IndexSamsung's response to political factorsSamsung's response to economic factorsSamsung's response to social factorsSamsung's response to technological factorsSamsung's response to legal factorsSamsung's response to environmental factorsIn a highly Interconnected and globalized, it is important for businesses to innovate and adapt to a rapidly changing environment. Samsung Electronics is the largest IT and technology company in the world in terms of revenue and therefore must consider all environmental factors to remain in its position (Financial Times, 2013). Samsung is currently ranked tenth among the world's most valuable brands by Forbes at $38.2 billion (Figure 3). As of the end of 2016, Samsung Electronics operated 220 operational hubs worldwide, including manufacturing subsidiaries, design centers, and R&D centers, while it operated 15 regional headquarters in Korea, North America, Europe, South- East Asia, Africa and other regions. of the world (Samsung Electronics Sustainability Report, 2017). This report will identify and analyze these factors using the PESTLE framework, which includes political, economic, social, technological, legal and environmental factors. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay The PESTLE framework, which only considers the macro environment, is designed as a strategic early warning system that allows companies to identify incoming threats. This framework can help a company prevent business failure and plan for the future. Political factors examine how the government influences the economy and the market in which the company operates. This may include factors such as the nature of the political system, government involvement and political stability (The Business Environment, 2008). Samsung recently regained the top spot in smartphone sales in the United States, with market share rising to 36.2% from 32.9% in the previous quarter (CNBC, 2017). However, there is uncertainty as to whether these sales will hold due to President Donald Trump's decision. views towards international trade and trading blocs, as demonstrated by the withdrawal from the Trans-Pacific Partnership (The Guardian, 2017). Any taxes and quotas on imports would hinder Samsung's sales and allow domestic or cheaper alternatives to thrive. Samsung's Response to Political Factors Samsung Electronics operates six mobile phone manufacturing plants in six countries including Vietnam, China, India, Brazil, Indonesia and Korea. The two factories in Vietnam currently produce fifty percent of all mobile phone production for Samsung (Business Korea, 2015). Since most of these countries are part of the Association of Southeast Asian Nations, Samsung is able to keep transportation costs low through low or free trade. However, Samsung plans to increase production in the United States. The move comes amid criticism from US President Donald Trump of companies manufacturing overseas for US consumers (Wall Street Journal, 2017). The Trump administration has threatened an import tax on large companies that do not increase or move production to the United States (Financial Times, 2017). To avoid tariffs or quotas, Samsung would have to continue moving into the US while maintaining its manufacturing hub in Asia. Economic factors consider the conditions and forces that influence the cost and availability of goods, services and labor and therefore shape the behaviors of buyers and sellers (Introductionto business, 2017). The ongoing global economic crisis has affected much of the developed world, damaging its purchasing power and reducing consumption. If left unaddressed, the economic downturn could have severely damaged the company's sales and its position as a market leader. However, due to the recession some opportunities have emerged. The value of the Korean won decreased by more than 9% against the US dollar from January to June 2008, helping Samsung make significant inroads into global electronics markets (Samsung Electronics: Managing Innovations in an Economic Downturn, 2017). Changes in the exchange rate can have a big impact on a company like Samsung that imports and exports in huge proportions. Samsung's Response to Economic Factors In response to the recent economic crisis, Samsung has had to look to emerging markets to be able to maintain revenue. While global consumption of electronic devices has stabilized since the recession, China's growing middle class has shown a reverse upward trend as it has demanded cheaper and more innovative electronic products (Financial Times, 2012). Furthermore, Samsung holds the largest market share for mobile phones, smartphones and televisions in China thanks to the distribution network formed between the company and Chinese retail giants, which allows them to eliminate as much damage to sales as possible (Samsung Electronics : Managing Innovations in an Economic Downturn, 2017). The social environment refers to the composition of society and the needs that businesses must respond to. This includes factors such as demographics, culture, level of education and communication, and societal needs. According to the BBC, 4 out of 5 adults own a smartphone, equal to 37 million people. With the current increase in population and aging trends, it is easy to predict that smartphone