Samsung, one of the leading brands around the world. It sells wide range of electronic appliances and technology such as television, personal computer and mobile phone. It accounted for more than 220,000 employees across the globe with it headquartered in Seoul, South Korea (Datamonitor360). Byung-Chull Lee started his business from selling dried Korean fish with 30,000 won in 1938 under the name Samsung. According to the company record (2012), Samsung has assets value of more than 430,000 billion won recorded and net income over 20,000 billion won. With fierce competitors such as Apple, Sony and Nokia, Samsung must perform it best to secure its future. Further in this essay will be focusing on Samsung keys development to its success and SWOT analysis of this company.
There are a number of key factors that drive Samsung to this stage. Firstly, In 1969 Samsung-Sanyo Electronics was established and Samsung’s first black and white TV was manufactured. This was a significant change to the company as TV was new to the market and its future profit was uncertain. Later in 1972, Samsung try domestic production of black and white TV and it reached its 4 millionth TV in 1978. Second factor is the diversification of its product throughout 1980s. Samsung manufacture many new appliances such as air-conditions and microwaves. In the 1990s, Samsung claim to be ‘copycat’ in electronic market (Kotler and Armstrong, 2012).
Even with that claim, Samsung still manufacture future to people life such as world’s first 64Mb DRAM (Dynamic random access memory) in 1992, worlds first 128Mb flash memory in 1998 and worlds first 32 GB SSDs (Solid state drive) in 2006. Last factor is its new management style. Kotler and Armstrong (2012) state that Samsung fast expansion due to Lee Byung-Chull’s management. He used what the company call “Wow test” to check product quality before it reaches the actual market. This is the reason behind Samsung success and expansion.
Looking at Samsung’s internal aspects there are number of features which can result in both positive (Strengths) and negative (Weaknesses) impact to the company. Firstly, Kotler and Armstrong (2012) reports that Samsung accounted for 25 percent of all corporate profit in South Korea. The statement can be support by Osborne’s report (2013) as she states that Samsung’s Galaxy S smartphone have gone over its sale expectation as 100 million units had been sold with in less than 3 years period; this can be clearly seen that Samsung customers are expanding rapidly and this will positively effect on company profit. BBC (2013) furthermore added that Samsung is now a market leader in smartphone industry with over 25 percent market share, while Nokia and Apple with 21.3 percent and 8.6 percent respectively; this shows that Samsung has a firm base of users in its market.
However, there are some negative factors that Samsung is not facing. Firstly, Lui (2012) reported that a long fight over copyright product and user interface between Samsung and Apple have come to an end with the court favoring over apple. This clearly shows the audiences that Samsung is a ‘copycat’. Moreover, Moore’s law (1970) states that processing speed double every two years; Samsung main market is technology base thus it needs to constantly catch up to be competitive. This can have a serious impact to the company if Samsung over or under predict the sale; this will lead to a great loss as those technology become obsolete quickly.
There are external event which can affect Samsung in various ways. First of all threat; BBC (2013) reports that Facebook and Apple has become partners as Facebook added free call feature to US iPhone users; this event may affect the sale of Galaxy S in US. If this partnership applies throughout the globe Samsung may face with a shocking statistic. Moreover, Ramesh (2013) states that Samsung is accuse of using child labor to manufacture its products. This issue has shown the end user that Samsung has less concern over human right issue. As social responsibility is vital for organization these days, Samsung may face with loss of brand loyalty. However, there are opportunities which must be consider. One of which is expansion in demand of Smart TV (Calcutt, 2012).
According to Harjani (2012) India’s young population has growth significantly. Additionally, Cost of tariff in India is decreasing swiftly; it can result in more mobile phone users. This will provide Samsung with a great opportunity for its future investment. Moreover, Samsung (2012) recently establish an incentive program to encourage the Indian to the London 2012 Olympic, the company act as main sponsor to Indian team that going to take part in the upcoming event. This act can secure Samsung relationship to this fast growing country. In addition, Kleinman (2013) further supports that cheaper smartphone market is growing rapidly and this is a good opportunity for Samsung to jump in supplying low-end product to this market.
In conclusion, it is clear that Samsung had been through many turning points. Its success was due to good management and unique product. Without those, Samsung would not achieve what it had been achieving. At this point, it is certain that Samsung future is promising and in good shape; this is due to its market share in many sector such as smartphone and smart TV. In addition, BBC (2013) reports that Galaxy S gain high profit to Samsung.
Population expansion in India also makes Samsung’s future seem encouraging. But it has to keep in mind that there are some aspects that can bring downfall to the company. Suggestion is that Samsung should get rid of the rumor about it manufacturing process with used child labor. Furthermore, it must change its product design to be real innovative and original in order to avoid other accuse the company as a ‘copycat’.
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