SWOT ANALYSIS OF SAMSUNG ELECTRONICS CO.

LTD
INTRODUCTION
Samsung Electronics Co., Ltd. (Korean: ) is a South

Korean multinational electronics company headquartered in Suwon, South Korea.[2] It is the flagship subsidiary of the Samsung Group and has been the world's largest information technology company by revenues since 2009.[3] Samsung Electronics has assembly plants and sales networks in 88 countries and employs around 370,000 people.[4] Samsung has previously been known for its position as a manufacturer of components such as lithium-ion batteries, semiconductors, chips, flash memory andhard drive devices for clients

such as Apple, Sony, HTC and Nokia.[5] [6] In recent years, Samsung Electronics has expanded upon its manufacturing roots and diversified into consumer markets leading to an ever increasing portfolio of products and revenue stream.[7] Samsung Electronics currently stands as one of the worlds largest vendors in the mobile phone and smartphone markets fueled by the popularity of its Samsung Galaxy line of devices.[8] The company is also one of the largest vendors in the tablet computer market thanks to its Android-powered Samsung Galaxy Tabcollection and is generally regarded as pioneering the phablet market through the Samsung Galaxy Note family of devices.[9] Samsung has been the world's largest maker of LCD panels since 2002, the world's largest television manufacturer since 2006,[10] and world's largest manufacturer of mobile phones since 2011.[11] Samsung Electronics displaced Apple Inc. as the world's largest technology company in 2011 and has been a major part of theEconomy of South Korea.

HISTORY
1969 to 1987 - Early years[edit] Samsung Electric Industries was established as a subsidiary of Samsung Group in 1969 in Suwon, South Korea.[12] Its early products were electronic and electrical appliances including televisions, calculators, refrigerators, air conditioners and washing machines. In 1970, Samsung Group established another subsidiary, Samsung-NEC, jointly with Japan's NEC Corporation to manufacture home appliances and audiovisual devices. In 1974, the group expanded into the semiconductor business by acquiring Korea Semiconductor, one of the first chip-making facilities in the country at the time. The acquisition of Korea Telecommunications, an electronic switching system producer, was completed at the start of the next decade in 1980. By 1981, Samsung Electric Industries had manufactured over 10 million black-and-white televisions. In February 1983, Samsung's founder, Lee Byung-chull, made an announcement later dubbed the "Tokyo declaration," in which he declared that Samsung intended to become a DRAM (dynamic random access memory) vendor. One year later, Samsung became the third company in the world to develop a 64kbDRAM.[citation needed] In 1988, Samsung Electric Industries merged with Samsung Semiconductor & Communications to form Samsung Electronics. 1988-1995 - Consumer struggles[edit]

Samsung Electronics launched its first mobile phone in 1988, in the South Korean market.[13] Sales were initially poor and by the early 1990s Motorola held a market share of over 60 percent in the country's mobile phone market compared to just 10 percent for Samsung.[13] Samsung's mobile phone division also struggled with poor quality and inferior products until the mid-1990s and exit from the sector was a frequent topic of discussion within the company.[13] Samsung Electronics acquired a 40 percent stake in AST Research, a United States-based personal computer maker, for US$378 million in February 1995.[14] 1995-2008 - Component manufacturing[edit] It was decided that by Lee Hun Kee that Samsung needed to change strategy. The company shelved the production of many under-selling product lines and instead pursued a process of designing and manufacturing components and investing in new technologies for other companies. It was hoped in this way Samsung would gain an understanding of how products are made and give a technological lead sometime in the future. This patient vertical integration strategy of manufacturing components has born fruit for Samsung in the late2000s.[15] As Samsung shifted away from consumer markets, the company devised a plan to sponsor major sporting events to remain in the public eye. One such sponsorship was for the 1998 Winter Olympics held inNagano, Japan.[16] As a chaebol, Samsung Group wielded wealth that allowed the company to invest and develop new technology rather than build products at a level which would not have a detrimental impact on Samsung's finances.[17] Samsung had a number of technological breakthroughs particularly in the field of memory which are commonplace in most electrical products today. This includes the world's first 64Mb DRAM in 1992, 256 DRAM in 1994, 1Gb DRAM in 1996.[18] In 2004, Samsung developed the world's first 8Gb NAND Memory chip and a manufacturing was struck with Apple in 2005. A deal to supply Apple for memory chips was struck in 2005 and Samsung remains a key supplier of Apple components.[19] However the Samsung-Apple relationship has soured following Samsung's emergence in the consumer market.

