SWOT ANALYSIS OF SAMSUNG ELECTRONICS CO. LTD

INTRODUCTION

Samsung Electronics Co., Ltd. (Korean: 삼 성 전 자 ) is a South

Korean multinational electronics company headquartered in Suwon, South Korea.[2] It is the

flagship subsidiary of the Samsung Group and has been the world's largest information

technology company by revenues since 2009.[3] Samsung Electronics has assembly plants and

sales networks in 88 countries and employs around 370,000 people.[4]

Samsung has previously been known for its position as a manufacturer of components such

as lithium-ion batteries, semiconductors, chips, flash memory andhard drive devices for clients

such as Apple, Sony, HTC and Nokia.[5] [6] In recent years, Samsung Electronics has expanded

upon its manufacturing roots and diversified into consumer markets leading to an ever increasing

portfolio of products and revenue stream.[7]

Samsung Electronics currently stands as one of the worlds largest vendors in the mobile

phone and smartphone markets fueled by the popularity of its Samsung Galaxy line of devices.[8] The company is also one of the largest vendors in the tablet computer market thanks to

its Android-powered Samsung Galaxy Tabcollection and is generally regarded as pioneering

the phablet market through the Samsung Galaxy Note family of devices.[9]

Samsung has been the world's largest maker of LCD panels since 2002, the world's largest

television manufacturer since 2006,[10] and world's largest manufacturer of mobile phones since

2011.[11] Samsung Electronics displaced Apple Inc. as the world's largest technology company in

2011 and has been a major part of theEconomy of South Korea.

HISTORY

1969 to 1987 - Early years[edit]

Samsung Electric Industries was established as a subsidiary of Samsung Group in 1969

in Suwon, South Korea.[12] Its early products were electronic and electrical appliances including

televisions, calculators, refrigerators, air conditioners and washing machines. In 1970, Samsung

Group established another subsidiary, Samsung-NEC, jointly with Japan's NEC Corporation to

manufacture home appliances and audiovisual devices. In 1974, the group expanded into

the semiconductor business by acquiring Korea Semiconductor, one of the first chip-making

facilities in the country at the time. The acquisition of Korea Telecommunications, an electronic

switching system producer, was completed at the start of the next decade in 1980.

By 1981, Samsung Electric Industries had manufactured over 10 million black-and-white

televisions. In February 1983, Samsung's founder, Lee Byung-chull, made an announcement

later dubbed the "Tokyo declaration," in which he declared that Samsung intended to become

a DRAM (dynamic random access memory) vendor. One year later, Samsung became the third

company in the world to develop a 64kbDRAM.[citation needed] In 1988, Samsung Electric Industries

merged with Samsung Semiconductor & Communications to form Samsung Electronics.

1988-1995 - Consumer struggles[edit]

Samsung Electronics launched its first mobile phone in 1988, in the South Korean market.[13] Sales were initially poor and by the early 1990s Motorola held a market share of over 60

percent in the country's mobile phone market compared to just 10 percent for Samsung.[13] Samsung's mobile phone division also struggled with poor quality and inferior products until

the mid-1990s and exit from the sector was a frequent topic of discussion within the company.[13]

Samsung Electronics acquired a 40 percent stake in AST Research, a United States-based

personal computer maker, for US$378 million in February 1995.[14]

1995-2008 - Component manufacturing[edit]

It was decided that by Lee Hun Kee that Samsung needed to change strategy. The company

shelved the production of many under-selling product lines and instead pursued a process of

designing and manufacturing components and investing in new technologies for other

companies. It was hoped in this way Samsung would gain an understanding of how products are

made and give a technological lead sometime in the future. This patient vertical

integration strategy of manufacturing components has born fruit for Samsung in the late-2000s.[15]

As Samsung shifted away from consumer markets, the company devised a plan to sponsor major

sporting events to remain in the public eye. One such sponsorship was for the 1998 Winter

Olympics held inNagano, Japan.[16]

As a chaebol, Samsung Group wielded wealth that allowed the company to invest and develop

new technology rather than build products at a level which would not have a detrimental impact

on Samsung's finances.[17]

Samsung had a number of technological breakthroughs particularly in the field of memory which

are commonplace in most electrical products today. This includes the world's first 64Mb DRAM

in 1992, 256 DRAM in 1994, 1Gb DRAM in 1996.[18] In 2004, Samsung developed the world's

first 8Gb NAND Memory chip and a manufacturing was struck with Apple in 2005. A deal to

supply Apple for memory chips was struck in 2005 and Samsung remains a key supplier of

Apple components.[19] However the Samsung-Apple relationship has soured following Samsung's

emergence in the consumer market.

