Write a report about the Market and Competition.
When a company plans to expand its business in a foreign market, it goes through comprehensive analysis of the market. The global marketer of the company selects the target country in which it intends to compete in. However, before introducing the product into the new market, the background of the product that is to be marketed should be analyzed. Hence, purpose of this report is to conduct a thorough environment analysis of the company in order to assist the management of the company in evaluating the possibility of the business opportunity in the selected foreign market. Here, Samsung Ultra HD TV has been chosen to compete in the foreign market.
The global marketer of the company has planned to compete with this product in the market of Australia. Therefore, it is also necessary to analyze the Australian market to ensure the decision of selection is rational. The thorough analysis incorporates the external and internal environmental analysis. The external analysis involves the political; economic; legal; social; technological and environmental factors that might affect the outcomes and marketing of the product of the company. The report also discuss about the competitors in the relevant industry in the competitive environment of Australia. In addition to this, this report also evaluates the internal environment by discussing the strength; opportunity; weakness and threats to the chosen product of the selected company.
The report incorporates PESTLE and SWOT analysis to assess the likelihood of being success in the foreign market. However, there are many other tools for evaluating the business prospectus of a company. Therefore, only external and internal analyses are not sufficient to decide a global marketing strategy and assessing opportunity in the new market where the product is to be introduced. Hence, the conclusion of the report is solely based on the environment analysis and does not include any other factors other than this. Excluding those relevant factors in evaluating the feasibility of the business opportunity of Samsung Ultra HDTV in the Australian market, is a limitation of this report.
Overview of the Company and the Product
Samsung Electronics is the one of the largest multi-billion dollar corporation in the world. It is a giant South Korean company and largest producers of the electronics producers. The main four divisions of the company are: Information and Communications; Home Appliances; Digital Media and Semiconductors etc. The major products of the company are Television; Smartphone or Cellular phones; fax machines; Air Conditioner; Fridge and so on. It has started with small and simple black and white television in the 1970s and gradually diversified in the consumer electronics and started to export after selling it successfully in the domestic market. Entering into the semiconductor market, the company revenue mounted up to 24 billion dollars from 1.3billion dollars. Since then this company is considered as a global competent. However, the company focused on the research and development of its products. the technology achievements through rapid innovation process put the company in the spotlight and made it global leader in producing electric appliances. It invests millions of dollars in innovating new technology for their products like, semiconductors and flat-screens. The company believes that the innovation is the key to its success and their philosophy is the large-scale expansion of the business.
The company is the leader in the TV technology since last 10 years. It continues to develop its products and launch it. The new product range strengthens the leadership of this company and sets the swiftness for the innovation; content and design across the industry. The company has launched Ultra High Definition TV in 2013 that has mounted up the demand of the consumers for this new technology. Samsung demonstrates its assurance towards new technologies and introducing further range of Samsung Ultra HD TV that is the world’s largest TV with 110 inches and world’s first curved Ultra HD TV at 105 inches (Samsung AU 2014). This company continuously works on the developing medium to long run roadmap for the next generation TV. The company has drove the industry growth through rapid innovation of technology in terms of high picture quality of the Ultra HD and its advance design. The Ultra High Definition picture alongside the curved design generates immersive amusement experience to the passionate people. The company is well positioned with the demand for Ultra HD TV, which is full of several features. The company has won six Innovation Awards for its TV product line. The panoramic effect of the curved and wider screen provides true-to-life viewing experience. To maximize the utility obtained from the curved TV, this company also developed optimal curvature 4200R. The PureColour technology also enhanced the color of the TV, which express the shades in more details. The resolution and pixel of this Ultra HD TV offers supreme picture quality. The soft of dimming technology assists in processing each picture block to bring deeper blacks and better contrast. The Ultra HD TV is considered as future-ready TV. The Smart TV of Samsung is easier to use; faster and fun in using. In this kind of TV, there is Multi-linked feature from which web-browser can be opened. The Smart Hub of Samsung TV allows organizing contents to make it easily accessible and control of their entertainment experience. The gaming panel and the variety of multimedia panel and social panels are offered into a single.
The company also revealed about its new product line of Super Ultra HD TV in 2016. It provides the unparalleled quality of picture with Quantum dot display, which is the first bezel-curved design (Samsung AU 2016). The loT hub technology allows the TV to operate as the controller of entire smart home. The Super Ultra HD TV offers remarkable engineering; craftsmanship and design. The quantum dot display offers unbeatable quality of picture. The Super Ultra HD TV offers stunning brightness; lifelike colors and exceptional contrast ever offered by the company itself. It provides finest experience of viewing no matter what is the lighting condition be. The new range of Ultra HD TV has the technology that significantly shrinks the reflection; enhanced picture with minimum frowning in front of the TV. The Ultra black technology of this range of television absorbs natural light, this is a nature friendly approach of the company. The viewers are concerned with the appealing content on the screen, however, by eliminating border and even removing screw gave it an elegant looks from every angle.
