Assessment on "Country Analysis for Samsung S Presence in Egypt and China"

Assessment 10 pages (3623 words) Sources: 10 Style: APA

[EXCERPT] . . . .

The cultural and social elements of Samsung's Chinese market contribute significantly, since the demographics undergo constant changes. For instance, there are continuous fluctuations in population age distribution and growth, and these may cause shifts in cultural values and social trends. Social behaviors and family size usually affect decision-making. Other social elements of potential importance with regard to Samsung's Chinese market include consumer lifestyles, emigration, education, collectivism, and religion (Makos, 2015).

Country Risk

Samsung's financial risk managers in its Egyptian firm concentrate on minimization of credit risk, liquidity risk, and market risk that arise from operations. For risk mitigation, Samsung has its own financial risk program and policy in place, which closely tracks and manages the aforementioned risks. The Company's finance team is in charge of managing financial risks. In collaboration with its overseas and local subsidiaries and divisions, Samsung's finance team measures, appraises, and hedges its financial risk on a periodic basis, while also establishing and implementing its global policy for management of financial risks. Company assets covered under this policy include cash, cash equivalents, receivables (including trade), available-for-sale financial assets, short-term financial instruments, etc. Company liabilities covered by this policy include payables (including trade payables), debentures, borrowings, etc. Between 2004 and 2008, Egypt aggressively introduced a series of economic reforms for attracting investment from overseas investors and facilitating GDP growth. However, it is now postponing additional economic reforms, owing to the global economic instability. The Egyptian parliament (government) of 2004 started a novel reform movement, by following a suspended economic reform initiative, which was started in the year 1991, but collapsed beginning from the mid-nineties. Domestic demand led to a strong economic growth in 2007. The liberal approach of the Egyptian government since the year 2004 has encouraged an atmosphere of confidence favorable for investment and consumption. The Egyptian economy has profited from oil-rich nations' boom as well, through migrant worker remittances and investments. With regards to technological factors significant to Samsung's Egyptian market, IT spending in Egypt was expected to rise from 1.3 billion U.S. dollars (2010) to 2.1 billion dollars (2014). Growth of the nation's IT market, in 2010, was predicted to be less than the growth levels before the global economic crisis. However, economic recovery, higher incomes owing to increased civil servant salaries, and delayed tenders from 2009, ought to maintain sales growth. Numerous policies for attracting foreign investors in the sector of IT outsourcing have been effected, including domestic employment subsidies, training cost deductions, and reduced corporate taxes. Telecom, finance, and government sector demands dominate Egypt's information technology services market, accounting for over 25% of the nation's overall spending. With regard to the nation's sociocultural environment, the total population of Egypt is estimated at 80.3 million with roughly 90% of citizens being Muslims and the rest being Christians. The population is highly concentrated in regions adjacent to the River Nile, with nearly 50% of the population residing in Alexandria, Cairo and other densely populated, urban cities. Regarding political factors influencing Samsung's market growth in Egypt, the country's market has been gradually opening itself up to the global marketplace, particularly after it signed an agreement in 2006 with EFTA (European Free Trade Association), as well as a treaty of free trade with USA. The three major export partners of Egypt are USA, Syria and the EU (the latter constitutes over 33% of Egyptian export trade), while USA, EU and China are its three major import partners. The principle export products of Egypt are oil and mineral fuels, iron, steel, and cotton, while its main imports include consumer capital and electronic goods, cereals, nuclear power-driven boilers and nuclear reactors, chemical products and food products. The country's volume of imports has not only increased two-fold, of late, but is also twice its export volume, causing a trade balance deterioration (Sobhi, 2010).

Samsung is faced with the challenge of dealing with China's newly developed semiconductor industry. The company's future rests on its evolution in the face of this impending transformation in the international semiconductor market's structure. Samsung can potentially profit from the extensive growth of China's technology manufacturing industry. Chinese labor expenses are low compared to Korea, with tax incentives being provided by the country's government. However, a few risks are involved (copyright infringement, for instance) and the company needs to weigh such risks against future opportunities. The growing, strong relevance and utilization of intellectual property is, especially true, in case of the ICT hardware and telecommunications equipment areas. In a majority of high-income nations, companies in these sectors regularly feature at the top of the list of leading patent filers (Jacks, 2013).

Business Environment

Both Egypt and China have witnessed three population development stages, with respect to their policies in the family planning area. In China, the early family planning phase started during the fifties, succeeded by further developmental waves during the sixties, and its historic "single-child policy" during the seventies. In Egypt, family planning's first phase started in 1965. This was succeeded by two additional developmental stages during the seventies and eighties. The two nations' family planning initiatives gleaned impressive results with both countries experiencing an extraordinary decline in fertility since the eighties. However, in spite of these accomplishments in the family planning sector, Egypt and China are both expected to witness waves of growth in population in the near future, which would, undoubtedly, continue challenging these nations' economic development prospects (Ahram, 2013).

