Case Study on Samsung PDF

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CASE STUDY
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CASE STUDY
Samsung is a well-known brand who has gained its popularity due to their
advancement in technological innovation for smartphones, televisions and other electronic
devices. The Porter's five forces play an important role in the industrial competition which
would impact the company. The Porter's five forces analysis of Samsung electronics consists
of five forces which are a competitive rivalry, bargaining power of customers, bargaining
power of suppliers, the threat from new entrants and threat from substitutes. Firstly, the
intensity of competition in the electronics industry is very high due to the existence of several
brands who compete in the same position as Samsung Electronics. Brands such as Sony,
Apple, LG and others play a significant role in the market and provides stiff competition to
Samsung. These large players make it difficult for Samsung to get the complete hold in the
market and therefore, Samsung would have to adopt new ideas and technologies to ensure
that they can maintain their foothold in the market (Van Alstyne, Parker and Choudary 2016).
There would always exist a fight for dominance in the market between these top brands in the
electronic market, and the brand who will be able to achieve customer satisfaction would be
able to stand out in this intense competition.
Secondly, the bargaining power of customers is also an important element which
creates an impact on Samsung (Johnson 2014). In current times, the bargaining power of
customers has seen drastic growth due to the availability of immense information about any
brand. In the case of Samsung, the bargaining power of the customers is moderately high.
The customers can easily get their desired information about the brand from other users of the
same brand and also has the potential and opportunity to switch brands if they are not
satisfied with Samsung. The customers can compare brands and the different products that
the brand has to offer along with the feedbacks of different customers. There are several other
reasons behind the increase in the bargaining power of the customers such as intense
competition between the brands, extensive use of technology and others. Samsung invests a

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CASE STUDY
lot of their money on advertising and marketing so that they can attract several new
customers. Due to the intensity of the competition in current times, brands are taking the
aggressive way to advertise their products and to ensure that customers do not switch their
brands. This proves that customers do have a high bargaining power for Samsung
Electronics.
Thirdly, the bargaining power of the suppliers in the case of Samsung Electronics is
low. Suppliers are an important part of any business since companies derive raw materials
from them which is necessary for the manufacturing of the finished goods which is ultimately
going to reach the customers (E. Dobbs 2014). It is very important to purchase good quality
raw materials for manufacturing a good quality product. This is why the bargaining power of
the suppliers affects the company to a great extent. If the bargaining power of the suppliers is
high, then the company’s competitive edge will be low, and if the bargaining power of the
suppliers is low, then the company’s competitive strength would be high. Samsung has a low
bargaining power of suppliers due to the size of the company which makes it easy for them to
switch to another supplier if they are not satisfied with the current one. Several suppliers all
over the world provide the raw materials which are needed by the company. Therefore, the
current supplier’s main source of income would be Samsung which would be hampered if the
supplier does not follow the terms that are laid down by the company. Samsung has a set of
rules and terms which are to be followed by the supplier extensively. These rules are set in
areas of product quality, labour welfare, sustainability and others which the company is
serious about. These are the factors which lead to the low bargaining power of the suppliers
in the aspect of Samsung Electronics.
Fourthly, Samsung has a very low threat of new entrants. This is because Samsung is
a large brand which has grown, developed and strengthened over the years. The company had