The realistic gaming experience on the large screen; simple access to the personal and favorite content at one place; smart control remote; Extra service button and Smart view mobile app that allows the user to share content instantly. The TV controller enables the consumers to set a routine to put the TV in correct picture settings and activate sound bar. This new product range also contains first Ultra HD Blue-Ray in the world, that offers four times better resolution and the color expression is 64 times more detailed. This product is world’s cadmium free television. The technology developed by NeuLion in Ultra HD TV, enables selecting sporting events live from the providers.
Overview of the Selected Foreign Country
The demand for big and flat screen has been considerably growing in Australia. They are buying television at least with a size of 50”. The trend of the top manufacturer in Australia is to launch their screens those are bigger in size. The Vice President of Samsung Australia stated that the demand for huge screen has evolved. In Australia Samsung is the market leader in the TV manufacturing industry. Previously, the 32-inch TV was considered to be the large enough. 50 to 55 inches of TV has become the default TV size for the people. The household infiltration of 4K resolution Ultra HD TV is expected to jump from 5% to 48% in 2020 (News.samsung.com 2016). Moreover, studies have found that by the end of 2016, more than 600,000 homes in this country will have minimum one 4K Ultra HD TV (Tucker 2016). The 80% of Ultra HD TV shipments featured 50 inch or larger display in the year of 2015. In addition to the big screen factor, the Ultra HD model with 4K resolution is in demand. It is expected that Australia will demand 40 inches TV but with 4K resolution. Furthermore, the other attributes of Ultra HD TV like high dynamic range; wide color scale etc are the reasons of high demand for this kind of TV range. The combination of higher resolution and enhanced color along with the several feature of the Ultra HD TV attracts the significant numbers of consumers to get the experience of life-like views. In addition to this, Samsung holds significant brand value as Samsung Corporation in Australia is the leader in manufacturing electronic appliances in the country. Therefore, it is easier for the company to capture significant share of the market. Furthermore, it has to mention that Samsung holds leading share of the TV market all over the world. In addition to this, Samsung is the first developer of largest and curved HD TV. The simplified experience of Smart TV makes it easy for the people of Australia to access their broadcast and online entertainment services. 71% Australian households are planning layout of open-plan living room (Smartoffice.com.au 2016). Moreover, the price of other curved TV available in the Australian market is too high. Hence, offering such high quality product at a lower price would help the company to capture considerable market share in the economy.
It is very crucial for any business to study the economic environment of the country, where they want to start their business. So this part of the report critically highlights the economic environment of Australia.
Australia has an impressive record of economic growth, and it has never faced a single recession for almost a period of 25 years, and it is a dynamic free-market democracy. Australia is also rich in natural resources and the effective government system, efficient legal system and a bureaucracy which is independent. These factors have always encouraged the development of entrepreneurship in the country (Heritage.org 2016).
Snapshot of economic freedom:
- Economic freedom score for 2016 is 80.3, which have fallen by 1.1points
- Australia is a free economy
- It is ranked at position five in the Global Ranking
- And it is positioned at rank 4th among the Asia-Pacific Region
- The country has an efficient legal system, effective regulatory systems, and open markets
- Government spending and Fiscal freedom are the two concerns of the country
- The overall score has fallen by 2.8 points since 2012.
Australia has always been a dynamic and attractive destination for investment because almost all the industries in the country advocated foreign competition and there is the availability of skilled labors. The government of Australia has withdrawn itself from most of the market areas and the competition in the financial sector has also increased. Government debt has increased after the Global Financial Crisis in Australia, but compared to the debt of other developed countries it is more stable (Heritage.org 2016).
So after discussing the economic environment of Australia it can be inferred, that the country encourages foreign competition, the country has abundant resources, and it is a favorite destination for investment. These factors will help Samsung to introduce Samsung UHDTV in the markets of Australia.
From the early 1980s, the government of Australia has undertaken many changes; the government has deregulated labor and financial markets to reduce the trade restrictions. Among the Asia-Pacific countries Australia is the wealthiest nation and the country has witnessed economic growth for more than two decades (Heritage.org 2016).
Legal; Political and Regulatory Factors
Legal: The judicial system of Australia functions indifferently and independently. The legal environment provides secure property rights, and contracts enforcement is reliable. The country has a stable political environment which helps in establishing efficient and transparent political processes, also helps in building a healthy legal system, efficient governance, and independent bureaucracy. The country has also undertaken many Anti-corruption measures to discourage bribery (Heritage.org 2016).