2008 to present - Consumer products[edit]

The Samsung wordmark as it appears on many Samsung products

The Samsung display at the 2008 Internationale Funkausstellung in Berlin

For four consecutive years, from 2000 to 2003, Samsung posted net earnings higher than five-

percent; this was at a time when 16 out of the 30 top South Korean companies ceased operating

in the wake of the unprecedented crisis.[20][21]

In 2005, Samsung Electronics surpassed Japanese rival, Sony, for the first time to become the

world's twentieth-largest and most popular consumer brand, as measured by Interbrand.[22]

In 2007, Samsung Electronics became the world's second-largest mobile-phone maker,

overtaking Motorola for the first time.[23] In 2009, Samsung achieved total revenues of US$117.4

billion, overtaking Hewlett-Packard to become the world's largest technology company measured

by sales.[24]

In 2009 and 2010, the US and EU fined the company, together with eight other memory chip

makers, for its part in a price-fixing scheme that occurred between 1999 and 2002. Other

companies fined included Infineon Technologies, Elpida Memory and Micron Technology.[25][26]

[27][28][29] In December 2010, the EU grantedimmunity to Samsung Electronics for acting as

an informant during the investigation (LG Display, AU Optronics, Chimei InnoLux, Chunghwa

Picture Tubes and HannStar Display were implicated as result of the company's intelligence). [30]

[31]

Despite consistent growth, Samsung, along with its chairman Lee Kun-hee, has developed a

reputation for insecurity regarding its financial stability and the potential for future crises to

arise. After returning from a temporary retirement period in March 2010, Kun-hee stated that

"Samsung Electronics' future is not guaranteed because most of our flagship products will be

obsolete in 10 years from now."[32]

Samsung has emphasized innovation in its management strategy since the early 2000s and it

again highlighted innovation as part of core strategies when it announced the Vision 2020 in

which the company set an ambitious goal of reaching $400 billion in annual revenues within ten

years. In order to cement its leadership in the areas of memory chip and television production,

the company has invested aggressively in research and development. The company has 24

research-and-development centers around the world.

In April 2011, Samsung Electronics sold its HDD commercial operations to Seagate

Technology for approximately US$1.4 billion. The payment was composed of 45.2 million

Seagate shares (9.6 percent of shares), worth US$687.5 million, and a cash sum for the

remainder.[33]

In the first quarter of 2012, the company became the highest-selling mobile phone company

when it overtook Nokia, selling 93.5 million units compared to Nokia's 82.7 million units.

Samsung also became the largest smartphone vendor as a result of strong sales of its Galaxy SII

and Galaxy Note devices.[34]

In May 2013, Samsung announced that it had finally managed to test speed-enhanced fifth

generation(5G) technology successfully.[35]

In June 2013, Samsung Electronics released their new flagship smartphone named the Galaxy S4

which features the company’s revolutionary octa-core processor.

