Question

For any organization of your choice, identify the various factors affecting their Marketing
Environment by highlighting both Internal and External environmental factors? (25 Marks)

Answer 1

Samsung has grown to one of largest electronics company since 1938. Since 1970’s and early 1980’s Samsung expanded globally with diversified intention into core technical business. Samsung leads the electronic industry with its high performance and with high growth rate along with stability. Now let's discuss about the environmental factors that affect the business of this company. We will discuss about both internal as well as external factors.
Internal factors :-
internal environment analysis of Samsung which will investigate the environment in which Samsung operates in. components of the analysis will be those in which the company has control over, as known as internal environment. It works of SWOT analysis.
1. Strength:- Samsung have increase their brand value in this past three to four years. Samsung is leading in design features. For example Samsung is the first one to produce dual screen phones, and they have a thinnest and lightest note pad ever. Their design are attractive and stylish at the result their sales are moving in high volumes.
2. Weaknesses:- Their prices are low, hence their product loss value easy in the market. They launch a new phone after another that can cause confusion to the customers. Poor creativity in terms of software, mostly they steal Apples software ideas. They are leading in hardware but they have too much dependence for their software from other parts.
3. Opportunities:- Samsung can unseat major stake holders in TV and DRAM sectors. It increase product range in consumer electronics and Can sustain future market using the idea of consumer taste research. Rapid growth in competitive markets across the globe and Increase in portfolio due to acquisitions of other firms also provide good opportunity to them.
4. Threats:- it refers to competition in market. Samsung faces aces high competition from Sony and Nokia in mobile phone sector, daily entrants of new technology companies, impact on sales due to Recession, lack of innovation in mobile industry threatens its position further down. Intense competition from existing companies in PC sector is also a biggest threat to this company.
External factors :-
To control the external factors of a company, PESTEL is used as decision making tools in macro-environment. PESTEL is Classified into:
1. Political factors: It’s all about intervenes of the government on the economy of the country. Political factors include areas like Tax policy, Labour law, Environmental law, Trade restriction, Tariffs, Political stability
Services and goods provide by the government ( merit goods ) and services which is not provided by the government (demerit goods), Goodwill among foreign nations. Samsung also face this stress in all the other countries where there is change in political parties.
2. Economic factors: It includes Interest rates, Economic growth, Rate of inflation (Inflation rate), Rate of Exchange (Exchange rate). Samsung's cost of capital is directly affected by interest rate and exporting goods and supply of goods is affected by exchange rate. Inflation raises cost.
3. Social factors: Demand of products and company operations are affected by social factors like culture of the society, natality rate, growth rate, age distribution.
4. Technological factors – It includes research and development activity, automation, better technology for the production of goods. Technological have direct impact on costs, quality which leads to innovation in product qualities of Samsung.
5.Environmental factors – It includes weather, climate change, locality (Place), ecofriendly products (to overcome with problem of global warming).Effect of pollution in nature harm the production unit of Samsung company.
6.Legal Factors – It include Consumer law, Employment law, Health and safety law and Discrimination law. Samsung should follow the minimum wages system in U.K as it is legal factor that affect business and minimum age for employment is fixed by the government.