Samsung is a South Korean company which has its headquarters in Samsung Town, Seoul. It was founded in 1938 by Lee Byung Chul as a trading company and has been in business ever since. Its product range has expanded over the years, from food, textiles and retail to electronics in the late 1960s and shipbuilding in mid-1970s (Kim,2016). Samsung, as we know it today, produces a wide range of electronics including mobile phones and its semiconductors.
Samsung India Electronics Pvt Limited has its head office in New Delhi, Delhi. They offer all Samsung products and have recently opened a mobile phone manufacturing plant in Noida. This is geared towards doubling Samsung's output by 2020. Samsung has approximately 320,000 employees globally in 73 countries. Samsung recorded an income of approximately 53 billion USD in the fourth quarter of 2018.
This refers to the similarities and differences between the domestic and foreign market. This is usually in terms of the political environment, technology, legal and economic environments.
South Korea is headed by President Park Geun-Hye with a Republic type of government. It has a mixed legal system consisting of Chinese classical thought, European Civil law and Anglo American law (Kim,2019). South Korea has a mature democracy with good political leadership. It is rich and technologically advanced and innovative, therefore providing a good market base for Samsung products.
Prior to the 21st century, South Korea's GDP per capita was approximately the same as that of developing countries in Africa and Asia. However, 15 years ago South Korea became one of the countries with a trillion dollar economy (Kim,2019). It is among the top 20 largest world economies. Such a large economy has supported large companies like Samsung in both expansion and growth over the years.
The large economy of South Korea has supported the development of many electronics companies. Its political stability, low costs of labour and availability of advanced technology has also attracted foreign investors (Kim,2019). Domestic electronics companies such as LG Electronics has posted a stiff competition for Samsung products both at home and overseas. Over 150 foreign companies, especially from Japan, have also invested in South Korea, with their products posing more competition in the market for Samsung products.
Political/Legal, Economic and Technological Forces
India is headed by President Pranab Mukherjee and his vice president Mohammad Hamid Ansari. It is a federal republic type of government. The legal system is composed of a judicial review of legislative acts, personal law codes depending on religion, that is, Hindu, Muslim and Christian as well as common law system based on the English model. Various political and legal reforms have directly affected foreign investors like Samsung. Since the political liberalization of 1991, India's political environment has improved making it attractive to foreign investors. These include policies such as improved export orientation and abolishment of disincentives to foreign investors. Legally, however, India has deteriorated from 0.26 in 1991 to -0.11 in 2011 according to the World Bank (Anstey,2016). This translates from poor implementation of the rule of law at the ground level.
Economic growth of India has accelerated since the 1990s. this can be attributed to factors such as reduced control on foreign investment and imports, privatization of government parastatals, reduced sanctions on trade as well as reduced restrictions on trade. India has some economic challenges that it is yet to address which directly affect foreign investor such as Samsung. These include poverty, corruption and violence.
India is a developing nation and ranks among the most attractive in the globe in terms of technology investments and innovation. The government has invested heavily on technological advancement, through the support of electronic as well as scientific and agricultural research.
India consists of 28 states and 7 union territories. Each of these regions has uniqueness in its culture but the most important of them all in terms of direct foreign investment like Samsung is urbanization. More urbanized states attract more foreign investors due to factors such as a large market base as well as efficient transport and communication lines. Culture may also affect the purchasing power of some goods such as electronics depending on the beliefs of different people.
Geography and infrastructure
The geography of an area can affect infrastructural development. Developing countries are characterized by rapidly expanding metropolitan areas. India is not an exception. Its geography has supported the mushrooming of new urban centres as well as the expansion of existing ones in most states (Anstey,2016). These metropolitan areas such as New Delhi are characterized by advanced infrastructural development. These include major subway railway lines in cities such as Delhi, Chennai and Jaipur. Others include major airports such as Chennai international airport. These have helped companies such as Samsung establish stability due to the timely delivery of staff and products as well as effective communication.
Structure of distribution
Samsung uses a channel marketing concept in the distribution of its products. This is composed of sales and service dealers, modern retail and the distributors. In most cities, Samsung has a single distributor who sells all its products in that city. An example of a distributor is SSK distributors in Mumbai, India.
