Organizations Mostly Invest Huge Capital †Myassignmenthelp.Com

Question: Discuss About The Organizations Mostly Invest Huge Capital? Answer: Introduction Corporate venturing is defined as the form of financial investment by an organization for earning enhancing business profit. The study will prepare an external environment report for Samsung. It is a South Korean multinational conglomerate, which is also the topmost seller of electronics products in global market. Moreover, the study will evaluate Technological Environment, Economic Environment, Competitive Environment, Labour Environment, Resource Environment, Customer Environment, Legal and Regulatory Environment and Global Environment. Furthermore, the study will also evaluate the main threats and opportunities of the organization. Company Overview Samsung is a South Korean multinational conglomerate, which is comprised of numerous affiliated businesses. The head quarter of the company is located in Samsung Town, Seoul. The company was established in the year 1938 by Lee Byung-chul. Over the next three years, the organization had diversified into different business areas like textiles, securities, food processing, insurance and retail. Samsung entered into electronic industry in late 1960, which had driven substantial business growth. Moreover, Samsung Electronics has become the 2nd largest information technology company of the world by its revenue. As per the market value, the organization has held 5th position in the world market (Samsung Australia, 2017). The revenue of Samsung is equal to 17% of South Koreas $1,082 billion GDP. It is also the largest seller of Smartphone in the world (Samsung Australia, 2017). The organization has hold double the market share of the Smartphone to its closest competitor Apple. The market share of Samsung is also increasing for enhancing sales volume of TV, Refrigerator, speakers, smart home, home theater and smart appliance. Samsung has also held top position in the global market at the Mobile World Congress (MWC) 2016, which is the largest mobile trade show in the world. Samsung has also become the 7th topmost brand in the world market, which has actually increased its brand value in the whole world. Figure 1: Best Global Brand (Source: Lee Lee, 2017) The unique design and technically advanced electronic products have made Samsung to stand out uniquely in the market. The unyielding passion for excellence and unfaltering commitment of Samsung always provide best products and service to the customers. External Environment Analysis Technological Environment Samsung effectively uses technological advancement of the developed countries for fostering the business growth. Moreover, the technical advancement of the developed countries like USA, UK, South Korea and others has led the organization towards incorporating innovative technical features in all their electronic products. Moreover, the organization also used the digital media advancement of these countries for better promotion of their innovative products. The organization gets compatibility of their innovative technology with the technological advancement of these technologically advanced countries. The organization is also aimed at launching 5G technology in near future having the support of such advanced technology (Jung, 2014). However, in some underdeveloped and developing countries, the organization faces technical compatibility issues due to backdated technology of those countries. Economic Environment While considering the home country of Samsung, it has been found that South Korea is an economically developed country. Moreover, the economy of this country is built upon the export of electronics and automobile products. Such developed economic condition of the country has actually raised the return on investment of the organization. Furthermore, the organization also utilizes the developed economic condition of the countries like USA, UK, Australia and others. As per Park and Lee, (2015), the organization has got expanding retail space and scope of adding more product line in developed economic condition. However, Manikandan and Ramachandran, (2015) opined that Samsung faces less profit potentiality in the weak economic condition of some countries like Myanmar, Malaysia and others. In such weak economy, consumers are constrained with their limited earnings and economic stability. Therefore, there is less profit potentiality for this organization. Competitive Environment According to Ghanbari et al., (2017), in South Korea, the organization faces tough competition from the competitors like HP, LG and others. Such competitors are also providing same types of electronic products to the customers. However, high brand value and unique features of Samsung electronic products have assisted the organization to create unique market position in its home country. Moreover, in South Korea, the organization has grabbed 59.31% market share, where Apple holds 20.12% market share and LG holds 14.34% (Refer to Appendix 1). However, Kim, (2014) in the global market, the organization faces extremely tough competition from the major market players like HP, Apple, Lenovo and others. Moreover, the global smart phone market share of Samsung has been dropped to 20.7 per cent from 23.3 per cent. Furthermore, the quality and design of Apple is creating tough challenges for Samsung in its home country as well as in global market. Therefore, in the global market, Apple more ma rket share than Samsung with their unique product features (Refer to Appendix 2). Some Chinese players are also creating quite hard challenges for the organization. Labour Environment According to Chang et al., (2013), the youth unemployment rate of South Korea has declined to 3.6% from 3.8%. In such situation, Samsung gets wide labour pool in this country, which can enhance the productivity of the organization. Moreover, the organization also gets pool of talented labour for effective organization performance. The employees of South Korea mostly face lack of job security in their organization. In such situation, Samsung also get huge access to the job interrupted and talented employees even in lowest cost. On the other hand, Park, (2015) opined that Samsung also gets wide access to the labour pool in the global market like India, China and others. These countries also have increasing unemployment rate, which helps the organization in getting wide range of talented labours in such market. Resource Environment In South Korea, Samsung gets wide access to talented human resources in lowest cost. Furthermore, Rani et al., (2016) opined that Samsung also gets wide access to the suppliers for providing raw materials for effective production of electronic products. Moreover, adequacy of suppliers provides scopes to Samsung in switching from one supplier to others for getting best price for the raw materials. Growing economic condition of South Korea assists the organization in getting financial resources even in low interest. However, ?irjevskis, (2016) argued that in developing countries, the organization faces lack of adequate supply of raw materials due to inadequate suppliers. Moreover, inadequacy of suppliers has also increased the price of raw materials in these countries. However, the organization gets wide pool of talented human resources also in these countries. In this way, the organization has got easy access to all types organizational resources in both of its domestic market and glo bal market. It actually