ASSIGNMENT 2 FRONT SHEET

Qualification BTEC Level 4 HND Diploma in Business

Unit number and title Unit 1: Business and Business Environment

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Table of Contents
Introduction ........................................................................................................................................ 4
Overview about Samsung Electronics ............................................................................................................ 4
Vision 2020: ............................................................................................................................................................................ 5
History: ................................................................................................................................................................................... 7

Competitive Environment .................................................................................................................... 9

Example of overview chart: ........................................................................................................................... 9
Threats of substitution ................................................................................................................................ 10
Industry Rivalry (current competitor) .......................................................................................................... 11
Power of Buyer ........................................................................................................................................... 11
Power of supplier ....................................................................................................................................... 13
Threats of entry (potential competitor) ....................................................................................................... 14
Political factor ............................................................................................................................................ 16
Economic factor .......................................................................................................................................... 17
Social factor................................................................................................................................................ 19
Technology factor ....................................................................................................................................... 20
Legal factor................................................................................................................................................. 21
Ethical factor .............................................................................................................................................. 22

Analysis of Samsung SWOT model ..................................................................................................... 22

Develop a strategy for Samsung Electronics under SWOT analysis ................................................................ 24
STRATEGY SO.............................................................................................................................................. 24
ST STRATEGY: ............................................................................................................................................. 26
WO STRATEGY ............................................................................................................................................ 26
STRATEGY WT ............................................................................................................................................. 26

Analyze according to Samsung's actual business decision ................................................................... 27

Conclusion ......................................................................................................................................... 28
References ......................................................................................................................................... 28

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Introduction
When entering a business market, the company will be affected by the internal and external
environmental factors of that market. The analysis of internal and external environmental factors as a
way to help businesses can make judgments and assess their strengths and weaknesses in the market so
that they can find out opportunities and challenges of the company help the company to come up with
appropriate strategies for the company to survive and develop. Within the scope of this report, I will
analyze the internal and external environment for a business company by analyzing the internal and
external environment of Samsung Electronics company.

Overview about Samsung Electronics

Samsung Electronics brings inspiration to people and shapes the future through innovative and modern
ideas and technologies. With a constant focus on innovation and discovery, Samsung Electronics
continues to redefine the world of TVs, smartphones, wearable devices, tablets, digital devices, networks
and memory, LSI systems, molding and LED solutions.

Samsung Electronics is committed and co-operated in the process of developing the global community
and bringing innovation to improve the quality of life of people every day.

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Vision 2020:
Samsung Electronics is committed to inspiring the world and creating the future through innovative
technologies, products and designs. Samsung has made itself the responsibility of being a creative leader
and devoting its efforts and resources to provide new values for the industry and all customers, while
sharing employee values. and company partners.

Samsung Electronics has set its ambitious growth targets by 2020: Samsung Electronics seeks to achieve
annual sales of US $ 400 billion, while placing Samsung Electronics' overall brand value in the top 5
bridge.

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Samsung Electronics leads the TV and screen market through superior image quality and innovative
design, reinforcing the company's No. 1 position as a global leader for nine consecutive years.

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History:
Since starting out as a small manufacturer of black & white televisions in 1969, Samsung Electronics has
grown into one of the most recognized global brands and a technology leader across multiple categories.
For over 40 years, Samsung Electronics has continued to expand its global reach and open new
possibilities for people everywhere by introducing innovative technology.

o 2018

Launched 'QLED 8K' and world’s first modular TV ‘The Wall’

Unveiled Samsung and HARMAN’s ‘2018 Digital Cockpit’

Built cutting-edge EUV semiconductor line in Hwaseong, Korea

Launched ‘Galaxy S9/S9+’ and ‘Galaxy Note9’

Debuted world’s first ‘3D Cinema LED’ for movie theater

Announced mid to long-term global expansion plans of renewable energy

Mass produced world’s first ‘fifth-generation V-NAND’ and developed ‘8Gb LPDDR5 D-RAM’

