Based on various researches at Oak Spring University , Samsung Electronics DRC is operating in a macro-environment that has been destablized by – geopolitical disruptions, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google,
challanges to central banks by blockchain based private currencies, increasing energy prices, etc
Introduction to SWOT Analysis of Samsung Electronics DRC
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Samsung Electronics DRC can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Samsung Electronics DRC, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Samsung Electronics DRC operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Samsung Electronics DRC can be done for the following purposes –
1. Strategic planning of Samsung Electronics DRC
2. Improving business portfolio management of Samsung Electronics DRC
3. Assessing feasibility of the new initiative in United Kingdom
4. Making a sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Samsung Electronics DRC
Strengths of Samsung Electronics DRC | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Samsung Electronics DRC are -
Organizational Resilience of Samsung Electronics DRC
– The covid-19 pandemic has put organizational resilience at the centre of everthing Samsung Electronics DRC does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management in the industry
– Samsung Electronics DRC is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in
– Samsung Electronics DRC is one of the leading players in the industry in United Kingdom. Over the years it has not only transformed the business landscape in the industry in United Kingdom but also across the existing markets. The ability to lead change has enabled Samsung Electronics DRC in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Samsung Electronics DRC is one of the most innovative firm in sector.
Sustainable margins compare to other players in industry
– Samsung Electronics DRC has clearly differentiated products in the market place. This has enabled Samsung Electronics DRC to fetch slight price premium compare to the competitors in the industry. The sustainable margins have also helped Samsung Electronics DRC to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Samsung Electronics DRC has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Digital Transformation in industry
- digital transformation varies from industry to industry. For Samsung Electronics DRC digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Samsung Electronics DRC has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Cross disciplinary teams
– Horizontal connected teams at the Samsung Electronics DRC are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Successful track record of launching new products
– Samsung Electronics DRC has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Samsung Electronics DRC has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Low bargaining power of suppliers
– Suppliers of Samsung Electronics DRC in the sector have low bargaining power. Samsung Electronics DRC has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Samsung Electronics DRC to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Samsung Electronics DRC is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure of United Kingdom is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
High brand equity
– Samsung Electronics DRC has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Samsung Electronics DRC to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of Samsung Electronics DRC | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Samsung Electronics DRC are -
Ability to respond to the competition
– As the decision making is very deliberative at Samsung Electronics DRC, in the dynamic environment of industry it has struggled to respond to the nimble upstart competition. Samsung Electronics DRC has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Samsung Electronics DRC is dominated by functional specialists. It is not different from other players in the industry, but Samsung Electronics DRC needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Samsung Electronics DRC to focus more on services in the industry rather than just following the product oriented approach.
Need for greater diversity
– Samsung Electronics DRC has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Workers concerns about automation
– As automation is fast increasing in the industry, Samsung Electronics DRC needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow to strategic competitive environment developments
– As Samsung Electronics DRC is one of the leading players in the industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Interest costs
– Compare to the competition, Samsung Electronics DRC has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Samsung Electronics DRC supply chain. Even after few cautionary changes, Samsung Electronics DRC is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Samsung Electronics DRC vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee of Samsung Electronics DRC is just above the industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High operating costs
– Compare to the competitors, Samsung Electronics DRC has high operating costs in the industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Samsung Electronics DRC lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Samsung Electronics DRC is slow explore the new channels of communication. These new channels of communication can help Samsung Electronics DRC to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring in industry
– The stress on hiring functional specialists at Samsung Electronics DRC has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Samsung Electronics DRC Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Samsung Electronics DRC are -
Leveraging digital technologies
– Samsung Electronics DRC can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Better consumer reach
– The expansion of the 5G network will help Samsung Electronics DRC to increase its market reach. Samsung Electronics DRC will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Low interest rates
– Even though inflation is raising its head in most developed economies, Samsung Electronics DRC can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in industry, but it has also influenced the consumer preferences. Samsung Electronics DRC can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Samsung Electronics DRC can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Samsung Electronics DRC to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Creating value in data economy
– The success of analytics program of Samsung Electronics DRC has opened avenues for new revenue streams for the organization in industry. This can help Samsung Electronics DRC to build a more holistic ecosystem for Samsung Electronics DRC products in the industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Samsung Electronics DRC to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Samsung Electronics DRC can use these opportunities to build new business models that can help the communities that Samsung Electronics DRC operates in. Secondly it can use opportunities from government spending in sector.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Samsung Electronics DRC can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Use of Bitcoin and other crypto currencies for transactions in industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Samsung Electronics DRC in the industry. Now Samsung Electronics DRC can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Samsung Electronics DRC in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the industry, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Samsung Electronics DRC has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in sector. This continuous investment in analytics has enabled Samsung Electronics DRC to build a competitive advantage using analytics. The analytics driven competitive advantage can help Samsung Electronics DRC to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Samsung Electronics DRC External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Samsung Electronics DRC are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Samsung Electronics DRC in industry. The industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Consumer confidence and its impact on Samsung Electronics DRC demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in industry and other sectors.
Regulatory challenges
– Samsung Electronics DRC needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the industry regulations.
Environmental challenges
– Samsung Electronics DRC needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Samsung Electronics DRC can take advantage of this fund but it will also bring new competitors in the industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Samsung Electronics DRC can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate Samsung Electronics DRC prominent markets.
Increasing wage structure of Samsung Electronics DRC
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Samsung Electronics DRC.
Stagnating economy with rate increase
– Samsung Electronics DRC can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the industry.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Samsung Electronics DRC in the sector and impact the bottomline of the organization.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Samsung Electronics DRC business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Samsung Electronics DRC may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of sector.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to industry are lowering. It can presents Samsung Electronics DRC with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Samsung Electronics DRC high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Samsung Electronics DRC will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Weighted SWOT Analysis of Samsung Electronics DRC Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Samsung Electronics DRC needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of Samsung Electronics DRC is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of Samsung Electronics DRC is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Samsung Electronics DRC to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Samsung Electronics DRC needs to make to build a sustainable competitive advantage.