SWOT Analysis

SWOT Analysis of Samsung

by Faizul Haque

The Samsung SWOT elaborates the strength, weakness of, and opportunities, threats for mobile. It will provide an overview that will prompt a view of the company’s strategic situation. It can be used to evaluate the position of their business. It can also be used to guide the overall business strategy session of Samsung.

Company Overview

Founded in 1938, Samsung is one of the leading mobile manufacturing companies in the world. This South-Korean based company, headquartered in Samsung City, provides different types of products including semiconductors, digital televisions, air conditioners, computers, liquid crystal displays, and active-matrix organic light-emitting diodes, monitors, mobile phones, refrigerators, printers, and telecommunications networking equipment. Samsung is the largest mobile phone manufacturer in the world. It’s listed under the South-Korean stock market.

SWOT Analysis of Samsung

Strengths of Samsung

Innovative designs. Samsung offers a lot of handsets with different types of designs, unlike its nearest competitor Apple iPhone.

Integration of open-source operating system, and software. The most strong strategy they took was an adaptation of the open-source technology like Android Operating System. The world is moving with Android opensource operating system. Different companies are working with it. It offers a lot of features, options, and software. Taking this strategy into account, Samsung grabbed huge competitive advantages over other mobile manufacturers.

Cost & Quality Focused. When it is about the production costs, Samsung reached the economies of scales. It outsourced its production to different countries that have a competitive advantage in producing quality products at small costs.

Too large product diversity (stability on sale). Samsung has a huge number of products in its product portfolio, it offers different types of products to its customers. In return, the profit it makes is very much stable. When the sale of one product goes down, other products may be experiencing an increase in sales.

Low production cost. Low production costs allow Samsung to offer its products at a lower price than its competitors do.

Largest Market Share in Mobile Phone Market. By applying the above strategies, Samsung has been able to grab the largest market shares in the market.

Recognized Brand. Without any doubt, Samsung is one of the most recognized brands in the world.

Strong Brand Reputation. Until now, it has been achieving a strong reputation of offering quality products at a low price.

Environmental Focus. It has been fulfilling responsibilities towards the environment. They provide energy-efficient products. They ensure that the chemicals used in the products do not harm their users. And currently, Samsung is operating the global recycling and take-back programs in 60 counties.

Very Strong R&D Department. Samsung has a strong R&D department which frequently helping to develop new innovative consumer products.

Samsung has a large number of skilled employees all over the world (489,000).

Samsung captures a greater than 40% smartphone market share in the Netherlands.
Samsung Malaysia Electronics won big at the Putra Brand Awards 2015. It will work as a positive reputation in Malaysia.

Weaknesses of Samsung

Low-Profit Margin. It always keeps a low profit market. There are lots of competitors in this industry. So, keeping the customers they must offer the products at a low price.

Damaging Image by Infringement. Few of the recent incidents affected its brand image negatively.

Too Large Product Diversity (lack of focusing on specific one). It takes a lot of work if the product portfolio is large. It cannot be possible to give concentration to each product with the utmost importance.

Lacking Own Operating System. Like Apple iPhone, it does not have its operating system.

Less Quality than Apple’s. When it comes to quality, Apple is doing better in the handset offers.

Heavily Dependent on Consumer Electronics. Dependence on consumer electronics is higher than other manufacturers.

Samsung’s Operating System Android has Many Lacking. Though they have been trying hard to make the Android more qualities, still it lacks perfection.

Large Dependence on Other Software. It cannot, solely, provide all of the software needed to support its devices. It depends on third parties.

Opportunities for Samsung

The Indian smartphone market is growing. People are becoming more tech-dependent, and smartphone became the most used communication tool in this era. As a result, the demand for smartphone is increasing.

Most people use feature phones that make a switch to a smartphone.

The demand for technologically advanced phones is growing. As smartphones are becoming the near alternative of computers, the demand for smartphones is increasing.
Strong financial position for the future. As Samsung has been doing business for a long period, it has been able to secure a strong financial position in the market. As a result, it will be able to make more investment in the future.

The growth of the tablet market. The growth of the tablet market is in a negative phase for which these users will be switching to smartphones.

Acquisition of new companies. Samsung has been acquiring companies. It is ensuring its future growth. Recently, Samsung bought the audio giant Harman for $8 billion. Also, it acquired Viv, an AI platform from the makers of Siri and completed the acquisition of NewNet Communication Technologies (Canada), Inc. recently.

Threats for Samsung

A large number of competitors. The mobile market is saturated. Samsung has a lot of competitors in the market, the number is also growing.

Strong Competitors like Apple, HTC etc. It has strong competitors like Apple, HTC, Lenovo, and Xiaomi Mobile. It is the biggest threat to Samsung.

Chinese Competitors are Gaining Competitive Advantages. As the Chinese companies can produce products at a low price and they can also give high quality, people are accepting those brands spontaneously.

People are Looking for Better Quality Nowadays. So, if there is any question of quality, people will be switching to the companies who give better qualities.

A Large Number of Products, Failing One will Affect Another. As Samsung has a large portfolio, it has a high risk also. If any product does harm to the customers, it will affect the brand image and therefore, will grow a negative effect on others.

Threats of Chinese, Taiwanese, and Indian Products in the Local Market.

Bottom Line

The Samsung SWOT showed that it has many strengths against its weakness. Also, they have great opportunities as well as market threats. If Samsung mobile does take steps to be stronger in the market by providing quality, it will be a stronger organization in future.

Related: 

Sources Used To Conduct This Analysis:

  • Wikipedia – 2016.
  • Samsung, annual Report – 2015 & 2016.
  • Samsung Official Website – 2017.
  • Phonearena.
  • http://www.samsung.com/us/aboutsamsung/sustainability/environment/
  • https://www.engadget.com/2016/11/14/samsung-buys-harmon-auto-audio/
  • https://news.samsung.com/global/samsung-acquires-rich-communications-services-business-from-skyview-capitals-newnet-communication-technologies