Business Level Strategies of Samsung Electronics

This report analyses the journey of Samsung Electronics from product design to manufacturing, using Porter's Five Forces Framework. The report discusses the bargaining power of buyers and suppliers, threat from customers and substitutes, and the threat of new entrants. The report also elaborates on the four strategies adopted by the company to gain competitive advantage: differentiate strategy, cost leadership strategy, innovation strategy, and growth strategy.

Business Level Strategies

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Introduction
Business strategy is the planning of the organisation to achieve the specific objective.
Strategic plan succeed when the business achieve success, beat a strong competitive position
and strong financial performance. In this report, the discussion is made on the case study of
Samsung Electronics. Samsung electronics is an electronic company who manufacture the
consumer electronics, semiconductors, Home appliances products. It is situated in South
Korea. The main purpose of this case study is to analyse the journey of the company of
product design to manufacturing the product. In this report, the discussion will be made on
the case study of Samsung electronics (Samsung, 2018). In the starting of the report, Porters
five forces framework is use to analyse the journey of manufacturing the product. After that,
the four strategies will be discussed which is adopt by the companies to gain the competitive
advantage.
Porters Five Forces Framework of Samsung Electronics
Bargaining power of Buyer
It has been seen that the bargaining power of consumer of Samsung is high due to high power
of switching the cost. The consumers can easily switch from one brand to another. It has been
found that the companies advertise the products on internet with their prices that is an
advantage of the consumers. Companies advertise the product with the prices to attract the
new consumers towards the product and services. Consumers use the internet to analyse the
product price of the company to another company (Khoja, 2016). The consumers compare the
prices of one brand to another brand. Competition between the brands for each other is shows
the aggressive nature regarding the competitors. Brand always try to beat the competitors to
reduce the support of the customer for the competitors. Brand market image is depends on the

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features and the quality of the products. Quality of products is a major component to attract
the consumer towards the brand and which helps to enhance the brand image in the market.
It has been found that the consumer’s electronics is the major component for the industry
because there is large number of consumers who wants consumer electronics product.
Competitors of the company also try to beat the competitors in the consumer electronics
product by attracting the large number of consumers.
The company brings the changes in their technologies to upgrade the product in the rapid
secession. It has been seen that the company was stood in a good position in selling the
products such as Television. The company is famous for its Television product and there are
two main markets of Europe and North which is famous for the technology and design. The
main focus of the company is on the design of the product by using the new technology to
attract the new consumers towards the company. Competitors of the company are the major
threat for the company which increase the bargaining power of competitors (Dobbs, 2014).
Bargaining power of Supplier
Suppliers are the source from which the company get the raw material to manufacturing the
product. It has been seen that bargaining power of supplier is low due to the large number of
supplier in the industry. The bargaining position of the supplier affects the position of the
company because if the company get the raw material in reasonable prices then the cost per
unit is decreases which are beneficial for the company (Bashir, and Verma, 2017). The
company can easily offer the product to the consumer at the low process and get the
competitive advantage. Due to large number of supplier in the market; the company can
easily switch to the suppliers. But according to supplier perspective, it is difficult to switch
from one company to another company. Companies are the only source of earning for the
supplier they cannot switch from one to another. The company makes the rules and regulation

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for the supplier which is necessary for the supplier to follow them. The supplier also has to
research the prices of the other supplier (Jung, 2014).
It has been seen that the role of design of product has the huge importance in the case of
consumer electronics. There are number of supplier who offers the services at the discount
which is beneficial for the company. The company can reach at the large number of
population with the reasonable prices.
Threat from customers
It has been seen that there are large number of competitors of Samsung electronics such as
Apple, Sony and LG. Expect these companies; there are also another competitors in the
market in the form of international competitors. Due to the large number of competitors the
company has high level of threat of competitors. This is also difficult for the new entrants to
enter in the competition market. Technology is becoming advanced due to which the
competition between the competitors is increases and the level of rivalry in the industry is
also remains high (Parajuly, Habib, Cimpan, Liu, and Wenzel, 2016).
The threat of new entrants
In the case of Samsung electronics, it has been seen that the Samsung has less threat of new
entrants. To enter the industry it is requires the high range of investment in the market. It
shows that the new entrants require the enough capital to invest in the market. There are
many competitors those has high brand image in the market; it is difficult for the company to
enter in the market and compete those companies. These are the barriers for the new entrants
to enter into the new market. Except from these entire barrier one more barrier the entrants
face the legal and regulatory pressure (Samsung, 2018).