Announced to invest KRW 180 trillion and hire 40,000 for next 3 years to revitalize economy

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Established 7 Global AI Centers in Korea, the US, the UK, Canada, and Russia

Supplied world’s first 5G network commercial equipment in the US (FWA) and Korea (NR Mobile)

o 2017

Completed acquisition of HARMAN

Began mass production at new semiconductor plant in Pyeongtaek, South Korea

Started mass production of its 2nd Generation 10nm FinFET Process Technology and strengthened
advanced foundry portfolio with new 11nm LPP and 7nm LPP with EUV Technology

Unveiled Galaxy S8, S8+, and Note8

Brought QLED TVs and The Frame to global markets

Bixby voice capabilities now available in over 200 countries globally

Debuted world's first Cinema LED Screen

Ranked no.6 in Interbrand's Best Global Brands 2017

o 2016

Announced plan to acquire HARMAN (Acquisition completed March 2017)

Announced comprehensive roadmap to enhance long-term shareholder value creation

Acquired Dacor, Joyent and Viv Labs

Started industry’s first mass production of system-on-chip with 10-nanometer FinFET Technology

Introduced world’s first Universal Flash Storage (UFS) removable memory card Line-up, offering up to
256-Gigabyte (GB) capacity

Brought Galaxy S7 and Galaxy S7 edge to the global market

Began mass producing world’s fastest DRAM – based on newest high bandwidth memory (HBM)
interface

Revealed spectacular 2016 SUHD TV lineup to begin a new decade of global TV leadership

(Samsung, 2019)

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 Competitive Environment

Example of overview chart:

Direct Opponents

Apple

Replacement items: Laptop; tablet

Market group competition

 Customer

Depend level: yes

Supplier Depend level: No

Threats of substitution
No Companies/ Products
1 Smartphone
Price ( VND) Design
8-25 million Compact design, can fit into
the pocket so convenient for
both handling and carrying.

2 Laptop 9- 37 million Big, need a lot of space to put

and use, making it difficult to
carry.

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3 Tablet 9- 22 million Larger than a smartphone but
smaller than a laptop, the
design is not as bulky as a
laptop, so it is easy to carry
and use.

Industry Rivalry (current competitor)

No Companies Price ( VND) Design
1 Samsung: Samsung Galaxy note 26,990,000 (cellphones, Beautiful, easy to use and
10 plus 2019) always catch up with the trend.

2 Apple: Iphone XS max 39,000,000 (cellphones, Nice design, easy to use and
2019) always leads the design trend.

Power of Buyer
According to research by Consumer Intelligence Research Partners (CIRP), Samsung is the brand with the
highest number of devices activated in Q1 / 2018 (as of March 2018) in the US market. Two positions are
ranked behind respectively Apple and LG. Specifically, Samsung accounted for 39% of the US mobile
market share. Apple ranked second with 31%, LG with 14% and the remaining brands accounted for 17%.

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 Brand Share of Mobile Phone Activations (Thanh, 2018)

Apple is still the firm with the most loyal customers

Brand Loyalty (% of phone activators remaining with Brand) (Thanh, 2018)

Through the chart shows that Apple is still the company with the largest customer loyalty rate when the
number of loyal customers reached the lowest level of about 80% in September 2017 and in January
2018 this number was up. 90% and always higher than other brands. Meanwhile, Samsung is the
following brand but there is a clear improvement in loyal customer attraction when in March 2017, the
number of loyal customers was only about 60% but by January 2018 the figure This is up to 70%.

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User shift from Iphone to Samsung (Anh, 2019)

An article gave an assessment of customer loyalty to smartphones. Accordingly, 25% of Apple iPhone X
customers switch to using other brands while Samsung's customer base is about 7.7%. The article also
pointed out that 18% of iPhone users have switched to Samsung and pulled the loyalty rate for Apple
down 15.2% compared to March 2018 data.

