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Microsoft SWOT analysis 2013

Strengths

Weaknesses

1.

Brand loyalty

1.

2.

Brand reputation

2.

3.

Easy to use software

4.

Poor acquisitions and investments


Dependence on hardware
manufacturers

3.

Criticism over security flaws

4.

Mature PC markets

5.

Slow to innovate

Strong distribution channels

5.

Robust financial performance

6.

Acquisition of Skype

Opportunities

Threats

1.

Cloud based services

1.

Intense competition in software products

2.

Mobile advertising

2.

Changing consumer needs and habits

3.

Mobile device industry

3.

Open source projects

4.

Growth through acquisitions

4.

Potential lawsuits

Strengths
1.

Brand loyalty. Over the years, Microsoft has been the leading OS and software
provider, which resulted in more than 90% market share for PC OS. Most of us grew up
using its easy to use OS, are familiar with it and will keep using it. Few other brands are
capable to compete with Microsoft for this reason. Even open source OS, which are
completely free and well suited to use for common user, find it hard to attract users.

2.

Brand reputation. According to Interbrand, Microsofts brand is the 5th most valuable
brand in the world, valued at $ 57.8 billion. Forbes listed the corporate as the 7th most

reputable business in the world. Brand reputation leads to higher sales and greater market
share.
3.

Easy to use software. Windows OS and Office software products are so popular not
just because Microsoft has great monopolistic power, strong distribution channels and good
brand reputation but also because its products are of great quality and really easy to use.

4.

Strong distribution channels. The company works with all the major computer
hardware producers such as Lenovo, Dell, Toshiba and Samsung and major computer
retailers to make sure computers would be sold with already pre-installed Windows software.
The company also invested in Dell and Nokia to tighten its relationships with these
companies.

5.

Robust financial performance. Microsoft grew its revenues by 20% from 2008 to 2012
and holds more than $63 billion of cash and cash equivalents that can be used for
acquisitions and substantial investments into R&D.

6.

Acquisition of Skype. With nearly 300 million users, Skype is a significant boost to
Microsofts online presence and have a lot of potential in generating income from online
advertising.

Weaknesses
1.

Poor acquisitions and investments. Few of Microsofts acquisitions were successful


and brought not just revenues and products but new skills and competencies to the
company. Massive, LinkExchange, WebTV, Danger are just few examples of multimillion
acquisitions made by Microsoft but soon shut down or divested.

2.

Dependence on hardware manufacturers. Microsoft is a giant software corporation


but it does not produce its own hardware and depends on computer hardware manufacturers
to develop products that run Windows OS. If cheap and popular alternative OS would
appear, hardware manufacturers may simple choose the alternative and Microsoft could do
little to change the situation.

3.

Criticism over security flaws. Windows OS, the main Microsoft product has been
heavily criticized for being so weak against various viruses attacks. Compared to other OS,
Windows is the least protected against such attacks.

4.

Mature PC markets. Only recently has Microsoft entered the mobile technology sector
and still heavily depends on its OS and software sales for standalone and laptop computers.

The market for these products has matured and Microsoft will find it harder to grow revenues
in these sectors.
5.

Slow to innovate. Microsoft has huge R&D resources and great position to enter new
markets with innovative products but constantly failed to do so. It had an opportunity to be
the first player in online advertising but missed the opportunity. Its entrance to mobile OS
was also too late, while Google and Apple captured the market share.

Opportunities
1.

Cloud based services. Microsoft could expand its range of cloud services and software
as the demand for cloud-based services is expanding.

2.

Mobile advertising. Mobile advertising markets are expected to grow in double digits
over the next few years and Microsoft has a great opportunity to tap into these markets with
its mobile OS.

3.

Mobile device industry. Smartphones and tablets markets will grow steadily over the
next few years and Microsoft could exploit this opportunity by introducing more of its own
tablets and a new company phone.

4.

Growth through acquisitions. With a huge reserve of cash Microsoft could start
acquiring new startups that would bring new technology, skills and competences to the
business.

Threats
1.

