STRATEGIC ANALYSIS REPORT – SAMSUNG ELECTRONICS CO., LTD.

 Samsung Electronics Strategic Analysis Report

Abstract

This report examines the strategic environment of Samsung Electronics, with a revenue of KRW 86.1 trillion in Q3 2025 and semiconductors/foldable dominance despite falling market share (45.2% to 35.4%). With PESTLE, it recognizes the sustainability requirements as the significant change, which can affect resource, supply chain and decision-making. The opportunities are staff empowerment and circular economy, whereas the challenges are costs and culture. The practices at Samsung help in implementation with the suggestion being to move to net-zero at a faster rate by 2050.

Introduction

Samsung Electronics Co., Ltd. based in Suwon, South Korea is a multinational conglomerate company dealing with consumer electronics, semiconductors and telecommunications equipment. The company was established in 1969 under the Samsung Group and has grown to be a worldwide technology innovator in the production of smartphones, televisions, memory chips and display panels. Its corporate business includes several divisions; Device Solutions (DS) in semiconductors, Mobile eXperience (MX) in smartphones and networks, Visual Display (VD) in TVs and monitors, and Harman in audio and automotive solutions. By 2025, Samsung will have a strong market share in semiconductors, with a large share in DRAM and NAND flash memory, which is guided by the market of AI. It dominates in foldable smartphones used in consumer electronics, but is expected to have its share drop to 35.4 per cent in 2025, as competition from Huawei and Google increases (Lee et al., 2015). Some of its main competitors are Apple in high-end mobiles, Sony in displays and TSMC in foundries.

Financially, Samsung was performing well in the Q3 2025 with consolidated revenues of KRW 86.1 trillion (an upsurge of 9 years over year) and an operating profit of KRW 12.2 trillion, which translates to a 14.1 margin (Jang et al., 2019).The KRW 33.1 trillion sales of the DS division did this expansion as it was driven by the high-bandwidth memory (HBM) in AI use. The MX division added KRW 33.5 trillion, which was enhanced by the Galaxy Fold 7 launch (Jang et al., 2019). The market capitalization is about 260 billion in total, which is a sign of strength despite the international economic challenges (Varma & Ravi, 2017). Nevertheless, there are issues in large-panel displays and networks in North America. The situation in the Korean electronics market presents the competition of innovation races in AI and sustainability, where Samsung is a versatile competitor in the industry with a revenue of 1.5 trillion dollars (Kumar & Ramu, 2018). This background preconditions the analysis of external changes and their strategic implications based on the recent developments suggesting the opportunities of advancement.

Environmental Analysis

As a strategy of evaluating the strategic environment of Samsung, an environmental analysis is carried out under the PESTEL framework with emphasis on the recent technological and social developments that have taken place in the electronics sector as at 2025. This is a tool that combines a systematic assessment of Political, Economic, Social, Technological, Legal and Environmental forces in order to determine the macro-level impacts.

In the social respect, a sharp inclination towards sustainability has been seen, as consumers are becoming more and more demanding of environmental-friendly products. According to surveys, more than 70 percent of consumers around the world choose brands with high environmental investment owing to the growing consciousness of climate change and e-waste effects (de Sousa & Castañeda-Ayarza, 2022). Electronics is being shaped into demand to have fewer carbon footprints and ethically sourced products, increased by the generational values of Gen Z and Millennials. These requirements are complicated economically by volatile supply chains and increasing material cost (e. g. of geopolitical tensions e.g. the US-China trade relationship) and are driving companies to the resilient and green models.

The development of AI and clean technology has continued to grow faster, which allows effective recycling and energy control. As an example, predictive analytics with AI can optimize supply chains, and battery recycling (e.g. cobalt recovery of scrap) can support circular economies. A report published by the World Economic Forum mentions new technologies, such as nanotechnology and energy-efficient computing, as transformative ones, and AI implementation should help to minimize e-waste by ensuring smarter device lifecycles (Kansongue et al., 2023). In the environmental domain, there are more stringent rules concerning emission and waste, the Circular Economy Action Plan by the EU requires a greater percentage of recycled materials in product units, whereas, worldwide net zero commitments are aligned with scenarios of the IPCC.