2008 to present - Consumer products[edit]

The Samsung wordmark as it appears on many Samsung products

The Samsung display at the 2008 Internationale Funkausstellung in Berlin For four consecutive years, from 2000 to 2003, Samsung posted net earnings higher than fivepercent; this was at a time when 16 out of the 30 top South Korean companies ceased operating in the wake of the unprecedented crisis.[20][21] In 2005, Samsung Electronics surpassed Japanese rival, Sony, for the first time to become the world's twentieth-largest and most popular consumer brand, as measured by Interbrand.[22] In 2007, Samsung Electronics became the world's second-largest mobile-phone maker, overtaking Motorola for the first time.[23] In 2009, Samsung achieved total revenues of US$117.4 billion, overtaking Hewlett-Packard to become the world's largest technology company measured by sales.[24] In 2009 and 2010, the US and EU fined the company, together with eight other memory chip makers, for its part in a price-fixing scheme that occurred between 1999 and 2002. Other companies fined included Infineon Technologies, Elpida Memory and Micron Technology.[25][26][27][28][29] In December 2010, the EU grantedimmunity to Samsung Electronics for acting as an informant during the investigation (LG Display, AU Optronics, Chimei InnoLux, Chunghwa Picture Tubes and HannStar Display were implicated as result of the company's intelligence).[30][31]

Despite consistent growth, Samsung, along with its chairman Lee Kun-hee, has developed a reputation for insecurity regarding its financial stability and the potential for future crises to arise. After returning from a temporary retirement period in March 2010, Kun-hee stated that "Samsung Electronics' future is not guaranteed because most of our flagship products will be obsolete in 10 years from now."[32] Samsung has emphasized innovation in its management strategy since the early 2000s and it again highlighted innovation as part of core strategies when it announced the Vision 2020 in which the company set an ambitious goal of reaching $400 billion in annual revenues within ten years. In order to cement its leadership in the areas of memory chip and television production, the company has invested aggressively in research and development. The company has 24 research-and-development centers around the world. In April 2011, Samsung Electronics sold its HDD commercial operations to Seagate Technology for approximately US$1.4 billion. The payment was composed of 45.2 million Seagate shares (9.6 percent of shares), worth US$687.5 million, and a cash sum for the remainder.[33] In the first quarter of 2012, the company became the highest-selling mobile phone company when it overtook Nokia, selling 93.5 million units compared to Nokia's 82.7 million units. Samsung also became the largest smartphone vendor as a result of strong sales of its Galaxy SII and Galaxy Note devices.[34] In May 2013, Samsung announced that it had finally managed to test speed-enhanced fifth generation(5G) technology successfully.[35] In June 2013, Samsung Electronics released their new flagship smartphone named the Galaxy S4 which features the companys revolutionary octa-core processor. In July 2013, Samsung Electronics forecasted weaker than expected profits for its April to June quarter. While analysts expected around 10.1 trillion won, Samsung Electronics estimated an operating profit of 9.5 trillion won ($8.3 billion).[36] During the same month, Samsung acquired the media streaming device manufacturer Boxee for a reported $30 million.[37] Products[edit] LCD and LED panels[edit]

The Samsung Galaxy S II, which incorporates a Super AMOLED Plus screen See also: OLED Display: Samsung applications By 2004 Samsung was the world's-largest manufacturer of OLEDs, with a 40 percent market share worldwide,[39] and as of 2010 has a 98% share of the globalAMOLED market.[40] The company generated $100.2 million out of the total $475 million revenues in the global OLED market in 2006.[41] As of 2006, it held more than 600 American patents and more than 2,800 international patents, making it the largest owner of AMOLED technology patents.[41] Samsung's current AMOLED smartphones use its Super AMOLED trademark, with

the Samsung Wave S8500 and Samsung i9000 Galaxy S being launched in June 2010. In January 2011, it announced its Super AMOLED Plus displays[42] which offer several advances over the older Super AMOLED displays real stripe matrix (50 percent more sub pixels), thinner form factor, brighter image and an 18 percent reduction in energy consumption. In October 2007, Samsung introducing a ten-millimeter thick, 40-inch LCD television panel, followed in October 2008 by the world's first 7.9-mm panel.[43]Samsung developed panels for 24-inch LCD monitors (3.5 mm) and 12.1-inch laptops (1.64 mm).[44] In 2009, Samsung succeeded in developing a panel for forty-inch LED televisions, with a thickness of 3.9 millimeters (0.15 inch). Dubbed the "Needle Slim", the panel is as thick (or thin) as two coins put together. This is about a twelfth of the conventional LCD panel whose thickness is approximately 50 millimeters (1.97 inches).