Political: Australia has a relatively stable Fiscal policy. The top income tax rate in the country is 45 percent and 30 percent for flat corporate tax. The tax system in Australia also includes taxes capital gain tax and value added taxes. The overall burden of the tax is 27.5 percent of the GDP. The government spending in Australia is 35.6 percent of the total domestic output. The public debt of the country remains stable but has witnessed a growth of 35 percent of the GDP (Heritage.org 2016).
Regulatory: The regulatory environment of Australia is considered as one of the most efficient and transparent systems in the world. The regulatory environment of the country encourages entrepreneurship. In Australia, it takes only two days to start a business. The country also has flexible labor market, which facilitates dynamic opportunities for employment. Such a regulatory system encourages foreign business to expand their business in Australia and help them operate efficiently (Heritage.org 2016).
So after discussing the political, legal and regulatory environment of Australia, it can be inferred that it would not be that tough for Samsung to introduce their new HDTV in the Australian market because the country has flexible labor market which will help the company in the production process. And the transparent and efficient regulatory environment will help the company to perform effectively.
Social and Cultural Factors
For any business, it is very crucial to understand the cultural and social environment of the country, where they want to extend their business. The population in Australia is direct, open and laid-back. The Australians are more independent and easygoing than many other cultures. Almost three-quarter of the Australian population lives in cities and the urban areas, mostly along the coastal region. The Australians believe in freedom of speech, democracy, freedom of religion, equality, peacefulness and provides equal opportunity to everyone. To be more specific Australia is an egalitarian society, where there are no differences based on people incomes or background. And all the people in the country can live according to their wish, can join any university and choose any religion (Griffith.edu.au 2016).
The Australians use humor, and it is considered as quite sarcastic. The sense of irony of the Australian are tough to understand but with time people get used to it, and the Australian accent is also tough to understand (Griffith.edu.au 2016).
While conducting CSR in Australia, primary importance is given to two areas:
The Australian believe in doing something good for the society which gives them immense pleasure. They advocated building a more caring and strong society.
The Australian also advocated the green and clean production, so that the environment is not adversely affected during the production process and also concentrates on sustainability.
So after discussing the above point, it can be inferred that Samsung needs to concentrate on these factors before expanding their business in Australia because the social and cultural environment also plays a crucial role in the global business environment.
The technological environment of the country also plays an important role in the global business environment. It is the duty of the business to study the technological environment of the country before expanding their business. The National Environment Protection Council on June 26th, 1998, made the first national ambient air quality standards in Australia, which is a part of the National Environment Protection Measure for Ambient Air quality. The country does not have national air quality standards for emissions. These standards are implemented by the environment protection authority of the particular territories and states (prezi.com, 2016).
The patent law of Australia highlights two different types of patents and they are innovation patent and standard patent (Legislation.gov.au, 2016):
- Standard patent: this is the basic patent protection form, for the innovations under the Australian rules and regulation and which is consistent with the minimal specifications for the protection of the patent under the TRIPS (Trade-related Aspects of Intellectual Property Rights 1994) (Legislation.gov.au, 2016).
- Innovation patent: this is the second tier of protection, and it was introduced in 2001 which replaced the old system of the patent. The primary aim of the innovation patent is to safeguard the inventions, that are a lower level and the standard patent is not available for such inventions and the design that are not included in the legislation of design (Legislation.gov.au, 2016).
In the recent years, the Australian economy has shifted from manufacturing and agriculture to more service sector and the mining industries are also growing in the county. These changes in the economy are because of the increasing demand in the service sectors. The development of the technologies has fostered the structural changes in the country, specifically in the service sector. Since 1970, the country has also invested lots of money in the computers and software. The finance industries also started installing Automated teller machines and electronic payment methods in the 1980s and 1990s. The country also has an advanced transportation system, which has resulted in the structural change (prezi.com, 2016).
So the above discussion clearly highlights the technological environment of Australia and also highlights the area where Samsung should focus on expanding their business in Australia.
This part of the report highlights the contemporary environmental issues that are concerning the government of the country is:
- Water: According to Dr. Linda Selvey, CEO of the Greenpeace Australia Pacific in southern Australia the rivers are witnessing excessive-extraction for the purpose of irrigation. The over-extraction of river water may result in drought (Abc.net.au, 2014).
- Climate change: the changing climate is a great concern that every country in the world is facing in the recent period. Australia has witnessed a 0.5 percent rise in the temperature due to the increasing pollution (Abc.net.au, 2014).
- Coal: Australia is the biggest exporter of gold in the world and the brown coal contributes a lot to the environment pollution. Australia also needs to bring down the level of CO2 from the environment to make it 350 parts per million (Abc.net.au, 2014).
