PESTLE Analysis of Samsung. Samsung is a South-Korean multinational tech company. Lee-Byung-Chul is the founding father of Samsung and he established the company in 1938. Samsung started as food like dried seafood, vegetables, and fruit Business Company. The brand used to export products to China
The management of Samsung started development in electronics in January 1969, but the company became serious and focused fully on electronics after 1990. Unlike many other tech rival companies, Samsung produces its products and doesn’t hire any third subsidiary party to manufacture its products.
Samsung has specialized in many areas like smartphone technology, artificial intelligence, and surface mount technology (SMT) are some of the tops of the head. Currently, the tech team of Samsung is manufacturing products in different categories.
Samsung is a giant multinational corporation and it deals with various products and services, but we’ll focus only on electronics and smartphones. The company has 8th world’s highest brand value by the end of 2020. The brand has won hundreds of awards over the years.
When we talk about the market of Samsung smartphones, then many factors impact the company’s growth. Some of them are easy internet access, customer preferences, and the technological development of the product. Although Samsung is still at the top in terms of market share, the sale of smartphones has decreased in the last quarter of 2019 and the first quarter of 2020. Hopefully, the launch of 5G technology would lift the company.
Today we’ll discuss pestle analysis of Samsung that how external factors like political, economical, social, technological, legal, and environmental issues impact the company. It’s time to discuss these factors in detail one by one. Here’s the pestle analysis of Samsung as follows;
Impact of Political Turmoil
Samsung is a multination tech smartphone manufacturing company and it has to follow existing laws and regulations of different countries. In the case of political unrest in the country would force the company either to withdraw or not to send its products. As the circumstances aggravate, expenses would increase, the financial loss of the company consequently.
Samsung’s association with the Political Party
Samsung has paid a heavy price of being associated with political parties. In the early 2000s, the company supported the political party of the first female president in South Korea. Event the brand spent billions of dollars in the political campaign of parties, the Uri Party, and the Grand National party. The general didn’t like the interference of Samsung in the election campaign. The whole scenario distorted the reputation and image of the company.
Bribery & Imprisonment of Successor
In the year 2007, there was a controversy that the successor of the company, Jay Y. Lee, has links and ties with the former president, Park Geun Hye. Even the heir bribed the former president’s political party with billions of dollars. The court found Jay Y. Lee guilty of bribery & fraud and sentenced him to prison for five years.
This event shocked the South Korean public and made them embarrassed. It had little impact on the sale of electronics and smartphones in some areas of the world. For instance, Germany refused to let Samsung’s Galaxy Tablet in her markets. The sale remained as casual as the rest of Europe.
Impact of Brexit
The exit of Britain leaving the EU didn’t have any significant impact on the sale of the company. There could be several impacts of Brexit on the UK and EU, but none of them have impacted the company’s growth. The rivals of Samsung, Apple, and Mac, increased their prices by 25% and 20% in the UK after Brexit.
Economic fall in developing economies
Samsung has recently opened many location points in different parts of the world. It paid off very well in developed countries like the US. But economic conditions in the underdeveloped-countries aren’t very good. The buying power of ordinary people is declining in the developing economies. The prices of Samsung are becoming out of reach customers.
Post-Pandemic (COVID-19) Economic Strategy
Factors like the impact of post-pandemic (covid-19), economic downturn, fewer jobs, and less income level are pushing the company to develop such business strategies relevant to the economic environment of the world.
Samsung has to launch such products that are affordable to the people in developing countries. So that the company could increase the market share and increase the revenue that has missing for the past few years.
Saturated Smartphone Market
Google and Apple’s iPhone are the top competitors of Samsung. Although Samsung is at the top position in the smartphone market, to stay at the supreme position you have to keep increasing its sales.
Family Owned Business
Samsung is a South-Korean family-owned business. Being a multinational corporation, the company offers its products and service locally inside the country and worldwide.
Remodel Company’s offering
When a company operates its business in different countries, then it has to adjust and remodel its products relevant to the cultural needs and requirements of different countries. Now people use smartphones for various reasons like style and showoff along with their needs.
For instance, Samsung has taken 6 months to offer Android Firmware update. When the company offered the update, it was closer to its expiration date. Many people could get to experience the latest update. Google got the firmware update immediately and offered it to the customers.
Check out this article as well: Pestle Analysis of Samsung (Smartphone Company)
Tech innovations, research, and development are the main traits of Samsung. Whenever the company launches its new model, it comprises of most advanced technology its time that competitors don’t have. The brand keeps on updating and upgrading its products every year. It makes people visit the stores and buy the latest technological product of the company.
Products like Samsung Galaxy Note 7 had the error of overheating batteries resulting in an explosion. The company had to experience some exploding mishaps of its products back in 2016-17. The company retrieved 95% of its product from the US market and refunded the full amount to the customers. It cost the company roundabout 5.3 billion dollars.
The lawsuit against Apple’s iPhone
Samsung and Apple had approximately 50 active lawsuits against each other on patent and copyrights issues in more than 10 countries worldwide. Samsung has won lawsuits in the UK, Korea, and Japan, whereas Apple won lawsuits in Australia, the US, and Germany. In 2016, Samsung finally won the lawsuit in the US by making the US Supreme Court reverse its decision of paying 400 million dollars to Apple. It’s a fact that Apple has won some of the lawsuits against Samsung.
People are becoming very cautious about the environment, pollution, and industrial. Samsung has taken environmentally friendly steps over the years to produce eco-friendly products. The company is also producing less waste in its manufacturing processes. It’s a plus point for the company and that’s why people prefer Samsung products.
Critical Environmental Concerns
Some critics also question the company that how Samsung would dump or recycle 4.3 million Galaxy Note 7 that the brand has retrieved from the market. It’s because millions of smartphones contain waste equal to 28 shipping containers, 1000 KG of silver, 100 kg of gold, 20 metric tons of cobalt.
After a detailed study of pestle analysis of Samsung and macro-environmental factors, it has become clear that Samsung is the world’s top smartphone selling brand. Even the political and legal controversies had cost the company billions of dollars, but the sale of Samsung products didn’t decline much as predicted. It doesn’t mean that the company is invincible; Samsung has to minimize the extra-expenses if the company wants to maintain its position in the market.