Samsung's Strategic Analysis: Competitors, Strengths, and Weaknesses

This research is credited to Ahmad Fuad Al Hattab

Introduction

Every company has its own strengths and weaknesses; hence, every company should always seek to get better and improve in its field. Even the biggest and most successful companies around the world have their own weaknesses. Hence, a company should continually strive to develop its capabilities, competencies, and skills.

However, unfortunately, there are a lot of companies that reach a certain level in developing their capabilities, then they become reluctant and unwilling to improve and develop, and that is why they fail. This report is a situational analysis of Samsung. It will first give a quick brief about the company, then it will move on to talk about the company's competitors.

After that. it is going to discuss the strengths and weaknesses of the company. Then, it will recommend and suggest some actions that the company should take to improve and develop its business activity. Next, in the conclusion, it will talk about the positive impact of these suggestions on the company.
 
A Brief About Samsung
 
To begin with, Samsung is a worldwide company. It is situated in South Korea and founded in 1969. It is specialized in mobile communications, information technology, device solutions and electronics. The president and head of device solutions is Kim, Ki Nam, the president and head of consumer electronics are Kim, Hyun Suk and Koh and Dong Jin is the president and head of IT and mobile communications.
 
In terms of revenue, “in the fourth quarter of 2018, Samsung Electronics recorded revenue of around 59.27 trillion South Korean won (approximately 53 billion U.S. dollars).” (Statista, n.d.). The objective of the company is to provide high-quality products and services to its customers. The next section is going to talk about the competitors, but in general, the main competitors of Samsung are Apple, Huawei, LG, Whirlpool, and Panasonic, among others.
 
The Competitors of Samsung in Brief
 
First of all, competitors in terms of smart phones and computers:
 
Apple
Conclusively, when it comes to smartphones, Samsung’s competitor number one is Apple, specifically the iPhone series. Apple releases three iPhones every year and these iPhones compete with the Galaxy flagship series from Samsung (Bhasin, 2018). iPhone has always been a big influencer on Samsung. One of the first smartphones that featured a touch screen was iPhone, hence, this unprecedented step had a huge impact on Samsung mobiles. Since then Samsung improved drastically and nowadays what makes it unique is its displays. Indeed, iPhone X featured an OLED display which is made by Samsung (Aljazeera, 2017). Not only displays but also processors, all iPhones’ processors are made by either Samsung or TSMC (Schiffer, 2017).
 
 
Huawei
Although the company is banned in the United States, it ranks second in the market share of smartphones after Samsung (Baptiste Su, 2018). This shows that it has become a strong competitor to Samsung. What distinguishes Huawei from other companies is that it offers mid-range smartphones with strong performance and with competitive prices. What also makes Huawei a strong competitor is that it has recently announced its foldable smartphone in February 2019 which is the mate x, which is the same month that Samsung has announced the Galaxy Fold (Andy Boxall, 2018). Consequently, Huawei is considered a powerful competitor.
 
Second of all, competitors in terms of home appliances:
 
LG
LG is one of the leading companies in the home appliances industry. It manufactures refrigerators, TVs, washing machines, etc. Whilst Samsung has fewer home appliances and kitchen products than LG, thus, it is considered a powerful competitor.
 
Whirlpool
It is considered a notable brand and it is very popular in the washing machine industry. Whirlpool originally began providing washing machines, then, the company started to offer several other durable goods. Moreover, Whirlpool has a huge array of fridges. Thus, when it comes to durable goods, Whirlpool is considered a competitor to Samsung (Bhasin, 2018).
 
Strengths of Samsung:

First of all, “Samsung has 124 offices and facilities across 56 countries across the world. The group's subsidiaries include 14 listed companies operating in various segments” (DATAMONITOR, 2007). There are many divisions: the electronic division, the heavy industries division, the Samsung Techwin division, the chemical business division, and the financial services division. Hence, these different divisions are a strength.
 
Samsung has a geographically large presence. It is a global company located in more than 70 countries around the world. General speaking, Samsung exists in all major countries. This huge presence of Samsung gives it an advantage; hence, the company is not tied to a particular market, which reduces the chances of risks.
 
In addition, Samsung dedicates huge resources to releasing modern and ingenious technologies. It has 17 research and development centres around the globe. Samsung has registered 1,600 US patents (MarketLine, 2019). One of its patents, for example, is the “browser-based command and control home network, which is a method and system for commanding and controlling diverse home devices” (Google Patents, n.d.). Subsequently, these patents are considered a strength.
 
Weaknesses of Samsung:

Every company has its weaknesses, and Samsung is no exception. One of the major weaknesses of Samsung is that it is dependent on the Android operating system, which belongs to Google. This is considered a weakness; therefore, when looking at its competitor Apple, it has its own IOS operating system, while Samsung does not have an operating system (MarketLine, 2017).
 