While reducing the thickness substantially, the company could maintain the performance as before, including full HD resolution, 120 Hz refresh rate, and 5000:1 contrast ratio.[45] Mobile phones[edit] Samsung's flagship mobile handset line is the Samsung Galaxy S, which many consider a direct competitor of the Apple iPhone.[46] It was initially launched in Singapore, Malaysia and South Korea in June 2010,[47][48][49] followed by the United States in July. It sold more than one million units within the first 45 days on sale in the United States.[50] The company's I9000 Galaxy S and S8500 Wave smartphones were the winners of the 2010 European EISA Awards in the smartphone and social media phone categories. The I9000 Galaxy S was recognized for its superior-quality screen and excellent connectivity while the S8500 Wave for its Bada operating system with unparalleled social networking and location-based services.[51] While many other handset makers tend to focus on supporting one (or at most two) operating system, Samsung has kept supporting a wide range of operating systems in the market. Although the Galaxy S adopts Google Android as the operating system; Samsung also supports other competing operating systems such as Symbian, Microsoft Windows Phone, Linux-based LiMo, and Samsung's proprietaryBada.[52] Samsung sold 235 million mobile handsets in the year 2009.[53] At the end of the third quarter of 2010, the company had surpassed the 70 million unit mark in shipped phones, giving it a global marketshare of 22 percent, trailing Nokia by 12 percent.[54][55] Overall, the company sold 280 million mobile phones in 2010, corresponding to a market share of 20.2 percent.[56] Partially owing to strong sales of theSamsung Galaxy range of smartphones, the company overtook Apple in worldwide smartphone sales during the third quarter 2011, with a total market share of 23.8 percent, compared to Apple's 14.6-percent share.[57] Samsung became the world's largest cellphone maker in 2012, with the sales of 95 million smart phones in the first quarter.[58] Semiconductors[edit]

A Samsung DDR-SDRAM Samsung Electronics has been the world's-largest memory chip maker since 1993. In 2009 it started mass-producing 30 nm-class NAND flash memories.[59] It succeeded in 2010 in massproducing 30 nm-class DRAMs and 20 nm-class NAND flashes, both of which were the first time in the world.[60] According to market-research firm Gartner, during the second quarter of 2010 Samsung Electronics took the top position in the DRAM segment due to brisk sales of the item on the world market. Gartner analysts said in their report, "Samsung cemented its leading position by taking a 35-percent market share. All the other suppliers had minimal change in their shares." The company took the top slot in the ranking, followed by Hynix, Elpida, and Micron, said Gartner.[61] Another hitherto not-well-publicized area where the company had significant business in for years is the foundry segment. It had begun investment in the foundry business since 2006 and now positioned it as one of the strategic pillars for semiconductor growth.[62] In 2010, market researcher IC Insights predicted that Samsung would become the world's-biggest semiconductor chip supplier by 2014, surpassing Intel. For the ten-year period from 1999 to 2009, Samsung's compound annual growth rate in semiconductor revenues has been 13.5 percent, compared with 3.4 percent for Intel.[63][64] Televisions[edit] In 2009, Samsung sold around 31 million flat-panel televisions, enabling to it to maintain the world's largest market share for a fourth consecutive year.[65]

Samsung launched its first full HD 3D LED television in March 2010.[66] Samsung had showcased the product at the 2010 International Consumer Electronics Show (CES 2010) held in Las Vegas.[67] Samsung sold more than one million 3D televisions within six months of its launch. This is the figure close to what many market researchers forecast for the year's worldwide 3D television sales (1.23 million units).[68] It also debuted the 3D Home Theater (HT-C6950W) that allows the user to enjoy 3D image and surround sound at the same time. With the launch of 3D Home Theater, Samsung became the first company in the industry to have the full line of 3D offerings, including 3D television, 3D Blu-ray player, 3D content, and 3D glasses.[69] In 2007, Samsung introduced the Internet TV, enabling the viewer to receive information from the Internet while at the same time watching conventional television programming. Samsung later developed "Smart LED TV" (now renamed to "Samsung Smart TV"[70]), which additionally supports downloaded apps. In 2008, the company launched the Power Infolink service, followed in 2009 by a whole new Internet@TV. In 2010, it started marketing the 3D television while unveiling the upgraded Internet@TV 2010, which offers free (or for-fee) download of applications from its Samsung Apps store, in addition to existing services such as news, weather, stock market, YouTube videos, and movies.[71] Samsung Apps offers for-fee premium services in a few countries including Korea and the United States. The services will be custom-tailored for each region. Samsung plans to offer family-oriented applications such as health care programs and digital picture frames as well as games. Samsung's range of Smart TVs include the apps ITV Player and motion controlled Angry Birds. Other[edit]