Thereby it can be seen that Samsung is creating a very good connection for customers. However, with a
strong brand like Apple, Samsung still needs to work hard to attract more loyal customers through
developing and designing its products and offering the best services for customers to be able to keep
customers and create a huge loyal customer base for the company. That will be a challenge that
Samsung needs to make in order to become the No. 1 brand in smart phones and compare with the top
position that Apple still occupies.

Power of supplier

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 Suppliers of Samsung Electronics (Samsung, 2019)

Suppliers have an important role for every company and Samsung is also paying attention to its
suppliers. Therefore, Samsung has formed links with many different suppliers with guaranteed
requirements about the company's operation objectives. However, Samsung does not depend on a
particular supplier because Samsung has a large supply and can meet all the needs of the company.

Threats of entry (potential competitor)

Samsung electronics is in a monopoly competition environment. The reason is that Samsung electronics
products such as smartphones, laptops or tablets are all items that have other brands involved in trading
activities such as Apple or Xiaomi and only different in design and a few Distinctive features according to
brands. Samsung phones, for example, have beautiful screens and cameras, Apple is highly personalized,
Xiaomi is prone to strong hardware. This proves that Samsung electronics is in a monopolistic
competitive environment, in addition to the amount of products or prices of these products between

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Samsung and other brands always have competition and mutual influence. A typical example of
competition is that the phone companies have focused on smart phone segments for around VND 12-15
million. Therefore, Samsung Electronics must definitely be in the monopolistic competition environment.

The article on the price of smart phone market in Vietnam (Genk, 2018)

In the technology product market, companies that want to enter require a strong financial investment to
buy and develop production technology, infrastructure, and system construction. distribution. In
addition, there is a highly specialized human resource because in the technology industry requires
creativity to make a difference to the products that already exist in the market. Because of such a large
investment requirement, it creates barriers to entry and withdrawal from the industry and it also creates
strong points in the industry that have low potential competitors.

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Political factor

The article is about protecting the ideology of the Vietnamese Party (Tu, 2018)

Considering the Vietnamese market on political factors, the Vietnamese Government is stable, certain
and Vietnam is a one-party state. Because a one-party country has no sectarian division in the state
management system, Vietnam has good security with no political instability like multi-party states.
Therefore, foreign companies and organizations investing and doing business in Vietnam will be assured
of the safety and stability of politics in Vietnam. This is evident in the stability of Vietnam's political
management apparatus when the National Assembly term in Vietnam lasts 4 years once according to
Article 45 of Vietnam's 1959 constitution. (thu vien phap luat, 1959)

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Economic factor

Article on Vietnam's inflation index (An, 2018)

With the control of inflation below 4%, it helps the Vietnamese economy increase its development index
thereby stabilizing market prices in Vietnam. That is an opportunity for Samsung to sell its products
because of its stable price, which leads to a stable life of the people, leading to increased shopping
demand.

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 Article about interest rates for 2019 (TBNH, 2019)

With banks raising long-term interest rates to recover capital. This has an effect on Samsung's sales
because people will limit shopping needs as they deposit money into banks to enjoy high interest rates.

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This is Samsung's challenge in 2019 when it is necessary to market products with great attraction to
attract customers to buy the company's products and ensure no losses.

Social factor

Vietnam's population structure 2019 (Danso, 2019)

With a population of more than 97 million people, continuing to increase with an increase of more than
1 million people per year, Vietnam is ranked 14th in the world. The labor force is abundant, eager to
learn, and the average salary is low so Vietnam has attracted many foreign companies to invest and build
factories and branches in Vietnam. Typically, Samsung Electronics established Samsung Electronics
Vietnam Co., Ltd. to manufacture mobile phones with a capital of US $ 650 billion in Vietnam. (Mai,
2018)

Korean culture is always oriented to domestic goods, so Samsung is very popular with Koreans and
becomes their pride when the group has overcome Japanese competitors to become one of the known
brands. Most in the world in the field of electronic chips, mobile phones and flat screens. This is also
different from the culture of Vietnam, Vietnamese people do not tend to use domestic goods, even
when the product quality of some domestic products is not inferior to foreign ones, the general
mentality of Vietnamese people Still prefer to use foreign goods. Especially for the electronics industry,
no Vietnamese electronics company has good quality to meet the needs of the market. Therefore, the
development path for Vietnamese electronics companies is still very difficult, while Samsung has become
a familiar and popular brand of Vietnamese people.

