Pestle Analysis – South Korea and Samsung PPT


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Pestle Analysis – South Korea and Samsung PPT

  1. 1. PESTLE ANALYSIS – SOUTH KOREA By Manisha Kunwar , Pawan Pandey and Juanita Kasbe
  2. 2. SOUTH KOREA • South Korea officially the Republic of Korea is a sovereign country located in the southern part of the Korean Peninsula . • Total area of 99,392 km2 (38,375 sq mi)[8] and has a population of 50 million. • The capital and largest city is Seoul, with a population of 9.8 million. • South Korea is a member of the United Nations, WTO. • Current President of South Korea is Park Geun Hye from Feb 2013. •
  3. 3. SOUTH KOREA PESTLE ANALYSIS Current Strengths Current Challenges Future Prospect Future Risks
  4. 4. POLITICAL ANALYSIS Current strengths ▪ Centralization of power ▪ Political will for economic reforms ▪ Strong foreign relationships Current challenges ▪ Military influence in South Korean politics ▪ Political violence Future prospects ▪ Confidence building measures with North Korea ▪ Strengthening relations with the EU Future risks ▪ Uneasy relationship with North Korea
  5. 5. ECONOMICAL ANALYSIS Current strengths ▪ Powerful export sector ▪ Successful economic reforms Current challenges ▪ Low level of imports ▪ Declining level of FDIs Future prospects ▪ Competitive tax policy ▪ Liberalized service sector ▪ Implementation of free trade agreements (FTA) Future risks ▪ Nuclear crisis ▪ Growing local hatred for foreign companies
  6. 6. SOCIAL ANALYSISCurrent strengths ▪ High wages ▪ Highly educated workforce ▪ Rapid urbanization Current challenges ▪ Low fertility rates ▪ Ageing society ▪ Low social welfare spending Future prospects ▪ Low unemployment rate ▪ Rising awareness of human rights Future risks ▪ Rising power of labor unions
  7. 7. TECHNOLOGICAL ANALYSISCurrent strengths ▪ Robust telecom sector ▪ Presence of large global and domestic players Current challenges ▪ Scarce natural resources ▪ Rising R&D costs Future prospects ▪ Government policies promoting R&D ▪ Growing R&D centers ▪ Commercialization of new ideas Future risks ▪ Foreign companies pulling out of the country ▪ Over-regulated governance
  8. 8. LEGAL ANALYSIS Current strengths ▪ Regulatory incentives ▪ Favorable tax policies ▪ An exclusive constitutional court Current challenges ▪ Absence of juries ▪ Inefficient customs operations ▪ Weak IPR enforcement Future prospects ▪ Judicial system similar to US and Germany ▪ Advantage of tax abatements and tax treaties for FDIs Future risks ▪ Judges quitting for private practice ▪ Low rate of students clearing the law examination
  9. 9. ENVIRONMENTAL ANALYSIS Current strengths ▪ Promotion of national parks ▪ Strong governmental intervention to protect environment Current challenges ▪ Limited natural resources ▪ Soil erosion Future prospects ▪ Environmental technology development ▪ Eco-businesses and green GDP ▪ Promotion of environmental education Future risks ▪ Rising emissions levels ▪ Dam in North Korea
  10. 10. Samsung Town, Seoul, Headqua rters Samsung Engineering , New Delhi, India
  11. 11. SAMSUNG – INTRODUCTION  Samsung means "tristar" or "three stars". The word "three" represents something "big, numerous and powerful"; the "stars" mean eternity  Samsung Group is a South Korean multinational conglomerate company headquartered in Samsung Town, Seoul.  Samsung comprises around 80 companies. It is highly diversified, with activities in areas including construction, electronics, financial services, shipbuilding and medical services.  As of April 2011 the Samsung Group comprised 60
  12. 12. SAMSUNG - FORMATION Samsung was formed in 1938 by Lee Byung-chull as a trading company based in Su-dong. The company grew and soon expanded to Seoul in 1947 but left once the Korean War broke out. Samsung entered the electronics industry in the 1960's with the formation of several electronics focused divisions In 1980, Samsung entered the telecommunications hardware industry with the purchase of Hanguk Jenja Tongsin. The mobile phone business was grouped together with Samsung Electronics which began to invest heavily in research and development throughout the 1980's. In 1987 with the death of Lee Byung-chull, the Samsung group was separated in to four business 1938 – 1958 1969 - 1979
