SWOT analysis of Samsung (6 Key Strengths in 2020)
Ovidijus Jurevicius | January 10, 2020
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
| Name | Samsung Electronics Co., Ltd. |
|---|---|
| Founded | January 13, 1969 |
| Logo |
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| 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.
| 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.
| 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]
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]
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.