SWOT on "SWOT Analysis for Samsung"

SWOT 6 pages (1726 words) Sources: 1+

[EXCERPT] . . . .

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 multinational conglomerates. It has become particularly recognizable on a global scale for its electronics division, which is identified as selling the largest volume of consumer electronics in the world on an annual basis. Indeed, Samsung is an institution, a primary employer and a commercial juggernaut in its home country. According to The Economist (2009), the South Korean firm "recorded sales of $174 billion in 2007, equivalent to 17% of the country's GDP that year." (Economist, p. 1) Still, in spite of its many strengths and the opportunities before it, Samsung is working today to contend with several major threats to its long-term competitive orientation. A host of structural complexities, a turnover of leadership and an array of legal challenges today stand directly in Samsung's path as it looks toward the future.

Threats:

Of particular note in the short- and long-term outlooks for Samsung is the general push in the global community for greater fiscal accountability. In many ways, this push stands in direct contrast with the relative orientation that Samsung has historically maintained as an almost untouchable source of economic power in the rapidly developing South Korean technology sector. That is to say that irregularities in the company's structure that have served its rapid growth well are today obstacles to its even greater viability in the global marketplace.

On this point, The Economist (2009) reports that among the greatest threats to the long-term stability of the Samsung corporation is a condition endemic to its unique position in South Korean economy and society. The enormity of its influence on the economic development of the nation and its rise in prominence on an international scale have allowed it a specialized insulation from the growth in regulatory oversight in international markets. With the continued swell in importance of trade liberalization on a global scale, it is incumbent upon firms emerging from developing nations to improve the transparency of their operations or risk being bypassed for competitors more adherent to industrialized standards of accounting, financial reporting and overarching corporate structuring.

In addition to being given almost total freedom in its operational orientation due to its pertinence to the total health of the South Korean economy, Samsung is now in a transitional phase. With the shift in majority ownership from the company's long-time CEO and president, Lee Kun-hee, to his children, Samsung is at a structural crossroads. According to The Economist, "the Lee family now owns 46% of Everland, which in turn owns 13.3% of Samsung Life, South Korea's biggest life insurer. Samsung Life owns 7.2% of Samsung Electronics, the world's biggest electronics company, which owns 35.3% of Samsung Card, the country's biggest credit-card firm -- which in turn owns 25.6% of Everland. The convoluted structure (see chart) helps to deter would-be raiders. Its confusing nature is the source of much criticism within South Korea, especially as other conglomerates such as LG Group have become more transparent." (p. 1)

This means that where Samsung has operated with relative impunity in the South Korean market, both from market regulation and competition, it now must recognize the convergence of both. With international governing standards such as the International Financial Reporting Standards now gaining greater adoption permeation on a global scale, Samsung's complex corporate structure runs contrary to the demands which will increasingly place pressure on the company to impose change. This is true even to the extent that Samsung has acknowledged the need to achieve a greater degree of regulatory compliance.

Unfortunately, this acknowledgement comes at a time when tremendous pressure has been placed upon the company by revelations of Lee Kun-hee's spectrum of corrupt practices. Certainly, another threat to Samsung's future stability is its capacity to rebound from the ruling against it and the general vulnerability in the firm's structure to acts of fraud. According to Olsen (2008), revelations that Lee Kun-hee had engaged in numerous acts of embezzlement and accounting fraud would lead to the first major shakeup in company leadership in more than two decades, when the CEO took over for his deceased father, founder of the company. According to Olsen's report in the Associated Press, "Special prosecutors Thursday indicted Lee on charges of evading 112.8 billion won ($113 million; 71 million euros) in taxes, ending a three-month probe in the family-run conglomerate prompted by allegations of wrongdoing by a former Samsung lawyer. Prosecutors, however, dismissed the most explosive claim -- that Samsung used affiliates to raise a slush fund to bribe influential South Koreans -- for lack of evidence." (Olsen, p. 1)

The mixed nature of the charges reveals just how extensively the influence of Samsung permeates the seats of power in South Korea. However, it also shows that there is a changing set of priorities for regulatory bodies in South Korea, most specifically created by pressure to remain a high-priority participant in global trade activities. For Samsung, these revelations, a $90 million settlement against the firms and the flux in personnel demanded by the situation all make Samsung a company today more susceptible than ever to the pressure of competition. This is especially true in the new generation of leadership fails to reign in the general irregularities and ethical misappropriation that has placed it in its present state. As Samsung continues to rebound from what is truly the first major blow to its reputation in the company's modern history, it will be important for new degrees of transparency, structural simplification and internal ethical oversight to be exhibited by Lee Kun-hee's children.