- Biodiversity: almost 1500 land species are facing the danger of extinction in Australia, which is becoming a great matter of concern for the country (Abc.net.au, 2014).
So the above discussion clearly highlights the contemporary environmental issues that Australia is facing, and it is crucial for Samsung to study these problems thoroughly and find out a solution for the problem before introducing their new product in Australia.
Relevant Industry and Competitors
In the Australian market, the top Ultra High Definition Television manufacturers are LG and Sony.
The LG’s “ColorPrime” technology is similar to that of Samsung’s Super Ultra High Definition TV. The only difference is the phosphor coating of the LED that provide backlight behind the LCD panel. The LG’s TV supports the Netflix that will enable to streaming of 4K videos to be delivered to the TV. The thinner body of LG’s OLED TV is a attraction to the consumers. However, the technology of thinner TV, with just a piece of glass, has nothing to do with the quality of the image. The only uniqueness is that it is the sleeker model than any other model. In addition to this, the TV can be updated through the company’s web-OS in order to improve the features and operating system. The HDR technology of LG is perceived as equivalent to the 4K Ultra HD of other companies like Samsung. This technology boasts better color shades. At present, the LG is soon to be launched its 8K screen in the Australian market. however, it is doubtful whether this product will make it to this country as it will cost very high.
Another competitor of the Samsung in the Australian market is Sony. The Bravia range of Sony television has Android TV in the operating system. Moreover, it is more open than the Tizen based Smart TV. The BRAVIA TV’s are powerful so it takes only few seconds to load app. Sony was the one who first launched 4K TV in Australia. The powerful 4K chip of the company does a good job of optimizing 1080p and/or 720p videos. The company also extends audio processing and high quality speakers in the high range TVs of the company, as it is equivalent to 90 watts and magnetic fluid speakers. The speaker system of the televisions of Sony is unique and competitive in nature. The slim backlight drive is the reason for claiming the greatness of the HDR. The grid-array structure of the backlight enables the TV system to boost the brightness and black level for ideal viewing of the HDR. The backlight drive of the TV set fixes close to the wall disappears into it.
The market share of LG in the Australian market is 22.9% as on 2015 and its share of 4K Ultra HD TV in Australia is 30.5% in the same year (Griffith 2015). Both of the market shares are higher than the last year. The Sony’s share of TV has dropped to 12.3%in 2014 and share of Ultra HD TV has fallen to 6.1% only (Smarthouse.com.au 2014). Therefore, in the relevant industry, Samsung is more likely to face challenges from LG than Sony in the Australian Market.
Internal Environment Analysis
Strength: The Samsung has brand value in the Australian market. It is a reputed company and a global leader in the digital TV industry. This TV manufacturer captures 20.98% of global market as on 2015 (Statista 2015). The curved surface of the Ultra HD TV of this company is the attraction to the viewers. In addition to this, the image quality is considered impressive as compared to any other brand.
Weakness: This kind of smart TV has high possibility of being hacked. In Australia it has lower share of profit margin. Moreover, the price of the Ultra High Definition TV is quite higher; hence, it might face challenges to stay in the market for long term.
Opportunity: Samsung has huge scope in developing further technology by investing in the innovation process and it constantly update and innovate its products like Smart TV. It enables the consumers to update its product through online without buying a new one. It has significant opportunity in advertising its product by investing huge in this process as well. Moreover, the growing demand for big screen with curved surface TV is growing in the Australian market.
Threats: The major threat to the company is the highly efficient competitors in the Australian market, such as LG and Sony. The competitors are offering ultra HD TV at a lower price than the Samsung does. In addition to this, there are possibility that the consumers are satisfied with high quality of this brand itself and they do not want to have any new features in this home appliance. Hence, there will be no further demand created for the innovation of the Ultra HD TV.
The report focused on explaining the possibility of success of Samsung Ultra High Definition TV in the Australian Market. It has discussed about the company’s position in the global market and found that it is one of the leading manufacturers of television. In addition to this the features of the Ultra High Definition TV has been discussed. It has been noted that the company constantly focuses on the technological innovation of its products. Therefore, it has maintained its position in the global market for last 10 years. The report analyzed the economic environment; political, legal and regulatory environment; social and cultural environment; technological environment and contemporary environmental issues of Australia. The paper also identified two competitors of Samsung in the Australian market. They are LG and Sony. It has found that LG has dominating market share and Sony’s market share is falling. The Opportunity- Threat and Strength- Weakness of the selected product of the company has been identified. It has been found that, in spite of tough competition, Samsung has significant scope in the Australian market. Therefore, it can be concluded that, entering into Australia to launch new Ultra HD TV is beneficial for the company.
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