India has a fast-growing demand for consumer electronics. It has no mobile manufacturing as at now, since the electronics companies that exist merely assemble the imported parts, adding value by less than 50%. However, the government has continually found ways to tap the benefits of this electronics manufacturing value chain (Chu, (2017). This is why the government endorsed the setting up of Samsung's Noida factory whose production is projected at 120 million mobile phones annually among other electronics like TVs. Samsung electronics are unmatched in this country in terms of superiority of product quality and the brand itself. Similar companies posing competition include Philips Electronics and Havells India Limited.
SWOT Analysis Summary
Samsung has several strengths that outweigh its weaknesses to achieve their current profit margins. Low production costs and a globally recognized brand have placed Samsung at an advantage over its competitors (Chu,2017). They also have stability in terms of product diversity. This means that they have a wide array of products such as mobile phones, kitchen appliances, TVs among others. They have innovated mobile phone designs that suit a wide variety of consumer preferences.
Weaknesses of Samsung include low-profit margins due to the tactic of low costs that they employ to stand above their competitors. Their brand is also of lower quality than its big competitor, Apple. Samsung's Android operating system has its inadequacies, forcing it to rely on third-party software for maximal efficacy of its devices.
Opportunities that continue to favour Samsung include financial stability for the future and a rapidly growing demand for smartphones, especially in India. Threats encountered by Samsung include stiff competition from big brands such as Lenovo, Apple and Tecno (Sammut & Galea,2015). The brand value of Samsung has also been threatened by a few faulty mobile handsets that allegedly exploded due to faulty lithium-ion batteries. This also threatens consumption of their other devices for fear of similar problems.
Controllable Elements and Strategies
Products in Samsung's Indian market include smartphones, LED TVs, microwave ovens, refrigerators and tablets, laptops, printers and storage devices such as hard drives and SD cards. Samsung's products are generally trusted due to their durability and efficacy.
Samsung used a skimming strategy when it comes to pricing its product. This is the adjustment of prices after a competitor launches a similar product. They also set market prices lower than competitors' prices to reduce the risk of competition on their end.
Samsung mostly has one distributor in most cities. These distributors then supply the products to dealers and retailers.
Samsung mostly promotes its products through advertisements. This is through newspapers, magazines and digital media. It also appoints public figures as brand ambassadors for the promotion of their products to their huge social media following. Samsung also sponsors events as a way of promoting their brand.
Samsung has employed over 320,000 people. These range from their world-class professionals, technicians and distributors. Thousands more are involved in retail and dealings as well as customer service.
Samsung is clear in its dealings and specifications in how products should reach their customers. To ensure that the integrity of their products is maintained, they have records of every dealer and distributor of Samsung products. These products are held accountable for their dealings (Singh & H, 2017).
Services offered by Samsung are intangible. However physical products such as mobile phones are offered beside the services for customer satisfaction.
Productivity and Quality
Samsung has a world class quality control management system that ensures that their products are top shelf. Quality objectives of Samsung are in accordance with quality policies.
Samsung is a multinational electronics company that was founded in 1938 and has its headquarters in Soul, South Korea. It has invested heavily in developing countries in India. Here, Samsung is aiming to multiply its profits by satisfying the increasing demand for electronics and technology. Samsung has set up a multimillion-dollar mobile phone factory at Noida, India which is aimed at producing approximately 120,000 mobile phones annually.
Anstey, V. (2016). The economic development of India. Longmans, Green.
Chu, Y. (2017). SWOT Analysis and Countermeasures of India Market Environment for Domestic Mobile Phone. International Conference on Education, Culture and Social Development. Atlantis Press.
Kim, C. (2016). Samsung, Media Empire and Family: A Power Web. Routledge.
Kim, S. C. (2019). Politics in North and South Korea: Political Development, Economy, and Foreign Relations. Pacific Affairs, 92(1), 152-154.
SammutBonnici, T & Galea, D. (2015). SWOT analysis. Wiley Encyclopedia of Management, 1-8.
Singh, H. (2017). Effect of Marketing Mix Elements on Brand Awareness of Consumer Durables. Doctoral Dissertation.
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