Samsung SWOT and PESTEL Analysis

Samsung SWOT and PESTEL AnalysisSWOT psychoanalysisDefinitionThis is part of a follows strategic planning process thatconnects the companys objectives and strategies to tactics and actions carriedout by employees. very much SWOT is part of a companys strategic planning processthat connects its objectives and strategies to actions and tactics carried outby employees. To better decide whatchanges to be made in a company and know where it stands on four key strategic aras it has to use a SWOT analysis.SWOT BasicsStrength, Weakness, Opportunity and Threats (SWOT) is anacronym that identifies the four critical elements of this analysis. Strengths commonly explain in detail an analysisof the companys advantages over its competitors. Weaknesses evaluate areas inwhich the company is at a competitive disadvantage and has a possibility offailure. Opportunities are untapped commercializes or business developments that thecompany could venture in and make profit. Threats transverse the for eign milieu that could affect the company, an example being technological,environmental and restrictive factors.Strengths and WeaknessesThe of import reason for utilize the SWOT analysis is so as to be adapted to evaluate and assess a companys strengths and weaknesses. This helpsthe company understand its main market advantages and areas that competitorscould take advantage of. Companies takeadvantage of its strengths by using them as marketing messages so as todifferentiate them from their competitors.By understanding their weaknesses companies commode decide what areas needimprovement and what areas are deeply rooted in the nature of its business.OpportunitiesBy exploring untapped opportunities company leaders are ableto film ways to grow. Any strong company has to look for ways to improveand elevate its growth curve because without growth meaning failure and lack of practice of opportunities, therefore, giving an advantage to thecompetitors. Opportunities are areas that co uld create more sales and profitsto the company, and these can be the inclusion of new and appear markets, newbusiness and yield developments and lastly strategic business partnerships.ThreatsThough this is not fun at all, companies always need to havean idea of what external terrors they may encounter so they can always beprepared and avoid being caught unawares.Government regulation changes may affect the level of competition orcosts companies face. ways in which a company abbreviates access and uses naturalresources can be touch on by environmental or conditional changes. Companies that do not integrated newtechnologies are always affected negatively. (Hill and Westbrook(1997).WHAT IS PESTEL ANALYSIS AND WHY ITS USEFUL?So as to be able to achieve maximum results and get to itsoptimum performance a company has to consider some factors. The Pestel analysisexplains these factors in six categories.POLITICALThese refer to the magnitude of government intervention inthe economy. Most times the foreignpolicy of a country plays an important role in determining the traderegulations that could either lead to trade restrictions or trade incentives. A company can be highly affected by specificregulations imposed by the government.ECONOMICALFuture operation of a company/organization is highlyaffected by stintingal factors. Also, the cost of imported and exported goodsare highly affected by the changes in exchange rate in different regions. Theexpansion and growth of an organization are highly influenced by the economysince there is a change in cost of capital. (Yksel, I. (2012). heartyThe macro-environment of the organization is formed bydifferent social factors, cultural and demographic aspects of the Socialfactors include attributes in ones career, age distribution, growth rate,population, how individuals are conscious closely their health and safety. A keenanalysis of these factors helps one understand the PESTEL analysis and helporganizations understand the dynamics of existing and the availability ofpotential markets and future client needs.TECHNOLOGICALWith the speed at which technology is evolving and customersbecoming more acquired to it, organizations have no option but to keep up withthis pace. New technology makes the anileone obsolete and outdated. An organization/company that is not ready to embracenew technology is at a chance of lagging behind its competitors and losing itsmarket value. LEGALThese are factors that affect the behavior of customers andthe operation of businesses. Things which may be affected by legal factors areproduct transportation, profit margins, and viability of certain markets andto mention a few. These factors help in knowing if there are any dangersbehind selling certain products want drugs and sharp objects and can to a faultaffect how a company stocks their inventory or interacts with the customer.Consumer law is used so as to protect consumers fromcompanies that are involved in fraud and alike preserve their rights when in themarket. This affects business because they have to put aside resources so as togive detailed information about their products and services. Employment law is also known as labor law, and it explainshow companies employees should be treated. This also helps protect childrenfrom child labor and also it makes the firing of innocent employees a bitharder.SAMSUNG SWOT ANALYSISSamsung Electronics Co. Limited is the consumer electronicssubsidiary of the Samsung