Samsung SWOT analysis 2016

| May 14, 2016

Company Background

Key Facts
Name Samsung Electronics Co., Ltd.
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 (80 countries)
Headquarters Suwon, Gyeonggi Province, South Korea
Current CEO Oh-Hyun Kwon
Revenue US$177.365 billion (2015) 2.7% decrease over US$182.273 billion (2014)
Profit US$16.848 billion (2015) 18.5% decrease over US$20.679 billion (2014)
Employees 319,000 (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 80 countries, where it sells a range of more than 100 products.

Samsung SWOT 2016 Factors


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 has spent US$14.1 billion on R&D in 2015, which was the 2nd largest amount spent in the world.[3] 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 2014 Change from 2013 As a % of revenues 2015 Change from 2014 As a % of revenues
Samsung Electronics 13.4 28% 6.4 14.1 5% 7.2
Apple 6.0 32% 2.6 8.1 35% 3.4
Microsoft 10.4 6.1% 13.4 11.4 9% 13.1
Intel 10.6 4.6% 20.1 11.5 9% 20.6 - - - 9.3 41% 10.4
LG Electronics 2.3 9.1% 3.9 2.1 (1)% 3.8
Sony 4.5 (10.2)% 6.9 3.9 0.3% 6.0

Source: Strategy+ Business[2][3] Data for Sony and LG are from their respective financial reports[30][31]

In 2014 and 2015, Samsung’s investment in R&D was the largest among technology companies and only Intel and Microsoft came close to their expenditure. Samsung’s R&D budget was also used efficiently as the company spent only 6.4% and 7.2% of its total revenues on R&D in 2014 and 2015, 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. from 2013-2015.

Figure 2. Utility patents granted in the U.S.

Company 2013 2014 2015 Total
Samsung Electronics 4,652 4,936 5,059 14,647
Apple 1,775 2,003 1,937 5,715
Microsoft 2,659 2,829 2,408 7,896
Intel 1,454 1,573 2,046 5,073 530 741 1,136 2,407
LG Electronics 1,945 2,119 2,241 6,305
Sony 3,073 3,214 2,448 8,735

Source: U.S. Patent and Trademark Office [4][5][6]

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.