What it pays to be a business SWOT? If you think your business could be doing better, why not try a SWOT analysis? Swot stands forStrengths, Weakness, Opportunities and Threats◊ By putting your firm under the magnifying glass in such a fashion you may find the way to grow your company or increase your earnings.
Samsung BackgroundO Founded by Lee Byung-chullO 1938 Samsung a Korean firm born as a company that dealt with green grocery(Fruit & Vegetable) and dried fishO Korean words meaning “Three “and “star”O 1950‟s Korean war lost all assets O Aimed to rebuild Korean economy manufacturing industry(sugar,fabrics) O Think globally and use of foreign laborO 1969 SEC (Samsung Electronic Company) was foundedInO 1970‟s entered into semiconductor businessO 1980‟s the Samsung Television Division was builtO 1987 Lee Kun-He take overO 1997 nearly all Korean business shrunk in size due to Asian financial crisis(Force to sell company asset on Aircraft/Motor).Making profit from TV‟s and Mobile phone
Samsung Strength as Turnaround strategyO Becoming a world known brand (over 200 countries) R&D (investing on scientific talents) Innovation (new digital technology) Customization (new products every year) New allocation of marketing resources (M-Net)
Samsung Strength Samsung enjoys the widest range of product portfolio which includes : Mobile phones Tablet TV/Audio/Video,Camera,camcorder, Home appliance Pc‟s,Laptop, peripherals, printer, memory cards and other accessories Well diversified and differentiated product line to meet changing customer needs .Samsung electronics has 4business areas to cover customer electronics needs.
Brand value through multiple sponsorships Practice the good leadership theory High market share that continues to grow (Mobile Phones and memory chip)and LCD Design with an attractive styling that interests the customer, as the result of the development of Samsung‟s new products that involve team of product designers
What is Samsung’s competitive advantage? Technologically driven niche products Strong Infrastructure High investment for R&D Wide range of products High brand value Higher economic scale and economic scope Horizontal and vertical integration (ie. Samsung‟s own stores, SRAM for their own mobile phones) Michael Porter‟s 5-Force, Samsung is a large buyer and can use that towards their advantage Higher yield than competitors R&D facility located at one single site Untraditional Human Resource practices based on meritocracy not on seniority Attractive pay, bonuses and incentives Allowed employees to fail. Financially strong, large resources at disposal
Samsung’s Opportunities product variation by introducing unique products and existing products with variety introduce user friendly mobile phones at affordable price. could launch sub brands to the company
Samsung’s Opportunities O open more stores more customers O Launch creative products "New Technology," "Innovative Products," and "Creative Solutions O offer additional services to retain existing customers and attract new ones.
Samsung’s Opportunities O planning to make the air-condition product category more strong unique and best technology O is called „Triple protection proposition‟ O help attract more customers & more profit
-Aver age pr i ces of pr oduct s seem t o bea l ow qual i t y pr oduct s-Not pr oact i ve i n i nt r oduci ng a newpr oduct s-N user f r i endl y ot
• D f f er ences bet w i een cul t ur al and l anguage w ch l ead t he hi gr oup i nt o conf l i ct s• I nsuf f i ci ent sof t w e or t al ent ar engi neer t o cr eat e t hei r own sof t w e ar• Heavi l y i nvest i ng i nt o devel opment of new m ket s er ar and not f ocusi ng on any one of cor e com enci es. pet
ThreatsThreats arise when conditions in externalenvironment jeopardize the reliability andprofitability of the organization‟s business.Threats are uncontrollable.Examples of threats :-macroeconomic matters-technological change-legislation-price wars-changes in the competitive marketplace.
For Samsung, the main threats are :1. low cost competitors in China2. legal war between Samsung and its competitors such as Apple.
Low-cost competitors Samsung is facing threats from many other low cost companies in China. While Samsung was busy competing with others, Huawei a company which focus on low cost products; is now a leader in fixed-line networks, mobile-telecommunications networks, and budget smart phones. Vizio, LCD TV supplier that overtook the premium brands in five years to become the North American market leader in large-format TVs.
Emulation mobile phone-In 2010 the numbers ofemulation mobile phonesimported from China to India hasreached 38 million-these low-cost competitors risemore quickly than premiumplayers anticipate-these low cost competitors mayface the risk of being sued forviolation of valuable intellectualproperty rights
In 2012, Apple temporarily managed to stopthe sale of the Samsung Galaxy Tab 10.1 inall of Europe, and now Apple is going afterthe whole Samsung Galaxy production line.Since 2011, Apple has filed a lawsuit againstSamsungApple claims that Samsung infringes patentsin terms of how it‟s Galaxy products operate
Can Samsung survive? To survive in the market: 1. time 2. resources Apple and Samsung are involved in ongoing copyright disputes in 10 countries, as competition in the smart phone and tablet sectors grows ever more intense. If the injunction of Samsung smart phone could not be lifted, it may create a certain impact on Samsungs earnings.
ConclusionSWOT analysis is best used by Samsung‟smanagers as a way of clarify the thoughtprocesses that goes into a business decision.The entire SWOT analysis can, and should, makethe managers think more deeply andsystematically into the business evaluationprocess.A careful and thoughtful analysis should bring intothe balance of Samsungs advantages andvulnerabilities
RecommendationO should review and check their marketing strategyO should receive payment for the products before it has to pay for the materials.O should use just-in-time (JIT) inventory management.
RecommendationO Chairman of Samsung Company should manage to incorporate the company‟s objective to their business strategyO should maximise stockholder value by maintaining a balance of three key financial metrics liquidity, profitability, and growth