SAMSUNG- PESTLE analysis
Political
Brexit
Tax increase
No trade deal
Has been subjected to copyright law suit
Following the EU referendum on 23 June 2016, IBISWorld has analysed the
potential effects of the UK's exit on more than 400 industries in our library. On 29
March 2017, Article 50 was triggered, beginning the process of leaving the
European Union. On 14 March 2019, MPs voted to extend Article 50. Following an
initial extension to 12 April, a further extension to 31 October was agreed after MPs
voted against leaving the European Union without a deal. Although the relationship
between the United Kingdom and the European Union following this date remains
unclear, some industries have already been affected by the result of the EU
referendum.
- Virtually all of the products sold by the industry are imported, and operators have
therefore faced higher purchase costs as a result of the depreciation of the pound
following the referendum.
- Short-term uncertainty could have a detrimental impact on both input costs and
demand.
- If the fallout from the UK's exit from the European Union causes UK economic growth
to slow, this may result in falling real household disposable income, which would
constrain spending on mobile phones.
International trade
The manufacturing process for mobile phones is highly globalised, and the final stages
of the manufacturing process often take place in China. Because of this, the price of
imported mobile phones is unlikely to be directly negatively affected by the possible
introduction of trade barriers between the United Kingdom and European Union.
However, because most products sold by the industry are imported, the industry is
heavily affected by changes in the real effective exchange rate of the pound, as this can
have a significant effect on the cost of stock. Following the EU referendum, the pound
depreciated against many currencies, including the Chinese Yuan, which was
particularly important, because China is the largest source of industry imports. As a
result, many operators faced higher import costs, which constrained profit. However,
some operators were able to pass on a proportion of this added cost to soften the blow.
This resulted in higher prices for consumers, which negatively affected demand.
Consumer confidence
Economic uncertainty increased following the EU referendum result. This had a negative
effect on consumer confidence that ultimately resulted in consumers becoming less
willing to make expensive purchases, including mobile telephones. Consumer
confidence is anticipated to remain depressed until the UK's future trading relationship
with European Union and the economic impact of this is more apparent. (IBISWorld, july
2019)
G47.421 - Mobile Telephone Retailers in the UK
Brexit Impact Statement
Economical
Recession
Demography
Market changes
Fluctuating GBP rates
Consumer confidence
Socio-cultural
the trend that Samsung produces the best smart phones
consumers influenced
Samsung looses trial for patent in favor of apple- had to pay 539 million to apple
Fingerprint issue
Ranked 1st in consumer electronics
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
Regulations and standards
Employment law
Environmental
Samsung is committed to minimizing the environmental impact of its innovative
products, which include smartphones, TVs and much more. As part of this
commitment, Samsung has developed various unique, eco-friendly design
processes
In 2005, Samsung established in-house processes to ensure
the eco-friendliness of its products from the development stage,
and in 2014, the company instituted a proprietary system to
assess the ecological merits of each product with an ‘eco-
rating’.
The system’s three ratings – Eco-Product, Good Eco-Product
and Premium Eco-Product – take into account each country’s
eco-labeling standards, evaluating a wide range of criteria
concerning a product’s compliance with energy and resource
efficiency regulations, as well as its environmental impact.
As of the end of 2016, approximately 86 percent of Samsung
products in development had attained ratings of Good Eco-
Product or higher. This year, Samsung plans to revise its in-
house evaluation formula to also incorporate the eco-labeling
criteria of external accreditation bodies. The goal is to ensure
that by 2020, 90 percent of Samsung products in development
reflect the highest eco-labeling standards.