  13. 13. CONTINUED….  Lee Kun-hee joined the Samsung group in 1968 and took over the chairmanship on December 1, 1987  In 1993, Samsung reorganized to focus on three industries, electronics, engineering, and chemicals.  Samsung invested in LCD technology, becoming the largest manufacturer of LCD panels in the world by 2005.  As part of it bio-pharma investment, Samsung formed a joint venture with Biogen, investing $255 million to provide technical development and biopharmaceutical manufacturing capacity in South Korea.  Samsung has also continued to expand in the 1980 - 1992 1992 Since 1993
  14. 14. SAMSUNG GROUP - SUBSIDIARIES AND AFFILIATES 1. Ace Digitech - Manufacture and sale of polarizing films 2. Cheil Industries – Textile 3. Cheil Worldwide – Marketing 4. Credu – Educational Institution 5. Imarket Korea – Industry Material Distributors 6. Samsung Card – Credit Cards 7. Samsung C&T Corporation – Construction and Trading 8. Samsung Electro – Mechanics – PCB‟s, MLCC‟s, SMPS‟s 9. Samsung Electronics LCD, LED Panels, Mobile
  15. 15. CONTINUED 12. Samsung Fire and Marine Insurance 13. Samsung Heavy Industries 14. Samsung Life Insurance 15. Samsung Machine Tools 16. Samsung SDI -Semiconductor and Other Electronic Component Manufacturing 17. Samsung Securities 18. Samsung Techwin - An aerospace, surveillance and defence company 19. Shilla Hotels and Resorts 20. S1 Corporation
  16. 16. KEY CUSTOMERS  Royal Dutch Shell Samsung Heavy Industries will be the sole provider of liquefied natural gas (LNG) storage facilities worth up to US$50 billion to Royal Dutch Shell for the next 15 years.  United Arab Emirates Government A consortium of South Korean firms – including Samsung, Korea Electric Power Corp and Hyundai – has won a deal worth 40 billion dollars to build nuclear power plants in the United Arab Emirates.  Ontario Government
  17. 17. KEY COMPETITORS  LG Corp.  SK Group  Hyundai Corporation  Apple Group  Panasonic Corporation  Sony Corporation  SK Hynix Inc.  Seagate Technology  Philips  Motorola  Canon  Sony
  18. 18. USP – SAMSUNG GROUP  Innovation  R&D  Customer preference  Quality and Price  Product Designs  Marketing
  19. 19. Samsung Group – (Geography wise Net Profit) (Q1 – 2013) •Samsung Electronics America (SEA)- 2,715,594 •Samsung Semiconductor (SSI) 3,740,587 •Samsung Electronics Vietnam (SEV) 5,769,437 •Samsung Electronics Huizhou (SEHZ) 4,500,864 •Samsung Asia Private(SAPL) 384,199 •Samsung India Electronics (SIEL) 1,574,164
  20. 20. SAMSUNG ELECTRONICS – SALES TURNOVER The second quarter of 2013.  Consolidated sales: Approximately 57 trillion Korean won  (Range: 56 – 58 trillion Korean won)  Consolidated operating profit: Approximately 9.5 trillion Korean won  (Range: 9.3 – 9.7 trillion Korean won)  2013 1Q and 2012 2Q consolidated figures (in trillion won) 2013.1Q 2012.2Q Sales 52.87 47.60 Operating profit 8.78 6.46
  21. 21. CSR - SAMSUNG GROUP  In 2009, Samsung launched the company‟s Corporate Social Responsibility initiative – „Samsung Hope Project‟ with projects in the areas of education, culture, sports, social welfare and community development emphasising on innovations for development of the community including education, technology, engineering and IT technical training.  Samsung Hope for Children, an initiative designed to help under-privileged children through e-learning centres.  Innovations for development of the community, a partnership between Samsung and various educational and media agencies to support grassroots innovation. Samsung Innovation Award with IIT, Delhi and Samsung
  22. 22. CSR- SAMSUNG GROUP  Hope for Culture represents Samsung‟s tribute to the rich Indian cultural heritage through Tagore Literature Awards that recognises the best literary contributions in 24 Indian regional languages. Samsung is partnering with the Sahitya Akademi for the Tagore Literature Awards. Additionally, Samsung partners with INKO to present the Samsung Women‟s International Film Festival that gives voice and expression to the perspective of women and celebrates her spirit through the medium of Cinema.  Sports Sponsorship is an ongoing initiative wherein Samsung supports top ranking athletes across individual sports disciplines with their training expenses while they prepare for the Asian or the Olympic Games. Samsung is also the Sponsor of the Indian team to the forthcoming London Olympics.  Samsung donates around US$100 million per annum to the Samsung Medical Center a non-profit healthcare provider founded by the group in 1994. Samsung Medical Center incorporates Samsung Seoul Hospital, Kangbook Samsung Hospital, Samsung Changwon Hospital, Samsung Cancer Center and Samsung Life Sciences