In July 2013, Samsung Electronics forecasted weaker than expected profits for its April to June

quarter. While analysts expected around 10.1 trillion won, Samsung Electronics estimated an

operating profit of 9.5 trillion won ($8.3 billion).[36] During the same month, Samsung acquired

the media streaming device manufacturer Boxee for a reported $30 million.[37]

Products[edit]

LCD and LED panels[edit]

The Samsung Galaxy S II, which incorporates a Super AMOLED Plus screen

See also: OLED Display: Samsung applications

By 2004 Samsung was the world's-largest manufacturer of OLEDs, with a 40 percent market

share worldwide,[39] and as of 2010 has a 98% share of the globalAMOLED market.[40] The

company generated $100.2 million out of the total $475 million revenues in the global OLED

market in 2006.[41] As of 2006, it held more than 600 American patents and more than 2,800

international patents, making it the largest owner of AMOLED technology patents.[41]

Samsung's current AMOLED smartphones use its Super AMOLED trademark, with

the Samsung Wave S8500 and Samsung i9000 Galaxy S being launched in June 2010. In January

2011, it announced its Super AMOLED Plus displays[42] – which offer several advances over the

older Super AMOLED displays – real stripe matrix (50 percent more sub pixels), thinner form

factor, brighter image and an 18 percent reduction in energy consumption.

In October 2007, Samsung introducing a ten-millimeter thick, 40-inch LCD television panel,

followed in October 2008 by the world's first 7.9-mm panel.[43]Samsung developed panels for 24-

inch LCD monitors (3.5 mm) and 12.1-inch laptops (1.64 mm).[44] In 2009, Samsung succeeded

in developing a panel for forty-inch LED televisions, with a thickness of 3.9 millimeters

(0.15 inch). Dubbed the "Needle Slim", the panel is as thick (or thin) as two coins put together.

This is about a twelfth of the conventional LCD panel whose thickness is approximately 50

millimeters (1.97 inches).

While reducing the thickness substantially, the company could maintain the performance as

before, including full HD resolution, 120 Hz refresh rate, and 5000:1 contrast ratio.[45]

Mobile phones[edit]

Samsung's flagship mobile handset line is the Samsung Galaxy S, which many consider a direct

competitor of the Apple iPhone.[46] It was initially launched in Singapore, Malaysia and South

Korea in June 2010,[47][48][49] followed by the United States in July. It sold more than one million

units within the first 45 days on sale in the United States.[50]

The company's I9000 Galaxy S and S8500 Wave smartphones were the winners of the 2010

European EISA Awards in the smartphone and social media phone categories. The I9000 Galaxy

S was recognized for its superior-quality screen and excellent connectivity while the S8500

Wave for its Bada operating system with unparalleled social networking and location-based

services.[51]

While many other handset makers tend to focus on supporting one (or at most two) operating

system, Samsung has kept supporting a wide range of operating systems in the market. Although

the Galaxy S adopts Google Android as the operating system; Samsung also supports other

competing operating systems such as Symbian, Microsoft Windows Phone, Linux-based LiMo,

and Samsung's proprietaryBada.[52]

Samsung sold 235 million mobile handsets in the year 2009.[53] At the end of the third quarter of

2010, the company had surpassed the 70 million unit mark in shipped phones, giving it a global

marketshare of 22 percent, trailing Nokia by 12 percent.[54][55] Overall, the company sold 280

million mobile phones in 2010, corresponding to a market share of 20.2 percent.[56] Partially

owing to strong sales of theSamsung Galaxy range of smartphones, the company overtook Apple

in worldwide smartphone sales during the third quarter 2011, with a total market share of 23.8

percent, compared to Apple's 14.6-percent share.[57] Samsung became the world's largest

cellphone maker in 2012, with the sales of 95 million smart phones in the first quarter.[58]

Semiconductors[edit]

A Samsung DDR-SDRAM

Samsung Electronics has been the world's-largest memory chip maker since 1993. In 2009 it

started mass-producing 30 nm-class NAND flash memories.[59] It succeeded in 2010 in mass-

producing 30 nm-class DRAMs and 20 nm-class NAND flashes, both of which were the first

time in the world.[60]

According to market-research firm Gartner, during the second quarter of 2010 Samsung

Electronics took the top position in the DRAM segment due to brisk sales of the item on the

world market. Gartner analysts said in their report, "Samsung cemented its leading position by

taking a 35-percent market share. All the other suppliers had minimal change in their shares."