At the legal level, adherence to such frameworks as RE100 and TCFD is becoming more stringent, and failing to comply can punish access to the market. On the political front, policies such as the US CHIPS Act encourage the manufacturing of goods within the country at low costs in terms of sustainability.

The most notable of them is the societal need of sustainability, which is interconnected with technological facilitators such as artificial intelligence to optimize resources. This change, which is noticeable in 2025 industry reports, is dangerous in terms of reputation given the loss in case of a failure to comply, but offers chances of differentiation. The case between Samsung and UN SDGs is an example of adapting, but overall industry statistics indicate that 4 out of 10 companies have completely implemented the shifts (Phan, 2021). PESTLE shows that not paying attention to this may result in loss of market share and active involvement increases competitiveness.

Implications of the Prominent Change for Strategic Management Areas

The environmental demand towards sustainability, which has been established in the environmental analysis, has far-reaching consequences on the strategic management of Samsung. This transformation that can be defined by the tendency of consumers towards low-carbon products and regulatory requirements of circularity influences at least three dimensions: resource management, supply chain management, and strategic decision-making. Based on academia, sustainability integration has the potential to improve the performance of firms but needs the adaptive strategies (Serafeim et al., 2014).

Sustainability in resource management requires a change in the linear to circular models where the human, financial and natural resources are affected. To sustain the innovation lead, Samsung will have to invest in green technologies training, such as recycling that is facilitated by AI. Economically, the KRW 7 trillion plus environmental investments by 2030 means the reallocation of budgets which may decrease the immediate profits but save in terms of efficiency with long term savings (Xiong et al., 2021). The consumption of natural resources, such as water and materials, is also questioned; recycling of 125 million tonnes of water in 2024 was a step in the right direction by Samsung, but water may be used already in the most stressful areas (Xiong et al., 2021). Among these are resource efficiency and the elimination of the need to rely on virgin materials e.g. 31% recycled plastic in products but there is a risk of cost overrun in case targets e.g. 50% by 2030 are missed.

The supply chain management is also metamorphosed and needs to be ethically sourced and made transparent. Sustainability requires the suppliers to be audited against ESG compliance, which is 92% in the case of Samsung (Lee et al., 2012). This reduces such risks as mineral wars (e.g. cobalt) but makes logistics complicated, where climate events may disrupt in IPCC SSP scenarios. Sustainable supply chains promote value creation and resilience academically, but high/low process management capabilities mitigate the results (Panwar et al., 2025). In the case of Samsung the implications would be to create a chain optimization through AI to monitor emissions, 75 percent supplier-setting targets, but difficult to set up at a global level due to trade barriers.

The strategic decision-making process is now turning into the data-driven and ESG-integrated processes. Executives need to integrate sustainability KPIs in the assessments, whereby executive compensation is based on net zero achievements. This supports proactive decisions, such as investing in HBM to make AI energy-saving, but requires the stakeholders to have their interests balanced. Studies indicate that nexus thinking (solving interrelated problems) improves decision-making (Dahlmann and Bullock, 2020). The ramifications on Samsung are better risk management through TCFD disclosures, but possible slowdown in innovation when sustainability becomes the top priority.

All in all, these implications place sustainability as a central force, which may result in performance improvement by means of differentiation, yet it needs cultural changes to be implemented successfully.

Opportunities and Challenges in Addressing the Implications

One of the opportunities is the power and the engagement of staff, innovation, participative decision-making. The 2024 sustainability training (95.7% of training) of 138,414 employees by Samsung can be extended through such training programs as the STaR Week, which will increase the range of engagements and ideas (green initiatives). This is in line with studies that indicate that employee engagement increases organizational sustainability (Muff et al., 2017). In resource management, it facilitates skills training of the recycled material management, which could cut down the waste by 20% like the recent scrap reduction project.

The strategic management approach that is sustainable provides differentiation, including the incorporation of ESG in the planning of the net zero by 2050. This might be beneficial to the market, as carbon-free products, such as Galaxy S25 (recycled cobalt) will win the attention of green customers. This is further enhanced by the practice of sustainability and the circular economy, with Samsung already with 6.9 million tonnes of e-waste since 2009, it is now set to achieve the 2030 goal of 10 million tonnes, both of which will close material loops and reduce environmental footprint (Samsung Electronics, 2024). Such innovations as microplastic-cutting washers under the concept of clean technology generate an income stream and mitigate Scope 3 emissions.

