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Based on the environment analysis, the report can identify the five key drivers and the responses Of the company. In the next section, after a statement of the key drives. Various situation involving possibility knowledge are investigated: first, this report will introduce the pest analysis. This part aim to show the macro aspect of Samsung Corporation. Then the report will be devoted to analyze the micro-environment. SOOT analysis will be used to analyze details in external and internal effects of Strengths, Weaknesses, Threats and Opportunities.
Based on the two frameworks the report will identify the five key drivers Of the company so as to get effective strategies and recommendations. In addition, the report will also show the Samsung Corporation makes efforts to develop sustainable development complying global regulation. Introduction Background to Samsung Founded in 1938 in South Korea and it is a multi. National company with 56 worldwide subsidiaries. Samsung has grown from a modest trading company to a multinational conglomerate.
Samsung operates in electronics markets and employs people in more than 60 countries, Samsung enjoys the widest range of product portfolio which includes Mobile phone, Tablet, TV/Audio/Video, Camera, camcorder, Home appliance, PC, peripherals, printer, memory cards and other accessories. Samsung is NO. 2 in terms to market share in mobiles, it is a big advantage of Samsung. Samsung is the best in terms of design features and technology. They produce screen, ship and almost parts by themselves. The major market locations of Samsung are South Korea, China and Vietnam.
Mobile launched a series of Smart phones recently which led to centralization. It does not like phone have a clear Market positioning. Samsung is a hardware leader but has too much of dependence for software from other parties like Google. The demand for LCD panels is expected to decline in the future Will become another problem. PEST Analysis TO begin With is external part With PEST analysis. This framework helps to provide information form the market and enables to identify and evaluate political, environmental, social and technological macro-environmental factors.
Political Factor First one is the political factor, in most of the markets where Samsung operates, the political environment is stable enough to Samsung. Because f the capitalist system to encourage competition, resource allocation by price signals. Most of countries Governments also provides a stable political environment and a sound legal system, minimal government intervention in business. Overall Samsung can be said well at political aspect.
For example that Hong Kong has maintained the first position in the economic freedom in 2013 than it is a good living conditions competitors in three areas, namely “size of government” and ‘freedom of international trade” and “regulation of credit, labor and As a result, it will provide a good business environment for the Samsung establish a price, and offer different products to meet the target customers. Economic Factor Second part is the economic factor and its affect to Samsung. Emerging market become a strong power in the world mobile phone market. Many of the open world market in development.
It means that the company can expand its global operations. However the global finance crisis forcing Samsung to seek profitable business in emerging markets. For example: Hong Kong is an offshore ARM center in Asia and CHEAP, and the Pearl River Delta since. Samsung can put Hong Kong as a gateway to China. No foreign exchange controls and trade barriers, Samsung makes it easier to run their businesses. @@@@ Samsung can take advantage of Hong Kong to expand its business in China. Samsung has adjusted better to be extended to emerging markets and developing markets gradually reduce consumers’ disposable income in the developed world.
In this way Samsung can keep progress in the future. Social Factor The third part is about social factors, Mobile phone market will influence by the impact to consumer little. Mobile phone culture is an important factor for company’s development. Nowadays, more and more people prefer to use mart phones not only for phone calls or massages, but also tort gathering the information all over the world through social media, Most people will choose their own mobile phones based on brand and promotion, which means that the advertisements of a company can effectively affect customers’ performance.
According to the Best Global Brands we can see the famous Samsung Android system using smart phone brand. With the brand name, will affect customers’ buying habits. Let Samsung may provide different types of smart phones and low-profile, high specification, to attract different types f customers who are interested in Samsung. Social value also an important factors. Samsung do different charity work and help some countries develop new technology to fight against the disease or something others, in order to meet their needs. Here are some examples: I.
Operation animal companionship, assistance and welfare programs, including employee dog adoption center; guide dog school: working dog breeding center; and dogs and rescue dogs business by connecting people with dogs that can improve their lives to support this the results. 2. Samsung hope for Children program was launched globally o bring attention to the global need for childhood education and health care, By providing Samsung products, lending our expertise and provide financial support, we are able to give thousands of children access to education, counseling, leadership and life-saving medical communities around the world.
