1. PESTLE ANALYSIS – SOUTH
KOREA
By
Manisha Kunwar , Pawan Pandey and Juanita
Kasbe

2. SOUTH KOREA
• South Korea officially the Republic of Korea is
a sovereign country located in the southern
part of the Korean Peninsula .
• Total area of 99,392 km2 (38,375 sq mi)[8]
and has a population of 50 million.
• The capital and largest city is Seoul, with a
population of 9.8 million.
• South Korea is a member of the United
Nations, WTO.
• Current President of South Korea is Park Geun
Hye from Feb 2013.
•

3. SOUTH KOREA
PESTLE
ANALYSIS
Current
Strengths
Current
Challenges
Future
Prospect
Future
Risks

4. POLITICAL ANALYSIS
Current strengths
▪ Centralization of power
▪ Political will for economic reforms
▪ Strong foreign relationships
Current challenges
▪ Military influence in South Korean politics
▪ Political violence
Future prospects
▪ Confidence building measures with North Korea
▪ Strengthening relations with the EU
Future risks
▪ Uneasy relationship with North Korea

5. ECONOMICAL ANALYSIS
Current strengths
▪ Powerful export sector
▪ Successful economic reforms
Current challenges
▪ Low level of imports
▪ Declining level of FDIs
Future prospects
▪ Competitive tax policy
▪ Liberalized service sector
▪ Implementation of free trade agreements (FTA)
Future risks
▪ Nuclear crisis
▪ Growing local hatred for foreign companies

6. SOCIAL ANALYSISCurrent strengths
▪ High wages
▪ Highly educated workforce
▪ Rapid urbanization
Current challenges
▪ Low fertility rates
▪ Ageing society
▪ Low social welfare spending
Future prospects
▪ Low unemployment rate
▪ Rising awareness of human rights
Future risks
▪ Rising power of labor unions

7. TECHNOLOGICAL ANALYSISCurrent strengths
▪ Robust telecom sector
▪ Presence of large global and domestic players
Current challenges
▪ Scarce natural resources
▪ Rising R&D costs
Future prospects
▪ Government policies promoting R&D
▪ Growing R&D centers
▪ Commercialization of new ideas
Future risks
▪ Foreign companies pulling out of the country
▪ Over-regulated governance

8. LEGAL ANALYSIS
Current strengths
▪ Regulatory incentives
▪ Favorable tax policies
▪ An exclusive constitutional court
Current challenges
▪ Absence of juries
▪ Inefficient customs operations
▪ Weak IPR enforcement
Future prospects
▪ Judicial system similar to US and Germany
▪ Advantage of tax abatements and tax treaties for FDIs
Future risks
▪ Judges quitting for private practice
▪ Low rate of students clearing the law examination

9. ENVIRONMENTAL ANALYSIS
Current strengths
▪ Promotion of national parks
▪ Strong governmental intervention to protect environment
Current challenges
▪ Limited natural resources
▪ Soil erosion
Future prospects
▪ Environmental technology development
▪ Eco-businesses and green GDP
▪ Promotion of environmental education
Future risks
▪ Rising emissions levels
▪ Dam in North Korea

10. Samsung
Town, Seoul, Headqua
rters
Samsung Engineering
, New Delhi, India

11. SAMSUNG – INTRODUCTION
 Samsung means "tristar" or "three stars". The word
"three" represents something "big, numerous and
powerful"; the "stars" mean eternity
 Samsung Group is a South
Korean multinational conglomerate
company headquartered in Samsung Town, Seoul.
 Samsung comprises around 80 companies. It is highly
diversified, with activities in areas including
construction, electronics, financial services,
shipbuilding and medical services.
 As of April 2011 the Samsung Group comprised 60

12. SAMSUNG - FORMATION
Samsung was formed in 1938 by Lee Byung-chull
as a trading company based in Su-dong.
The company grew and soon expanded to Seoul in
1947 but left once the Korean War broke out.
Samsung entered the electronics industry in the
1960's with the formation of several electronics
focused divisions
In 1980, Samsung entered the
telecommunications hardware industry with the
purchase of Hanguk Jenja Tongsin.
The mobile phone business was grouped together
with Samsung Electronics which began to invest
heavily in research and development throughout
the 1980's.
In 1987 with the death of Lee Byung-chull, the
Samsung group was separated in to four business
1938 – 1958
1969 - 1979

