Environmental Analysis Of Samsung In Australia

Retail Industry and Current Trends

The purpose of this report is to enlighten the reader about the marketing and management practices of the company Samsung. The report explains the trends prevailing in the electronic industry along with the growth and profitability scale of company as well. It also evaluates the macro environmental analysis of the information technology industry. Along with the analysis of the industry, it also evaluates the nature of competition as well. Furthermore, involvement of the market in decision-making process along with positioning map is discussed. Samsung is South Korean multinational conglomerate that is headquartered in Samsung Town Seoul. Further, in the given paper the country chosen for the environmental analysis is Australia. The report engages the reader about the segmentation and targeting of the people of Australia along with positioning map and branding strategies of the company as well. More details about the report are discussed below:

Samsung is the largest South Korean brand that is present in the information technology industry. The company was founded by Lee Byung-chul in the year 1938 as a trading company. Further, the company was then divided in many areas like retail, food, textile etc, for the next three decades. Further, the company entered in the electronic industry in the late 1960’s since then the company earned optimum revenue in that market. Samsung is also regarded as highest revenue earning company in the information technology industry. Samsung company has explored the worldwide international information technology market and is earning reputable returns as well. The company serves mobile phones, LCD monitors, hard disk, digital camera etc. Further the growth rate of the company Samsung.

From the statistics, it can be clearly seen that the company Samsung has captured the market of Australia. The company has managed to create an identified goodwill as well.  

In the beginning of the year 2017, the android market share was 55.7% in the country. The operating system of Apple can be looked as a significant competitor for the company with 42.2% share. The electronic market is majorly divided between these two companies only (Samsung and Apple).

In the country Australia, the sales of smartphone is experiencing double digits growth in upcoming years. This growth is increased due to increase in the market share of the Samsung company. The company Samsung is provides products to the people that are cost friendly, economic and easy to use as well (The Statistical Portal, 2017). Resulting in which, the company is becoming one of the market leader as well. However, there is still scope for the organization to explore the market using their capabilities and grow as well. In the recent years, the company holds the market share of 22.27%. However, entrance of new Samsung products in the market has given rise to the market share in Australia and reduced competition as well. Thus, the growth rate of the company in industry is significant (Armstrong, Adam, Denize, and Kotler, 2014). 

Growth

In the year 2017, the company made an operating profit 53.6 trillion from the sales of the products in the external international market. The major shares of the company are earned by selling android phones in the market, further, the demand of the company is enhancing with increasing population in Australia. The profitability of the company is along the increasing revenue as well (The Statistical Portal, 2017). 

The above mentioned graph shows the growth rate of the company. It can be seen that in the year 2016, the company showed explicitly growth and became world’s largest company in terms of revenue. The IT and mobile communication branch of the organization is providing maximum revenue due to its cheap and affordable prices with many in built services as well  (IBT, 2017).

The purpose to conduct PESTLE analysis is to evaluate different external factors present in the company that can affect the growth and success of the company present in that country. This analysis includes political, economic, social, technological, environmental, legal factors.

Political Factors: The market of Australia is one of the most stable markets and is one of the most significant market for companies like Samsung. The political system of the company is stable for the international organizations to expand their business in the country. Stable political environment helps the companies to enter in the country and make the country competitive as well. The legislations are flexible enough to help the companies’ trade properly (Hill, and Jones, 2013).

Economic Factors: economic factors are the most important factors that helps in identifying the type of market to expand the scope of business for a company. The economic growth rate of the country is higher than other countries like UK, US. The GDP of the country is higher than many other countries like France, Germany and UK. Thus, these aspects states that the environment factors present in the country support the growth of an organization like Samsung. Increasing economies of scale in the society is increasing the share of the company as well. The middle income level people prefer buying these products that provide high value at low cost to the customers (Hill, Jones, and Schilling, 2014).

Social Factors: The social factors basically refers to the trends present in the that will directly affect the sales of the company Samsung in the external market. The people present in the country are economic due to which they like to invest less on goods and earn more value from it. Resulting in which, the people buys the products offered by Samsung to increase the level of satisfaction at low cost. The social factors support the attributes of the company due to which, revenue of the organization also increases (Jenkins, Ambrosini, & Collier, 2016).

Profitability

Technological Factors: It refers to the level of technology present in the country and level of use of such technology by people and company. So, the use of internet and advanced technology is increasing in American households that is directly increasing the sales of Samsung in Australia. The android phone with maximum benefits helps the users to reach to the maximum extent of technology and use it at the same time. However, the increasing sale of smartphone is reducing the sales of computers in the worldwide market (McDonald, and Wilson, 2016).

Legal Factors: The regulations imposed on the companies present in Australia are work friendly and it does not hamper the sales of the companies in any way. Also, it should be noted that government intervention is limited but the government imposes heavy penalty in case of fraud or noncompliance of rules.

Environmental Factors: The country is very particular towards the environment and negative impacts of companies in the environment of Australia. Resulting in which, the company initiates environmental friendly activities that eliminate the greenhouse gases effect and protect the environment as well (Menon, Bharadwaj, Adidam, & Edison, 2015).

Thus, it should be noted that the above mentioned are the major factors present in Australia that affects the growth of the business of Samsung in the country. Most of the factors are in favour of the company that are positively influencing its growth.

