Samsung SWOT analysis 2017

| August 12, 2017

Company Background

Key Facts
Name Samsung Electronics Co., Ltd.
Logo
Industries served Consumer electronics (digital cameras, camcorders, TVs, blu-rays, laptops, home theaters, displays, tablets)
Telecoms equipment (phones, smartphones)
Semiconductors (DRAM, V-NAND, SSD, UFC)
Home appliances (washers, refrigerators, microwaves, dishwashers, vacuums)
Geographic areas served Worldwide (79 countries)
Headquarters Suwon, Gyeonggi Province, South Korea
Current CEO Oh-Hyun Kwon
Revenue (US$) 174.047 billion (2016) 0.6% increase over 173.001 billion (2015)
Profit (US$) 19.594 billion (2016) 19.2% increase over 16.433 billion (2015)
Employees 308,745 (2016)
Parent Samsung Group
Main Competitors Apple Inc., Nokia OYJ, Intel Corporation, LG Display and LG Electronics, Sony Corporation, Texas Instruments Inc., Lenovo Group Limited, Hewlett-Packard Company, Sanyo Electric Co., Ltd., Toshiba Corporation, SK Hynix Inc., Western Digital Corporation and many other consumer electronics, telecommunications equipment, semiconductor and home appliance companies.

Samsung Electronics Co., Ltd. (further Samsung), a part of the Samsung Group, is the world’s second largest technology company by revenue. The company produces consumer electronics, telecommunications equipment, semiconductors and home appliances. Samsung operates three business divisions:

  • Consumer electronics - Visual Display Business, Digital Appliances Business, Printing Solutions Business and Health & Medical Equipment Business.
  • IT and Mobile communications - Mobile Communications Business and Networks Business.
  • Device solutions - Memory Business, System LSI Business and LED Business.

The company is the world’s largest mobile phone and smartphone vendor. It is also the largest memory chip and TV manufacturer. Samsung operates in 79 countries, where it sells a range of more than 100 products.

Samsung SWOT Factors

Strengths

1. Very high research and development (R&D) expenditure resulting in one of the strongest patent portfolios among technology companies.

Innovation is crucial to succeeding in the technology sector. Usually, the more a business invests in R&D, the more innovations it creates. Samsung operates 34 R&D centers across the world. The company has spent US$12.753 billion on R&D in 2016, which was the 3rd largest amount spent in the world.[1] R&D spending strongly correlates with a company’s revenue growth and expansion into the new product markets.

Figure 1. R&D spending by Samsung and its largest competitors (in US$ billions and percentages)
Company 2015 As a % of revenues 2016 As a % of revenues
Samsung Electronics 12.802 7.4 12.753 7.3
Apple 8.1 3.4 10.0 4.6
Microsoft 12.0 13.1 12.0 14.1
Intel 12.128 21.9 12.740 21.5
Amazon.com 12.540 11.7 16.085 11.8
LG Electronics 2.050 4.2 2.128 4.5

Source: Companies’ respective financial reports[1][2][3][4][5][6]

In 2016, Samsung’s investment in R&D was the 2nd largest among technology companies only behind Amazon.com. Samsung’s R&D budget was also used efficiently as the company spent only 7.4% and 7.3% of its total revenues on R&D in 2015 and 2016, respectively.

Samsung’s high R&D spending has resulted in it developing the largest patent portfolio among its key rivals. The following table shows the number of patents granted for each company in the U.S. during 2014-2016.

Figure 2. Utility patents granted in the U.S.
Company 2014 2015 2016 Total
Samsung Electronics 4,936 5,059 5,504 15,499
Apple 2,003 1,937 2,101 6,041
Microsoft 2,829 2,408 2,398 7,635
Intel 1,573 2,046 2,779 6,398
Amazon.com 741 1,136 1,662 3,539
LG Electronics 2,119 2,241 2,426 6,786

Source: U.S. Patent and Trademark Office [7][8][9]

The more patents a company has, the better position it is in to defend its innovations from being copied by rivals. Currently, Samsung’s patents portfolio is one of the strongest in the technology industry.

Both its R&D spending and patent portfolio are factors that indicate Samsung’s strong competitive position in the markets in which it operates.

2. Product innovation and design capabilities.

Samsung has long been viewed as an innovative company that is capable of producing well designed and ecologically friendly products. This is proven by the many awards the company has received over the years. The prestigious Consumer Electronics Show (CES) awarded Samsung for its innovation and product design 13 years in a row. The company received 35 innovation awards in 2016, including the CES ‘Best of Innovation’ award, and has received more than 350 awards over the last 11 years.[19]

In 2016, Samsung has also received 5 International Design Excellence Awards (IDEA) awards.[20] Since 2009, Samsung has won the most (IDEA) awards among all nominated companies”.[21]

The company’s commitment to producing ecologically friendly products and to decrease its greenhouse gas emissions has also been recognized. Since 2009, Samsung has consistently been recognized for its leadership in driving eco-innovations. For the fourth consecutive year the company received the Environmental Protection Agency’s (EPA) annual ENERGY STAR Partner of the Year – Sustained Excellence Award.

Samsung also made its way onto the EPA’s 2016 Green Power Partner list for Top 30 Tech and Telecom companies recognized for significant renewable energy investments.[22]

Few other companies have received as many awards for innovation and eco-friendly product design as Samsung. This enhances the company’s reputation, increasing brand awareness and sales.

Access the full analysis...

Published: August 12, 2017
Format: PDF
Pages: 26
Price: USD $19

Reasons to buy this SWOT

17 Unique Factors Explained

11 Tables and Charts

Quickest Insight into Samsung Business

Written by SWOT Professionals

New Report Guarantee

Have Any Questions? Contact Us