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Samsung Electronics Company manufactures the higher level of creativity. The main focus of
the company is their design which is design by the company themselves. The company send
the designer to work abroad in diverse industry such as furniture, fashion for a certain period
of time. The kind of design by the designers is enabling to design by the other companies or
even think about it. It becomes difficult for the new entrant to beat the Samsung electronics
(Porter, and Heppelmann, 2014).
Threat of Substitute
It has been seen that there are many competitors who manufacture the same product with the
different design and techniques. In the case of Samsung Electronics, the number of
competitors that operates the same business and these are Apple, LG and Sony. These
companies manufacture the same products which are also designed by the Samsung.
Samsung electronics manufacture the different design but the other companies manufacture
the same product but they have different pattern and design. It has been seen that the
customers have the number of substitute’s brands that is why it can easily switch from one
brand to the other. In the whole scenario, it states that the Samsung electronics has the
number of the substitutes from which the companies has the high threat of substitute in the
market (Zhao, Zuo, Wu, Yan, and Zillante, 2016).
In the context of the case study, it has been seen that the journey of Samsung towards design
excellence began in 1993 when the founder of the company comes to visit the store of Los
Angles (Suciu, and Florea, 2015). It has been found that there are no attractive product is
manufacture by the competitors of the companies and they have become the major reason to
attract the loyal customer towards the company.

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Business Strategies
It has been seen that the company takes the initiates to improve the design of the products and
handle the situation of similar products. In the case of Samsung Electronics, the company
handle the upsetting situation when the two model of Samsung is the similar with the
competitors of the company such as SPH-V8900 and the SCHN-V890. These two models are
similar with the Apple and Microsoft products. The four strategies of the company are
elaborated which is used by the company to handle the situation and increase brand image in
the market.
Differentiate strategy
The company use this strategy to differentiate the product from the other companies. The
company manufacture the product with some different techniques and design so that the
company can attain the competitive advantage in the market. According to the case, it has
been seen that the designers of the company send abroad to bring the new design for the
international market (Rothaermel, 2015).
Cost leadership strategy
This strategy is able to describe that how companies move ahead from their competitors by
lowering the prices. This strategy is used by the company to decrease the cost by using the
techniques. In this case, it has been seen that the company focus on the volumes and the cost
of the products and starting ignore the value of the customer (Baack, and Boggs, 2008).
Innovation strategy
The company introduced the new models in the market without copying the other companies.
The company faced the embarrassing situation as it has been introduced the similar model
which is discussed above. Now, the company introduced the new product and design

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carefully with the innovative ideas. New innovative product attracts the consumer towards
the product (Choung, Hwang, and Song, 2014).
Conclusion
From the above analysis, it has been concluded that the Samsung electronics face the issues
of similar products, high level of competition and the many others. Porter’s Five Forces have
been used to elaborate the issues which are face by the company. To reduce these issues the
company take the initiate and reduce the issues. The strategies follow by the company is to
attain the competitive advantage and reduce the issues.

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References
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emerging markets. International Journal of Emerging Markets, 3(2), pp.125-139.
Bashir, M. and Verma, R., 2017. Why business model innovation is the new competitive
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Choung, J.Y., Hwang, H.R. and Song, W., 2014. Transitions of innovation activities in
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E. Dobbs, M., 2014. Guidelines for applying Porter's five forces framework: a set of industry
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