Samsung Pestel Analysis

Political Factors

Since Samsung operates in 57 countries, its performance of business will greatly affected by global political factors. Because the U.S. government forbade U.S. producers from shipping advanced semiconductor equipment to China and at the same time the Taiwanese government forbade its companies from shipping cutting-edge production technology to China, Samsung’s competitors from China may endure an obstacle which provided Samsung a great opportunity to gain competitive advantages. However, the competitive advantage can be temporary because Samsung’s Chinese competitors can switch to other countries.

While Samsung may endure a risk to cooperate with a Chinese partner as it will be illustrated later in Legal Factors section, Samsung can take advantage in Chinese political policies regarding to semiconductor industry. Although China did not have critital infrastructure to provide a supportive environment to semiconductor industry, Chinese government always had a favorable policy to the industry by subsidizing all needs around Shanghai and Beijing. If Samsung is willing to cooperate a Chinese partner to build up a cutting-edge semiconductor facility, it can take cheap credit, abundant land, cheap utilities, engineering talent, tax incentives, and other essential resources provided by Chinese government.

Economic Factors

Most companies were severely influenced by the global economy. However, while global semiconductor market went to a recession, Samsung kept invest money to its R&D because Kun Hee Lee can confidently predict the huge potential of semiconductor’s market in the future. However, Samsung’s business was threatened by the entrants of Chinese competitors

Sociocultural factors

Although Samsung is a Korean based company when it was founded, it is now a global firm which actively recruits foreign talents. Samsung recruits employees internationally in order to keep the company international. In addition, Samsung encourages its employees to study global business skills and invests money to place employees in foreign countries to learn local languages and cultures. The investment of foreign culture and language learning provided Samsung a great opportunities not only to obtain important data about foreign market potential but also to train employee to a better skilled level.