Introduction of Samsung

Samsung is a South Korean company originally founded as a grocery trading store

by Lee Byung-Chull in March 1938. The company forayed in the electronics industry

in 1969 and its first electronic product was a black-and-white television. Soon, the

company also started exporting its products and became a major electronic

manufacturer in its home country. In 1970, the company acquired a 50 per cent

stake in Korea Semiconductor.

Witnessing a rapid expansion in the early 1980s, the company established separate

branches for its various electronics businesses. It is at this time that the company

also made investments in two research & development institutes which helped it

become the market leader in information technology services. By 1990s, the

company had become one of the top five electronics makers in the world and was

mainly known for its semiconductors, LCD screens and other technology products.

Samsung forayed into mobile phones in 2000 with the launch of a feature phone

with built-in camera that could take up to 20 photos at a time. By late 2000, the

company had launched several phones, but its global success story started with the

launch of the Galaxy S series of smartphones that used the company’s OLED screen

technology and hummingbird processor. Besides smartphones, the company is also a

major vendor of tablet computers, particularly Android-powered Samsung Galaxy

Tab-series, and is regarded as the originator of the phablet category through its

Samsung Galaxy Note-series devices.

 Now, Samsung is one of the major manufacturers of electronic components

globally. It is also one of the major suppliers of electronic products like batteries,
semiconductors, chips, flash memory and hard drive to companies such as Apple,

Sony, Nokia, etc. Samsung has also been the world's largest manufacturer of

television since 2006, and of smartphones since 2011. In 2017, the company

overtook Intel to also become the world's largest manufacturer of semiconductor

chips.

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 287,439 employees as of December of 2019.

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

smartphone market for years. According to Gartner, in Q1 of 2020, Samsung

has maintained the No. 1 spot globally with a 18.5% market share, where

as Apple is at 13.7% market share.

2. 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. 

3. 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.

4. 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.

5. 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

1. 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.

2. 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.

confidence and trust in the company. Samsung has delivered several faulty

products to the market from the exploding Samsung Galaxy A20e to a faulty

foldable phone.

4. Dependence on Low-end Smartphones – A large portion of Samsung

revenues come from low-end smartphone sales. Recent events have impacted

this segment more than the high-end smartphone segment, which played a

role in Samsung’s decline from 71 million smartphone sales and 19.1% of

market share in Q1 2019 to 55 million smartphones sold in Q1 2020

with 18.5% of market share (as per Gartner Report).

5. Hereditary Leadership – Since its founding, Samsung has always been

under the leadership of the family for three generations. Even though keeping

the leadership within the family has offered Samsung immense stability, the

company can stagnate due to a lack of fresh ideas. After being dogged by

several scandals, Samsung heir Jay Lee has vowed to end dynastic

succession.  

6. Bribery Scandal – In 2015, Samsung’s reputation was tainted by the

revelation that the president of the company bribed the government of South

Korea to facilitate a merger. He was found guilty and jailed for about one

year until Feb. 2018, which eroded trust bestowed by consumers in South

Korea and the world over.

Samsung’s Opportunities
1. 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.

2. 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.

3. 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.

4. Introduce Innovative Products – The smartphone sector is highly

dynamic, with the latest trends going out of style in an instant. Samsung can

attain immense growth by setting the trend with great and innovative

products like the foldable phone.

know-how to exploit this opportunity. The company is already in active

commercial discussions with operators in the EU to supply 5G and 6G network

equipment. Samsung is one of the top companies in the UK’s list of potential

5G providers.

Samsung’s Threats

1. Patent Infringement 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.

2. 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.

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.

4. Economic Uncertainty – Recent events have catalyzed uncertainty in the

global market and led to a decline in new smartphone sales by 20.2% in

Q1 of 2020. Financial struggles have forced many consumers to seek recycled

or refurbished phones, which has increased by 24%. Samsung has already

experienced a decline in sales, and it can drop further if uncertainty persists.

5. Rise of Counterfeiting – According to numerous research studies, Samsung

is by far the most counterfeited phone brand. Statistics from mobile

benchmarking site AnTuTu highlight that over 36% of all

counterfeit smartphones are Samsung copies. Also, Samsung Galaxy S7 Edge

holds the record of the most counterfeited smartphone model.

6. Impending Court Cases – Any disruption in leadership can affect

performance. A South Korean court is debating whether to send Samsung’s

leader and heir Jay Lee back to jail. New allegations of stock-price

manipulation and audit-rule violations have dogged the executive and

threaten to throw the company into another tumultuous period without

leadership. 
 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 American markets and 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.