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

By Ahmad Fuad
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Introduction

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

However, unfortunately, there are many companies that reach a certain level in developing their capabilities, then become reluctant and unwilling to improve and develop, which is why they fail. This report is a situational analysis of Samsung. It will first give a brief overview of the company, then move on to discuss the company's competitors.
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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 activities. Finally, the conclusion will discuss the positive impact of these suggestions on the company.

A Brief About Samsung

To begin with, Samsung is a global company. It is headquartered in South Korea and was founded in 1969. It specializes 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 is Kim Hyun Suk, and Dong Jin Koh 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 will discuss its competitors, but in general, the main competitors of Samsung are Apple, Huawei, LG, Whirlpool, and Panasonic, among others.

The Competitors of Samsung in Brief
Competitors in Terms of Smartphones and Computers

Apple
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When it comes to smartphones, Samsung’s number one competitor 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). The iPhone has always been a major influence on Samsung. One of the first smartphones to feature a touch screen was the iPhone; hence, this unprecedented step had a huge impact on Samsung’s mobile devices. Since then, Samsung has improved drastically, and today what makes it unique is its displays. Indeed, the iPhone X featured an OLED display made by Samsung (Aljazeera, 2017). Not only displays but also processors — all iPhone 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 global 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 competitive prices. What also makes Huawei a strong competitor is that it recently announced its foldable smartphone, the Mate X, in February 2019 — the same month Samsung announced the Galaxy Fold (Andy Boxall, 2018). Consequently, Huawei is considered a powerful competitor.

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, and more. While Samsung has fewer home and kitchen appliances than LG, it is still considered a strong competitor.

Whirlpool

Whirlpool is a notable brand and very popular in the washing machine industry. It originally began by providing washing machines and later expanded to offer several other durable goods. Moreover, Whirlpool has a wide range of refrigerators. Therefore, 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 around the world. The group’s subsidiaries include 14 listed companies operating in various segments” (DATAMONITOR, 2007). There are many divisions: the electronics 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 large geographical presence. It is a global company operating in more than 70 countries around the world. Generally speaking, Samsung exists in all major markets. This vast presence gives it a strong advantage; therefore, the company is not tied to a particular market, which reduces risk.

In addition, Samsung dedicates huge resources to developing modern and innovative technologies. It has 17 research and development centers around the globe and has registered 1,600 U.S. 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 major strength.

Weaknesses of Samsung

Every company has its weaknesses, and Samsung is no exception. One of the major weaknesses of Samsung is that it depends on the Android operating system, which belongs to Google. This is considered a weakness; whereas its competitor Apple has its own iOS operating system, Samsung does not have its own (MarketLine, 2017).

A huge company like Samsung should produce its own OS along with its hardware. This would enable the company to have an operating system that aligns with its objectives. Moreover, it would allow Samsung to customize the OS to reflect its identity.

Furthermore, when it comes to marketing, Samsung cannot catch up with Apple, especially in the U.S. market. “The 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 Samsung in the U.S. market, and this is not only a weakness but also a threat that Samsung faces.

In addition, Samsung has a limited number of online stores, which is a major mistake since people nowadays tend to buy online, and it has actually become a habit. Therefore, customers prefer what saves them time and effort. It is quite surprising that a brand like Samsung neglects the virtual world that most people now rely on. Moreover, when looking at Samsung’s online stores, it is clear that there is a lack of mid-range and budget smartphones, which is another issue.

Nowadays, most flagship smartphones are too expensive, and in fact, many people cannot afford them. Hence, most people tend to buy mid-range and budget smartphones. Accordingly, the presence of smartphones across different price ranges in Samsung’s 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. It is advisable that Samsung release its own operating system by the first of January 2020, as this would be an ideal time — ten years after the launch of the Galaxy series. This new operating system would mark the beginning of a new era in Samsung’s history. Samsung should aim to create a powerful OS that can compete with iOS and Android.

Promotion:

Second, it should double its investment in advertising campaigns, particularly in the U.S. market. It should spend and invest millions of dollars in marketing to compete with Apple. Moreover, sponsoring major events is a good way to draw people’s attention to the company and its products. This way, it can attract more customers. In addition, it should diversify its advertising methods — for example, using traditional marketing such as street advertising, newspapers, magazines, and television advertisements, as well as non-traditional marketing such as online advertising.

Place:

Samsung should open more online stores in different countries, or at least one global online store that supports multiple languages, allowing people worldwide to access it easily. This online store should be user-friendly and include a chat service so that customers can communicate with support about any concerns or questions. In addition, it is vital to allow customers to comment freely on the company’s products. This will enable Samsung to listen to customer feedback and perspectives, ultimately helping the company improve and develop its business activities.

Conclusion

In conclusion, it is a weakness that Samsung does not have its own OS. The most significant element in a smartphone is its operating system, and Samsung currently relies on Google. If Samsung develops its own operating system, it can distinguish itself from other companies and, more importantly, compete with Apple’s iOS.
This would show that the company is strong enough to provide both software and hardware to its customers. Additionally, investing in marketing in the U.S. market would benefit the company significantly, as this market is huge.

Therefore, Samsung should focus on this market, where Apple currently has a strong presence. There are many advantages to having an online store, as it allows people worldwide to access it anytime. In addition, an online store is available 24/7, which gives customers more flexibility (Business Queensland, 2016). Moreover, having online stores will have a positive impact on Samsung’s sales. That is why the 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.
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.