As a result, Samsung image will get improve. It also can attract people to give support by buying Samsung product. Technological Factor The last part is technology factors. Technology is especially important to mobile phone industry. New technology can help a company produce extraordinary reduce and control the market share. Samsung can be considered as being among the world’s leading innovative companies. This means that the company is at an advantage as far as harnessing the power of technology and driving innovation for sustainable business advantage is concerned.
SOOT Analysis SOOT analysis is a strategic tool used for identifying and evaluating the strengths, weakness, opportunities and threats in a business. It enables the business to analyze the external environment focus on strengths and weaknesses, and internal environment in terms of opportunities and threats. Strength: Samsung is focused on producing devices which can be integrated with most of the softy,’are and 05. This gives Samsung products an edge over Apple’s (its arch rival) devices, especially as Android and other SO are gaining market share when ISO and SO X are losing it.
Weakness: Apple, Sony, Dell, HP are the main buyers of Samsung Electronics products as well as the firm’s main competitors. Such situation would be favorable to Samsung (if competitors could not find complementary products and would form a relatively low share Samsung revenues) because it could use its bargaining power over competitors. Due to reverse conditions (competitors can find complements and they form a relatively high share of firm’s revenues) Samsung cannot use its bargaining power over competitors as it can easily lose its customers and sales.
Opportunities: Growing Indian’s smartened market. Indian’s smartened market is one Of the least penetrated among Asia/Pacific countries. Samsung has a strong presence in Indian’s market and could use this opportunity to expand its sales. Growing mobile advertising industry. The company could develop advertising platform for its mobile devices and significantly benefit from this curative market. Threats: Saturated smartened markets in developed countries. Smartness market in the developed economies is saturated and the sales will not be growing at a high rate.
Rapid technological change. The serious threat that Samsung and the other tech companies are facing is a rapid technological change. Companies are under the pressure to release the new products taster and faster, The one that cannot keep up with the competition soon fails. This is especially hard when the business wants to introduce something new, innovative and successful. Five Key Drivers This section devoted to introduce the five main key drives of Samsung Company.
They are regulatory, cost reduction and buyer power, technology changes and the threats of new entrants The drivers are important for a mobile phone company to compete and develop in the electronic product industry. Regulatory Regulation of businesses is used to weight and measure the rationalization and normalization of the company’s activities, which is a very important aspect for electronics industry. Through regulatory can Stop vicious actions and make competition be more effectively and ensure the quality of products. Cost Reduction Second one key driver is cost reduction.
The profit of a product equal selling price subtract cost, If a company can control the price off product, In the other word, the company can earn more profit than before and get superiority than other companies Buyer Power The power of buyer or customers is also an important driver for Samsung Company. The bargaining power Of buyers Will increase if there are many alternative products or suppliers available for customers. Because customers gets more power to choose suppliers according to the price, functions and appearance of mobile phones.
As for Samsung, there existing many substitutes’ products or companies such as Apple, Sony and Monika and so on. Therefore, Samsung may decrease the price and cost of production so as to attract more buyers. The second factor to affect the power is cost of switching to other suppliers. When the cost of change for another brand mobile phone is low, customers will tend to consider other mobile phones fifthly have better quality or lower price, As a result, Samsung should make efforts to develop outstanding products and be more competitive so that it can control the power of buyers and get maximum profit for the company.
The next driver is technology change, advanced technology can help a company be more efficiently and productively. Through new technology a company can produce some extraordinary product like phone, Technology also can help Samsung keep dominance in an industry. The last one is the threat of new entrants. Even if a big company cannot ignore this threat. In some industry new entrance become a strong power. Especially in mobile phone industry. Monika not the no. L mobile phone manufacturers any more. Apple and Samsung beyond it can nowadays some new brands like Mi and Maize. They occupied more market share than before.