Intense competition in software products. Microsoft is more than ever on the


pressure to introduce successful OS both in PC and mobile markets as such competitors like
Google and Apple have already established positions.

2.

Changing consumer needs and habits. Customers shift from buying laptops and
standalone PCs to buying smartphones and tablets, the markets, where Microsoft has only a
modest market share and may never establish itself.

3.

Open source projects. Many new open source projects are coming to the market and
some of them became quite successful, such as new Linux OS and Open Source Office.
Open source projects are free and so they can become an alternative to expensive
Microsofts products.

4.

Potential lawsuits. Microsoft has already been sued for many times and lost quite a few
large scale lawsuits. Lawsuits are expensive as they require time and money. And as

Microsoft continues to operate more or less the same way, there is high probability for more
expensive lawsuits to come.

Company background
Name

Apple Inc.

Industries served

Computer hardware, Computer software, Consumer


electronics, Digital distribution

Geographic areas served

Worldwide

Headquarters

U.S.

Current CEO

Tim Cook

Revenue

$ 156.508 billion (2012)

Profit

$ 41.733 billion (2012)

Employees

72,800 (2012)

Main Competitors

Samsung Electronics Co., Ltd., Amazon.com, Inc.,


International Business Machines Corporation, Cisco Systems,
Inc., Google Inc., Microsoft Corporation, Dell Inc., LG
Electronics, Lenovo Group Limited, Hewlett-Packard
Company, Sony Corporation and many others.

Apple Inc. is an American multinational corporation, which designs, manufactures and sells
personal computers, consumer electronics and software, and provides related services. The
business has experienced a tremendous growth from 2001 when it has introduced its iPod mp3
player. Apple Inc. is considered to be the most successful electronics company in the world.
You can find more information about the business in its official website or Wikipedias article.

SWOT

Apple SWOT analysis 2013


Strengths
1.

2.

3.

Customer loyalty combined with


expanding closed ecosystem
Apple is a leading innovator in mobile
device technology

Weaknesses
1.

High price

2.

Incompatibility with different OS

3.

Decreasing market share

4.
Strong financial performance
($10,000,000,000 cash, gross profit margin

Patent infringements

43.9% and no debt)

5.

Further changes in management

4.

Brand reputation

6.

Defects of new products

5.

Retail stores

7.

Long-term gross margin decline

6.

Strong marketing and advertising teams

Opportunities

Threats

1.

High demand of iPad mini and iPhone 5 1.

Rapid technological change

2.

iTV launch

2.

2013 tax increases

3.

Rising pay levels for Foxconn workers

4.

Breached IP rights

3.

4.

5.
6.
7.

8.

Emergence of the new provider of


application processors
Growth of tablet and smartphone
markets

5.

Price pressure from Samsung over key


components

Obtaining patents through acquisitions


6.

Strong dollar

7.

Android OS growth

Damages from patent infringements


Strong growth of mobile advertising
market

8.

Competitors moves in online music


market

Increasing demand for cloud based


services

Strengths
1.

Customer loyalty combined with expanding closed ecosystem. While at first Apples
closed ecosystem was a weakness for the business, this has now changed. First, Apple now
has a full range of apps, software and products that are interlinked and support each other.

Second, new products and supplements will be released soon (iTV), hence expanding the
ecosystem. Third, Apple has a strong customer loyalty, which increases due to Apples
closed ecosystem, which, in turn, is supported by customer loyalty. So the combination of
Apples expanding closed ecosystem and customers loyalty increases firms competitive
advantage.
2.

Apple is a leading innovator in mobile device technology. Apple has been chosen as
the most innovative business in the world for the 3rd time in 2012. Companys core
competency of producing innovative products is the strength the company builds upon and is
able to bring the most innovative products to the market.

3.

Strong financial performance ($10,000,000,000 cash, gross profit margin 43.9%


and no debt).Apples financial performance is one of the best among many companies.
Company currently (end of 2012) holds about $10,000,000,000 in cash, which can be used
for acquisitions, buying back company shares and other matters. It also has higher gross
profit margin than its main competitors, which is equal to 43.9%. Company has no debt and
is not directly affected by interest rates or credit markets.