Adopting new performance measurement systems, like KPI-based compensation (introduced 2021), monitors such progress as 31.4% of renewable energy utilization in 2024, and allows making data-driven changes. Opportunities are exerted in the supply chains where ethical practices are encouraged through supplier audits (202 suppliers in 2024), which increase resilience (Burbano et al., 2024).

Nonetheless, the issues are high start-up fees, e.g., KRW 7 trillion investments will impose financial pressure on the profitability in the context of the 12.2 trillion profit in Q3 2025 (Samsung Electronics, 2025). Staff empowerment may be hampered by cultural resistance in an organization that is traditionally hierarchical that necessitates communication strategies. Geopolitical risks and non-compliance among suppliers exist in the complexities of the supply chain such as ensuring that 90 percent of ISO 14001 standards are met (Lee et al., 2012). The presence of regulatory differences in 80 countries makes the implementation of the circular economy more challenging, and the imposed fines may be applied in case of failure to meet the e-waste requirements. Through scholarly insights, it is noted that, although sustainability strategies enhance performance, stakeholder pressure and gaps in the process management are obstacles (Panwar et al., 2025).

Samsung needs to focus on staged deployment, efficiency in the use of AI, and cost-sharing in collaborations to create difficulties into competitive advantages.

Critical Analysis of Current Practices and Organizational Culture

The existing practices and organizational culture of Samsung also offers grounds on which the implementation of sustainability opportunities can be done, but also exposes areas of lack of adaptability. The focus is put on practices, including innovation and compliance, and the 2025 Sustainability Report includes net zero plans, as well as circular plans, including 99% of waste recycling in DS divisions (Samsung Electronics, 2025). Such certifications as Zero-Waste-to-Landfill Platinum at Korean sites show the level of commitment, and supplier engagement (75% GHG targets) helps to promote ethical chains. Nonetheless, enforcement can be constrained by voluntariness (e.g. by differences in transitions to renewable) (93.4% in DX as compared to 24.8% in DS) (Samsung Electronics, 2025).

The organizational culture is one which is innovation based and the Samsung Culture Index (SCI) diagnose trust and communication every year (Putthiwanit & Vēvere, 2022). Such initiatives as Startup Samsung are designed to decrease the top-down structure, which encourages lean production and employee empowerment with 730,053 volunteering hours in 2024 (Samsung Electronics, 2025). This creates a possibility of sustainability integration with 92% being engaging in grievance mechanisms and ISO 45001 safety certifications being reported. Studies show that such cultures increase the adoption of sustainability when in line with values (Etzion and Aragon-Correa, 2016). However, the traces of top-down hierarchy, as observed in the criticism of long work hours, might hamper bottom-up efforts such as employee led green decisions.

Most importantly, the practices are timed with the opportunities (e.g., recycled materials in Galaxy S25), but the rigidness of the cultures can slow complete implementation down. Employees are also prepared with high employee training rates (66.8 hours average), but the disparities are shown by differences in global DEI programs (Putthiwanit & Vēvere, 2022). There is a high probability of success in case hierarchy is again broken and the available strengths in R and D used in clean tech is exploited. In general, the culture in Samsung is encouraging to implement but needs further cooperation to overcome the obstacles.

Conclusion

Overall, this strategic analysis of Samsung Electronics shows that it is in a strong position in the international technology market and has its financials and innovative leadership in the third quarter of 2025. Sustainability as a fundamental shift in the environmental analysis highlights the societal need to be sustainable; the implications of which transform resource management, chain of supply, and decision-making. The opportunities of staff empowerment, the circular economy, and performance systems present the avenues to progress, but such issues as expenses and culture change as well should be addressed. Importantly, Samsung practices and culture of innovation make it well-positioned in implementation with hierarchical aspects being handled. Finally, sustainability reduces risks but increases competitiveness, which fits the academic suggestions of the integrated approaches (Abdeldayem et al., 2022). It is recommended to accelerate employee engagement and supplier partnerships to attain net zero and circular targets in 2030, which would make sure that the business resists in the long term.

Reference list

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Appendices

Table 1: Samsung's Key Sustainability KPIs (2024-2025 Targets)

Table 2: Divisional Financial Performance (Q3 2025)