The company took the top slot in the ranking, followed by Hynix, Elpida, and Micron, said

Gartner.[61]

Another hitherto not-well-publicized area where the company had significant business in for

years is the foundry segment. It had begun investment in the foundry business since 2006 and

now positioned it as one of the strategic pillars for semiconductor growth.[62]

In 2010, market researcher IC Insights predicted that Samsung would become the world's-biggest

semiconductor chip supplier by 2014, surpassing Intel. For the ten-year period from 1999 to

2009, Samsung's compound annual growth rate in semiconductor revenues has been 13.5

percent, compared with 3.4 percent for Intel.[63][64]

Televisions[edit]

In 2009, Samsung sold around 31 million flat-panel televisions, enabling to it to maintain the

world's largest market share for a fourth consecutive year.[65]

Samsung launched its first full HD 3D LED television in March 2010. [66] Samsung had

showcased the product at the 2010 International Consumer Electronics Show (CES 2010) held in

Las Vegas.[67]

Samsung sold more than one million 3D televisions within six months of its launch. This is the

figure close to what many market researchers forecast for the year's worldwide 3D television

sales (1.23 million units).[68] It also debuted the 3D Home Theater (HT-C6950W) that allows the

user to enjoy 3D image and surround sound at the same time. With the launch of 3D Home

Theater, Samsung became the first company in the industry to have the full line of 3D offerings,

including 3D television, 3D Blu-ray player, 3D content, and 3D glasses.[69]

In 2007, Samsung introduced the Internet TV, enabling the viewer to receive information from

the Internet while at the same time watching conventional television programming. Samsung

later developed "Smart LED TV" (now renamed to "Samsung Smart TV"[70]), which additionally

supports downloaded apps. In 2008, the company launched the Power Infolink service, followed

in 2009 by a whole new Internet@TV. In 2010, it started marketing the 3D television while

unveiling the upgraded Internet@TV 2010, which offers free (or for-fee) download of

applications from its Samsung Apps store, in addition to existing services such as news, weather,

stock market, YouTube videos, and movies.[71]

Samsung Apps offers for-fee premium services in a few countries including Korea and the

United States. The services will be custom-tailored for each region. Samsung plans to offer

family-oriented applications such as health care programs and digital picture frames as well as

games. Samsung's range of Smart TVs include the apps ITV Player and motion controlled Angry

Birds.

Other[edit]

The Samsung GX-10 digital SLR camera

Samsung produces printers for both consumers and business use, including mono-laser printers,

color laser printers, multifunction printers, and enterprise-use high-speed digital multifunction

printer models.

In 2010, the company introduced a number of energy efficient products, including the laptop

R580, netbook N210, the world's-smallest mono-laser printer ML-1660, and color laser

multifunction printer CLX-3185.

Samsung has introduced several models of digital cameras and camcorders including the WB550

camera, the ST550 dual-LCD-mounted camera, and the HMX-H106 (64GB SSD-mounted full

HD camcorder). In 2009, the company took the third place in the compact camera segment.

Since then, the company has focused more on higher-priced items. In 2010, the company

launched the NX10, the next-generation interchangeable lens camera.

In the area of storage media, in 2009 Samsung achieved a ten percent world market share, driven

by the introduction of a new hard disk drive capable of storing 250Gb per 2.5-inch disk.[72] In

2010, the company started marketing the 320Gb-per-disk HDD, the largest in the industry. In

addition, it was focusing more on selling external hard disk drives. Following financial losses,

the hard disk division was sold to Seagate in 2011.

In the MP3 player segment, Samsung has launched products including the M1 MP3 player, and

the world's-smallest DivX MP3 player R1.[73]

Management and board of directors[edit]

In December 2010, Samsung switched its management system from the single CEO system of

last year under Choi Gee-Sung, to a two-person management team with Choi Gee-Sung, CEO

and Vice chairman, and Lee Jae-Yong, Chief Operating officer and President. In June 2012,

Samsung appointed Kwon Oh-hyun as the new CEO of the company.[74] The team was credited

as being younger both in age and in outlook, and some executives dyed their hair black.[75] Samsung also reorganized its overseas marketing bases in line with changes in the market,

including a combined Britain/Continental Europe regional subsidiary, and a combined

China/Taiwan regional subsidiary.

