Samsung’s Strengths – Internal Strategic Factors
Rules the Smartphone Market
Samsung’s penetration in the smartphone market is immense. Samsung has successfully competed with its rival in the market. Gartner presented the report that in the first quarter of 2020, Samsung was able to grasp first spot all over the world and captured around 18.5% market share ahead of Apple, which secured 13.7% only.
Honors and Prestige of the Brand
Samsung has served the world in a generous way. The market is attentive to the innovative credibility of the corporation. It secured many awards in this regard. One of the great honors Samsung is delegated is the winning of Consumer Electronics Show (CES) for five consecutive years. In 2018, it won 36 CES awards and a total of about 400 awards in 14 years’ time. This outstanding performance of the brand is the outcome of the successful strategic planning of the company. The company also won 7 positions in International Design Excellence Awards (IDEA).
Strong Presence in Asian Markets
Samsung has been able to penetrate the local markets of Asian nations. India, China, and Pakistan are the countries with excessive Samsung users. The company underwent incentivization to capture these markets. These developing countries and their markets hold excessive opportunities for international brands.
Environmentally Friendly Innovations
The company secured 9th position in the Top 30 Tech and Telecom companies of the EPA’s 2016 Green Power Partner list. This honor has enhanced the company’s prestige and proven its commitment to environmental preservation. Samsung also received the Environmental Protection Agency’s (EPA) annual ENERGY STAR Partner of the Year Excellence Award for five consecutive years. These achievements, when they often make headlines all across the world, enhance the company’s reputation and customer base.
Research and Development
Corporations’ aggressive pursuit of research and development policy is manifested in the outcomes it generates. Due to its innovative nature, the company has produced diverse ranged products which include tablet, camcorder, mobile phone, camera, TV/video/audio, memory cards, PC, and more. These accessories are used by customers worldwide. The company has settled up more than thirty-four research and development centers in different regions of the world.
Samsung’s Weaknesses
Deterioration in Smartphone Sales
The company is suffering from declining sales of smartphones due to the rise of other competitors. The Chinese market, for instance, has given birth to many new rivals, which declined Samsung’s product sales. Moreover, the price sensitivity of the Chinese has made Samsung shift focus to the Indian market. Unfortunately, Samsung didn’t benefit much from their new strategy.
Deeply reliant on the American Markets
Americans are great consumers of electronic products due to many reasons, including aware and populous masses with a strong economy. Both the world-leading smartphone brands Samsung and Apple rely heavily on the American market for sales. They sold around 70.8% of products to the Americans. However, the American economy is susceptible to changes, and it is unpredictable. Samsung has developed a market in Asian countries to mitigate the effects.
Product Fiascos
Samsung’s faulty products have threatened public safety concerns over the years. The exploding device Samsung Galaxy A20e and its foldable phones pose a great threat to the company’s global recognition and image. A company must devise a system to avoid such incidents in the future.
Dynastic Leadership
In a recent development, the company’s leadership Jay Lee, announced his plan to end the dynastic succession. Samsung has been governed by the same family for three successive generations since its founding. Although immense stability is observed in the company, it undervalued the induction of fresh ideas and innovation. This policy of stagnation is another internally prevalent weakness of the company.
Low Sales of High-End Smartphones
Samsung has suffered a shock in the sales of high-end smartphones. The revenue generated from high-end products declined. According to Gartner, 55 million products were sold in 2020 as compared to 71 million high-end smartphone sales in 2019. The percentage decline was less than 1%, from 19.1% to 18.5%. Therefore, Samsung is vulnerable to depending on low-end smartphone sales.
Loss in Brand’s Dignity
Samsung damaged its brand image and reputation when the company’s president was caught bribing the South Korean company to carry on a merger. The president was proved to be guilty of the charges and spent one year in jail. This harmed the company’s image in South Korea as well as around the globe.
Samsung’s Opportunities
Diversification and Acquisitions
Samsung must undertake robust diversification and acquisitions to increase its influence over the markets. Moreover, it must not limit itself to a single regional market as it can undergo a risk if that market faces destabilization. It, along with limited resources, brings political influences and strains. Samsung must aspire to fill the vacuum present in European and Asian markets. It would generate more revenues and a customer base.
Acquaint with Innovative Products
Smartphone technology is growing at a higher pace. The updated and advanced versions are applauded by the customers. Innovation and advancement should be the core principle of Samsung’s strategic policies. Therefore, Samsung can enjoy cutting-edge benefits if it stays a step ahead of its rivals.
Triple Protection Proposition
Samsung’s Triple protection proposition in electronics would enhance the reliability and age of its product. This policy is intended to attract and satisfy Samsung users for the long-term financial and market benefits.
HR Management
A company’s performance and resources depend on the quality and quantity of its workforce. Samsung must invest deeply in HR services to enhance the intake of highly able and skilled employees. It would lead to leverage over its rivals.
5G Technology
Samsung’s innovative pursuit of the technological world has capacitated it to explore new opportunities. While the world is planning to move towards more advanced network technologies like 5G or 6G, Samsung is ready to take the lead. It has signed agreements with the EU to provide 5G and 6G network-related equipment in Europe. It can further explore other regions to gain profit from this potential opportunity.
Bringing Innovative Products
Electronics, specifically smartphones, are a highly dynamic industry. New trends and styles put aside the prevalent products in the market. Samsung’s innovation like foldable phones and other potential innovative products can increase the corporation’s resources, growth, and long-term stability.
Samsung’s Threats
Amplified Competition
Competition in the electronics market is surging with the arrival of new corporations. Huawei, Xiaomi, and Apple are posing serious threats to the market value and finances of the company. Smartphone products, computing devices, and their consumers are growing at high speed. These trends increase the pressure for Samsung to struggle in market competition and finances.
Economic Vagueness
Recent events around the globe have forced economic recessions. It declined the rate of sale of new mobile phones. People have started purchasing refurbished and recycled devices due to pressurized economies. Its rate is increased by 24%. Moreover, a 20.2% decline in sales was observed in Q1 of 2020. Samsung can face more regression if this uncertainty persists in the long run.
Patent Infringement Issues
Samsung has suffered a lot from patent infringements lawsuits. Recently, Samsung was fined for paying $1.049 billion when it lost a case filed by Apple. The court decided that Samsung had copied Apple and penalized plenty over it. These unhealthy controversies could damage the reputation and prestige of the company.
Upsurge of Counterfeited Samsung Devices
Numerous studies have revealed that Samsung is among the top companies whose products are exposed to counterfeit. Some studies have given facts that more than 30% of all counterfeited mobile devices are Samsung copies. Samsung Galaxy S7 was rated as the top counterfeited device so far. Samsung must devise an effective policy to rule out these practices.
Legal and Regulatory Threats
With the rise in globalization and digital markets, governments and institutions are becoming stricter in their rules and regulations. These regulations are different for each government. These legal and regulatory practices are responsible for market regularization. However, these legal guidelines sometimes hinder the normal functioning and operations of the companies. Samsung must adapt itself to follow the regulations so that it can avoid any uncertain condition in the future.
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