4.

Brand reputation. Apple has a reputation of highly innovative, well designed, and wellfunctioning products and sound business performance. Apple brand is valued at $76.5 billion
and was the second most valuable brand in the world in 2012.

5.

Retail stores. Apples retail stores ensure high quality customer experience; provide
direct contact with knowledgeable staff and increases brand awareness. Besides, Apples
stores are one of the most profitable in terms of sales/ft2.

6.

Strong marketing and advertising teams. Marketing is one of the strongest functional
areas Apple has. It can sell pricier products, build superior stores (they are more or less built
to achieve marketing goals) and advertise their products in a compelling manner.

Weaknesses
1.

High price. Apples products cost much more than its competitors devices. Some
critics argue that the price is not justified. When theres such a fierce competition, Apple
products price becomes a weakness because consumers can easily opt for similar quality
but lower price products.

2.

Incompatibility with different OS. The iOS and OS X are quite different from other OS
and uses software that is unlike the software used in Microsoft OS. Due to such differences,
both in software and hardware, users often choose to stay with their accustomed software
and hardware (Microsoft OS and Intel hardware).

3.

Decreasing market share. The less market share Apple has, the less it can influence its
potential customers and persuade them to jump into using Apples closed ecosystem
products.

4.

Patent infringements. The firm is often accused of infringing other companies patents
and has even lost some trials. This damages Apple brand and its financial situation.

5.

Further changes in management. Apple has lost Steve Jobs in 2012 and Tim Cook
became the new CEO. Scott Forstall and John Browett (chief of retail) left the company too
and this will have an impact on companys management, which, as many think, will be
negative.

6.

Defects of new products. This is not current Apple weakness but one that jumps out
time to time. Some of Apples iPod and iPhone releases had clear faults and thus disturbed
sales of the products and firms reputation of superior product performance.

7.

Long-term gross margin decline. Current Apples gross margin is one of the highest in
the tech industry but analysts fear that due to increasing component prices and competition
current margins will not be sustained. Hence, glooming firms future financial performance.

Opportunities
1.

2.

High demand of iPad mini and iPhone 5. iPad mini sales will increase Apples market
share in the tablet market and, will strengthen firms competitive advantage.
iTV launch. iTV launch will support Apple TV sales and the products ecosystem.

3.

Emergence of the new provider of application processors. Samsung, the main


Apples competitor, is also the only provider of application processors for Apples products.
Apple has to find a new source for the component but could not find a suitable one yet.
Nonetheless, new manufacturers with superior engineering capabilities are arising and its
just a matter of time, when Apple will seize upon the opportunity of being less dependent on
its direct competitors.

4.

Growth of tablet and smartphone markets. Growth of tablet and smartphone markets
is a good opportunity to expand firms share in these markets.

5.

Obtaining patents through acquisitions. Apple lacks of some patents to sustain its
growth and the best way to acquire those patents is to acquire the firms holding them. In
addition, Apple could develop new skills and competencies.

6.

Damages from patent infringements. Apple patents are often infringed by its
competitors. Thus, collecting the damages from the companies that do so is a viable
opportunity to not only increase the cash reserves but to damage the competitors reputation
and sales as well.

7.

Strong growth of mobile advertising market. Apple has developed iAd advertising
platform, which allows advertising on Apple iPhone, iPad and iPod touch. The growth of
mobile advertising market is an opportunity which could be further seized upon.

8.

Increasing demand for cloud based services. Apple could expand its range of iCloud
services and software as the demand for cloud-based services is expanding.

Threats
1.

2.

Rapid technological change. One of the most severe threats Apple and the other tech
companies are facing is rapid technological change. Companies are under the pressure to
release new products faster and faster. The one that cannot keep up with the competition
soon fails. This is especially hard when a business wants to introduce something new,
innovative and successful. Apple was able to bring very innovative products to the market so
far but for the moment, even Apple hasnt unveiled any plans for the new products (except
iTV) and may lack new introductions to keep up with competition.
2013 tax increases. Tax increases in USA in 2013 will negatively affect Apple.