The company added a new digital imaging business division in 2010, and now consists of eight

divisions, including the existing display, IT solutions, consumer electronics, wireless,

networking, semiconductor, and LCD divisions.

It also reorganized its business organization to strengthen business synergies, by merging its

Digital Air Solutions Team and Samsung Electronics Gwangju (consumer electronics and air

conditioners, merged in 2010) under the consumer electronics business division. The set-top

boxes business was merged with the Visual Display Business division.

The company's December 2010 reorganization was as follows: Among the eight divisions, the

network division and the digital imaging division experienced new appointments, while the

remaining divisions were maintained in accordance with their results.

Chief executive officer, Vice chairman: Choi Gee-Sung

Chief financial officer: President Yoon Ju-hwa

Chief operating officer, President: Lee Jae-Yong

The following are the names of board of directors members:[76]

List of products

SWOT

Samsung SWOT analysis 2013

Strengths Weaknesses

1. Hardware integration with many open

source OS and software

2. Excellence in engineering and producing

1. Patent infringement

2. Too low profit margin

hardware parts and consumer electronics

3. Innovation and design

4. Focus on environment

5. Low production costs

6. Largest share in mobile phones and 2

place in smartphones sales

7. Ability to market the brand

3. Main competitors are also largest buyers

4. Lack its own OS and software

5. Focus on too many products

Opportunities Threats

1. Growing India’s smartphone market

2. Growing mobile advertising industry

3. Growing demand for quality application

processors

4. Growth of tablets market

5. Obtaining patents through acquisitions

1. Saturated smartphone markets in

developed countries

2. Rapid technological change

3. Declining margins on hardware

production

4. Breached patents

5. Apple’s iTV launch

6. Price wars

Strengths

1. Hardware integration with many open source OS and software. Samsung is focused on

producing devices which can be integrated with most of the software and OS. This gives

Samsung products an edge over Apple’s (its arch rival) devices, especially as Android and

other OS are gaining market share when iOS and OS X are losing it.

2. Excellence in engineering and producing hardware parts and consumer electronics.Samsung

is the number 1 by market share in televisions and mobile phones sales and some of the

hardware parts (processors, memory chips, etc.). This was largely achieved due to excellence

in engineering and both efficient and effective production.

3. Innovation and design. In 2011, Samsung ranked second on the list of US top patent

assignees. More patents strengthen Samsung position among its competitors. The firm also

won many awards for the design of its products, proving the superior advanatage over the

competitors.

4. Focus on environment. Samsung focuses on producing environment friendly products that are

free from PVC and BFRs (currently only MP3 and mobile phones). It also develops various

recycling programs that are awarded for their success. Thus, Samsung’s focus on environment

gives it an edge over its competitors in the eyes of its customers.

5. Low production costs. The company has set up its production facilities in low cost countries.

This allows producing goods with low production cost and benefit Samsung as it can offer

lower price and earn higher margins.

6. Largest share in mobile phones and 2 place in smartphones sales in the world. Samsung

Electronics have achieved large market share in many products they sell, especially in mobile

phones, smartphones, semiconductors and television sets. Large market share has its

advantage, bargaining power, that Samsung can use to further reduce costs and demand for

better contract conditions.

7. Ability to market the brand. Samsung is named as top rising brand by Interbrand and is the

9th most valuable brand with value nearly $33 billion. It has risen by 40% from 2011 to 2012.

This was mainly achieved due to company’s ability to market the brand in sporting events and

social contributions.

Weaknesses

1. Patent infringement. Samsung is infringing Apple’s and some other firms’ patents, thus,

damaging its reputation and having to pay a huge amount of money in damages.

2. Too low profit margin. Samsung Electronics is the largest technology business in the world in

terms of revenues but it has a low gross profit and net profit margins. Although its

smartphones business is quite profitable, Samsung’s profit margin is low due to its

semiconductors sales and aggressive price cuts.

