Samsung Analysis: Porters Five, SWOT and PESTEL

Samsung Analysis: Porters Five, SWOT and PESTEL INTRODUCTION Samsung electronics Industry Corporation was created in 1969 as a division of Samsung group, and the name of corporation was changed to the current name which Samsung electronics in 1984. Mainly it manufacture and exported electronics products, which include color TV, electronic calculator, electronic watch, electronic cash registers, as well as electronic home appliances such as refrigerators, air conditioners, washing machines, an also telecommunication devices. Especially, it recorded the outstanding number of manufacturing black and white TVs which was going up above 10 million and took top of the world in terms of export of black and white TVs. It succeeded to develop super mini VTR (8mm) in 1983, started to export VTR in 1985, and merged Samsung semiconductors and telecommunication cooperation in 1988. Since then Samsung electronics has dramatically grown as one of the worlds leading electronic giant with branches all over the world. Now millions of Samsung electronic products are being manufactured and sold every day and its product is seen in almost every house around the world. Samsung electronics has one of the best inventory management systems, supply and distribution chain in the world and its products are unique and durable with dedicated, efficient work force. Also, its research and development department is second to none in the electronic industry hence we decided to carry out this in-depth analysis to access the various strategies they have being applying since their existence and to advise them on the possible strategic options available to them now and in the future. ENVIRONMENT ANALYSIS Industry Analysis Porters Five Forces Analysis (http://www.masslearning.com/) Michael Porter stated that for any business entity there are 5 forces in action, these forces can have a great influence on the current affairs and strategy of the business. These forces consist of the following factors. Buyers power Buyers are the driving force of any industry including the automotive sector. Buyer behaviour is an essential part of marketing strategy and in-depth studies and research have been conducted to try to understand buyer behaviour. Typical question to ask when considering buyer behaviour are, who are our buyers? How do they buy? When do they buy? Where do they buy? Why do they buy? For Samsung electronics the brand strength allows them to make radical changes as they have a large base of loyal customers (due to an long history of building quality electronics), this has been evident with the radical exterior design changes to the Samsung product line up. Thus Samsung can be considered as a trend setter in their respective markets. This is a powerful position as it allows for some control of the direction of the future markets and trends. But strong competition from their rivals ensures that the changes arent too radical as they may lose customers to their opposition. Suppliers power Suppliers are the foundations of any industry they can supply raw materials, labour components and other supplies. Therefore it is important that a business has a good healthy relationship with its suppliers to ensure that it can operate smoothly and efficiently in cohesion with its suppliers. The power of suppliers varies depending on certain factors, for example if the product is standardised then the supplier will be weak, an example of this in the electronics industry would be silicon manufacturers. There are many to choose from and product diversity is relatively low thus suppliers are weak in this market. Suppliers are more powerful when they provide a more specialised product. Samsung has a technologically advanced component with existing patents, so in this case the supplier has more power in the relationship then in the case with silicon. Threat of Substitute products A substitute product is a product in another market which poses a threat because it is potentially a substitute to your product. A substitute (product) can negatively affect the ‘price elasticity of your product since more substitutes become available the demand becomes more elastic as customers have more alternatives a close substitute product constrains the ability of firms in an industry to raise prices. In the electronics industry substitute products will include other similar products from other manufactures. The threat of substitutes in the electronics sector is increasing since the consumer are being motivated by both social responsibility and legislation to find alternative manufacture that meets their criteria to reduce the affect of global warming energy consumption . Legislation in the UK such as high charging for energy bill also promotes substitutes in to electronic industry so it is a growing threat in this sector. Degree of rivalry Perhaps this is one of the most important of Porters 5 forces, since competition is what tends drives innovation changes in the market since firms strive for a competitive advantage. The intensity of rivalry amongst firms varies across markets. In a market that is saturated rivalry can become fierce as firms compete for the same customers, but in a growing market firms dont need to compete as fiercely as there may have their own growing customer base to which they can cater their product. When considering direct rivals to Samsung such as Motorola and Dell they are all long established in the industry so it is likely that they have coexisted by having disciplined competition and also having a ‘code of conduct between themselves. This is evidence of ‘friendly competition within the automotive sector. Barriers to entry This relates to how easy it is