3.

Rising pay levels for Foxconn workers. Pay levels for Foxconns workers already rose
3 times from 2010 to 2012. Foxconn is the main manufacturer of Apple products and the
rising pay level for Foxconns workers will likely raise the prices for Apple products.

4.

Breached IP rights. The companies that breach Apple patents might not be discovered
soon and may benefit from it, while weakening Apple at the same time.

5.

Price pressure from Samsung over key components. Samsung has already asked
Apple to pay higher price for its application processors. Due to intense competition and no
viable substitutes, Apple may be asked to pay even more.

6.

Strong dollar. Apple earned more than half of its revenues from outside US. Dollar
appreciation against other currencies reduces potential profits from those countries.

7.

Android OS growth. Android OS is the main competitor for iOS in mobile device
market. The domination of Android decreases iOS power over influencing consumers to join
Apple.

8.

Competitors moves in online music market. Apple faces threat from online music
stores, such as Amazon, Wal-Mart and online music subscription companies, such as
Spotify.

Company background
Name

Google Inc.

Industries served

Internet

Geographic areas served

Worldwide

Headquarters

U.S.

Current CEO

Eric Schmidt and Larry Page

Revenue

$ 50.17 billion (2012)

Profit

$ 10.7 billion (2012)

Employees

53,861 (2012)

Apple Inc., Facebook Inc., Microsoft Corporation, Samsung


Electronics Co., Ltd., International Business Machines
Corporation and many others.

Main Competitors

Google Inc. is a multinational corporation that provides Internet-related products and services,
including internet search, cloud computing, software and advertising technologies. Advertising
revenues from Ad Words generate almost all of the company's profits.
You can find more information about the business in its official website or Wikipedias article.

SWOT

Google SWOT analysis 2013


Strengths
1.
2.

3.
4.

Open source products and services


Quality and customer experience are
the primary objects

Weaknesses
1.

Relies on one source of income

2.

Unprofitable products

3.

Patent litigations

Financial situation
Access to the widest group of internet
users worldwide

5.

Strong patents portfolio

6.

Product integration

7.

Culture of innovation

Opportunities

Threats

1.

2.
3.

Growing number of mobile internet


users

1.

Growing number of mobile internet users

2.

Unprofitable products

3.

EU antitrust laws

4.

Competition from Microsoft

Obtaining patents through acquisitions


Driverless electronic cars

4.

Growing into electronics industry

5.

Google fiber cables

Strengths
1.

Open source products and services. As the company states: Googles mission is to
organize the worlds information and make it universally accessible and useful. The same is
with almost any of Google products. Let it be Google maps, calendars, drive, OS or the
advices how to rank better in a search index. Googles products can also be used with any
OS or mobile device without a charge. Google openness is the key why Google is the
number one in many products and services.

2.

Quality and customer experience are the primary objects. Everything that Google
offers is of premium quality. The products are aimed at solving customer needs and
problems by providing excellent customer experience.

3.

Financial situation. Google is one of the most profitable companies in the world with
earnings nearly $50 billion and $11 billion profits (22%). The company also holds $48 billion
in cash and just $7 billion of debt. Few other companies are so strong financially to compete
with Google.

4.

Access to the largest group of internet users worldwide. Google has an access to
79% of the world desktop search market users and 89% of the world mobile search market
users. Combined, these internet users represent an extremely large market that Google can
use to promote and sell its products and services.

5.

Strong patents portfolio. In 2012, Google added 1,151 patents and was the 21st
business worldwide in terms of number of patents. Intellectual property is the key in
competing against competitors and Google with Motorolas acquisition gained a strong
advantage over its competitors.

6.

Product integration. Nearly all Google products are integrated with each other forming
an ecosystem that enriches customers experience and encourages using more of companys
products and services. Besides, Google products can be used on any OS or any device
without a trouble or can be integrated with other companies applications. No other major
tech organization offers the same level of integration.

7.