Owing to China's rapid economic growth, entrepreneurs (including Samsung Electronics) are increasingly being attracted to the country. Multinational investment helps boost economic prosperity and growth. For attracting FDI and achieving success in China, analyzing one's macro-environment and identifying factors (cost, supply, demand, etc.) capable of impacting the firm's economy, is imperative. A PEST (Political, Economic, Social, Technological factor) analysis represents a strategic tool for businesses (Porter, M., 1985). Some recommendations are given to foreign and local investors and entrepreneurs, to enable them access China's market and effectively share management skills, cultural skills and advanced technological information with local businessmen, for creating competition and stimulating faster growth of the nation's economy (Ahram, 2013).

Political Factors:

Political factors influencing Samsung's Chinese market pertain to law, government and regulatory policy, which impact governmental decisions and economic factors. Subsequent to the 1978 economic reform, China's economy is witnessing a spectacular growth. The reform encourages private business development, FDI, employment profile, industrial production investment, and foreign trade liberalization. Between 1979 and 1994, an economic growth of over 42% has occurred (Mohsin S. Khan, 1997).

Economic Factors:

Economic factors directly impact businesses, as they influence capital availability, supply, demand, and cost. High demand and low capital costs attract a larger number of investments, allowing increased production. But in times of economic recession, a few small-scale enterprises can enter and compete in the business market (Blind, Pohlmann, Ramel & Wunsch-Vincent, 2014).

Environmental Factors:

Environmental factors that impact Samsung include the fact that capital markets in China are determined by its government. Increase in government spending can lead to increase in money supply and capital market boom. Depending on company performance, its shareholders decide upon selling their shares or providing more equity funds. The Chinese labor market hints at the presence of specific labor costs and skills for specific industries and regions, governed by governmental and training policies, in addition to the activities of trade unions, inflation, and industrial sector needs (Judy, 2015).

Technological Factors:

As the Chinese industrial sector and government give emphasis to technological efforts, China's government allocates considerable funds to research. This indicates that Samsung must explore and develop advanced technological innovation and accelerate technology transfer. Demand growth for energy has decelerated, of late, in China, with the nation consuming lesser energy than U.S.A in the year 2009. Rate of energy consumption dropped from 16.1% (2004) to 5.2% (2009). Energy consumption per unit GDP experienced a 15.6% drop between 2006 and 2010. Samsung's Chinese market may be segregated into 3 geo-economic regions: wealthy, coastal China, middle-income regions of central China, and poor rural areas. The first two regions are more strongly bound by the nation's single child policy as compared to the latter region (which forms the majority of China's population). This is partly because China lacks a government-sponsored rural retirement program (Yu, 2011).

Political instability impacts business operations in case of Egypt. This is particularly true for international/multinational firms. A nation's political scenario impacts its economic climate, which in turn impacts business performance. In USA, for instance, one can see several major differences between Republican and Democratic policies, which impacts factors such as government spending and taxes, ultimately impacting the economy. Increased government spending typically results in economic stimulation, which most likely impact companies' social, technological, and political factors (Makos, 2015).

E-Business Readiness Rating

The Economist Groups' Intelligence Unit represents the group's business information division. Through its global network comprise of roughly 650 analysts, the unit constantly assesses and forecasts business, political, and economic conditions of 200 countries. Being the leading country intelligence provider in the world, it aids executives in making better organizational… READ MORE

How to Reference "Country Analysis for Samsung S Presence in Egypt and China" Assessment in a Bibliography

Related Assessments:

Country Analysis Our Company Is Considering Two Thesis

Country Analysis

Our company is considering two markets to enter in the near future. Italy represents a strong established world market, while Turkey represents a developing market with significant potential.… read more

Thesis 4 pages (1136 words) Sources: 2 Style: APA Topic: Israel / Palestine / Arab World

---

Sony's SWOT Analysis Samsung Essay

Sony's SWOT analysis

Samsung's SWOT analysis

Sony Corporation's Strengths

Samsung's Strengths

Sony Corporation's Weaknesses

Samsung's Weaknesses

Sony Corporation's Opportunities

Samsung's Opportunities

Sony Corporation's Threats

Samsung's Threats

Technologies used in marketing… read more

Essay 11 pages (2953 words) Sources: 6 Topic: Business / Corporations / E-commerce

---

SWOT Analysis for Samsung SWOT

Samsung SWOT

Short-Term Threats to the Samsung Corporation

The Samsung Corporation, originally founded in South Korea, is both among the nation's most influential corporations and among the world's most profitable… read more

SWOT 6 pages (1726 words) Sources: 1+ Topic: Economics / Finance / Banking

---

Egypt Is Going Dissertation

Egypt is going to take in order to secure its interest in the Nile waters and in the Nile Basin countries, especially after the change of regime and the uprising… read more

Dissertation 36 pages (9929 words) Sources: 30 Topic: Israel / Palestine / Arab World

---

People's Revolution in Egypt Essay

People's Revolution In Egypt

On January 28th Egypt would explode into nearly three weeks of mass protests that would end with ouster of President Hosni Mubarak. This was an important… read more

Essay 3 pages (1084 words) Sources: 1+ Topic: Israel / Palestine / Arab World

---

View 100+ more related papers  >>