Impact of Five Forces and Strategies for Competitive Advantage of Samsung Electronics

Running Head: Business Marketing
Samsung Electronics
Business Marketing

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1. Impact of five forces on Samsung Electronics
Samsung Electronics is a behemoth player of international consumer electronics industry
and organization has managed to acquire leading position through which the demand for
the consumer electronics has been increased along with the increase in the revenues and
sales of the organization. This has ultimately helped organization to gain competitive edge
over existing players like Sony, Panasonic and other big brands of consumer electronics
industry. Samsung Electronics has expanded its functional area by introducing new
products with the objective of retaining interest of existing and potential customers
segments along with attracting new customer segments towards the organization. In the
competition of IDEA 2006 (Industrial Design Excellence Awards), organization won gold
for touch messenger and two silver awards for digital presenter and portable digital
projector. This helped the organization to move towards the peak position by passing all
the big companies in the industry as this was the biggest achievement for any consumer
electronic company as being rewarded with most IDEAs in last five years (Samsung
Electronics, 2018a).
Samsung Corporation have made their unique identity in the global market by introducing
new and attractive designs regularly in order to satisfy their wide customer base’s
demands and wants. With the help of IDEAs and other awards, Samsung acquired newly
design prowess. In the brand survey of 2005, Samsung was ranked as the fastest growing
brand by Interbrand (leading brand consultancy firm) (Govind & George, 2006).
Impact of external forces has a big impact over organizational performance and with
regards to this, it has been observed that evaluation is necessary of these factors so that
impact of each five forces could be analysed. Competition is also evaluated on the basis of
these five forces and in order to make the organization effective, appropriate strategies will
be framed on the basis of these factors.

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Porter’s five forces
Bargaining power of suppliers
Suppliers deliver raw materials to the organization for making finished goods. They are
crucial part of the organizational production process; thus, the impact of supplier’s
bargaining power is quite high. This power not only impacts organizational performance
but it also creates impact over competitive position of the organization in the industry
(Ottman, 2017). But in the case of Samsung, suppliers’ bargaining power is less due to
certain crucial factors. First factor is that suppliers’ size is relatively small than the
corporation’s size while the next factor is the availability of suppliers. Samsung is a well-
known consumer electronics brand, thus, their approachability and brand image is huge
enough to attract suppliers from different parts of the globe, and thus, they could easily
switch from one supplier to another easily. While, suppliers would not be able to switch
from Samsung as their source of income will be impacted, hence, it could be said that
overall bargaining power of suppliers is weak (Samsung Electronics, 2018b).
Bargaining power of customers
Due to large number of companies and continuous introduction of new entrants in the
consumer electronic industry has led to increase the bargaining power of consumers. In
case of Samsung, the bargaining power of consumers is moderately high due to low
switching cost for the buyers and they could easily move towards any other competing
brand along with this; they have option to compare the products of different brands in
order to get the most appropriate fit for them. Existing customers also posts about the
quality and features of the product which create impact over the demand of the product
and in order to attract new customer segments, organization needs to invest high part of
their earnings towards advertising and promoting their products to showcase their
products upper than their rivals’ products. With regards to this, all these factors also
creates impact over the organizational competitive position, thus, it could be evaluated that
the customers’ bargaining power is high and organization is required to make strategies on
the basis of current trends, audience’s demands and wants for maintaining their acquired
position in the global market (Samsung Electronics, 2018c).