SWOT Analysis of Samsung

SWOT Analysis
SWOT analysis (or SWOT matrix) is a strategic planning technique used to help a person or
organization identify strengths, weaknesses, opportunities, and threats related to business competition
or project planning
SWOT Analysis of Samsung
The following is the SWOT analysis of Samsung -
Samsung’s Strengths –

 Internal Strategic Factors - Dominates the Smartphone Market – Samsung has dominated
the smartphone market for years. According to Gartner, in Q1 of 2020, Samsung has
maintained the No. 1 spot globally with a 18.5% market share, where as Apple is at 13.7%
market share.
 Research and Development – The foundation of Samsung has always been on Innovative
research and development. Expenditure in these departments resulted in the company having
a wide range of product portfolio among its competitors. These include tablet, camcorder,
mobile phone, camera, TV/video/audio, Memory Cards, PC, and other accessories. They have
34 R&D (research and development) centres operating worldwide.
 Award Winning Brand – Samsung’s position as a pioneer for innovation is backed with
credibility. Samsung has won many awards for its offerings. Samsung has been awarded the
CES (Consumer Electronics Show) owing to its designs and products for 14 consecutive
 years. It went on to receive 36 CES awards in 2018 along with 400 more awards within a
period of 14 years. It also secured 7 wins at the (IDEA) International Design Excellence
Awards.
 Ecologically Friendly Innovations – Samsung has enhanced its brand reputation through its
environmentally friendly innovations. It secured its ranking at 9th position in the Top 30 Tech
and Telecom companies of the EPA’s 2016 Green Power Partner list. It also received the
Environmental Protection Agency’s (EPA) annual ENERGY STAR Partner of the Year
Excellence Award for five consecutive years. Other companies do not share this achievement
and hence increases Samsung’s appeal across all business lines.
 Stronghold in the Asian Markets – Samsung retains a stronghold in the Asian markets,
particularly India and China. Both India’s and China’s business markets are growing
substantially which is why Samsung has taken advantage of the opportunity and incentivize in
these countries accordingly.
Samsung’s Weaknesses

 Heavily dependent on the American Markets – It is estimated that both Apple and
Samsung sold at least 70.8% of smartphones in the USA. While Samsung has diversified its
resources and expanded its operations in Asia, it is still heavily dependent on the American
markets. The American economy is very unpredictable and another recession could put
Samsung’s revenues in jeopardy and can damage its operational resources. That’s why
Samsung needs to involve itself into the Asian and European markets to ensure sustainability
and avoid potential failures if the US economy ever collapses.
 Decline in Smartphone Sales – Samsung has been experiencing a decline in smartphone
sales since 2017. A similar trend was seen in China due to the price sensitivity of the Chinese
market. They dump a lot of those products in the Indian market at a lower cost which harms
the Samsung sales. Samsung has tried to shift more focus in India, but that strategy did not
produce substantial results for the company.
 Product Failures – Any product that threatens the life of consumers erodes confidence and
trust in the company. Samsung has delivered several faulty products to the market from the
exploding Samsung Galaxy A20e to a faulty foldable phone.
 Dependence on Low-end Smartphones – A large portion of Samsung revenues come from
low-end smartphone sales. Recent events have impacted this segment more than the high-end
smartphone segment, which played a role in Samsung’s decline from 71 million smartphone
sales and 19.1% of market share in Q1 2019 to 55 million smartphones sold in Q1 2020 with
18.5% of market share (as per Gartner Report).
 Hereditary Leadership – Since its founding, Samsung has always been under the leadership
of the family for three generations. Even though keeping the leadership within the family has
offered Samsung immense stability, the company can stagnate due to a lack of fresh ideas.
After being dogged by several scandals, Samsung heir Jay Lee has vowed to end dynastic
succession.
 Bribery Scandal – In 2015, Samsung’s reputation was tainted by the revelation that the
president of the company bribed the government of South Korea to facilitate a merger. He
was found guilty and jailed for about one year until Feb. 2018, which eroded trust bestowed
by consumers in South Korea and the world over.
Samsung’s Opportunities

 Triple Protection Proposition – Samsung is preparing to launch its new air conditioning
product called the ‘Triple Protection Proposition’ that incorporates cutting edge technology
and impeccable construction. The product is geared towards a target customer base that would
ensure maximum customer retention.
  HR Management – Samsung can make impressive transformational accomplishments if it
invests in its HR management. Not only would it be good for its sales but it will also give it
competitive leverage over its rival. The company can utilize its brand image and hire highly
qualified and skilled employees to improve employee performance and productivity.
 Diversification and Acquisitions – It is critical that Samsung avoids the mistake of being
limited to just one marketplace. It not only invites risks from an economic perspective, but it
also attracts unwanted political polarization and negative media publicity. That’s why there is
a business vacuum present in the Asian and European economies in which Samsung can
thrive. It needs to expand its customer base as well. It can only be achieved through
diversification and acquisitions of other businesses. Samsung is a popular brand and can
generate impressive revenues thanks to its financial standing.
 Introduce Innovative Products – The smartphone sector is highly dynamic, with the latest
trends going out of style in an instant. Samsung can attain immense growth by setting the
trend with great and innovative products like the foldable phone.
 5G Technology – As the world moves to 5G, Samsung has the capacity and know-how to
exploit this opportunity. The company is already in active commercial discussions with
operators in the EU to supply 5G and 6G network equipment. Samsung is one of the top
companies in the UK’s list of potential 5G providers.
Samsung’s Threats