to enter the market place, this force has only negative implications on current market competitors since the easier entry into a market is the more competitors there potentially is. But usually there are legal requirements that must be overcome before the market place can be entered for example a product must pass minimum quality and safety standards and licences are usually required for trading. When considering the electronics industrial sector entry into the market is extremely difficult, since a large initial investment is required, and competition is fierce. In the current economic climate entry in this sector will be almost impossible unless an innovative unique selling point is achieved. Currently the easiest entry into the electronics sector is through excellent design reliability, durability and cost effectiveness of electronics being the most obvious. Electronics Industry Life Cycle Stage According the theory of industry life cycle, Samsung Electronics already got the Maturity stage. Because growth is no longer the main focus,market share andcash flow become theprimary goals of the companies left in the space. Samsungs products like TV, audio, video, mobile phones, camera, camcorder, PC, peripherals, Printers, home appliances and memory cards all have good reputation and occupy important place in market. PESTEL Analysis This section serves as a business environmental scan. Here a PESTLE analysis is applied of the external macro environment in which SAMSUNG operates. The pestle analysis is applied to SAMSUNG looking at its market i.e. no specific product. The diagram below highlights the main issues within each factor. All the factors have a high level of influence on our business and our future strategy. Portfolio Analysis SWOT Analysis Porters Generic Competitive Strategy Analysis STRATEGIES CHOICE GE Matrix Analysis Mobile phone industry attractiveness and business strength assessment of Samsung phones Industry attractiveness Business strength assessment Depending on the analysis of the mobile phone market and industry attractive terms, the current score of attractiveness of the mobile phone industry is 3.68 points; the attractiveness of the industry is relatively high. Through the analysis of financial statements of Samsung, Samsungs business strength total score of 3.19 points in the industry belongs to a high level, in the matrix belongs to GE leader-type to business, this score indicates Samsung mobile phones has a good market share in current market. TV industry attractiveness and business strength assessment of Samsung TV Industry attractiveness Business strength assessment From the table, we can see that on the all TV market analysis, financial statements and marketing analysis of Samsung TV and Samsung in the GE matrix effort to business, the TV industry has a strong attractiveness, but Samsung in the TV business strength only belongs to middle level, which need considerable investment of resources, through the efforts of Samsung could be a leader-type business, or it will be difficult to fierce competition in the market to survive. Washing-machine industry attractiveness and business strength assessment of Samsung washing-machine Industry attractiveness Business strength assessment Through the washing-machine industry analysis and a brief Samsung washing-machine business development analysis show that the attractiveness of the washing-machine industry for Samsung is very strong, but Samsung washing-machine for production in terms of business strength is weak and the question mark in the GE matrix operations, the attractiveness of the industry itself is very easy to attract new entrants into the market and existing enterprise competition, but the washing-machine industry because of the competition is fierce, national brands in the market want a share of the domestic and international well-known brands have already endless which want to improve their competitiveness in this industry. Samsung is in a very difficult situation in the washing-machine industry. According to the industry attractiveness and business strength matrix of Samsung mobile phones, TVs, washing-machines, we mapped the GE matrix of Samsung: B: mobile phone, F: TV .H: washing-machine. (http://www.showppt.com/ppt_79.html) The GE matrix is displayed by Samsung, Samsungs mobile phones plays a leader place in the market and it must keep go on. TV business in the maintenance of regional (between effort and regulator), business attraction and business position in the industry do not have the advantage of both the absence of the formation of a unique segment had to compete with many rivals, enterprise by supporting these businesses strive to improve the businesss market share, and strive to develop into a leading-type business. Samsung washing-machine business is a question mark position difficult for enterprises to compete with the market the original members, requiring substantial investment of resources, currently giving up their own production of washing-machine is an inevitable choice. Boston Matrix Analysis Samsung electronics was build up in 1969, it cost 40 years developed from a small company which only 36 people worked in it to a worldwide company. Now there are nearly 20 kinds of products in Samsung which got a good reputation all over the globe. Take Samsung electronics as an example, it got lots of awards in the Industrial Design Excellence Awards in America. It is the company which got the most awards in several consecutive years, which can prove the design ability of Samsung reach the world-class level. It will be analysis with Boston Matrix. The television and mobile phone can be looked as the cash cow product, because the market growth rates are relatively