Samsungs Galaxy tab Strategy Analysis in the UK Market (Research Paper Sample)

Samsung and Samsung’s Galaxy tab strategy analysis in the UK market
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Executive Summary
This report provides an analysis of the strategy employed by Samsung on its Galaxy tab tabs, in the United Kingdom. It uses PESTEL, Porter’s Five Forces, Value Chain, and porter’s generic strategy models to analyse the current competitive position of Samsung and its Galaxy tab. The findings from the analysis show that the political stability in the UK guarantees a peaceful for Samsung. Additionally, the growing UK economy, adoption of ‘green’ initiatives, advances in technologies, and favourable social aspects such as the growing demand for technological products among the UK citizens, favour the performance of Samsung’s galaxy tab. However, the ever-changing customer preferences and stiff competition present challenges to the company. To stay competitive in the market, Samsung employs an effective marketing program, highly-skilled employees, greater R&D capability, and focuses on timely and efficient procurement process. However, it has a weak infrastructure in the UK. Additionally, Samsung Electronics Logitech is particularly charged with handling outbound logistics in overseas plants. The company employs focused differentiation because it offers high quality tabs, but at high prices. This report recommends that Samsung should employ a low cost strategy. It also recommends that it should invest in R&D capabilities, in order to keep pace with the ever-changing needs, tastes and expectations of its technologically-savvy consumers in the UK. Additionally, the report recommends that Samsung should pay much focus on the UK market, just the way it does overseas. For instance, it should have its production plants in the UK and improve its infrastructure in the UK to avoid delays in delivering and distributing its Galaxy tabs.
Table of Contents
TOC \o "1-3" \h \z \u 1.0 Introduction PAGEREF _Toc390175487 \h 4
2.0 External Environmental Analysis PAGEREF _Toc390175488 \h 5
2.1 PESTEL Analysis PAGEREF _Toc390175489 \h 5
2.1.1 Political factors PAGEREF _Toc390175490 \h 5
2.1.2 Economic factors PAGEREF _Toc390175491 \h 5
2.1.3 Social factors PAGEREF _Toc390175492 \h 6
2.1.4 Technological factors PAGEREF _Toc390175493 \h 6
2.1.5 Environmental factors PAGEREF _Toc390175494 \h 7
2.1.6 Legal factors PAGEREF _Toc390175495 \h 7
2.2 Porter’s five forces framework PAGEREF _Toc390175496 \h 7
2.2.1 Threat of new entry PAGEREF _Toc390175497 \h 8
2.2.2 Intensity of competitive Rivalry PAGEREF _Toc390175498 \h 8
2.2.3 The supply power PAGEREF _Toc390175499 \h 9
2.2.4 Bargaining Power of Buyers (customers) PAGEREF _Toc390175500 \h 9
2.2.5 Threat of Substitution PAGEREF _Toc390175501 \h 10
3.0 Value Chain Analysis PAGEREF _Toc390175503 \h 10
3.1 Primary activities PAGEREF _Toc390175504 \h 11
3.2 Support Activities PAGEREF _Toc390175505 \h 12
4.0. SWOT analysis PAGEREF _Toc390175506 \h 13
5.0. Key issues of Samsung galaxy tab PAGEREF _Toc390175508 \h 15
6.0 Porter’s generic strategies PAGEREF _Toc390175509 \h 15
7.0 Conclusion PAGEREF _Toc390175510 \h 17
8.0. Recommendations PAGEREF _Toc390175511 \h 18
References PAGEREF _Toc390175512 \h 20
1.0 Introduction
Samsung is popular for its electronic brands in the global market. This company comes second after Apple in the tablet global market, basing on market share and shipment units (Majid, 2013). As per its culture in all of its business units, Samsung treats Galaxy tab uniquely and independently in the UK. However, there are several challenges that the company goes through in the UK market, which this report analyses. This report seeks to analyse Samsung and Samsung galaxy tab in the UK market. To begin with, it analyses the external environment of the UK, using PESTEL and Porter’s Five Forces models. Secondly, it uses the value chain analysis framework to analyse the internal environment of Samsung. Thirdly, it uses SWOT analysis to identify the company’s strengths, opportunities, weaknesses, and threats in the UK, after analysing the external and internal environments. It then looks at the key issues surrounding the company and uses Porter’s generic strategies to analyse the current strategies that Nike integrates in its business operations and devise an alternative strategy to the same organization. Finally the report provides a brief conclusion and recommendations for Samsung’s improved performance in the electronics industry.