3. Main competitors are also largest buyers. Apple, Sony, Dell, HP are the main buyers of

Samsung Electronics products as well as the firm’s main competitors. Such situation would

be favorable to Samsung (if competitors could not find complementary products and would

form a relatively low share Samsung’s revenues) because it could use its bargaining power

over competitors. Due to reverse conditions (competitors can find complements and they form

a relatively high share of firm’s revenues) Samsung cannot use its bargaining power over

competitors as it can easily lose its customers and sales.

4. Lack its own OS and software. Software and OS production has a high profit margin, can

increase integration of company’s products and brand loyalty. Without strong software and

OS Samsung is at disadvantage over its competitors.

5. Focus on too many products. Samsung Electronics serves 4 different industries with many

different products in them. Samsung is at disadvantage over its competitors because it loses a

focus when competing in too many industries and too many products.

Opportunities

1. Growing India’s smartphone market. India’s smartphone market is one of the least penetrated

among Asia/Pacific countries. Samsung has a strong presence in India’s market and could use

this opportunity to expand its sales.

2. Growing mobile advertising industry. The company could develop advertising platform for its

mobile devices and significantly benefit from this lucrative market.

3. Growing demand for quality application processors. Samsung is one of the key manufacturers

of application processors for smartphones and tablets. The growing demand for these products

requires more best quality application processors that only Samsung provide.

4. Growth of tablets market. Tablets market is expected to grow in double digits over the next

few years. Samsung business has a strong position in tablets market and could expand it by

introducing newer, better quality tablet models, such as its current galaxy line.

5. Obtaining patents through acquisitions. The key to Samsung’s competitive advantage is the

large portfolio of patents. Patents can be discovered by engaging in costly R&D or through

acquisitions of other firms.

Threats

1. Saturated smartphone markets in developed countries. Smartphones market in the developed

economies is saturated and the sales will not be growing at a high rate.

2. Rapid technological change. The serious threat that Samsung and the other tech companies

are facing is a rapid technological change. Companies are under the pressure to release the

new products faster and faster. The one that cannot keep up with the competition soon fails.

This is especially hard when the business wants to introduce something new, innovative and

successful.

3. Declining margins on hardware production. Samsung is the second largest semiconductors

producer where the profit margins are very thin, thus weakening the whole company's figures.

4. Breached patents. Samsung Electronics has many patents which are often used by its many

competitors. Such situation makes it hard to find out which companies benefit from

Samsung’s technology but do not pay for the rights to use it.

5. Apple’s iTV launch. Apple’s iTV is the next big lunch from Apple, which may hurt

Samsung’s TV sales.

6. Price wars. Samsung has a very low gross margin on many of its products and is already

selling some of them with significant price cuts. Competitors could follow price cutting

strategy too and induce price wars, which would erode Samsung’s profit margin to 0%!

Market segment

4’ps of market mix

Samsung is a market leader in Consumer Electronics and Cell Phones.

PRODUCT

SAMSUNG GALAXY Y

DUOS LITE

Launched in 5th sep.in

Delhi.

features

Android v2.3 (Gingerbread) OS

2 MP Primary Camera

Dual Active SIM (GSM + GSM)

2.8-inch LCD Capacitive Touch screen

832 MHz Processor

FM Radio with Recording

Wi-Fi Enabled

Expandable Storage Capacity of 32 GB

price & place

Price of this product is Rs. 6990

Available major four cities Mumbai, Kolkata, Chennai, Delhi.

And also available in all mobile phone galleries.

promotion

Advertisement

Banners & posters

Kiosks

Newspapers

ABOUT SAMSUNG MOBILE

Expectations

New innovative products.

Design.

Price.

Competitors

Apple

Nokia

Sony

LG

Whirlpool

Intel

Dell

Seagate technology

Complaint handling mechanism

Complaint is filed

Respond to customer

Analyze customer claims

Solution

CRM strategies

One way of Samsung to run CRM is with use facebook.

Samsung can promote their product using facebook.

Samsung use facebook to as a place to talk about Samsung Mobile and all things.

Samsung hear about suggestions, advices, or complain from the customer. Then they

response it. It is one of act, that they care to customer.