low and the relative market share are so high. (http://www.masslearning.com/) Samsung electronics started the business of liquid crystal display from 1995, when it get to 2005, the total amount of sales volume is more than one hundred million and it is more than 2 hundred million in 2007, 3 hundred million in 2008, in last month, the total sales volume is more than 5 hundred million. The reason of why Samsung electronics can get the outstanding achievement is the extended market of the LED TV panel and the powerful sell of the big size LCD TV. In 2010, Samsung is going to sell 10 million LCD televisions with LED and 22 million all kinds of LCD TVs. In the sales amount aspect, Samsungs market share got to 23.6% all over the globe in the fourth quarter in 2009. The high sells amount and market share of Samsung is because of the high shipments of television market in the world, the integrity layout of the product size and the leader status of the advanced technology. Samsung got the double champion of the shipment and the sales amount on television in continue 13 seasons. So they looked as the cash cow product. The market share and the market growth rate of five TV brand in 2009 (http://finance.baidu.com/2010-02-23/122741032.html) Samsung is the second biggest mobile phone producer in the world. In 2009, it paid more attention on the fashion style which attracted a great deal of young person and the shipments got to 235 million, the market share got to 19.5%. Compared with 2008, it has a big improvement, because the shipment and market share is only 199 million and 16.3% respectively. The successful of Samsung electronics is come from the swift and agility, but lack of innovativeness may lead to the loss of probability. Nowadays Samsung pay more attention on the Smartphone, the Bada system is a good example. Bada system is a platform of the new smart phone which developed by Samsung company, the interface of it is more fashion in colour and style. So it can be looked as the cash cow product because the market growth rate is low but the market share is very high, the characteristic of which is the sale volume is high but the rate of liability is low, it can provide fund for the company and the product do not ne ed improve the invests. So it can be the supporter for recover the funds for the company, support the other product. The market is becoming mature, the company do not need to invest huge capital for enlarge the market and as a leader in the mobile phone area, it bring lots of profit for the whole company. (http://article.pchome.net/scripts/art_content.php?article_id=447146) In 1997, Samsung produce a series of double door fridge named ‘ZIPEL, in these 10 years, it was export to more than 130 countries and the market share got to the peak over about 50 countries. After sell the fridge to America for 7 years, the market share of Samsung became the highest one. In 2007, the French fridge started to sell in America, the market share was only 5.6% at that year, but after one year, it rocket to 16%. In 2009, the total sales of bridge take account of 28.6% and the sales volume take account of 27.2% in America, rank the first place. So the fridge should also be looked as the cash cow products, a company should have several kinds of cash cow products, if there is something wrong with the other dogs products, it balance the funds of the whole company. From 2007, Samsung produce a series of camera, such as blue, WB, PL, ES and ST series. Especially Blue series which was made the advertisement by Dongjian Zhang, leave a good impression for Chinese customer, so attract lots of customers attention. But in the whole area, Canon, Sony and Nikon still the first three brands, Samsung cannot catch up with them. Although it developed harder on the camera area, the market share still cannot as high as the other area. So the camera area can looked as the question marks product in the Boston Matrix analysis. Most products of Samsung electronics have a good reputation and sell very well, but there are some exceptions. Take air c The Man of the Crowd | Literary Analysis The Man of the Crowd | Literary Analysis Such a great misfortune, not to be able to be alone, declares the opening line of Edgar Allan Poes Man of the Crowd. Surrounded by a city full of people, the narrator is indeed not alone in that sense. Alone, though, may be viewed in another light: to be unique, to stand alone against the chaos and homogeneity of the crowd. The relationships the narrator has with and the observations he makes about the people of London give insight regarding the nature of urban relationships generally. Though the narrator does not in reality have any direct communication with the people in this story, he observes and reports on each of them, and these observations substitute for his lacking personal relationships. It is his observations of the city of London itself, of the crowd, and of the old man that reveal Poes distaste for the isolation and loss of individuality that city life fosters. The city is mostly only described at night, and we see almost nothing of the daylight hours. The audience, therefore, is left with a dark and gloomy image of the city. By providing this sole nighttime portrait of the city through the narrator, Poe automatically creates a depressing outlook on city life that pervades the story and provides the backdrop for the entire commentary. To reinforce the depressing outlook, Poe has the narrator enumerate the features of the verge of the city in more detail than any other part of London (220). He states that this place [wears] the worst impress of the most deplorable poverty, and of the most desperate crime (220). The poverty and crime reveals that people do