Samsung External Analysis Paper Example

Samsung is an electronics industry founded in the year 1963. The company manufactures a wide range of electronic devices. Over the years, Samsung has grown tremendously and have become the second largest corporation in the manufacturing electronics (Choi, 2016). Its products are widely used all over the world. It's that feature that makes it come up with the best marketing strategies. The main competitors are LG, Dell, Motorola, Nokia, and Apple. The industry has more a quarter percent of the share market in the electrical industry, but nevertheless faces various challenges. For instance, its sales for smart phones are slowing down hence lowering the revenue of the firm. Chinese companies are making similar handsets and availing them to customers at a cheaper price.

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Michael Porter`s theories on business strategies and forces apply in the industry as well. His analysis consists of The powers that influence the growth of a business which are the risk of entry by potential competitors, intense rivalry among the established company, the power of buyers and suppliers. The risk of entry by potential competitors is a force that substantially interferes with the operations of the industry. As for rivalry, Samsung does not face high level of rivalry from other companies striving to venture in the same line of business due to the lack of capital is required for a company to start dealing in electronics. Though there are a number of strong companies. Also, the level of competition is high in the industrial sector. This is because LG, Apple, Dell, Motorola and Nokia have already settled in this business. This makes Samsung a fragmented industry. Furthermore, to do well in the electronics business a company should have the best design of products which should be durable, and the prices should be fair enough (Choi, 2016). It is a solid strategy to apply bearing in mind that the economic situation across the globe is unbearable. The degree of rivalry between Samsung and its rivals is low, and this matters a lot. Competition is what drives it into coming up with better products in the market since innovation promotes consumer`s confidence.

The intensity of the rivalry between various companies is different from one market to another. For this reason, a market where the level of rivalry between two firms is high the competition too is high because the companies compete to satisfy the customers hence producing goods and services of the highest quality. The bargaining power of buyers plays a role of maintaining Samsung`s marketing operations. The customers are behind the success of the company. The way they react to their products matters so much. Samsung applies the right brand name and provide the necessary adjustments to their products so as to win customers. The bargaining power of the buyers is high. There is a big pool of loyal customers who aid the company to remain on top and control of the market (Daniel, 2014). The bargaining power of suppliers too has a significant part in Samsung`s operations. Samsung supplies its raw materials to itself. Hence it knows when and how to regulate them. They use raw materials of high quality to make their commodities. The use of technology and qualified personnel in the industry lead to products of high quality. The supplier has more power; thus, Samsung performance is good.

Regarding the industry life cycle, Samsung is at the maturity stage because the electronics has already passed the embryonic stage and the growth stage where it focused on producing commodities which can appeal the customers. The products of Samsung have earned an excellent name in the market (Daniel, 2014). The home appliances are accepted all over the globe indicating that the growth rate of this company is high. Customers are being given information about the products through different advertisements. Also, Samsung has already passed the stage where the demand for the goods and services that the firm is producing kept on increasing. Samsung products are incessantly rampant in the market, and the company`s growth is minimal. The firm enjoys economies of scale, a factor which restrain other companies from investing in the same type of business as Samsung.

Several macroeconomic factors apply to the Samsung electrical industry. First, Samsung has maintained good international relations with foreign countries. This condition has made various countries reduce the amount of tax they charge the company when importing the products. At the same time, work conditions have been criticized by the Brazilian government. Moreover, there are some countries experiencing political instability which affects the business, for example South Korea (Knopfle, 2016). Besides, Samsung is disadvantaged since it is subjected to lawsuits from other companies due to the copyright infringements. A social factor influences Samsung as well because the preferences of consumers have an impact on the operations of the firm. Consumer trends always change with time depending on how the company makes its products. The level of technology affects the Samsung industry because the extents to which the consumers have access to the internet make them aware of the latest models of the commodities made by Samsung and help them chose the products. The brand of Samsung is not doing so well due to this factor because people are not loyal to the company. Customers tend to rely on substitute goods provided by its competitors (Knopfle, 2016). Economic factors too apply to Samsung. The level of employment makes a difference in the spending habits of people in a given country. The sales of Samsung are always high because the citizens can afford its products with much ease. On the other hand, global economic crisis adversely affects Samsung for exchange rates keeps on fluctuating hence the export and import costs are not balanced. The customers are forced to pay heavily for Samsung products.

In conclusion, Samsung faces many threats in the market, but nevertheless has a lot of plausible conditions to remain in the market. Dealing with the threats to minimize the level of competition is the best way to enhance the profitability of the industry. Making use of the opportunities in the industry is also another way to make bigger profits. Reducing the competition through the creation of unique products could reduce the number of industries which engage in manufacturing electronics. Winning the number of customers is another strategy the company can apply to beat their rivals in the market. The company has an obligation to abide by the rules and regulations set aside by governments of various countries. Maintaining reasonable costs of its products is a technique to be applied by Samsung to keep them affordable to the consumers hence increasing the sales volume.

References

Choi, P. P. (2016). Evolution of Samsung group and its central office: Imperfect market and capacity-building. Asian Business & Management, 15(5), 370-398.doi:10.1057/s41291-016-0011-1

Daniel, V. (2014). CSR Analysis; the Samsung Company. Docs. school Publications. Retrieved from https://www.oboolo.com/business-market/business-strategy/case-study/csr-analysis-samsung-company-85600.htmlKnopfle, G. (2016). Samsung Electronics and the Global Market. The History and the Competitive Advantage. Retrieved from http://www.grin.com/en/e-ook/324000/samsung-electronics-and-the-global-market-the-history-and-the-competitive