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Technology factor

The article about creating an era for Samsung's 5G device (Samsung, 2019)

In modern 4.0 technology, Samsung has developed technologies for 5G to meet the development of
technology and incorporate them into their products to meet and deliver customer experience and
service with quality. Best quality. Especially for technology companies like Samsung, developing future
technologies such as 5G or AI will always be important activities affecting the company's survival and
development. This is one of Samsung's biggest challenges because technology development is the
foundation and core of technology companies like Samsung and whether or not to compete is entirely
dependent on research. Whether or not to apply new technology is quick and timely.

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Legal factor

Document directing and operating (Van ban chinh phu, 2012)

In the document issued on September 13, 2012, the Government has agreed to the Ministry of Planning
and Investment to guide relevant agencies and localities to grant / amend investment certificates for the
first project. SEV phase II with investment incentives has been proposed. Along with allowing SEV to
enjoy the highest investment incentives as a high-tech enterprise, with incentives such as applying
annual corporate income tax rate of 10% during the project implementation period. ; exempted from
corporate income tax for 4 years from the time of taxable income and 50% reduction of payable tax for
the next 9 years ..., the Government also agreed to adjust the research criteria and development (R&D)
for SEV's project.

According to the petition, SEV wants to apply the method of calculating the labor rate (5%) working in
the R&D field based on the calculation of the number of workers who do not produce 3 shifts / day (an 8-
hour working day; week work 5 days). The cost of R&D activities for the extension must still comply with
the provisions of the High-Technology Law, but allow the full cost of training forms (domestic and
foreign) and support costs. training support and expenses for sponsoring domestic science and
technology organizations into expenses for R&D activities of enterprises.

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Ethical factor

Samsung's ethical management (Samsung, 2019)

Through the management of ethics in the company, based on Samsung's code of global code of conduct,
it creates the cultural identity in the company. Besides, it also increases the image of Samsung in the
region and in the international arena, thereby creating brand popularity to everyone. This enhances
Samsung's understanding of the business style to everyone and creates an invisible value in terms of
brand image in everyone's mind about Samsung's conduct and ethics.

Analysis of Samsung SWOT model

External environment
Opportunity
1. The market for smartphones
and tablets in the coming years
The market for smartphones and
tablets is expected to continue to
increase in the coming years
(according to the forecast IDC
smartphone market will return to
the annual growth rate of 3%
from 2019, to 2022 The average
growth rate is 2.4%). (IDC, 2019)
2. Increasing demand of
populous markets such as China
and India
3. Loyalty to Apple users is
declining.
4. Weakness of rivals such as
Nokia, BlackBerry
5. The lack of components for
smartphone / tablet of rival
Apple.
6. There are many product
segments that competitors /
Threates
1. Having trouble related to
patents related to competitors
(especially Apple)
2. The strong development and
fierce competition of
competitors other than Apple in
the field of smartphone / tablet
(Sony, HTC, Microsoft with
Windows Phone, Google with
Nexus, Amazon with Kindle)
3. Apple is looking to reduce its
reliance on Samsung chips in
smartphone / tablet products
4. Global economy is expected to
continue to grow low or will
deteriorate and spread
5. The real threat from much
cheaper Chinese products is
taking up a large market share in
the largest market in the world.

