Professional Documents
Culture Documents
2015
Samsung Electronics:
Written by:
Submitted to:
Date of submission:
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Samsung Smart Phones. 2015
Contents
Introduction: ................................................................................................................................................. 3
Company Background: .................................................................................................................................. 3
Country Background: .................................................................................................................................... 4
PESTEL Analysis: ............................................................................................................................................ 4
1. Political Issues ................................................................................................................................... 6
2. Environmental ................................................................................................................................... 6
3. Social Factor ...................................................................................................................................... 7
4. Technological Factor ......................................................................................................................... 8
5. Economic Factor................................................................................................................................ 8
6. Legal .................................................................................................................................................. 9
Porter Five Forces Analysis: .......................................................................................................................... 9
1. Competitive Rivalry ......................................................................................................................... 10
2. Bargaining Power of Suppliers and Vendors ................................................................................... 11
3. Bargaining Power of Buyers and Customers ................................................................................... 11
4. Threat of new entrants ................................................................................................................... 12
5. Threat of Substitutes....................................................................................................................... 12
Strategic recommendations:....................................................................................................................... 13
Conclusion: .................................................................................................................................................. 14
Bibliography ................................................................................................................................................ 14
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Samsung Smart Phones. 2015
Introduction:
Samsung Electronics is a worlds largest Smartphone making company. The company was the
second company after Apple Corporation that started making Smart Phones. At present the
company has taken over Nokia devices and holds worlds largest market share in selling Smart
Korea. The country is among the worlds fastest growing economy achieving 10% growth on
yearly basis. The purpose of the report is to make PESTEL analysis and apply Porters 5 forces
models to analyze the external environmental factors that affect the company. The strategic
recommendations will also be discussed so that the company can achieve higher growth targets,
Company Background:
year 1938 by Lee ByungChul as a trading company. The company has its headquarters in Seoul,
South Korea. Samsung Electronics is one the worlds largest information Technology Company.
The company took over the world market as a leader in 2012, by taking over Nokia Devices
which was market leader since 1998. In year 2013 the company started its construction of
worlds largest mobile phone factory in Thai Nguyen province of Vietnam. At present the
Samsung Electronics Company holds 31% of the market share and has control over the largest
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Samsung Smart Phones. 2015
Country Background:
South Korea is a country in Korean Peninsula in the East of Asia. The country has China on its
west and Japan on its East. The capital of South Korea is Seoul which is the worlds second
largest most populated capital city with nearly 25 million residents. South Korea at present is the
worlds 11thlargets economy and ranks 8th in the international trade. The country has border
issues with its Northern half named North Korea. This way a tension between the countries rises
at regular intervals as the country supports liberal ideas and North Korea supports communist
ideas.
PESTEL Analysis:
PESTEL initials for Political, Environmental, Social, Technological, Environmental and Legal
environment analysis which are external to the company. This way PESTLE analysis helps the
companies to look after the various issues and problems that may rise in the external
environment. In the present day there exists high competition in the market. Also the political
and legal environment has been changing at regular pace Therefore to sustain these conditions
the companies needs to analyze its conditions through PESTLE analysis so that the opportunities
can be availed and the threats to the business can be dealt with accordingly. The following shows
the various factors that forms part of the PESTLE analysis(Malhotra, 2002).
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Samsung Smart Phones. 2015
Political
Legal Environmental
Economic Social
Technological
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Samsung Smart Phones. 2015
1. Political Issues
There are a number of political issues that has become a point of concern in United States of
America due to the increasing usage of Smart Phones. Actually in year 2012 the number of
Smart Phones users reached 92 million and these became the important mode of federal
campaigns in the country. Therefore the election campaign related regulations and anti-political
information transfers through videos and text messages has resulted in generating concerns for
developing security measures and prevention during the election period(Rao & Klein, 2004).
2. Environmental
The United States market has been controlled by Apple Corporation. The companys
Smart Phones are high in demand since its introduction in the market since 2007.
Thus after the careful study of the following data about the Smart Phone market
penetration by manufacturer and operation system for quarter four in year 2011 for
different countries can help in evaluating the real status of Samsung Smart Phone in
the market.
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From the above information it is clear that the United States market is controlled by Apple Smart
Phone which has become the priority of American people. According to a survey by ComScore
in year 2011, Apple Smart Phones had 29.6% of the market share followed by Nokia Devices
3. Social Factor
Samsung Smart Phones has been widely accepted as the best methods of remaining in connect
with the family and friends in the United States. The use of Smart phone in the recent years has
increased manifolds which have resulted in changing the figures of market share that prevailed in
year 2011. Until the end of year 2013, the Samsung Smart Phone because of its cost effectiveness
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Samsung Smart Phones. 2015
and similar features capability like Apple Smart Phone made it a hot stock in the United States.
