SWOT analysis of Samsung (6 Key Strengths in 2018)

Ovidijus Jurevicius | May 10, 2018

SWOT analysis of Samsung Electronics Co., Ltd.

This Samsung SWOT analysis reveals how the second largest technology company used its competitive advantages to become a leader in consumer electronics, home appliances and semiconductors industries.

It identifies all the key strengths, weaknesses, opportunities and threats that affect the company the most. If you want to find out more about the SWOT of Samsung, you’re in the right place.

For more information on how to do a SWOT analysis please refer to our article.

Keep reading.

Company Background

Key Facts
Name Samsung Electronics Co., Ltd.
Founded January 13, 1969
Logo
Industries served Consumer electronics
Telecoms equipment
Semiconductors
Home appliances
Geographic areas served Worldwide (79 countries)
Headquarters Suwon, Gyeonggi Province, South Korea
Current CEO Kinam Kim (Device Solutions)
Hyunsuk Kim (Consumer Electronics)
Dongjin Koh (IT and Mobile Communications)
Revenue (US$) 211.812 billion (2017) 18.7% increase over 178.473 billion (2016)
Profit (US$) 37.298 billion (2017) 85.6% increase over 20.092 billion (2016)
Employees 308,745 (2017)
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.

You can find more information about the business in Samsung Electronic's official website or Wikipedia’s article.

Samsung SWOT analysis

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$14.857 billion on R&D in 2017, which was the 2nd 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 2016 As a % of revenues 2017 As a % of revenues
Samsung Electronics 13.079 7.3 14.857 7
Apple 10.045 4.7 11.581 5.1
Microsoft 11.989 14.1 13.037 14.5
Intel 12.128 21.9 13.098 20.7
Amazon.com 12.540 11.7 22.620 12.7
LG Electronics 2.183 4.5 2.110 3.9

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

In 2017, 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 7.3% and 7% of its total revenues on R&D in 2016 and 2017, 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 14 years in a row. The company received 36 CES 2018 innovation awards, including 2 ‘Best of Innovation’ awards, and has received more than 400 awards over the last 14 years.[19]

Samsung's strength is innovative products. The company has won 36 CES awards in 2018.

In 2017, Samsung has also received 7 International Design Excellence Awards (IDEA) awards.[20] Since 2009, Samsung has won the most (IDEA) awards among all nominated companies”.[21]

Samsung's another strength is its design capabilities. The company has won 7 IDEA awards in 2017 alone.

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 fifth consecutive year the company received the Environmental Protection Agency’s (EPA) annual ENERGY STAR Partner of the Year – Sustained Excellence Award.

Samsung also ranked at No. 9 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.

3. Enormous advertising and marketing budget

Samsung’s advertising budget was US$4.731 billion in 2017 – the second largest among all of its competitors.

Figure 7. Yearly advertising budget spending by Samsung and its competitors (in US$ billions)
Company 2016 2017 Change from 2016
Samsung Electronics 3.919 4.731 20.7%
Apple - - -
Microsoft 1.6 1.5 (6.3)%
Intel 1.8 1.4 (22.2)%
Amazon.com 5 6.3 26%
LG Electronics 1.169 1.106 (5.3)%

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

Samsung’s total marketing budget, which includes all expenses related to selling its products, was over US$11 billion in 2017, more than any of its competitors.

While Samsung’s marketing capabilities are not as effective as Apple’s, its huge advertising spending has its advantages. The company’s products have become more prominent and users are more willing to buy products bearing the Samsung logo as a result.

There is no doubt that Samsung would not have sold nearly as many wearable gadgets or newest smartphone models as it has, without its advertising efforts.

Access the full analysis... more Samsung strengths, weaknesses, opportunities and threats

Published: May 10, 2018
Format: PDF + PowerPoint
Pages: 26
Words: 4,900
Charts/tables: 11
$19
BUY SAMSUNG SWOT 2018 You will be redirected to the payment page.

What you get

PDF analysis
PowerPoint presentation
Thorough insight into the business
Visualization of data
Comparison against rivals

Table of contents

  • Company Overview
  • SWOT Analysis
  • Strengths
  • Weaknesses
  • Opportunities
  • Threats
  • Summary
  • Sources

Sources

Why buy from us?

Best source We're the No.1 source for both free and paid SWOT analyses on the web.
Well researched All the information is supported with data from the most trusted sources.
Instant Access You can download your swot instantly after the payment.
Trusted Many customers often contact us with requests for custom business/market specific SWOTs, because they trust us.

Have any questions?

Contact us by

Phone: +37064025219

Email: [email protected]strategicmanagementinsight.com

Related Articles

Profile picture of author Ovidijus

About Ovidijus Jurevicius

Ovidijus is the founder of SM Insight and the lead writer since 2013. His interest and studies in strategic management turned into SM Insight project, the No.1 source on the subject online.

He's been using his knowledge on strategic management and swot analysis to analyze the businesses for the last 5 years. His work is published in many publications, including three books.