopoly model: Customer Needs and Solutions , 3 (2), 104-114.