The Samsung GX-10 digital SLR camera Samsung produces printers for both consumers and business use, including mono-laser printers, color laser printers, multifunction printers, and enterprise-use high-speed digital multifunction printer models. In 2010, the company introduced a number of energy efficient products, including the laptop R580, netbook N210, the world's-smallest mono-laser printer ML-1660, and color laser multifunction printer CLX-3185. Samsung has introduced several models of digital cameras and camcorders including the WB550 camera, the ST550 dual-LCD-mounted camera, and the HMX-H106 (64GB SSD-mounted full HD camcorder). In 2009, the company took the third place in the compact camera segment. Since then, the company has focused more on higher-priced items. In 2010, the company launched the NX10, the next-generation interchangeable lens camera. In the area of storage media, in 2009 Samsung achieved a ten percent world market share, driven by the introduction of a new hard disk drive capable of storing 250Gb per 2.5-inch disk.[72] In 2010, the company started marketing the 320Gb-per-disk HDD, the largest in the industry. In addition, it was focusing more on selling external hard disk drives. Following financial losses, the hard disk division was sold to Seagate in 2011. In the MP3 player segment, Samsung has launched products including the M1 MP3 player, and the world's-smallest DivX MP3 player R1.[73] Management and board of directors[edit] In December 2010, Samsung switched its management system from the single CEO system of last year under Choi Gee-Sung, to a two-person management team with Choi Gee-Sung, CEO and Vice chairman, and Lee Jae-Yong, Chief Operating officer and President. In June 2012, Samsung appointed Kwon Oh-hyun as the new CEO of the company.[74] The team was credited as being younger both in age and in outlook, and some executives dyed their hair black.[75] Samsung also reorganized its overseas marketing bases in line with changes in the market, including a combined Britain/Continental Europe regional subsidiary, and a combined China/Taiwan regional subsidiary.

The company added a new digital imaging business division in 2010, and now consists of eight divisions, including the existing display, IT solutions, consumer electronics, wireless, networking, semiconductor, and LCD divisions. It also reorganized its business organization to strengthen business synergies, by merging its Digital Air Solutions Team and Samsung Electronics Gwangju (consumer electronics and air conditioners, merged in 2010) under the consumer electronics business division. The set-top boxes business was merged with the Visual Display Business division. The company's December 2010 reorganization was as follows: Among the eight divisions, the network division and the digital imaging division experienced new appointments, while the remaining divisions were maintained in accordance with their results.

Chief executive officer, Vice chairman: Choi Gee-Sung Chief financial officer: President Yoon Ju-hwa Chief operating officer, President: Lee Jae-Yong

The following are the names of board of directors members:[76]

List

of

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SWOT Samsung SWOT analysis 2013 Strengths Weaknesses

1. Hardware integration with many open 1. Patent infringement source OS and software 2. Too low profit margin

2. Excellence in engineering and producing 3. Main competitors are also largest buyers hardware parts and consumer electronics 4. Lack its own OS and software 3. Innovation and design 4. Focus on environment 5. Low production costs 6. Largest share in mobile phones and 2 place in smartphones sales 7. Ability to market the brand 5. Focus on too many products

Opportunities 1. Growing Indias smartphone market 2. Growing mobile advertising industry

Threats 1. Saturated smartphone markets in

developed countries

3. Growing demand for quality application 2. Rapid technological change processors 4. Growth of tablets market 5. Obtaining patents through acquisitions 3. Declining production 4. Breached patents 5. Apples iTV launch 6. Price wars margins on hardware

Strengths 1. Hardware integration with many open source OS and software. Samsung is focused on producing devices which can be integrated with most of the software and OS. This gives Samsung products an edge over Apples (its arch rival) devices, especially as Android and other OS are gaining market share when iOS and OS X are losing it.