Group, based in Suwon, southeastern Korea. Samsung is commonly known as the worlds largest shaper of mobile phones,smartphones such the highly commonplace and successful Galaxy as well as otherelectronic devices like Television sets, LCD panels home theaters,refrigerators and even cooking appliances. Having a heavy(p) and unchallenged manufacturing and marketingexpertise, Samsung is regarded as the worlds second largest consumerelectronics company the first being Apple,Inc. its American rival. S TRENGTHS It is the worldsmost successful electronics manufacturer of television sets, liquid crystaldisplay (LCD) panels, mobile phones and smartphones and other electronicappliances. By use of itsstrategic marketing style Samsung is the worlds act one mobile phonesseller with the worlds largest market share of 21.4% in 2015s second quarter.Apple comes second with 13.9% By use of itsimpressive inquiry and design capabilities, Samsung has been able to createand roll out a payment app with similar capabilities to Apple Pay, in less thana year the Samsung Pay. Also, thecompany has been able to incorporate many of the capabilities of both Applephones and Google Android operating system to its mobile devices. Samsung not onlyhas strong manufacturing capabilities but also have undisputed marketingstrategies that have led to the success of the company. Samsung has beenable to sustain long-standing relationships with retailers in the United Statesand Europe that have been able to provide a steady sales channel for itsproducts through out the years.WEAKNESSES It is quite clearthat Samsung has not been able to match Apple Inc.s marketing capabilities forsmartphones. This is because Its shareof the U.S. smartphone market fell by 2.3% between 2014 and 2015 yet Applesshare price grew by 34.9%. Some Chinesecompetitors such as Huawei and Xiaomi are catching up to Samsung in thesmartphone market. In the year 2014 and 2015 Huaweis share grew by 48.1%, andXiaomis share grew by 29.4%. Samsungsdependence on customer electronics sales in markets that have limited resourcefor growth is dangerous. The company depends on these markets an example beingthe United States and Europe, for much of its revenue. The public hasnot accepted the Android operating system in an equal manner like the techcommunity. This is because many consumers view Android as an inferior productto Apples IOS. Samsung devices use theGoogle source action system and this is a weakness because it is notpreferred by a majority of people. Apple productsare viewed as more technology advanced and true(p) on than Samsung productsby a large number of consumers. Samsung needs toimprove its marketing efforts and standards, so as to be in the same level asApple.OPPORTUNITIES Samsung needs togrow its market for smartphones, tablets and other technological devices indeveloping regions where consumers are not familiar with PCs. This is because in 2015 sales of tabletsovertook sales of traditional in-person computers. An example of these regionsis Africa and India. Samsung shouldseize the increased demand for tablet and smartphone-based solutions and marketsome of its products that are not known to many such as Samsung Pay The companyshould venture into new technologies such as wearable tech The growth of themiddle class in the developing world will increase the market for consumerelectronics Sales channelssuch as Amazon.com can be used by Samsung to grow its online marketTHREATS Samsung has notbe en able to outdo Apple. This is because Apple has emerged as the dominantsmartphone and tablet brand in some markets, such as the United States. The growth ofApples reputation for quality, reliability, and sophistication is a threat toSamsung because it seems to be lagging behind. Samsung is mostpopular for its Galaxy devices. We could even say that it depends on thesedevices. The problem is, the Google Android operating system, which thesedevices depend upon, is not as popular with average people as iOS that is inmost other devices incuding Apple is. Key markets forSamsung are North America and the United States. The declining and stagnating of themiddle-class incomes in these areas could boil down consumer buying power andtherefore affect Samsungs sales. Samsung isexperiencing rivalry from Chinese manufacturers such as Huawei and Xiaomi. Thisis evident because the capital share of these companies rose and Samsungs isfalling. If Apple immovableto produce more consumer products l ike home appliances and cameras, Samsungcould be greatly affected.Though Samsung has been able to maintain an impressiveresearch, design and manufacturing capabilities, its marketing strategies arequestionable. There is a need for the company to revisit and improve itssmartphone marketing and design efforts so as to be able to maintain its marketshare in life-and-death arenas like the U.S.If the Samsung wants to maintain its position as an industryleader it needs to 1. New capabilities like Samsung Pay 2. learn to deal withaggressive Chinese competitors like Huawei and Xioami3.Compete with Apples reputation.PESTLE ANALYSIS OF SAMSUNGINTRODUCTIONSamsung is a global company that operates in the market forconsumer appliances and gadgets. Samsung is owned by a South Korean family andhas global aspirations to expand into newer markets. Since Samsung is notcontent with operating in some markets in the world, it wants to cover as manycountries as possible. This analysis focuses on the ext ernal