SWOT analysis refers to a method through which a company can determine their internal strengths and weaknesses. The company also gets the opportunity to discover their opportunities which they can exploit to ensure that the company prospers. They also discover the threats the company faces that can make it impossible for the company to achieve their set goals. The purpose of this write-up is to conduct a SWOT analysis for Samsung. The strengths, weaknesses, opportunities and threats that face the company will be analyzed and outlines. A conclusion on the way forward for the company will also be provided at the end of this study.
Samsung Company was founded in the year 1938. Its headquarters are in South Korea. It is among the leading producers of electronics for consumers. To be specific, it is positioned as the second largest after Apple Inc. It produces telecommunication equipment such as smartphones, consumer electronics such as TVs, home appliances such as washers and fridges, and semiconductors. The company operates three major divisions in its business. The first division deals with consumer electronics which include digital appliances, visual display, health and medical equipment, and printing equipment. The second division deals with mobile and IT communications. The main products produced in this division are smartphones and computers, which range from personal computers, laptops, and tablets. The final division deals with device solutions.
Samsung Company has many strengths. The first strength is its production of products that are leading in the world. Samsung is classified as the most successful manufacturer of electronics in the world. The company is the largest producer when it comes to television sets, mobile phones, liquid crystal display panels, as well as smartphones. Its products do not end there. It also has some other leading products which are very popular among customers. They include microwaves, refrigerators, washing machines, computers, cameras, memory cards, personal computers and their peripherals, printers, and other home appliances. All these products are classified as the best and thus the company can base their sales on this fact (Datamonitor 5).
Moreover, the company has a very strong brand. In the electronics field, Samsung is a well-known brand name. The company enjoys a great reputation as their products are of high quality, thus famous among the customers. Most people also know the brand and thus, most of them always ask for a Samsung gadget for their home once they visit the shipping stores. Their strong brand helps to ensure that they will continue to have more sales even in the future. It also prevents more entrants into their area of operation which also guarantees them of future sales. The company is also well known all over the world. They also operate in most of the countries in the world. Their global presence is yet another strength. It helps them to market their products all over the world. It creates a large market which they can exploit to increase their sales, revenue, and eventually their profit. Is also provides a basis for them to expand their company.
Strategic alliances is another internal strength of Samsung. The company has formed some alliances with the best companies in the world. The first is IBM, which they have partnered with so that they can assist them with the development of technology. Samsung concentrates their manufacturing on hardware. They have thus partners with IBM to develop technology which they use to manufacture equipment’s which are modern and very competitive in the international market. They have also formed alliances with Sony, IMEC, Time Warner Cable, and Maytag. With Sony, they share knowledge relating to the development of technology while IMEC helps them develop technologies that relate to future portable products in communication. Time Warner Cable, on the other hand, helps them with infrastructure relating to cables, and Maytag helps with washing machines production (Datamonitor 6).
Every company has weaknesses and Samsung is no different. The firs weakness that the company has is their high concentration on hardware production. The company focuses more on hardware as compared to software. However, most of their products apply software which they have to purchase from other companies. Other companies, thus manufacture the most important thing in their products which is the software, and thus the benefit of the company is just the hardware production. Were it not for their famous brand name, the company would be a danger of collapsing. The company has also depended on the sale of consumer electronics in Europe and the United Sates. These markets provide most of their revenue. However, there is a little potential that the market in this area will grow (Jurevicius 4).
Moreover, the company has been unable to increase their marketing capabilities. Apple Inc. their competitor, has the best marketing capability which explains their continued growth in the market share. In the United States, Samsung smartphone market share declined by 2.3% in between the year 2014 and 2015. On the other hand, apple’s market share increased by 34.9%. Another weakness is the company’s low-profit margin. The company reduces their prices so as to cope with competition and thus to obtain lower profits as compared to their main competitor Apple. Apple ensures that as they introduce their product, there is a high-profit margin. As a result, even when they lower their product prices, they still have a lot of profit, and thus, higher revenue as compared to Samsung.
The company has many opportunities which, while exploited can help it increase revenue and profit. The first opportunity is the growing market for smartphones, especially in India. Currently, the rules of the world are changing. In the past, only parents and business persons used to have smartphones. However, today, almost everybody needs to have a smartphone. Parents are also purchasing smartphones for their children despite their age. It is an opportunity for the company to obtain a larger market share to capture the growing market. There is also an increased demand for tablets which the company also produces. They can increase their tablet production to capture the growing market (Kumar 15).
Moreover, the society demands a change of products after a while. There is a community that is always wanting to newest technology or product in the market. It ensures that Samsung will have future sales of their products, especially when they produce better products. They also have an opportunity for research and design. They can focus on increasing research and improving design for their products which may enhance their sales. For instance, they can research on how to produce a slimmer smartphone that will enable them to compete with Apple’s iPhone.
Among the threats that the company faces is the growing competition, especially from Chinese-based companies in the smartphones production. Huawei is one of the company based in China that produces high-quality smartphones that are quickly gaining favor among customers. Their competitors have also begun production of smartphones, which are cheaper and have a similar function as Samsung. The increase of competitors is also a threat to the company as they share the same market thus reducing the company’s market share. Moreover, the company has several product lines which they depend on. Once any of their product lines fails, all the other lines are at risk as the brand name will be diluted leading to lower demand for other products. It is unlike their competitors such as Nokia which depend only on one line (Datamonitor 6).
In conclusion, Samsung has various strengths, opportunities, weaknesses, and threats. Among their strengths are their strong brand, leading products, global presence, and strategic alliances. Their weaknesses include weaker marketing capabilities compared to competitors such as Apple, focus on hardware, and low-profit margin. Their opportunities include growing smartphone market, increasing demand for tablets, society demand for a change of products, and research and design opportunities. Their threats include increased competition, competitors offering lower prices, reducing market share, and wide product variety. Despite the weaknesses and threats, the company can focus on the strengths and opportunities to increase their revenue and sales. They can also improve on their weaknesses.
Works Cited
Datamonitor. Samsung Electronics Co., Ltd : Company Profile. New York: Datamonitor USA, 2010.
Jurevicius, Ovidijus. "Samsung SWOT Analysis." 2016.
Kumar, Arun. "SWOT Analysis of Samsung." Marketing 91 4 December 2012.