13. CONTINUED….
 Lee Kun-hee joined the Samsung group in 1968
and took over the chairmanship on December
1, 1987
 In 1993, Samsung reorganized to focus on three
industries, electronics, engineering, and
chemicals.
 Samsung invested in LCD technology, becoming
the largest manufacturer of LCD panels in the
world by 2005.
 As part of it bio-pharma investment, Samsung
formed a joint venture with Biogen, investing
$255 million to provide technical development
and biopharmaceutical manufacturing capacity in
South Korea.
 Samsung has also continued to expand in the
1980 - 1992
1992
Since 1993

14. SAMSUNG GROUP - SUBSIDIARIES AND
AFFILIATES
1. Ace Digitech - Manufacture and sale of polarizing
films
2. Cheil Industries – Textile
3. Cheil Worldwide – Marketing
4. Credu – Educational Institution
5. Imarket Korea – Industry Material Distributors
6. Samsung Card – Credit Cards
7. Samsung C&T Corporation – Construction and
Trading
8. Samsung Electro – Mechanics –
PCB‟s, MLCC‟s, SMPS‟s
9. Samsung Electronics LCD, LED Panels, Mobile

15. CONTINUED
12. Samsung Fire and Marine Insurance
13. Samsung Heavy Industries
14. Samsung Life Insurance
15. Samsung Machine Tools
16. Samsung SDI -Semiconductor and Other
Electronic Component Manufacturing
17. Samsung Securities
18. Samsung Techwin - An aerospace, surveillance
and defence company
19. Shilla Hotels and Resorts
20. S1 Corporation

16. KEY CUSTOMERS
 Royal Dutch Shell
Samsung Heavy Industries will be the sole provider of
liquefied
natural gas (LNG) storage facilities worth up to US$50
billion
to Royal Dutch Shell for the next 15 years.
 United Arab Emirates Government
A consortium of South Korean firms – including Samsung,
Korea
Electric Power Corp and Hyundai – has won a deal worth
40 billion
dollars to build nuclear power plants in the United Arab
Emirates.
 Ontario Government

17. KEY COMPETITORS
 LG Corp.
 SK Group
 Hyundai Corporation
 Apple Group
 Panasonic Corporation
 Sony Corporation
 SK Hynix Inc.
 Seagate Technology
 Philips
 Motorola
 Canon
 Sony

18. USP – SAMSUNG GROUP
 Innovation
 R&D
 Customer preference
 Quality and Price
 Product Designs
 Marketing

19. Samsung Group – (Geography wise Net Profit)
(Q1 – 2013)
•Samsung Electronics America (SEA)-
2,715,594
•Samsung Semiconductor (SSI)
3,740,587
•Samsung Electronics Vietnam (SEV)
5,769,437
•Samsung Electronics Huizhou (SEHZ)
4,500,864
•Samsung Asia Private(SAPL)
384,199
•Samsung India Electronics (SIEL)
1,574,164

20. SAMSUNG ELECTRONICS – SALES
TURNOVER
The second quarter of 2013.
 Consolidated sales: Approximately 57 trillion Korean
won
 (Range: 56 – 58 trillion Korean won)
 Consolidated operating profit: Approximately 9.5
trillion Korean won
 (Range: 9.3 – 9.7 trillion Korean won)
 2013 1Q and 2012 2Q consolidated figures
(in trillion won) 2013.1Q 2012.2Q
Sales 52.87 47.60
Operating profit 8.78 6.46

21. CSR - SAMSUNG GROUP
 In 2009, Samsung launched the company‟s Corporate
Social Responsibility initiative – „Samsung Hope Project‟
with projects in the areas of
education, culture, sports, social welfare and community
development emphasising on innovations for development
of the community including
education, technology, engineering and IT technical
training.
 Samsung Hope for Children, an initiative designed to
help under-privileged children through e-learning
centres.
 Innovations for development of the community, a
partnership between Samsung and various educational
and media agencies to support grassroots innovation.
Samsung Innovation Award with IIT, Delhi and Samsung

