Economics and Samsung Electronics Co . Essay

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Pages: 5

Samsung Electronics Co., Ltd. PEST Analysis
Introduction

Company Overview
Samsung Electronics Co., Ltd. (Samsung or 'the company'), a part of the Samsung group, is one of the leading consumer electronics brands in the world. The company operates in Asia, Europe and Americas. It is headquartered in Seoul, South Korea and employed 221,726 people as of December 31, 2011.
The company recorded revenues of KRW165,001,771 million ($148,501.6 million) during the financial year ended December 2011 (FY2011), an increase of 6.7% over FY2010. The operating profit of the company was KRW16,249,717 million ($14,624.7 million) in FY2011, a decrease of 6.1% compared to FY2010. The net profit was KRW13,359,192 million ($12,023.3 million) in FY2011, a decrease of 15.4% compared to FY2010.
SWOT ANALYSIS
Samsung Electronics Co., Ltd. (Samsung or 'the company'), a part of the Samsung group, is one of the leading consumer electronics brands in the world. The company enjoys robust market position coupled with strong brand equity which imparts significant competitive edge to the company in terms of scale and recognition, which in turn auger well for the company's expansion plans. However, intense competition poses several threats including erosion of market share impacting the revenues adversely and high price competition impacting the profitability at Samsung.

Political Factor Economical Factor
Patent litigations
 Strong growth in smartphone and tablets market
Strong demand in emerging markets Robust growth for smart TVs
Fragile world economy
Social Factor Technological Factor
Strong demand in emerging markets Intensely competitive environment in the mobility market
Weakness in the DRAM segment
Robust growth for smart TVs

The smartphones and tablets market is expected to grow at a robust pace in the medium term. Several industry estimates indicate that the smartphone shipments are set to grow at a robust pace of close to 35% in 2012. During 2012–16, the smartphone shipments are estimated to grow at a CAGR of over 18%. Furthermore, tablet shipments in 2012 are estimated to reach 122.3 million units, 172.4 million units by 2013 and 282.7 million units by 2016. Samsung is a leading player in the smartphone market and has strong presence in the tablets market. The company will benefit from the growth trends in the smartphone and tablet market.
Strong demand in emerging markets
In 2011, the global demand for PCs continued to surge, especially in emerging markets. For the first time, total PC purchases were higher in China than in any other country, followed by the US, Brazil, and Russia. According to the industry estimates, emerging markets are driving worldwide PC growth in both the short and long-term, and in 2012 and then 2013 onwards growth in emerging markets will support overall PC market growth as their share increases from just over 50% in 2011 to nearly 70% in 2016. Emerging markets have very low PC penetration and even with the availability of other devices the uptake of PCs is expected to be steady. Overall, the PC market is estimated to grow by 4.4% in 2012. The company will benefit from the growth in the PC segment as Samsung with its brand value is well poised to convert it into top line growth.
Robust growth for smart TVs
The adoption of smart TVs is expected to increase as they experience a robust growth. According to the industry estimates, by the end of 2012, 159 million homes worldwide will have at least one smart TV. This number is expected to grow more than threefold by 2017 to 510 million households. Strong growth in the segment will enhance growth prospects at Samsung as the company enhances its portfolio of smart TVs. The company’s strong market position in the segment will enable it to effectively address the growth trends.
Threats
Intensely competitive environment in the mobility market
Samsung’s mobile products face fierce competition. The company competes with hugely successful companies like Apple.…