This way the company Smart Phone became the worlds favourite in year 2013. This way the
Samsung Smart Phones are used as convenient and time saving devices to remain socially
4. Technological Factor
The latest applications of Apple Smart Phones are very much similar to Samsung Smart Phones.
For example the Apples Iphone 6 introduced recently has a feature of lighter and thinner than its
earlier versions. But the similar kind of feature and technology are present in Samsung Galaxy
S5 which has an additional feature of 8-core exynos, 5 screen and two day battery backup. This
way the features of the top most brand mobile phone are very similar to Samsung Smart Phone
5. Economic Factor
Due to increasing unemployment and economic slowdown since 2008 the demand for goods and
services is facing a serious setback. However the demand for latest and high technology mobile
phones has never became a hurdle in purchase by Mobile Phone lovers. Thus the economic
factor does not affect the sale of Samsung Mobile Phones. Instead its cost effectiveness than
Apple iPhone has resulted in increasing its demand and gain more market share than
earlier(Jayachandran, 2004).
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Samsung Smart Phones. 2015
6. Legal
There are various legal issues that are concerned with the use of Smart phone. The unlimited
applications allow the users to make use of even the most complicated and restricted application
through their mobile phones. For instance the mobile phone applications offering medical
devices like control such as measuring heart beat and other benefits are hindered from being
downloaded. Thus Samsung Electronics along with other mobile manufacturing companies has
to follow a legal format through which such applications that are not legal are avoided from ing
downloaded. The company is also required to follow the product safety through genuine battery
and follow other liability laws to track down the mobile phone during steal so that the purchase
experience can be made more comfortable and legal for the owners(Malhotra, 2002).
Porters five force model helps in analysing the external conditions that affect the business. This
way the various factors that influence in positive and negative terms to the business is analysed
through Porters five force analysis. The five forces of Porters analysis include the followings.
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Samsung Smart Phones. 2015
Threat of
new
entrants.
Bargaining
Intensity of
power of
rivalry.
Smart Phone suppliers.
busiess of
Samsung
Electronics.
Bargaining
Threat of
power of
substitutes.
buyers.
The benefit of Porters Five Force analysis is that it helps in analysing the external environment
conditions that could prove beneficial if the opportunities are avail and fatal if the problems and
issues are not dealt on time. The competitive rivalry, threats of substitutes, bargaining power of
suppliers, the threat of new entrants and intensity of rivalry are all analysed through the Porters
five force analysis(Porter, 2008). The Analysis for Smart Phones market as per Porters five force
1. Competitive Rivalry
The competitive rivalry has been on the rise ever since the introduction of the Smart Phones in
North America. Due to this reason, every month there has been an introduction of new mobile
phone technology in year 2014. This includes Apple iPhone 6, Galaxy S5, LG G Flex phone etc.
This has resulted in the rise in the need to develop brand image, fixed cost and barrier to exit etc.
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Samsung Smart Phones. 2015
Thus the varied features of competitive rivalry include the followings.
a. Rising number of companies manufacturing and selling Smart Phones in the United
States.
b. The tough competition has divided the market share almost equally among the market
c. The similar features and benefits has made it easier for the customers to select the best
suitable and most cost effective mobile phone irrespective of the brand name.
Smart Phones manufacturing companies mostly select the suppliers from Asian countries so that
the cost of production remains low without affecting the quality output. Due to this reason
Samsung has initiated its process of developing the worlds biggest manufacturing factory in
Thailand so that the cost of making Smart Phones can be controlled to meet the competitive
market requirements. Samsung has made its ties with various suppliers such as Hamanatsu
Corporation, Mouser Electronics and various others companies. The strategic partnership and
support for further investment has helped the company in gaining control over the bargaining
The bargaining power of buyers and customers in the United States has been increasing every
since. This is due to the presence of number of Smart phone making companys presence in the
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Samsung Smart Phones. 2015
market. Apple, LG, HTC are among the few market leaders that give tough competition to the
products of Samsung Smart Phones. Also the customer loyalty towards Apple iPhone has
seriously affected the bargaining power of buyers and customers in the United States. However
the cost effectiveness and similar product feature has resulted in tempting the customers to the
company. The entrance of new Smart Phones with latest technology also attracts many customers
In the recent year there has been an excessive number of companies entering the American
markets. These companies offer the similar kind of Smart Phones at low prices. However the
quality assurance and after sales services is missing. This way Samsung Smart Phones has less to
consider about the threat of new entrants who are attracting new customers but the output and
performance of these cheap products has brought these customers back to Samsung Smart
Phones who prefer quality over cost. This way a right blend of quality and cost has resulted in
bringing no effect from the threats of new entrants(Caniels & Gelderman, 2007).
