Environmental Scan

Organizations must first scan its internal and external environment before the organization can
being developing strategy formulation; it is essential for the organization to identify possible
external opportunities and threats and internal strengths and weaknesses within the environment.
“Environmental scanning is the monitoring, evaluation, and dissemination of information from
the external and internal environments to key people within the corporation” (Wheelen &
Hunger, 2012, p. 98); environmental scans help organizations eliminate strategic surprise and
secure the organization’s long-term health. Within an organization’s environment are several
external and internal factors, organizations should conduct environmental scans to determine
projection on the external and internal factors that could possibly impact the success of the
organization. Environmental scans refer to the control and use of an organization’s information
regarding patterns, trends, and external and internal relationships developed within the
organization. An effective, thorough, and productive scan can assist management and key people
within the organization in making decisions about the organization’s future path towards success.

Samsung Electronics

Samsung Electronics is constituent of one of the biggest multi-billion dollar corporations in the
world; whose core philosophy focuses on devoting the company’s talented people and
technologies to produce the best products and services to contribute to global society. Several
Samsung critics contend that the company’s success is owed to copying and then fine-tuning the
innovations of others. But Samsung is known as the global leader in televisions, screen
technology, chip design and batteries which leads several to conclude the company is doing
something right in terms of innovation. Samsung’s ability to compete and line up against
forerunners such as Apple and Google Inc. is by the company aim towards patent evasion when
innovating. “From its early forays into innovation, competing against Toshiba in washing and
drying machines, Samsung has chased patents in areas where its competitors appear to have
protection and has oriented its innovation efforts to find new patentable ideas in its competitors’
backyard” (Shaughnessy, H, 2013).

“In a challenging environment fraught with rapid change and uncertainty…a leader must go
beyond the boundaries of current markets and technologies” (Samsung, 2015). Samsung is an
international corporation with an estimated 673Samsung Group global office affiliates located
within 90 countries. $16.1 billion investment made in future technologies and the company was
ranked number 1 global market share across 17 categories in 2013. 20 years ago, the company
made a commitment to never stop improving, to always keep changing (Samsung, 2015). Since
being established in 1969, that is precisely what Samsung has accomplished. Through an internal
environment of relentless innovation and discovery, the company continues to transforms the
worlds TVs, smartphones, tablets, PCs, cameras, home appliances, printers, LTE systems,
medical devices, semiconductors, and LED solutions (Samsung, 2015). Samsung’s network
extends across the world and the company takes pride in their diversely, creative, and talented
employees who drive the company’s growth. Like Apple Inc., the company boldly invests and is
committed to R&D and future technologies. It operates 34 R&D centers globally, with an
estimated 69,000 employees devoted to R&D. Samsung believes living by core values, along
with a rigorous code conduct, is key to good business and the heart of every decision made by
the company (Samsung, 2015).

Samsung utilizes the STEEPLE analysis as part of the company’s strategic analysis for the
medium and long term, along with the assessment of Samsung prospects. With Samsung’s recent
unhappiness with operating within leading markets alone, the company’s decision to expand into
new markets shows that it wants to cover as many countries as possible and requires an analysis
that provides concentrated information which covers various aspects of the external environment,
such as STEEPLE. The STEEPLE analysis focuses on the following 7 external environmental
drivers: Social, Technological, Economic, Environmental, Political, Legal, and Ethical. Strategic
analysis such as STEEPLE provides Samsung with the competitive advantage it needs to place
the company in a better position than competitors like Apple and Google. The
telecommunications market is extremely competitive. Samsung’s decision for expansion into
new markets is a very effective strategy which builds on the company’s strength while focusing
on consumers’ needs. The STEEPLE analysis guidelines prepares Samsung to navigate the
global market, as well as creates value and helps the company sustain competitive advantage
through innovative R&D teams with a different style and mode of working methods.

STEEPLE and Samsung’s core values and code of conduct are utilized by the company as
measurement guidelines for verification that the company’s strategies are effective. The results
as a networked company who emphasizes on speed and flexibility in regards to decision making
and the company’s many accomplishments displays the effectiveness of its measurement
guidelines. The measurement guidelines, along with continuous learning, reflects Samsung’s
growth and its employees support towards each other’s growth and developing relationships
through innovations and new ideas.