environmentalfactors that drive the Samsungs strategy.POLITICALA large number of markets where Samsung operates have apolitical environment that is conducive for business. This meat that itsoperations excrete smoothly and though there might be some minor distractions toits operations in some of the foreign markets like India, Overall it can beconcluded that Samsung is operating in markets where the political factors arenot harmful. Samsung has faced significant political blows in its home countrySouth Korea because of the countrys tensions with North Korea. Due to thisinstability, the company has had to take into vizor this political factor andalso the threat of war in the Korean Peninsula. In areas where the politicalenvironment is unstable Samsung faces a lot of political pressure. This includesareas in many African and Latin American countries where the politicalenvironment is unstable and experiences frequent changes in the organizationstructures.This is not yet a majo r cause for worry for the company because ithas factored the political instability into its strategic calculations.ECONOMICSOpening up of several markets in the developing world meansthat Samsung can expand in the global markets. This, therefore, means thateconomic factors are a critical consideration. The current global economiccrisis has affected the purchasing power of customers forcing the company toseek profitable ventures in the emerging markets. The global environment inwhich Samsung operates in has a lot ofuncertainties and volatilities which means that the company has to keep onadjusting its strategies. Through expansion of Samsung into emerging anddeveloping markets has made it possible for the company to adjust well to thetapering off of the consumer fluid incomes in the developed world. This isthe main reason that Samsung has an aggressive push into the emerging marketswith hopes that it shall recover all its lost businesses in the developedworld. SOCIO-CULTURALSamsung being a South Korean multinational owned by a familymeans that despite its global footprint it still operates from the core of aKorean company and culture. This means that among its global operations,adapting itself to local conditions is paramount. Since Samsung is a globalcompany that has had to act locally, therefore adapting a global strategy makesit possible to be productive in emerging markets. Together with this, Samsunghas had to tailor its products in markets it operates in so as to cater totheir customers whose preference changes so fast. It is important to note that Samsung operatesin a market deferral that is strongly influenced by the lifestyle preferences ofconsumers. The fact that socio-culturalfactors are different in each country Samsung has had to reorient itself ineach market accordingly.TECHNOLOGICALSamsung is considered to be among the worlds leadinginnovative companies. Therefore, the company is at an advantage of controlling and fashioning use of the power of technology and driving innovation for sustainablebusiness. This has resulted into an obsessive mission by the company to outdoits rivals and competitors when it comes to technology and innovations. Thecompanys main goal is to be the first to reach the produce devices that arepreferred by customers and also be the first products of their kind in themarket. LEGALDue to Samsungs alleged imitation of the Apples iPad andiPhone it has had to face substantial penalties and law suits. This affectedthe company negatively on areas of public perception and consumer approvalstrategies. From Samsungs experience of having various lawsuits with itscompetitors, other technology driven companies should know that having anelaborate basis of a design or model is key rather than making a fast move soas to be able to present a product to the consumers that shall, in the end,ruin your reputation.ENVIRONMENTALSamsung has to be on the lookout when making its products soas to be able to satisfy its custome rs. When doing this, it has to take intoaccount its social and environmental responsibilities so as to make sure theyare both ethical. Therefore, this meansthat the company should ensure that it does not compromise on its staff wagesor their working conditions for they are all involved in producing the finalproduct. (Grade and Pestel)CONCLUSIONAs Samsung prepares to expand globally, it has to be sure ofwhat is expected of it. engineering changes so fast and customer preference evenfaster. Therefore, with this analysis, Samsung has clear guidelines on what toexpect in the global consumer landmine.REFERENCESGRADE, G. B.PESTEL Analysis Of The Energizer.Hill, T., &Westbrook, R. (1997). SWOT analysis its time for a product recall.Long range planning,30(1), 46-52.Khan, U. A.,Alam, M. N., & Alam, S. (2015). A Critical Analysis of Internal andExternal Environment of Apple Inc.International Journal of Economics,Commerce and Management,3(6),955-961.Kim, M., &Park, J. (2011, February). Demand vaticination and strategies for thesuccessfully deployment of the smart TV in Korea. InAdvanced Communication Technology (ICACT), 2011 13thInternational Conference on(pp. 1475-1478). IEEE.King, R. K.(2004). Enhancing SWOT analysis using triz and the bipolar conflict graph acase study on the Microsoft Corporation.Proceedings of TRIZCON2004, 6th Annual Altshuller Institute.Yksel, I.(2012). Developing a multi-criteria decision making model for PESTEL analysis.International Journal of Business and Management,7(24),52-66.