5. Threat of Substitutes
There are a number of Smart Phone options available in the United States. Lot many companies
has been selling their brand Smart phones. This has resulted in increasing the threat of substitutes
in the short run. Although these companies offers warranties similar to other branded Smart
Phones but the customers still find it difficult for their products to achieve the output, gains and
consistency as the leading brand products. Thus the threat of substitutes is for the short run, as it
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will affect the sales of branded Smart phones like Samsung forsome time. Therefore even the
switch over to other cheap brand will end in bringing back customers to the leading brands which
not only guarantee quality performance but also deliver it accordingly(Acharyulu & Shekhar,
2012).
Strategic recommendations:
A number of strategic recommendations can be given to the Samsung Electronics company for
dealing with the external environment that may prove threat if not dealt wisely.
1. Samsung Electronics must invest more in research and development so that there exist a
new technological upgrade in their Smart Phone at every regular interval that could tempt
2. New schemes and promotions of latest Smart Phones with varied features needs to be
introduced regularly to keep the customers interested in getting more knowledge about
3. EMI or Easy monthly installment methods should be promoted so that the customers who
cannot spent huge amount at one time can move to purchase through easy monthly
installment method. This way they will not have to compromise quality and purchase
4. All the legal aspects should be administered and followed so that any legal issue may not
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Samsung Smart Phones. 2015
5. Offering new applications including software updates, games and other applications
should be made available at the Android store so that the customer stays interested in
them.
6. The customer complaints should be dealt fairly, wisely and actively to achieve customer
satisfaction.
(Aseisdefimedia, 2011)
Conclusion:
In conclusion, Samsung Electronics has a lot of things to consider in its external environment.
The PESTLE analysis and Porters five force model provides an in-depth knowledge of the
problems, issues and opportunities available to the company in the external environment. The
strategic recommendations can help the company in availing the opportunities and get the most
desired results in terms of increasing sales and achieving consistent growth and sustenance in the
long run. Efforts should be made to follow all legal requirements so that the issues and problems
for the business should be avoided. Finally the company needs to develop new production ideas
and bring new innovations in action as the technology in the present day Smart phones get
obsolete very soon. Therefore bringing something new in the market is the best way to remain in
news for the company and avail opportunities for getting successful business for Smart
Phones(Winsource.com, 2012).
Bibliography
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Samsung Smart Phones. 2015
Aseisdefimedia. (2011). "The difference between market intelligence, business intelligence and strategic
intelligence". Retrieved 10 12, 2014, from Youtube: http://youtu.be/tvT1f6H7ADM
Caniels, M., & Gelderman, C. (2007). Power and interdependence in buyer supplier relationships: A
purchasing portfolio approach. Industrial marketing management., 36(2), 219-229.
Chopra, S., & Meindl, P. (2001). Supply Chain Management: Strategy, Planning and Operation. (1 ed.).
New Jersey: Princeton Hall.
Economou, D., Rivoire, S., Kozyrakis, C., & Ranganathan, P. (2006). Full-system power analysis and
modeling for server environments. In Proceedings of Workshop on Modeling, Benchmarking and
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Gelderman, C., & Van Weele, A. (2003). Handling measurement issues and strategic directions in Kraljic's
purchasing portfolio model. Journal of Purchasing and supply management., 9(5), 207-216.
Malhotra, N. K. (2002). Basic Marketing Research: A Decision-Making Approach. Upper Saddle River,
New Jersey.: Prentice Hall,.
Mintzberg, H. (1994). The rise and fall of strategic planning: Reconceiving roles for planning, plans,
planners. Toronto: Free Press.
Nagarajan, G., & Sheriff, K. J. (2013). Emerging Challenges and Prospects of FMCG Product Development
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Pearce, F. (2009). Consumption Dwarfs Population as Main Environment Threat. Yale: Yale University.
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Rao, P., & Klein, J. (2004). Growing importance of marketing strategies for the software industry.
Industrial marketing managment, 23(1), 29-37.
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Winsource.com. (2012). Apple iPhone 5 vs Nokia Lumia 920 vs Samsung ATIV S. Retrieved 12 25, 2014,
from http://winsource.com/2012/09/12/chart-apple-iphone-5-vs-nokia-lumia-920-vs-samsung-
ativ-s/
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