Conclusion

Environmental scans are extremely beneficial and effective to organizations. Through SWOT
analysis environmental aid the organization with identifying its strengths and weaknesses and
can used as a measurement guideline for effective competitive advantage position against
competitors. According to Wheelen & Hunger (2012), before an organization can begin strategy
formulation, it must scan the internal environment for strengths and weaknesses and its external
environment to identify possible threats and opportunities (Wheelen & Hunger, 2012). Both
Samsung and Apple, Inc. are two successful, forerunner companies who exemplify the utilization
of environmental scans.

Political

In most of the markets where Samsung operates, the political environment is conducive to its
operations and though there are minor irritants in some of the foreign markets like India, overall
Samsung can be said to be operating in markets where the political factors are benign. However,
in recent months, it has faced significant political headwinds in its home country of South Korea
because of the country’s tensions with North Korea wherein the company has had to take into
account not only the political instability but also the threat of war breaking out in the Korean
Peninsula. Apart from this, Samsung faces political pressures in many African and Latin
American countries where the political environment is unstable and prone to frequent changes in
the governing structures. Of course, this is not yet a major cause for worry as the company has
more or less factored the political instability into its strategic calculations.

Economic

This dimension is especially critical for Samsung, as the opening up of many markets in the
developing world has meant that the company can expand its global footprint. However, this
dimension is also a worry since the ongoing global economic crisis has severely dented the
purchasing power of consumers in many developed markets forcing Samsung to seek profitable
ventures in the emerging markets. The key point to note here is that the macroeconomic
environment in which Samsung operates globally is beset with uncertainty and volatility leading
to the company having had to reorient its strategies accordingly. The saving grace for the
company is that it has adjusted rather well to the tapering off of the consumer disposable
incomes in the developed world by expanding into the emerging and the developing markets.
Indeed, this is the reason Samsung has begun an aggressive push into the emerging markets in
the hope of making up for lost business from the developed world.

Socio-Cultural

Samsung is primarily a South Korean Chaebol or a family owned multinational. This means that
despite its global footprint it still operates from the core as a Korean company. Therefore, there
are several aspects to its global operations some of which include adapting itself to the local
conditions. In other words, Samsung being a Global company has had to act locally meaning that
it has had to adopt a Glocal strategy in many emerging markets. Apart from this, Samsung has
had to tailor its products to the fast changing consumer preferences in the various markets where
it operates. The key point to note here is that Samsung operates in a market niche that is strongly
influenced by the lifestyle preferences of consumers and given the fact that socio cultural factors
are different in each country; it has had to reorient itself in each market accordingly.

Technological

Samsung can be considered as being among the world’s leading innovative companies. This
means that the company is at an advantage as far as harnessing the power of technology and
driving innovation for sustainable business advantage is concerned. This has translated into an
obsessive mission by the company to be ahead of the technological and innovation curve and a
vision to dominate its rivals and competitors as far being the first to reach the market with its
latest products is concerned. however, as we shall discuss later, this has also resulted in the
company cutting corners with its imitation of the legendary Apple’s product design and this has
brought legal and regulatory scrutiny and troubles for the company. There is a lesson here for
other technology driven companies from Samsung’s experiences and it is that no matter how fast
you are to reach the consumer in this age of Big Bang Disruption, doing the basics right is still
the key to success.
Legal

As mentioned in the last section, Samsung has had to face heavy penalties for its alleged
imitation of the Apple’s iPad and iPhone and this has led to the company taking a beating as far
as public perceptions and consumer approval of its strategies are concerned. It remains to be seen
as to how the company would wriggle out of the legal maze that it finds itself in the developed
markets because of the various lawsuits.

Environmental

With the rise of the ethical consumer who wants his or her brands to source and make the
products in a socially and environmentally responsible manner, Samsung has to be aware of the
need to make its products to satiate the ethical chic consumer. This means that it has to ensure
that it does not compromise on the working conditions or the wages it pays to its labor who are
engaged in making the final product.