A huge company like Samsung should produce its own OS along with the hardware. This enables the company to have an operating system that is in line with its objectives. Moreover, this will allow it to put its own touches on the operating system and thus create an identity.
 
 Moreover, when it comes to marketing, Samsung cannot catch up Apple specifically in the US market. “Smartphone market fell by 2.3% between 2014 and 2015. In contrast, Apple’s share price grew by 34.9%” (PESTLE analysis, 2015).
Accordingly, Apple has surpassed and transcended Samsung in the US market, and actually, this is not just a weakness but also a threat that Samsung is facing.

In addition, Samsung has limited online stores, indeed, this is considered a big mistake since people nowadays tend to buy a lot via the internet, and it has actually become a habit, therefore, customers are predisposed to what saves their time and efforts.
 It is a stigma really when a brand name like Samsung neglects the virtual world that most people actually live in. Not only that but also when looking at Samsung's online stores, it is really obvious the lack of mid-range and budget smartphones in Samsung’s online stores, and this is also another problem.
 
Nowadays, most of the flagship smartphones are too expensive, and in fact, most people cannot afford them, hence, most people tend to buy mid-range and budget smartphones. Accordingly, the presence of all smartphones in different ranges in the online store is very important.
 
Recommended Actions That Can Improve Samsung’s Business Activity  
 
Product: First of all, Samsung should create its own operating system, so it is advisable that Samsung by the first of January 2020 release its own operating system, and this is an ideal time to release it; therefore, ten years have passed since the Galaxy series was launched. Hence, this new operating system will be the first step towards a new era in Samsung’s life. Samsung should aim to create a powerful OS so that it can compete with IOS and Android.
 
Promotion: Second of all, it should double its investments on advertising campaigns in the US in particular. It should spend and invest millions of dollars in marketing to compete with Apple. Moreover, sponsoring is a good way to draw people's attention to the company and its products. This way it can attract more customers, which is why it should sponsor many huge events. In addition, it should diversify its advertising methods, for example, it should use traditional marketing, such as street advertising, newspapers, magazines, television advertisements, and even non-traditional marketing, such as online marketing.
 
Place: Samsung should open many online stores in different countries, or at least it should open an online store that includes different languages, so that all people can access it, and this online store should be easy to navigate. In addition, the company should include a chat box service on the online store to allow people to talk with customer service about any concern, question, or compliance. In addition, it is vital to allow customers to comment on the company’s products and say their opinions freely, this way, the company can listen to customers’ opinions and perspectives. This ultimately will help the company improve and develop its business activity.
 
Conclusion

In conclusion, it is considered a weakness that Samsung does not have its own OS. The most significant element in the smartphone is the OS, and it is with another company, which is Google. When Samsung has its own operating system, that means it can distinguish itself from other companies and, more importantly, compete with IOS from Apple.

This indicates that the company is strong enough to provide its customers with the software and hardware. In addition, investing in marketing in the USA is going to benefit the company a lot, since the US market is huge.

Subsequently, it is very significant, and Samsung should not neglect it. Samsung should specifically focus on this market; therefore, Apple has a strong presence at this market. There are many advantages to have an online store; hence, it allows people from all around the world to access it.

In addition, the online store is available 24/7, which gives the customer more flexibility (Business Queensland, 2016). Moreover, having online stores will also have a positive impact on Samsung’s sales. That is why a company should consider these suggestions and recommendations.
 
References

Aljazeera (2017). iPhone X: How much of a Samsung is it? 

Andy Boxall (2018). Samsung to manufacture iPhone chips for Apple again. Digital Trends.

Baptiste Su, J. (2018). Huawei Fortifies #2 Spot in Global Smartphone Market, Beating Apple Again. Forbes.

Bhasin, H. (2018). Top 21 Samsung Competitors: Competitor analysis of Samsung. Marketing91. 

Business Queensland (2016). Benefits of doing business online | Business Queensland. 

DATAMONITOR (2007). Samsung Group, Company Profile. https://library.essex.ac.uk.

Google Patents (n.d.). Browser-based command and control home network. 

MarketLine (2019). COMPANY PROFILE Samsung Electronics Co., Ltd. https://library.essex.ac.uk. 

MarketLine (2017). COMPANY PROFILE Samsung Electronics Co., Ltd.  https://library.essex.ac.uk.

PESTLEanalysis (2015). SWOT analysis of Samsung. 

Schiffer, A. (2017). Samsung to manufacture iPhone chips for Apple again.

Statista (n.d.). Samsung: revenue 2011-2018 | Statista.