When an organization offers its products and services in a new market, it analyse the favourable market conditions and nature of competition as well. The company Samsung experience oligopoly nature of competition as many players are influencing the market demand in the current era like, Apple, HTC, Motorola, Nokia, Sony etc. As discussed above, Apple is the biggest competitor of Samsung in the international market. However, Apple provides iOS services at high value and Samsung provides Android services at low value. Increasing satisfaction at low cost has placed the company on the top most position in the market and Apple on the second best (Pearce, and Robinson, 2011).

Further, the strengths and weaknesses of Apple and Samsung are discussed below:

Segmentation refers to the process of dividing the external environment on the basis of product specification, choice of customers, income range etc. Targeting refers to the process of targeting a specific group of people in the market from whom the company expects that they will purchase the products and initiate sales (Menguc, B., Katsikeas, & Auh, 2016). The primary and secondary target customers of Samsung are discussed below:

Environmental Analysis (PESTLE Analysis)

Primary target refers to the target market that the company believes will provide the best opportunity to sell their products and services. These are those customers who properly match to the specifications of the company and want to buy products offered by the organization. Samsung company targets people on the basis of demographic segmentation under which they mainly focus on age and income of people. The company targets the middle level income group and age group of 19-30 and 40- 50 age group people. The company targets 19-30 age group people because these people want more benefits at less prices and they target 40-50 age group people because these people want products that are cost friendly and easy to use (Ritcher, 2016).

This target market is the group of prospective people who may or may not buy the products of the company. The customers present in this group have less demand and need of the products and services offered by the company. For instance, the secondary target market of the company Samsung would be people who belong to age group of 15-18 and 30-40. This target market people include students or high income earning age group of 30-40. These people will buy the products and services Samsung only as a second phone and not the first phone. In this segment, less people aim to purchase the products of Samsung in the market (Zikmund, D’Alessandro, Winzar, Lowe, & Babin, 2017). 

The market segmentation plays a significant role in influencing the organization in initiating decisions in the target market. This segmentation includes the demographic, behavioral, psychographic and geographic characteristics. Thus, the primary target is the reason for the growth of the company so it majorly influences the process of decision making of the company. When Samsung introduces a new smartphone in the market, it conducts a market research and establishes its target customers so the level of involvement of primary customers is very high (Bajaj, 2017).

The company initiates specifications in the basis of preference of primary customers in the market. On the basis of requirements of primary customers only the company initiates decision in the organization. For instance, Samsung is launching new smartphone in the market for the middle-income level people. Therefore, the company will advertise the products in the market in which primary customers are present, also the prices and special feature; body etc. related decision would also be taken according to the taste of the primary customers present in the market. Recognition of the primary market is very important for the business is it will depend the success of the products in the market. Samsung initiates the decision on the basis of primary customers only that results in the increase in sales of the company (Manorek, 2016).

Nature of Competition

Below mentioned is the positioning graph of the company Samsung after analysing the primary market, competition, level of involvement of customers etc.  

The above mentioned positioning map shows that the company is taking good pricing decision that is adequately placing them in the desirable position in the target market. It is targeting people from middle-income level and provides high quality products and services to them. Further, the branding strategy of the company introduced effective advertisement and promotional strategies for the business. The major aim of the brand is to develop something that same to other business product but to make it more effective and much better lower cost and faster (David, David, and David, 2017). With the help of this strategy the company aimed to establish identity of the product and place them at a position where every person is capable to purchase it. Further, the marketing mix strategies of the company are discussed below:

• Product:There are various products served by the company in the target market. These products includes, mobile phones, refriderators, LED TV, LCD TV, washing machines, microwave oven, laptops, camera etc. The products of the company are pocket friendly and easy to use as well. Problems with the products have been negligible (Jung, 2014).
• Price: The Company make use of competitive pricing strategy under which they provide such prices to the customers in the market that the competitors fail to give. Resulting in which, the company attracts more customers in the target market.
• Place: The Company has various channels to supply its products in the market. Samsung has three-segmented channel of marketing that includes sales and service dealer, modern retail and distributors.
• Promotion: The Company make use of various forms of promotions to attract the customers in the market. The company uses the promotional strategy to push the products to the customers by the way of sales promotions(Manorek, Pangemanan, & Rumokoy, 2016).

Thus, in this way the company initiates the marketing strategies in the external markets like Australia to initiate their sales and capture the market as well.

Conclusion

Thus, in the limelight of above mentioned events, the fact should be noted that the company Samsung is a profound company present in the market of Australia. The company provides high quality products at low prices that attract middle-income level people in the market. These people also influence the decision making process of the company. Further, the biggest competitor of Samsung is Apple Inc. that provides high price and high quality services in the market. However, still the company aims to achieve the top most position in the market using its marketing and branding strategies. The customers have positioned the company at the most appropriate place in the market of Australia. 

References

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IBT., (2017). Chip off the old block: Samsung topples Intel as leading computer chip maker. Retrieved from: https://www.ibtimes.co.in/chip-off-old-block-samsung-topples-intel-leading-computer-chip-maker-736267

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The Statistical Portal. (2017). Vendors’ market share of smartphone shipments in Australia from 1Q’14 to 2Q’17. Retrieved from < https://www.statista.com/statistics/436033/australia-smartphone-shipments-vendor-market-share/>

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