not care about each other, in that no one helps the poorest of the poor and the criminals have no regard for their fellow city dwellers. People are isolated from, and apathetic towards, their fellow city dwellers. To give a further impression of the impoverishment and apathetic nature of the city, he describes the beggars, poor girls returning from their demanding work, and sick people wandering about the streets. From the descriptions of these people it is evident that the city is a cold, uncaring, and unforgiving place: the sick were in search of some chance consolation and the young girls had to return to careless homes (217). The lack of concern for others in the city highlights Poes notions that the urban environment creates isolation amongst its inhabitants. While describing the crowd, the narrator is seated behind a window, separated from the people. Putting him behind the glass isolates him from those whom he is so meticulously observing. One would think that after being sick and inside for months on end, the narrator would want some kind of personal, human relation, yet he is perfectly content to sit alone indoors and ponder the pedestrians from afar. His willingness to be alone further contributes to the sense that people are truly isolated in the city. This isolation is also seen in the pedestrians, who [talk] and [gesticulate] to themselves, as if feeling in solitude on account of the very denseness of the company around (216). Here the narrator explains that because there are so many people around and since no one knows each other, these people feel like they are alone. Poe suggests, through the narrators observations, that while one may be in extreme proximity to others in the city, he is not truly connected with any of them, except in the sense that he may share some general attributes with a large group of others that causes him to be seen as part of the whole. The narrator states that he at first looks at the people in their aggregate relations but then moves into observing the details of which there were innumerable varieties (216). Herein lies a contradiction: he points out there are innumerable varieties, yet he does exactly the opposite by enumerating the types of people that he sees and placing each person into a specific category. The narrator treats each person within each of his classifications as the same as the whole: though he calls them individuals, he immediately places them into a larger group. Poe here is trying to say that while you may think that you are a distinct person in the city, you have already lost your individuality by being part of the crowd. The narrator tells himself that everyone is different, but in pointing out their differences, he makes sweeping generalizations, thus making many people the same as one another. Furthermore, when the narrator classifies and describes the crowd, he does so in a very scientific manner, looking at each of them through their figure, dress, air, gait, visage, and expression of countenance (216). While these traits should make each person different at least in some way from another, they are all treated as exactly the same within each group. The classification of the people in the crowd makes them lose their individuality by generalizing and putting each person into a pre-labeled group. When a person comes along, the man of the crowd, that cannot be classified, the narrator is startled (218): he doesnt know how to think about this man since he cannot put him in a well-defined category. He is so intrigued by this man that he leaves the coffee shop where he has been meticulously scouring the people of the crowd. He purposefully hides among the pedestrians so as not to be seen and, in doing so, loses his individuality and becomes just another undistinguishable face amid a sea of others, suggesting that his quest to classify this man is futile. If the narrator himself is indistinguishable, how is he able to individualize and ascribe specific attributes to someone else? Also, the way in which he describes the passages that the old man takes causes him to become intertwined with the old mans identity: the narrator says that he hurried into the street [] until we emerged (220). He has to do exactly as the old man does in order to stay close and observe him. Again, this mixing of identities emphasizes the loss of individuality in the city that Poe wishes to point out. A person starts to lose his identity when he starts behaving like other people. The narrator eventually abandons his pursuit, saying that this man does not permit [himself] to be read (215). He points out that he can learn nothing else about him. The narrator here seems to just ignore someone that does not fit into he predetermined classifications. This eventual disregard for the peculiarity of the old man again shows that there is no true individuality in the city. If other people like this man cannot be classified, they are probably simply ignored; in effect they do not exist. So, in essence there are no individuals. The tale opens by saying that it is a great misfortune, not to be able to be alone. The narrator in Man of the Crowd is surrounded by a city full of people, unable to be alone, though is truly isolated from them. Through the observations made by this narrator, it is evident that the same isolation applies to every other member of society in London; no one knows anyone else and, in that sense, everyone is isolated. Though, these people are not alone in that none of them are distinguishable from a larger group. Each person is defined as being part of a group within the crowd and as a part of the crowd generally. It is this loss of individuality that gives meaning to the vagueness title The Man in the Crowd.