 Patent Infringement Controversies – Samsung has been involved in controversies that have
threatened its business. Its rival Apple filed a lawsuit against Samsung for patent infringement
which underwent a heated court battle for seven long years until finally reaching a settlement.
However, the company suffered consequences when a jury decided that Samsung had indeed
copied Apple and was to pay $1.049 billion in damages. This suit damaged the company’s
reputation and its sales.
 Increased Competition – Competition from opponents especially from those within the
consumer electronics, smartphone products, and computing industries has reached a record
high. Whether it’s Xiaomi, Apple, or Huawei, all the technological competitors are
outmanoeuvring and outperforming each other to become the best technology company. This
only increases the pressure for Samsung in both competition and finances.
 Legal and Regulatory Threats – With the world becoming more globalized and digitally
oriented, governmental authorities have begun issuing their guidelines which are increasing
legal and regulatory threats to companies around the globe. Samsung is no exception to these
rules. Laws differ from market to market, and these strict regulations cause a hindrance in
operations. Failure to comply could even result in a complete shutdown in the respective
market which may be fatal for Samsung.
 Economic Uncertainty – Recent events have catalysed uncertainty in the global market and
led to a decline in new smartphone sales by 20.2% in Q1 of 2020. Financial struggles have
forced many consumers to seek recycled or refurbished phones, which has increased by 24%.
Samsung has already experienced a decline in sales, and it can drop further if uncertainty
persists.
 Rise of Counterfeiting – According to numerous research studies, Samsung is by far the
most counterfeited phone brand. Statistics from mobile benchmarking site AnTuTu highlight
that over 36% of all counterfeit smartphones are Samsung copies. Also, Samsung Galaxy S7
Edge holds the record of the most counterfeited smartphone model.
 Impending Court Cases – Any disruption in leadership can affect performance. A South
Korean court is debating whether to send Samsung’s leader and heir Jay Lee back to jail. New
allegations of stock-price manipulation and audit-rule violations have dogged the executive
and threaten to throw the company into another tumultuous period without leadership.
 BCG Matrix of Samsung

The BCG matrix is used as an analytical tool that helps the company allocate resources in
different business verticals.
Using the chart, analysts plot a scatter graph to rank the business units (or products) on the basis
of their relative market shares and growth rates.

 CASH COWS - Products/Businesses in low growth markets with a high market share.
 STARS - Products/Businesses in high growth markets with a high market share.
 QUESTION MARK - Products/Businesses in high growth markets with low market
share.
 DOGS - Products/Businesses with low growth or market share.
Let’s check out the BCG Matrix of Samsung

 CASH COWS - The key feature for the business or product that falls under the cash cow
category is that it brings in much more money than the money it burns. The products/
businesses under this category have a large enough market share that brings in high sales
for the organization. Samsung Home appliances which include Samsung AC’s,
Refrigerators, Washing Machines and Cooking Appliances are the Cash Cows for the
company. Catering to the changing times and customer needs, Samsung has invested a
huge sizeable amount of money in creating new product features that would help the
brand compete against its competitors and ultimately achieve a sizeable amount of market
 share. For instance, the refrigerator carries the feature of adjustable temperature in
different compartments, making it an appealing product for the target market. Based on
these factors, the home appliances can be identified as a cash cow for the organization.
 STARS - Samsung Mobile phones, Tab, and TV business are the Stars for the brand.
These products have a high market share in a very high growth market. In this high-paced
growth industry, Samsung is investing a sizeable amount of its revenue in R&D for its
mobiles, Tab, and TVs and comes up with its innovative products every year. Samsung
caters to customers from every walk of life with its extensive and varied product line.
Samsung QLed TV and Curved TV are a few of its innovative products in the Samsung
TV product category. Samsung Zflip, Samsung S10 series, Samsung S20 series are some
of the famous smartphones of Samsung.
 QUESTION MARKS - Products/Businesses in high growth markets with low market
share. The small market share obtained by the organization makes the future outlook for
the product uncertain, therefore investing in such domains is seen as a high-risk decision.
For Samsung, it’s the Samsung Smartwatch which can be considered as the Question
Mark. Launched with much fanfare, Samsung Smartwatch failed to create the magic that
the company hoped for. Stiff competition from Big brands like Apple and Xiaomi as well
as other smaller players led to the downfall of the product. Hence Samsung Smartwatch
can easily be placed in the Question Marks quadrant of the BCG Matrix
 DOGS - Dogs are those products that were perceived to have the potential to grow but
however failed to create magic due to the slow market growth. Considering the
performance of all the products that Samsung offer, Samsung Printer is one such
product that can be placed in the Question Mark quadrant of the BCG Matrix of Samsung.
High competition and a small market share of the product in the industry are what make
its place in this quadrant. Hence Samsung Printers can easily be placed in the Dog
quadrant of the BCG Matrix
This concludes the BCG matrix of Samsung.