Culture of innovation. Many unique products are offered by Google every year, with so
many in development stages. According to Boston Consulting Group (BCG) Google is the
2nd most innovative business in the world. The company was also the second patent creator
in the worle in 2012. Google emphasizes its innovative work culture as one of its main
competitive advantages.

Weaknesses
1.

Relies on one source of income. More than 90% of Googles revenue comes from
online advertising. Online advertising is expected to grow in double digits in 2013 and will
grow Googles income in the short term. But in the long run, Google may experience slow
income growth or even the decline due to a few reasons. First, the market for personal
computers is growing slowly and the Google experiences the overall decline in its desktop
search engine market. If Google wont push the competition back it will lose not only the
market share but the main source of its income as well. Second, Google as many other
firms, find it hard to monetize mobile device users, who will represent the highest growing
group in online advertising. Third, online advertising growth is driven by emerging economies
where an average price for an advertisement is considerably lower than in the developed
economies, so the growth of online advertising will only grow the income of companies
insignificantly.

2.

Unprofitable products. Google has many products and services that add little value for
the business and make only losses, thus decreasing firms profits.

3.

Patent litigations. Google is often involved in litigations over the breached patents and
other intellectual property. These litigations are costly and time consuming and distract the
company from innovating rather than litigating.

Opportunities
1.

Growing number of mobile internet users. Google has an opportunity to create a


platform that could be used to better display ads for mobile device users and increase firms
income.

2.

Obtaining patents through acquisitions. For Google to grow and to compete


successfully, it has to obtain more new patents. One way of doing that is to acquire
companies that have strong patents portfolio. Google has acquired Motorola in 2012,
obtaining more than 17,000 patents from the business.

3.

Driverless electronic cars. Goggle has introduced and successfully tested driverless
cars in Nevada, U.S. The technology of these cars could easily be installed in any future
model and would be a huge technological step. Although, Google has no intentions of
manufacturing such cars itself, the company could sell licenses for car manufactures for
using their technology and IP.

4.

Growing into electronics industry. Google has already launched a few new models of
notebooks, tablets and smartphones into the market but these were only introduction
models. Google could strengthen its entry into electronic devices industry by introducing
more products for more customer groups and cut out its market share. This would result in
tighter integration of its software products and diversified income.

5.

Google fiber cables. Google is currently testing their new fiber cables that can deliver
internet content at astonishing 100 times as fast as current providers. It is wise for Google to
invest in such infrastructure that virtually would have no competition and would integrate the
company vertically.

Threats
1.

Growing number of mobile internet users. Goggle finds it hard to monetize mobile
internet users as there is less space to place ads on a mobile device and the ads costs less
than usual. The growing number of mobile users means fewer searches made on the
personal computers and lower income growth or even decline for Google.

2.

Unprofitable products. Google has introduced many products and services but few of
them earn profits for the business. Most of the services are the burden for Google and only
makes losses. If Google continues to introduce new products that add little value and only
make losses, the companys profits will fall.

3.

EU antitrust laws. Google is currently accused by EU of using its dominating position in


internet search engine market to display its own services higher than competitors in search
results. If proved guilty, Google would have to pay fines that would significantly lower firms
profits.

4.

Competition from Microsoft. Microsoft is gaining a market share in internet searches


and is playing an important role against Google. The company has also introduced Windows

8, the OS aimed for mobile devices, to carve out its market share in mobile OS market. In
both fronts, internet search and mobile OS, Microsoft is challenging Google and is taking
away the potential revenues.

Company background
Name

Samsung Electronics Co., Ltd.

Industries served

Consumer electronics, Telecoms Equipment, Semiconductors,


Home Appliances

Geographic areas served

Worldwide

Headquarters

South Korea

Current CEO

Kwon Oh Hyun

Revenue

201.103 trillion (2012)

Profit

23.845 trillion (2012)

Employees

221,726 (2012)

Parent

Samsung Group

Main Competitors

Apple Inc., Nokia OYJ, Intel Corporation, LG Display and LG


Electronics, Sony Corporation, Texas Instruments Inc., Lenovo
Group Limited, Hewlett-Packard Company, Sanyo Electric
Co., Ltd., Toshiba Corporation, SK Hynix Inc., Western Digital

Corporation and others.