2. Excellence in engineering and producing hardware parts and consumer electronics.Samsung is the number 1 by market share in televisions and mobile phones sales and some of the hardware parts (processors, memory chips, etc.). This was largely achieved due to excellence in engineering and both efficient and effective production. 3. Innovation and design. In 2011, Samsung ranked second on the list of US top patent assignees. More patents strengthen Samsung position among its competitors. The firm also won many awards for the design of its products, proving the superior advanatage over the competitors. 4. Focus on environment. Samsung focuses on producing environment friendly products that are free from PVC and BFRs (currently only MP3 and mobile phones). It also develops various recycling programs that are awarded for their success. Thus, Samsungs focus on environment gives it an edge over its competitors in the eyes of its customers. 5. Low production costs. The company has set up its production facilities in low cost countries. This allows producing goods with low production cost and benefit Samsung as it can offer lower price and earn higher margins. 6. Largest share in mobile phones and 2 place in smartphones sales in the world. Samsung Electronics have achieved large market share in many products they sell, especially in mobile phones, smartphones, semiconductors and television sets. Large market share has its advantage, bargaining power, that Samsung can use to further reduce costs and demand for better contract conditions. 7. Ability to market the brand. Samsung is named as top rising brand by Interbrand and is the 9th most valuable brand with value nearly $33 billion. It has risen by 40% from 2011 to 2012. This was mainly achieved due to companys ability to market the brand in sporting events and social contributions.

Weaknesses 1. Patent infringement. Samsung is infringing Apples and some other firms patents, thus, damaging its reputation and having to pay a huge amount of money in damages.

2. Too low profit margin. Samsung Electronics is the largest technology business in the world in terms of revenues but it has a low gross profit and net profit margins. Although its smartphones business is quite profitable, Samsungs profit margin is low due to its semiconductors sales and aggressive price cuts. 3. Main competitors are also largest buyers. Apple, Sony, Dell, HP are the main buyers of Samsung Electronics products as well as the firms main competitors. Such situation would be favorable to Samsung (if competitors could not find complementary products and would form a relatively low share Samsungs revenues) because it could use its bargaining power over competitors. Due to reverse conditions (competitors can find complements and they form a relatively high share of firms revenues) Samsung cannot use its bargaining power over competitors as it can easily lose its customers and sales. 4. Lack its own OS and software. Software and OS production has a high profit margin, can increase integration of companys products and brand loyalty. Without strong software and OS Samsung is at disadvantage over its competitors. 5. Focus on too many products. Samsung Electronics serves 4 different industries with many different products in them. Samsung is at disadvantage over its competitors because it loses a focus when competing in too many industries and too many products. Opportunities 1. Growing Indias smartphone market. Indias smartphone market is one of the least penetrated among Asia/Pacific countries. Samsung has a strong presence in Indias market and could use this opportunity to expand its sales. 2. Growing mobile advertising industry. The company could develop advertising platform for its mobile devices and significantly benefit from this lucrative market. 3. Growing demand for quality application processors. Samsung is one of the key manufacturers of application processors for smartphones and tablets. The growing demand for these products requires more best quality application processors that only Samsung provide. 4. Growth of tablets market. Tablets market is expected to grow in double digits over the next few years. Samsung business has a strong position in tablets market and could expand it by introducing newer, better quality tablet models, such as its current galaxy line.

5. Obtaining patents through acquisitions. The key to Samsungs competitive advantage is the large portfolio of patents. Patents can be discovered by engaging in costly R&D or through acquisitions of other firms. Threats 1. Saturated smartphone markets in developed countries. Smartphones market in the developed economies is saturated and the sales will not be growing at a high rate. 2. Rapid technological change. The serious threat that Samsung and the other tech companies are facing is a rapid technological change. Companies are under the pressure to release the new products faster and faster. The one that cannot keep up with the competition soon fails. This is especially hard when the business wants to introduce something new, innovative and successful. 3. Declining margins on hardware production. Samsung is the second largest semiconductors producer where the profit margins are very thin, thus weakening the whole company's figures. 4. Breached patents. Samsung Electronics has many patents which are often used by its many competitors. Such situation makes it hard to find out which companies benefit from Samsungs technology but do not pay for the rights to use it. 5. Apples iTV launch. Apples iTV is the next big lunch from Apple, which may hurt Samsungs TV sales. 6. Price wars. Samsung has a very low gross margin on many of its products and is already selling some of them with significant price cuts. Competitors could follow price cutting strategy too and induce price wars, which would erode Samsungs profit margin to 0%! Market segment

4ps of market mix

Samsung is a market leader in Consumer Electronics and Cell Phones.

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Expectations

New innovative products. Design. Price. Competitors

Apple

Nokia Sony LG Whirlpool Intel Dell Seagate technology Complaint handling mechanism

Complaint is filed Respond to customer

 Analyze customer claims Solution CRM strategies One way of Samsung to run CRM is with use facebook. Samsung can promote their product using facebook. Samsung use facebook to as a place to talk about Samsung Mobile and all things. Samsung hear about suggestions, advices, or complain from the customer. Then they response it. It is one of act, that they care to customer.