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Strength:
1. Being dominating the largest
smartphone market (22%, Q1,
2018). (Team couterpoint, 2019)
2. Always maintain high R&D
investment (6% of total revenue,
2.5% higher than Apple) (Phuc,
2019)
3. The global brand of Samsung is
regularly promoted and
promoted (ranked 4th in the top
10 most valuable brands in the
world in 2018). (Tinh, 2018)
4. As a leading manufacturer of
displays and semiconductor
devices.
Weakness:
1. Still considered to be a tailor in
finding and meeting the needs of
customers / markets.
2. Smartphone products are
present in too many adjacent
competitors are currently vacant.
7. Political factors (together with
Asia, users are more sympathetic
than Western firms), cultural
similarities, geographical factors.
8. Weakness of competitors in
the ability to reach new and far
markets.
9. The market is growing.
10. No legal support for
competitors in some countries.
1. Breakthrough with new
features, satisfying user
requirements (wireless charging
for smartphones, stylus pen,
AMOLED plastic display, large
touch screen, large QWERTY key)
2. Producing smartphone / tablet
devices with high screen quality
(the problem that consumers are
most interested in).
3. Apple's customer segment
dominance (due to declining
loyalty).
4. Promoting promotion in
emerging / populated markets.
5. Build a brand as typical as
Apple has built with its brand to
enhance brand value for
consumers.
6. Promoting the construction
and development of Samsung's
"ecosystem" ecosystem to a new
level (where Samsung's TVs,
monitors, refrigerators,
smartphones, tablets have
occupied a huge market share in
the world).
1. In each special segment, make
a difference in products
(Samsung Galaxy S, Galaxy Note,
Galaxy Tab, Galaxy 2 sim, Galaxy
mini product lines) compared to
the products available in the
1. Develop a promotional
strategy that emphasizes
Samsung's leading technology
products.
2. Cutting costs, lowering
components costs helps products
have the most competitive prices
compared to competitors.
3. Take the lead in acquiring
patents related to smartphone /
tablet technology.
4. Promote and promote the
Samsung brand and market
dominance in countries with a
contrasting legal system with the
US to combat patent-related
troubles.
5. Continue to research, develop,
invest in technology and increase
production to continue to lead
the market of screen and
semiconductor devices,
increasing the dependence of
other competitors.
1. Know the legality of each
country / market to be able to
win (lose in the US, win in
England, Japan, Korea).
2. Focus on the price strategy of
products tailored to each market
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segments (leading to market. segment.
competition that reduces mutual 2. Make the difference between 3. Search for new customers in
revenue). Samsung products compared to the field of manufacturing and
3. Much depends on the other brands (with the operating consuming Samsung mobile
software of other partners. system) through user interface chips.
changes that make it more 4. Limiting the use of
satisfying for users (TouchWiz copyrighted technologies from
interface), part management competitors in markets with high
Software (Samsung Apps). intellectual property laws;
3. Eliminate some products that combine specific market-based
are close together in the cooperation agreements to
customer segment to focus more benefit together, share the
on the smartphone segment. market.

Develop a strategy for Samsung Electronics under SWOT analysis

SO strategy Strategy ST
• (S2, S4 + O2, O3) => Product differentiation • (S1 + T1) => Product development strategy.
strategy. • (T2, T3, T4, T5) => Defense strategy.
Continue to pursue a product differentiation
strategy on the success of the Galaxy series.
• (S2, S4 + O3, O7) => Focused strategy. Focusing
heavily on special markets like China, India, ...
• (S3, S6 + O8, O9) => Market development
strategy Develop new markets like Myanmar
• (S2 + S4 + 05 + 010) => Market penetration
strategy.
Attract rival customers by creating similar feature
lines like price differences based on strengths
WO strategy WT strategy
• (W1, W3 + O1, O3, O5) => Product differentiation • (W1 + T1, T3) => Cooperation strategy
strategy • (W2 + T2, T4, T5) => Low cost strategy
• (W2 + O2, O4) => Focused strategy

STRATEGY SO
S2 + S4 + 02 + 03 Product differentiation strategy.

Continue to pursue a product differentiation strategy on the success of the Galaxy Note series. Based on
the following strengths:

- S2.C has strong R&D ability to develop a separate product line.

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- S4 Having a supply of components that is completely proactive for production.

The opportunity is:

- O3 There are many product segments that competitors / competitors are currently vacant.