Samsung Electronics Co., Ltd. is the largest worlds technology company in terms of revenues.
It is the largest mobile phone maker and television manufacturer and second largest
semiconductor chip producer.
You can find more information about the business in its official website or Wikipedias article.

SWOT

Samsung SWOT analysis 2013


Strengths
1.

2.

Hardware integration with many open


source OS and software
Excellence in engineering and
producing hardware parts and consumer
electronics

3.

Innovation and design

4.

Focus on environment

5.

Low production costs

6.

7.

Weaknesses
1.

Patent infringement

2.

Too low profit margin

3.

Main competitors are also largest buyers

4.

Lack its own OS and software

5.

Focus on too many products

Largest share in mobile phones and 2


place in smartphones sales
Ability to market the brand

Opportunities

Threats

1.

Growing Indias smartphone market

2.

Growing mobile advertising industry

3.

Growing demand for quality application


processors

4.

Growth of tablets market

5.

Obtaining patents through acquisitions

1.

Saturated smartphone markets in


developed countries

2.

Rapid technological change

3.

Declining margins on hardware


production

4.

Breached patents

5.

Apples iTV launch

6.

Price wars

Strengths
1.

Hardware integration with many open source OS and software. Samsung is focused
on producing devices which can be integrated with most of the software and OS. This gives
Samsung products an edge over Apples (its arch rival) devices, especially as Android and
other OS are gaining market share when iOS and OS X are losing it.

2.

Excellence in engineering and producing hardware parts and consumer


electronics.Samsung is the number 1 by market share in televisions and mobile phones
sales and some of the hardware parts (processors, memory chips, etc.). This was largely
achieved due to excellence in engineering and both efficient and effective production.

3.

Innovation and design. In 2011, Samsung ranked second on the list of US top patent
assignees. More patents strengthen Samsung position among its competitors. The firm also
won many awards for the design of its products, proving the superior advanatage over the
competitors.

4.

Focus on environment. Samsung focuses on producing environment friendly products


that are free from PVC and BFRs (currently only MP3 and mobile phones). It also develops
various recycling programs that are awarded for their success. Thus, Samsungs focus on
environment gives it an edge over its competitors in the eyes of its customers.

5.

Low production costs. The company has set up its production facilities in low cost
countries. This allows producing goods with low production cost and benefit Samsung as it
can offer lower price and earn higher margins.

6.

Largest share in mobile phones and 2 place in smartphones sales in the


world. Samsung Electronics have achieved large market share in many products they sell,
especially in mobile phones, smartphones, semiconductors and television sets. Large market
share has its advantage, bargaining power, that Samsung can use to further reduce costs
and demand for better contract conditions.

7.

Ability to market the brand. Samsung is named as top rising brand by Interbrand and
is the 9th most valuable brand with value nearly $33 billion. It has risen by 40% from 2011 to
2012. This was mainly achieved due to companys ability to market the brand in sporting
events and social contributions.

Weaknesses
1.

Patent infringement. Samsung is infringing Apples and some other firms patents, thus,
damaging its reputation and having to pay a huge amount of money in damages.

2.

Too low profit margin. Samsung Electronics is the largest technology business in the
world in terms of revenues but it has a low gross profit and net profit margins. Although its
smartphones business is quite profitable, Samsungs profit margin is low due to its
semiconductors sales and aggressive price cuts.

3.

Main competitors are also largest buyers. Apple, Sony, Dell, HP are the main buyers
of Samsung Electronics products as well as the firms main competitors. Such situation
would be favorable to Samsung (if competitors could not find complementary products and
would form a relatively low share Samsungs revenues) because it could use its bargaining
power over competitors. Due to reverse conditions (competitors can find complements and
they form a relatively high share of firms revenues) Samsung cannot use its bargaining
power over competitors as it can easily lose its customers and sales.

4.