adds to the organizational success with reduced organizational cost. Customer Environment In South Korea, the organization has got huge customer base with its unique product quality. According to Sundstrm and Radon, (2015), the customers of South Korea are confident upon their spending power. Moreover, growing economic condition of the country has increased their earning and purchasing power. Therefore, they are more inclined to live sophisticated life having using technical advanced electronics. Furthermore, Deschamps and Nelson, (2014) opined that in most of the developed countries, customers are now high tech savvy. Therefore, such customers mostly prefer technically advanced equipments of the organizations like Samsung. Therefore, such tech savvy customers actually enhanced the sales volume of the organization. On the other hand, Salihu, (2015) opined that in some underdeveloped countries, customers are having limited purchasing power with limited earning sources. Therefore, such customers cannot spend much on their luxurious products line Smart Phone, TV, refrigerators and others. In this way, such limited spending power of the customers actually decreases the profit potentiality of the organization. On the other hand, competitor companies are frequent launching new and more technically advanced electronic products. Furthermore, customer preferences and demand are also changing with enhanced technical advancement in their countries. In such situation, the organization often faces issues in meeting the customized demand of the customers. Legal and Regulatory Environment In the external environment, Samsung faces wide varieties of legal and regulatory policies, which have huge influence on its organizational success. Samsung has to face strict patent laws of the different countries. In such case, Samsung has already got penalty for breaking the patent laws and imitating Apples the iPhone and iPad. Such accusation has hampered the corporate image of the organization in the market. As per Daeyoup and Jaeyoung, (2015), South Korea has free trade agreement for enhancing industrialization of the country. Moreover, the organization gets reduce tariff rate for international trades and enhanced the profit level from international trade. Furthermore, Wen-Ting, (2014) stated that the organization also gets the scope of reduced business tax rate of the country. It has actually reduced the organizational cost of the organization and enhanced its profit level. Furthermore, the organization is also concerned with global environment protection laws through recyclin g the electronic materials and reducing carbon footprint through using sustainable materials in their electronic products. Global Environment Samsung has wide global reach beyond its South Korea, which has increased the sales volume and customer base in international markets. Increasing global market reach has provided various business opportunities to the organization for enhancing its product lines as per global customer needs. It has actually added to the competitive edge of the organization for beating the major competitors in the market. However, Liu et al., (2016) in the global market, Samsung is facing extreme tough competition from Apple. Moreover, the unique features and design of their products are creating tough competition for Samsung. In this way, tough competition is actually dropping the global market share of the organization. Interpretation and Discussion Main Opportunities Developed Economy Samsung has wide business opportunities in the developed economic condition of developed countries like US, UK, Australia and others. In such developed economic condition, the organization has huge opportunity to earn increasing profit. Moreover, developed economic condition can lead to higher rate of return for the organization (Park, 2015). In this way, Samsung has huge potentiality for increasing profit level in all over the world. Technological Advancement Samsung can grab the opportunities of technological development in the developed countries. Moreover, Piao and Kleiner, (2015), pointed out that technological advancement in the developed countries can enhance the promotional opportunities of the organization. In such developed countries, the organization can get the technological blessings of the developed in digital media, social media and others. In this way, the organization can stand unique in the market through conveying their unique value to the customers. Furthermore, technologically advanced equipments of these developed countries has smoothened the business process, which can reduce the operational cost of the organization. Wide Resource Pool Samsung can also grab the opportunities of wide resource pool in the developing countries like India, China and others. Moreover, Jung, (2014) stated that these countries are having increasing unemployment rate over the years. Therefore, the organization has huge opportunities to hire talented employees even in lowest cost. Apart from that, the organization also has the opportunities to get wide source of suppliers for acquiring raw materials in reduced cost, which can enhance business performance. Free Trade Agreement The home country of Samsung namely South Korea has free trade agreement for running business. In such free trade agreement, the organization can get flexible business opportunities for doing both import and export related to their business. Apart from that, in such business environment, Samsung can get reduced tariff rate for doing international business (Kim, 2014). Therefore, Samsung has got huge opportunities for global expansion in such business environment. Main Threats Competitive Pressure In the global market, Samsung is facing extreme threats from their competitors like Apple, HP, Lenovo and others. As per Rani et al., (2016), Apple has held 27.80% market share in the global market, whereas Samsung has held 22% market share. Apple is being far more capable of providing innovative design of the electronics products. Therefore, Samsung is facing huge competitive pressure from Apple in the global market. Changing Consumer Preferences Consumer preferences are changing rapidly day by day. Moreover, they are expecting more technically advanced apps and features in their all electronic equipments. Therefore, it is becoming too much difficult of the organization to frequently modifying their product features as the changing customer needs (Piao Kleiner, 2015). In this way, lack of customization in the electronic products actually reducing its sales volume. Legal Restrictions In some countries, Samsung faces increasing tariff rate for operating business. It actually increases the operational cost of the organization. It also faces environmental restrictions in regards to utilization of hazardous substances like mercury, cadmium, lead and many others (Park, 2015). Therefore, such restrictions can hamper the business process of the organization. Conclusion While concluding the study, it can be said that Samsung is a popular South Korean conglomerate, which is the topmost seller of electronics products in global market. From the analysis of external environment, it can be known that developed economic condition of the countries like USA, UK, and Australia has increased return on investment of the organization. However, the organization faces competitive pressure in the global market from the competitors like HP, Apple, Lenovo and others. 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