Particularly in light of these challenges, it is particularly problematic on two levels that Samsung today finds itself locked in ongoing and constantly emergent court battles with another global technology giant in Apple. The rulings that have come from the various courts to this juncture have tended to favor Apple, demonstrating simultaneously the vulnerability that Samsung faces in increasingly strict international regulatory contexts than those to which it is historically accustomed and that, as a direct consequence, Samsung is also facing increasingly stiffer competition from those companies inherently suited for such a regulatory environment. Apple has proven to be just such a formidable competitor.

According to Roumeliotis & Kreljger (2011), Samsung is up against Apple in patent courts in ten different nations. And most recently, in a Dutch court, Samsung suffered another in a line of defeats. According to Roumeliotis & Kreljger, "earlier this month, Samsung was forced to upgrade three of its smartphones to get around temporary sales bans on earlier versions of products that a Dutch court said violated an Apple patent." (p. 1) This demonstrates a relative degree of laxity on the part of Samsung where its Research & Development, market research, product design, and legal research are concerned. It might not be a stretch to argue that such laxity is a direct consequence of a company culture, leadership orientation and structure that have all given way to irregularity and even carelessness. To an extent, this is a pattern repeated on a global basis as the developing markets of Asia come up against the threshold of industrialized nations. For countries like Thailand, China and South Korea, exposure to the regulatory environments of the international markets have produced a distinct threat to those companies unwilling to invest in true change and compliance.

The continued struggles for Samsung in courts all over the world demonstrate as much. The article by Roumeliotis & Kreljger reports that with pending cases on the same issue of copied smartphones in France and Italy, Apple will likely anticipate the use of the Dutch findings are precedent throughout the European Union. These findings represent a continued threat to Samsung's growth and stability in the European markets. And, as an article by Price (2011) reports, a similar threat looms in the United States, where patent courts are in ongoing investigation of Apple's claim that Samsung 'slavishly' copied its iPad in the design of the Galaxy Tab. According to Price, Samsung's attorney's suffered a particularly embarrassing moment in court this week when a deliberator asked Samsung's lawyers to differentiate the two tablets in question from ten feet away. According to article, the first attorney questioned was unable to identify the tablet produced by the firm that she represented. (2011).

This does not bode particularly well for Samsung as it looks to get back on track from several years of scandal. One of its new technology staples in a chief foreign market appears to be on the track toward a considerable makeover, denoting the considerable duress under which the changing regime will attempt to bring structural refinement to Samsung. It is clear that no small range of challenges stand before Samsung.

Recommendations:

Naturally, it is still of importance to note that Samsung is a powerful firm with many dependencies and partnerships in the South Korean marketplace. These will serve well to protect it to an extent. But the last… READ MORE

How to Reference "SWOT Analysis for Samsung" SWOT in a Bibliography

Related SWOTs:

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 of Samsung Essay

This makes for a cluttered market and Samsung can sometimes get lost in the shuffle due to the presence of other companies like LG and others. An opportunity for Samsung… read more

Essay 2 pages (893 words) Sources: 2 Topic: Transportation / Mass Transit

---

Marketing Management SWOT Analysis for Apple Brand SWOT

Apple has designed a new, mobile game console that it will market under the iPad brand, as iPad Game. This device will appeal to two main gaming demographics -- younger… read more

SWOT 14 pages (4394 words) Sources: 14 Topic: Business / Corporations / E-commerce

---

Analysis of iWatch and Apple Inc SWOT

2. Weakness

Incompatibility with other Different Operating Systems

In particular, all products sold by the company are only compatible with iOS and OS X operating systems. This is a weakness… read more

SWOT 2 pages (747 words) Sources: 3 Topic: College Admissions / Financial Aid

---

Best Buy Thesis

Best Buy SWOT Analysis

Best Buy is one of the world's largest and most diversified retailers of home office products, consumer electronics, and entertainment software with $45B Annual Revenue as… read more

Thesis 7 pages (1762 words) Sources: 5 Style: MLA Topic: Business / Corporations / E-commerce

---

View 100+ more related papers  >>