SAMSUNG ELECTRONICS

External Analysis of Samsung Electronics

External Analysis of Samsung Electronics

Introduction

This research paper is about a company known as “Samsung Electronics”. The research paper aims to provide information about the external analysis of the company. Tools for external analysis would include PESTLE analysis, Porter's five forces and SWOT analysis. The paper would also provide guidance to the CEO of the company about how to get the benefit from these external analysis tools.

Samsung Electronics Co. is one of the world's leading companies in the industry of consumer electronics. The company has its operations in the countries of Asia, United States and Europe. The company's headquarter is located in Seoul, South Korea. It employs over 200,000 people as of December'12 (Marketline, 2012).

Discussion

Samsung Electronics Co., Ltd. is facing intensive competition from main competitors like Hitachi Ltd. and Panasonic Corporation. The competition possesses a number of threats for the company including market share and profitability. It is extremely valuable for the organization to make external analysis in order to be aware of threats and opportunities available in the outside environment.

PESTEL Analysis

PESTEL analysis is a useful tool to analyze factors of the external environment including political situation, economical conditions, technological aspects, and socio-cultural aspects, ecological and legal aspects that may impact an organization. These are macro factors that may influence the functioning of an organization (Miller, Vandome and McBrewster, 2011).

Samsung Electronics is operating in many countries around the globe. Political problems such as war against terrorism possess a threat on the functioning of the company. Political factors for Samsung Electronics are changing at the time. Changes in policies and regulations are in the hands of government which may affect the company. The company is facing political problems in many countries around the globe. For example: Samsung Electronics is accused of labour related abuse. The China labour watch accused the company of violating labour laws in its factories of China. In September 2012, there was an investigation on the factories of Samsung that were operating in China. Reform and opening policies in China are advantageous for the company. Political instability in Asian countries is impacting the sales of Samsung's products in Asia. Political situation in South Korea is extremely attractive of Samsung Electronics as the country is politically stable. International laws and policies can affect Samsung Electronics in various ways. The federal governments in the countries where Samsung operates have the power to make changes in minimum wages, VAT and taxes. It is important for the company give importance to the changing international political and legal factors.

Due to recession, disposable incomes are decreasing, and it has a negative impact on the sales of consumer electronics around the globe. Recession has increased the price competition in the industry of electronics. Economic analysis of South Korea is Vital for Samsung Electronic as it is headquartered in South Korea. According to Data Monitor (2008), South Korea is receiving strong economic support by United States. The country enjoys healthy economic situation because of strong economic ...