  23. 23. Corporate Governance - Samsung Securities Established Its‟ “Samsung Securities Corporate Governance Charter”, Including A Comprehensive Preamble, Five Major Subjects, And 20 Specific Items Item Note Employee ethics establishment - Board of directors(BOD) 4 inside directors and 5 outside composition (outside director 55.6%) directors (as of 2012.6.5) BOD operation rules establishment Established BOD rules Regular BOD meetings Holds “regular BOD meeting” once a quarter Committee to fairly recommend BOD candidates Established the outside director candidate recommendation committee Liability insurance for directors out of company expenses Signed up for Director’s & Officer’s Liability Insurance Audit committee 1 inside director and 3 outside directors (including financial/accounting expert) Audit committee meeting Holds “regular audit committee meeting” once a quarter Independency of external auditor - Clear confirmation on business reports and others Confirmed by CEO and executive in charge
  24. 24. ETHICAL PRACTICE  Since 2008, Providing cyber education on ethical management for all employees once a year.  After 2010, Tested employees for level of understanding of ethical management and re-tested those found to lack enough understanding  Installed the Internal Transaction Committee under the BOD in February 2012.  Declaration of code of ethics and employees' pledge to practice ethical management  Established code of ethics listing six values as the standards for employees' thoughts and behavior and also continued the efforts to build consensus on ethical management by getting our employees to sign on the ethical management
  25. 25. SAMSUNG … SUCCESS STORY……  Entered the semiconductor business late in 1983, Samsung is now the world's 2nd largest semiconductor distributor behind Intel.  The turning point in the company's history was in February of 1983 when Lee Byung Chul, the CEO of Samsung Group made a push towards a large investment in memory chips and was determined to break into the semiconductor market (Kim, 1998).  Lee Byung Chul recognized that there would be a need in the future for more memory chips and he identified that this was going to be the trend.  Samsung realized that the semiconductor business was only
  26. 26. SAMSUNG – SETBACK  Mobile World Congress (MWC), Samsung touted its new Galaxy Note, but mentioned that the company isn't exactly thriving in the tablet arena.  Samsung has struggled trying to catch up with Apple's ever-popular iPad, which originally released back in April 2010.  Apple originally sued Samsung for patent infringement regarding devices like the Galaxy S 4G, pic 4G, Nexus smart phones and the Galaxy Tab 10.1  Apple managed to successfully ban the Galaxy Tab 10.1 in both Australia and Germany, but Samsung pulled a few punches of its own and lifted the ban in
  27. 27. SAMSUNG – INNOVATION AND R&D  Innovation is crucial to Samsung's business as new technologies are being constantly introduced to the market.  Around 50,000 employees in50 research facilities are engaged in R&D division of Samsung  The Samsung Advanced Institute of Technology (SAIT), Samsung's technology competitiveness in core business areas, identifies growth engines for the future, and oversees the securing and management of technology.  Each year at least 9% of the sales revenue is invested in R&D activities.  Samsung centres in Korea and18 more in nine other countries, including the United States, the United Kingdom, Russia, Israel, India, Japan and China, as well as
  28. 28. FUTURE GLOBAL CHALLENGES  Strong competition from Apple and other mobile companies.  Patent and Legal Issues  Political Violence  Rising R&D cost
  29. 29. Thank You ! Gamsahabnida !