Threats

  • There is high threat for the company from the Chinese players since they can make blueprints of everything.The security of the exclusive product is a challenge.
  • The retention of the intellectual property rights is also an issue.
  • The rising number of new entrants into the market is also a challenge, since the market has shown potential growth.

 

PESTEL Analysis- Samsung

Political Factors

Samsung operates mostly in stable regions where the political systems are stable. This allows it to develop a strong business strategy in a particular region for a sustainable period of time. However, in the current period, Samsung is faced with intense political instability in its home country as well in the US, due to home war with neighboring country and presidential elections respectively.

Economic Factors

The rising trend of globalization and the emerging markets in Asian regions have called Samsung to establish the markets in the Asian and other regions. However, since these regions are still emerging and the trend of the economy is unstable and volatile, it poses great threat to the continuous growth of Samsung in those markets for example, India. However, the strategy of Samsung to offer smart phone and technology to the developing regions offers it a suitable path to pursue in order to develop a strong market in the region and compete in terms of profits with Apple.

Social Factors

The social factors include the lifestyle, brand positioning, and niche marketing. Since smartphones and other technologies have become a part of consumer social factors, Samsung faces great pressure which calls for the customized product offering ineach region. Since the socio-economic factors differ from one another, Samsung needs to develop strong customization strategy for each region in order to incorporate the social factors in it.

Technological Factors

Samsung can be considered as one of the most technologically advanced companies in the globe. Over the period of time, with the advancement in technology, Samsung has incorporated the technological expertise into its business strategy which has allowed it to give intense competition to Apple.

Legal Factors

The legal factors account for the breach of patent rights, copyrights and trademark. Recently, Samsung has been penalized in the US region due to the imitation of some of the legal designs of Apple products. This has affected the brand image of Samsung in the US market and also damaged its strong position and distinctive market image in the US. Hence the legal factors pose a great threat to the innovative and technologically strong business strategy, since the legal rights and patent authorization can cause great hurdle in pursuing or adopting certain technology.

Competitive Edge

Samsun has strong manufacturing and verticalintegration that allow it in-housemanufacturing, reducing thedependence on theexternal suppliers, which in the long term may imitate thetechnology. In addition, thecompany efficientlyoperates in differentcategoriessuch assemiconductors,digital media, mobile phones, and telecommunication, allowing it to expand in the market through strong market penetration and productdevelopment strategy.

Inaddition to this, the company also has strong supply chain management and marketing strategy that makes it the top tier brand in the global market………………………….

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