22. CSR- SAMSUNG GROUP
 Hope for Culture represents Samsung‟s tribute to the rich Indian
cultural heritage through Tagore Literature Awards that recognises
the best literary contributions in 24 Indian regional languages.
Samsung is partnering with the Sahitya Akademi for the Tagore
Literature Awards. Additionally, Samsung partners with INKO to
present the Samsung Women‟s International Film Festival that gives
voice and expression to the perspective of women and celebrates
her spirit through the medium of Cinema.
 Sports Sponsorship is an ongoing initiative wherein Samsung
supports top ranking athletes across individual sports disciplines
with their training expenses while they prepare for the Asian or the
Olympic Games. Samsung is also the Sponsor of the Indian team to
the forthcoming London Olympics.
 Samsung donates around US$100 million per annum to the Samsung
Medical Center a non-profit healthcare provider founded by the
group in 1994. Samsung Medical Center incorporates Samsung Seoul
Hospital, Kangbook Samsung Hospital, Samsung Changwon
Hospital, Samsung Cancer Center and Samsung Life Sciences

23. Corporate Governance - Samsung Securities Established Its‟ “Samsung
Securities Corporate Governance Charter”, Including A Comprehensive Preamble, Five
Major Subjects, And 20 Specific Items
Item Note
Employee ethics establishment -
Board of directors(BOD) 4 inside directors and 5 outside
composition (outside director 55.6%) directors (as of 2012.6.5)
BOD operation rules establishment Established BOD rules
Regular BOD meetings Holds “regular BOD meeting” once a
quarter
Committee to fairly recommend BOD
candidates
Established the outside director
candidate recommendation committee
Liability insurance for directors out of
company expenses
Signed up for Director’s & Officer’s
Liability Insurance
Audit committee 1 inside director and 3 outside directors
(including financial/accounting expert)
Audit committee meeting Holds “regular audit committee meeting”
once a quarter
Independency of external auditor -
Clear confirmation on business reports
and others
Confirmed by CEO and executive in
charge

24. ETHICAL PRACTICE

Since 2008, Providing cyber education on ethical
management for all employees once a year.

After 2010, Tested employees for level of
understanding of ethical management and re-tested
those found to lack enough understanding

Installed the Internal Transaction Committee under
the BOD in February 2012.

Declaration of code of ethics and employees' pledge
to practice ethical management

Established code of ethics listing six values as
the standards for employees' thoughts and
behavior and also continued the efforts to build
consensus on ethical management by getting our
employees to sign on the ethical management

25. SAMSUNG … SUCCESS STORY……
 Entered the semiconductor business late in 1983, Samsung
is now the world's 2nd largest semiconductor distributor
behind Intel.
 The turning point in the company's history was in February
of 1983 when Lee Byung Chul, the CEO of Samsung Group
made a push towards a large investment in memory chips
and was determined to break into the semiconductor
market (Kim, 1998).
 Lee Byung Chul recognized that there would be a need in
the future for more memory chips and he identified that
this was going to be the trend.
 Samsung realized that the semiconductor business was only

26. SAMSUNG – SETBACK
 Mobile World Congress (MWC), Samsung touted its
new Galaxy Note, but mentioned that the company
isn't exactly thriving in the tablet arena.
 Samsung has struggled trying to catch up with
Apple's ever-popular iPad, which originally released
back in April 2010.
 Apple originally sued Samsung for patent
infringement regarding devices like the Galaxy S
4G, pic 4G, Nexus smart phones and the Galaxy Tab
10.1
 Apple managed to successfully ban the Galaxy Tab
10.1 in both Australia and Germany, but Samsung
pulled a few punches of its own and lifted the ban in

27. SAMSUNG – INNOVATION AND R&D
 Innovation is crucial to Samsung's business as new
technologies are being constantly introduced to the
market.
 Around 50,000 employees in50 research facilities are
engaged in R&D division of Samsung
 The Samsung Advanced Institute of Technology
(SAIT), Samsung's technology competitiveness in core
business areas, identifies growth engines for the
future, and oversees the securing and management
of technology.
 Each year at least 9% of the sales revenue is invested in
R&D activities.
 Samsung centres in Korea and18 more in nine other
countries, including the United States, the United
Kingdom, Russia, Israel, India, Japan and China, as well as

28. FUTURE GLOBAL CHALLENGES
 Strong competition from Apple
and other mobile companies.
 Patent and Legal Issues
 Political Violence
 Rising R&D cost

29. Thank You ! Gamsahabnida !