2.1.1 Political factors
Political environmental factors refers to the government policies and regulations that directly or indirectly impact business operations in a country (Sherlekar, S. and Gordon, 2010). Politically, the UK is stable. However, there are several government policies and regulations, which affect the performance of tablet products in the UK market. For instance, the country has one of the highest tax rates in the world, which ranges above 28% (Coates, 2014). This increases operational costs to foreign companies such as Samsung. However, the recent initiatives made by the UK government, which include signing bilateral agreements, deregulations, and other trade agreements with other countries is likely to make the country reconsider reducing the corporate tax rates and VAT imposed on foreign corporations.
2.1.2 Economic factors
Economically, the UK has shown remarkable improvements since the end of the period of recession and the Euro Zone crisis (Berglof, 2011). This is affirmed by the fact that the current consumers in the UK, who easily access borrowings without difficulties and with low interest rates (Coates, 2014). In return, this has led to increased consumer spending and high living standards of the UK citizens (Krishna, 2012). Therefore, this increases the demand for Samsung’s galaxy tab tabs in the UK.
2.1.3 Social factors
Consumers in the UK market exhibit a high tendency of consuming high-end products that incorporate the latest technologies (Bergloff, 2011). This implies that companies like Samsung, which offers high-end products such as galaxy tab tabs, is likely to benefit or enjoy the demand for its products. For instance, according to BBC News Business (2013), Samsung galaxy tab enjoys 10% of the UK market share. However, the changes in consumer preferences and tastes might affect the company’s performance. For instance, if they opt for substitute products offered by competitors at a lower price, the performance of Samsung and its rivals, operating in the industry can be negatively affected.
2.1.4 Technological factors
Many companies in the mobile and electronics industry utilise the advancing technologies in their operations, in order to meet customers’ specifications. For instance, as noted by Barrow (2011) and Ranchhod (2012), companies in the industry employ technologies in designing and differentiating features of their products. Furthermore, most companies in the industry invest heavily in Research and Development (R&D) projects, in order to keep pace with the ever-changing customer tastes and preferences (Barrow, 2011).
2.1.5 Environmental factors
Any company operating in the UK must comply with the environmental rules and policies put forth by the UK government alongside environmental groups and agents. For instance, the UK government as well as environmental pressure groups have been on the forefront, in airing their demand for businesses to adopt eco-friendly business practices (Coates, 2014). Most companies in the mobile electronics industry have adopted and implemented the "Go Green Initiatives”. For instance, Samsung has made remarkable efforts to ‘go green’ in its manufacture of tablet products through recycling technologies. Additionally, consumers in the UK market are highly conscious of businesses’ CSR policies (Coates, 2014).
2.1.6 Legal factors
Despite the recent initiatives made by the UK government, which include signing bilateral agreements, deregulations, and other trade agreements with other countries, there are specific laws that impact on business operations in the UK. For instance, the Business Act 2009 outlines stringent measures and requirements that must be met by foreign firms such as Samsung before and after starting its operations in the country (BBC News Business, 2011). Additionally, the tablet market experiences many legal battles and lawsuits, related to patent rights. For instance, this is affirmed by the Samsung’s Galaxy tab, which has been embroiled in lawsuits with Apple before, over patent infringement (Thakur, 2011).
2.2 Porter’s five forces framework
This framework analyses a business unit’s industry, with the aim of establishing its level of competitiveness in the industry.
Source: (Porter, 1998).
2.2.1 Threat of new entry
Currently, the threat of new entrants in the UK tablet computer market is low. This is affirmed by the high capital requirement to start and operate the business. Additionally, the tablet market segment requires companies to integrate high mastery of advanced technologies, which are expensive to adopt and implement (Thakur, 2011). Therefore, organisations with weak R&D capabilities cannot succeed in the market/industry. s
2.2.2 Intensity of competitive Rivalry
The intensity of competitive rivalry in the UK tablet industry is high, considering that there are many key players in the market, competing on different platforms. For instance, the key players in the UK market and their market share are as follows; Apple’s iPad with 56% market share, Samsung 12% market share, Blackberry with 4% market share, and Acer with 2% m...