Samsung and U.K Economy
Samsung is a South Korean company with markets globally for its products such as phones. Various market forces have contributed to shaping the company and prompted organisational responses. According to Business Dictionary (2016), market forces refers to powers of demand and supply that signify the summative effect of egocentric purchasers and sellers on a product’s price and quantity presented in the environment. Excessive production of a commodity brings about decreased demand (Dahlen, Lange and Smith, 2010). A rise in demand, on the other hand, requires a company to produce more products, whereas a decrease in demand leads to more costs than profit. High demand creates more work opportunities while weak demand causes cutting off some employees (UKessays, 2016). Public relations, advertising and experience affect customer’s impression of a product.
Business and cultural environments take fundamental roles in shaping an organization, for example, referring to SAMSUNG Corporation. Political factors include health and issues concerning workers (UKessays, 2016). For instance, Samsung experienced political headwinds recently in South Korea due to tensions in the market (Munson, 2014). Political instabilities and frequent changes in some of the countries such as Latin America have prompted the firm to include political instability in its strategic calculations. Business Dictionary (2016) asserts that social factors concern the society such income level and preferences. Samsung usually changes and modify products to suit local market conditions (Dahlen, Lange & Smith, 2010). The company has likewise continued designing and developing products to cater for the dynamic consumer preferences and match social factors in each country (Makos, 2015).
Technical factors relate to change in technology. Samsung is very innovative but has also been accused of imitating Apple products, thereby shedding light on the company regarding the importance of originality (Nationsencyclopedia.com, 2016). Legal factors constitute business regulations. Samsung got penalized for imitating Apple products. The occurrence created bad image and perception among customers (Managementstudyguide.com, 2016).
International trade refers to the exchange of services and products among countries. Many benefits accrued from such a broad market. Global labour players associate Samsung with problems such as loss of local jobs. Implications of world trade to UK businesses can be illuminated through comparative advantage (Dudovskiy, 2013). UK government support and champion international trade organizations such as WTO and pose few restrictions for foreign trade (Nationsencyclopedia.com, 2016).The initiative serves an advantage for the Samsung being an international firm. BRIC countries include Brazil, Russia, India and China. BRIC forms part of the largest and fast-growing markets economies contributing to the majority of world GDP growth (Economywatch.com, 2016). Jones and Evans (2013) postulates that UK is the most internet-based economy in G20. The statement evidences the country’s confidence in technology (Munson, 2014). Dudovskiy (2013) notes that the advantage creates an excellent opportunity for Samsung to develop its market being technologically innovative firm.
The impact of Global factors in the UK have affected businesses and Samsung as well. For instance, the volume of imports to the UK are disadvantaging international trade due to competitive advantage arising from low labour costs (Dudovskiy, (2013). The market opportunity is also increasingly becoming very competitive. For instance, Apple is posing a significant challenge to Samsung.
According to Dudovskiy (2013), policies of European Union on Samsung and business organizations have various impacts. EU enlargement and taxation policies affect the Samsung Profitability and marketability. Though the tax system may constrain profitability, EU enlargement offers a favorable business opportunity for Samsung. Most customers are interested in quality and not price (Economywatch.com, 2016). Therefore, the high price of Samsung does not have any adverse effect. However, financial conscious customers resort to cheaper commodities (Ferrell and Hartline, 2005).
Samsung competition in Europe is challenging due to the dominance of Apple Company that serves as the primary threat (Dahlen, Lange and Smith, 2010). Samsung is very innovative with new technologies thereby helping the firm to gain gaining competitive advantage in the UK over rival companies.
BusinessDictionary.com. (2016). What are market forces? Definition and meaning. [Online] Available at http://www.businessdictionary.com/definition/market-forces.html [Accessed 19 Apr. 2016]. N.p.
Dahlen, M., Lange, F. and Smith, T. (2010). Marketing communications. Chichester, UK: Wiley.
Dudovskiy, J. (2013). Significance of International Trade to UK Business Organisations Research Methodology. [Online] Research Methodology. Available at: http://research methodology.net/significance-of-international-trade-to-uk-business-organisations/ [Accessed 19 Apr. 2016]. N.p.
Economywatch.com. (2016). The BRIC Countries: Brazil, Russia, India, China | Economy Watch. [Online] Available at: http://www.economywatch.com/international organizations/bric.html [Accessed 19 Apr. 2016].N.p.
Ferrell, O. and Hartline, M. (2005). Marketing strategy. Mason, Ohio: Thomson/South-Western.
Jones, P. and Evans, J. (2013). Urban Regeneration in the UK. London: SAGE Publications.
Makos, J. (2015). STEEPLE Analysis of Samsung. [Online] PESTLE Analysis. Available at: http://pestleanalysis.com/steeple-analysis-samsung/ [Accessed 19 Apr. 2016].
Managementstudyguide.com. (2016). PESTLE Analysis of Samsung. [Online] Available at: http://managementstudyguide.com/pestle-analysis-of-samsung.htm [Accessed 19 Apr. 2016]. N.p.
Munson, L. (2014). Samsung Foresees Smart Society. But Will It Be Secure? | SecurityWatch.[online]Bhconsulting.ie.Availableat:http://bhconsulting.ie/securitywatch/? p=2223 [Accessed 19 Apr. 2016].N.p.
Nationsencyclopedia.com. (2016). United Kingdom International Trade, Information about International trade in United Kingdom. [Online] Available at: http://www.nationsencyclopedia.com/economies/Europe/United-Kingdom INTERNATIONAL-TRADE.html [Accessed 19 Apr. 2016].N.p.
UKessays. (2016). Pricing And Output Decisions Of Businesses Marketing. [Online] Available at: https://www.ukessays.com/essays/marketing/pricing-and-output-decisions of-businesses-marketing-essay.php [Accessed 19 Apr. 2016].N.p.