SWOT Analysis
Threats
Samsung, according to its 2014 business report, is facing “unfavorable market conditions
resulting from intensyfing competitions as more competitors enter the market with more
products and lower prices”:
In the smartphone industry, Samsung is facing a lot of competition with other markets from
developed countries, like Apple. This competition has restarted after the release of Samsung’s
Galaxy S6 Edge and Apple’s iPhone 6. An article says “The company’s profits from mobile
devices dropped 57% year-over-year in the first quarter of the year, the company said
on Wednesday. Meanwhile, sales of Apple’s iPhone are up 40% and accounted for nearly 70%
of the Cupertino, Calif. company’s profits in the last quarter”.
On the other hand, Samsung is competing with companies from China and India, like China’s
Xiaomi and India’s Micromax, which are releasing high quality smartphones and in a low cost.
Xiaomi, according to another source, has closed the year with a 186.5 percent year-on-year
growth in shipment and edged out previous market leader Samsung, which saw a 22.4 percent
dip in shipment and slid to second position with 12.1 percent market share. Other Chinese
companies, like Huawei and Lenovo are focusing on producing smartphones with decent
specifications and most importantly, low prices. In this chart, the market positions are shown:
Even if this is a threat now, if Xiaomi remains number one leader in the Chinese market, it can
become a weakness,if their products are developed in high-quality ones and remain in a
comparatively low cost than Samsung.
According to another article, Samsung is “having difficulty producing the new screens fast
enough” of their new Galaxy S6, which could hold back sales. In addition, Samsung seems to
have problems with the production of DRAMs, according to its 2014 business report, where it
states that “DRAM demand increased driven by product launch, but supply did not due to
difficulties in process migrations"
Additionally, Samsung has been facing a patent battle with NVIDIA since September last year.
Both companies are in this legal patent battle, where each is accusing the other one of
infringing patents. If Samsung loses the battle, according to Matt Larson, a technology litigation
analyst working for Bloomberg Intelligence, Samsung might have to "pay an astounding $3
billion in damages for the lawsuit in a federal district court." This would mean an economical
loss for the company. The patent battle will possibly conclude by the end of 2015.
Sources
Back, A. (2015). "Samsung Looks Set to Recharge". Retrieved May 7th from
http://www.wsj.com/articles/samsung-looks-set-to-recharge-1430283589
Blank, M. (2015). “Samsung Group Could Be Liable To Pay $3 Billion In Damages To NVIDIA
Corporation (NVDA)”.Retrieved May 15th from http://www.bidnessetc.com/41974-samsunggroup-could-be-liable-to-pay-3-billion-in-damages-to-nvidia-corpora/
Linshi, J. (2015). “This 1 Chart Shows How Intense the Apple-Samsung Rivalry Really Is”. Retrieved May
7th from http://time.com/3840414/samsung-apple-market-share/
Samsung Business Report(2014).Retrieved May 1st from
http://www.samsung.com/us/aboutsamsung/investor_relations/financial_information/downlo
ads/2014/2014_business_quarter04.pdf
Yu, E. (2015). “China rings up 420M smartphones in 2014, Xiaomi takes market lead”. Retrieved
May 7th from http://www.zdnet.com/article/china-rings-up-420m-smartphones-in-2014xiaomi-leads-market/