Lack its own OS and software. Software and OS production has a high profit margin,
can increase integration of companys products and brand loyalty. Without strong software
and OS Samsung is at disadvantage over its competitors.

5.

Focus on too many products. Samsung Electronics serves 4 different industries with
many different products in them. Samsung is at disadvantage over its competitors because it
loses a focus when competing in too many industries and too many products.

Opportunities

1.

Growing Indias smartphone market. Indias smartphone market is one of the least
penetrated among Asia/Pacific countries. Samsung has a strong presence in Indias market
and could use this opportunity to expand its sales.

2.

Growing mobile advertising industry. The company could develop advertising


platform for its mobile devices and significantly benefit from this lucrative market.

3.

Growing demand for quality application processors. Samsung is one of the key
manufacturers of application processors for smartphones and tablets. The growing demand
for these products requires more best quality application processors that only Samsung
provide.

4.

Growth of tablets market. Tablets market is expected to grow in double digits over the
next few years. Samsung business has a strong position in tablets market and could expand
it by introducing newer, better quality tablet models, such as its current galaxy line.

5.

Obtaining patents through acquisitions. The key to Samsungs competitive


advantage is the large portfolio of patents. Patents can be discovered by engaging in costly
R&D or through acquisitions of other firms.

Threats
1.

Saturated smartphone markets in developed countries. Smartphones market in the


developed economies is saturated and the sales will not be growing at a high rate.

2.

Rapid technological change. The serious threat that Samsung and the other tech
companies are facing is a rapid technological change. Companies are under the pressure to
release the new products faster and faster. The one that cannot keep up with the competition
soon fails. This is especially hard when the business wants to introduce something new,
innovative and successful.

3.

Declining margins on hardware production. Samsung is the second largest


semiconductors producer where the profit margins are very thin, thus weakening the whole
company's figures.

4.

Breached patents. Samsung Electronics has many patents which are often used by its
many competitors. Such situation makes it hard to find out which companies benefit from
Samsungs technology but do not pay for the rights to use it.

5.

Apples iTV launch. Apples iTV is the next big lunch from Apple, which may hurt
Samsungs TV sales.

6.

Price wars. Samsung has a very low gross margin on many of its products and is
already selling some of them with significant price cuts. Competitors could follow price
cutting strategy too and induce price wars, which would erode Samsungs profit margin to
0%!

SWOTanalysisofNokia
Strengths

Nokia worlds largest producer and manufacturer of cell phones as well as has the largest
distribution network around the world.
It is also known for the Creativity, Innovativeness, durability & reliability.
It has very good financial position, higher return on equity (ROE), return on assets (ROA)
and net profit margins (NPM)

Nokia leads the global cell phone industry

Nokia dominates the world cellular industry because it has the Strong R & D facilities.

Nokia also possessing the all fashion strategies and four style new generation characteristic
from manufacturers

It has diverse work force and advanced technology.

Weaknesses

It has declared its profits had dropped by 40 % in 2010.

Nokia mobile phones prices are higher as compare to the prices of china mobiles handsets.

Nokia presence in the US cellular industry is very low and in Japan it has very weak position.

In India Nokia has few service centers and very appalling after sales service

In Japan Nokia closed the mobile handset distribution and also canceled the distribution of
E71 handset due to low market preference.

Opportunities

In 2011, the global cell phone industry expected to grow by double digits

Today, Asia-Pacific mobile phone industry is one of the fastest-growing industry in the world.

Developing countries like China, Bangladesh, India and Pakistan has enormous demand
potential.

Nokia had a 50-50 joint venture with Siemens of Germany

Youth wants the stylish aesthetics, fashionable handsets, it drive the new market for players.

Threats

Consumers are becoming more complicated in the choice of handset due to new styles by
china mobiles.

Difficult for sellers to differentiate their products and retain loyalty.

Nokia is facing very strong price pressure from china and other mobile producers

Nokia is losing global market share after the arrival of several Chinese producers

In the Asia/Pacific emerged competitive forces.

Apple, RIM and the other different sellers have created strong pressure for Nokia.