- O2. The market has developed strongly, many emerging markets have brought many new untapped
needs

S2 + S4 + 03 + 07 Focused strategy.

Focusing heavily on special markets such as China, India, etc. Based on the following strengths:

- Very flexible in meeting the needs of local network operators.

- S2 Has strong R&D

- S4 Good supply of components

The opportunity is:

- O3 The delay of other competitors

- O7 Political factor (together with Asia, users are more sympathetic than Western firms), cultural
similarities, geographical factors, ...

S3 + S6 + O8 + O9 Market development strategy

Develop new markets like Myanmar, etc. based on available strengths:

- S3 Strong brands easily penetrate new markets

- Along with other consumer electronics items easily participate, set up distribution channels.

- S6 Ability to capture customer needs, understand regional culture to create advantages to meet
potential needs.

With the opportunity:

- O8 Weakness of competitors in the ability to reach new and far markets

- O9 The market is growing

S2 + S4 + 05 + 010 Market penetration strategy

Attract rival customers by creating similar feature lines like price differences based on strengths:

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- S4 Components manufacturing capability

- S2 R&D capability

Opportunity:

- The weak competitors in the component manufacturing section should not take full initiative in price.

- No legal support for competitors in some countries

- Product development: Constantly developing product features, size and product quality

- Product improvement

- Improving the product lines are conceived

ST STRATEGY:
S1-T1 product development strategy

T2-T3-T4-T5 defensive strategy

WO STRATEGY
Product differentiation strategy (W1, W3 + O1, O3, O5)

- Focus on strongly developing the high-end smartphone / tablet market segment by developing product
lines with Samsung's own characteristics such as Galaxy S10 with 6.1-inch screen with typical TouchWiz
interface, Galaxy Note with pen versatile stylus, Galaxy Tab with powerful features of Android to trend of
smartphone / tablet growth in the following years with the dominance of Apple's rival (users are
wondering to change / upgrade the device )

Focused strategy (W2 + O2, O4)

- For densely populated markets like China and India, focus on developing products in niche market
segments (customers' tastes and incomes) such as Galaxy 2 sim, Galaxy mini

STRATEGY WT
- Understand the legality of each country / market to be able to win (lose in America, win in England,
Japan, Korea).

- Focus on price strategy, build strategies appropriate to each market segment

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Analyze according to Samsung's actual business decision

Press release on cooperation between Samsung and Microsoft (Samsung, 2019)

Samsung's decision to cooperate with Microsoft in expanding the smartphone experience is based on
Samsung's strengths in technology, research and development, and the threat of incoming phone brands
from China is gradually strong and typical is Huawei. With the strong point of having a system and high
product development research team, the cooperation with Microsoft will help Samsung to develop
technology based on available Microsoft software and integrate them into products. to help customers
easily use and feel familiar. Besides, the fact that Chinese brands have emerged so strongly makes
Samsung need to come up with a strategy to push the company so as not to be surpassed by Chinese
brands.

Samsung's decision to cooperate with Microsoft is entirely consistent with elements in the macro
environment and in a competitive environment. Since Samsung is a technology company, the analysis of
technology factors in the environment will be appropriate to assess the compatibility of decisions with
elements in the macro environment. Along with the development of modern technology, Samsung as
well as other technology companies must always race on the race of technology like 5G, AI, ... The
combination of 2 famous technology brands together like Samsung and Microsoft will create a strong

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development team and also attract the interest of customers to Samsung products in the future because
of curiosity about products and their quality. when combined between the two big tech guys, Samsung
and Microsoft. Besides this decision is also to extend the distance between Samsung and the brands
from China. The partnership with Microsoft also helps Samsung come closer to perfecting its products to
be able to compete strongly with Apple's iPhone. Thereby directing Samsung closer to its top goal in the
smartphone industry.

Conclusion
Through analysis of Samsung Electronics' internal and external environment, Samsung can find its
resources extremely powerful and able to adapt well in the business environment in Vietnam. From an
investor's perspective, we can count on Samsung's business decisions and developments at present and
in the future.

References
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nao
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