sales will increase. For example, Japan has the world's oldest population, with over a quarter of the population aged 65 or older (Sky, 2017). Decades of improving life expectancy and declining birth rates have produced rapid aging and a shrinking population (Bloomberg, 2017). There is evidence that consumers in all countries shift spending patterns as they age towards health-related goods and services (World Economic Forum, 2015). Additionally, changes in class structure in emerging markets have meant there are more people with higher disposable incomes, increasing demand for luxury goods such as smartphones and other electronic devices. Samsung's Response to Social Factors In order for Samsung to keep up with the aging population in countries around the world, they need to tailor their products more to older generations. This could include smart healthcare products such as wearable technology and healthcare software. According to Innovatemedtec, the global wearable technology market will reach 210 million units shipped and $30 billion in revenue by 2018 from 96 million units shipped and $8.5 billion in revenue during 2018. 2012. Samsung leveraged this trend as it has currently released 6 smartwatches in total (CNBC, 2015). YH Eom, European president of Samsung, said: “The wearables market has enormous potential. So we are making a strong investment in research and development…. I would say that a significant portion of our investments are in wearable devices and we will be ready in time to address the market trend" (CNBC, 2015). Investments in innovation and technology are often seen as a key element for the success of a company and allows it to differentiate itself from the competition.The rise of automation and robotics in many industries has allowed businesses to reduce costs and improve efficiency (Brookings, 2016). Some restaurants have robots that deliver food and autonomous ordering kiosks available to industrial robot customers is on the rise. In 2013, there were 1.2 million robots in factories and warehouses. In 2014 there were 1.5 million robots and the following year they rose to 1.9 million (Brookings, 2016). reduce costs while providing a better product. This would allow Samsung to compete with its large competitors by leveraging the price and quality of their products. Samsung's response to technological factors Thanks to a ten-year development program, Samsung has achieved economies of scale and scope that. it has become its comparative advantage that few can emulate (Samsung Electronics: Managing Innovations in an EconomicCrisi, 2017). Samsung's innovation and manufacturing power are demonstrated by the fact that its major customers are some of the world's leading technology companies such as Sony and Apple (Figure 1). By supplying its competitors, Samsung can ensure that it stays ahead of everyone, as there will always be demand for Samsung products or components. Additionally, Samsung planned to invest 21.4 trillion won in South Korea to extend its leadership in memory chips. and next-generation smartphone displays (The Business Insider, 2017). They plan to build a new NAND manufacturing plant in Pyeongtaek, a new semiconductor manufacturing line in Hwaseong, and many other projects (The Business Insider, 2017). These investment projects will help Samsung remain industry leaders as they will increase their innovation. Other companies' dependence on Samsung production will also increase, as they will likely continue to purchase Samsung components. Legal factors examine how legal frameworks influence business operations and its relationship with customers and suppliers. It is closely linked to political factors as both set regulations and restrictions on how a company can behave. An example of this type of regulation is a patent. A patent is a license that excludes any other company from reproducing, using, or selling the same invention during a specified period of time (Business Insider, 2011). Samsung had the second-highest number of patients in 2015 through June 2 among all large companies, 600 patients behind IBM (Figure 2). In 2012, Samsung was granted over 5,000 patents in the United States (Samsung Electronics: Managing Innovations in an Economic Downturn, 2017). This encourages Samsung to innovate and protects its ideas, allowing Samsung to stay one step ahead of its competitors. Additionally, there are regulations that affect employment and labor, the environment, privacy, safety and health. By following all these regulations, Samsung is able to uphold its brand image and avoid having to pay any fines. Samsung's Response to Legal Factors Samsung has been in a long battle with Apple over patent violations since 2011 (NPR, 2016). Samsung was previously ordered to pay Apple $399 million in damages (Forbes 2017). According to NPR, “Apple alleged, in part, that its South Korean rival had infringed three design patents for discrete components of the iPhone. This includes the front of the device, the rounded edges that frame the dial, and the device's distinctive array of colorful square icons. However, the Supreme Court ended up siding with Samsung, voiding the $399 million it had to pay. It is clear that Samsung must be able to find a way to identify whether there are patent violations during.