Business Level Strategy and Competitive Advantage at Samsung

This report provides an analysis of Samsung Electronics Ltd's business-level strategies, focusing on the application of Porter's Five Forces to understand the company's competitive landscape. It examines the bargaining power of suppliers and customers, the threat of substitutes and new entrants, and the intensity of rivalry within the industry. The report also explores four potential strategies for Samsung: innovation, cost leadership, differentiation, and adaptability for competitive advantages. It concludes that while Samsung has strengths, adopting a more comprehensive strategic approach, including cost leadership and differentiation, could enhance its market position. Desklib provides access to a wide range of similar solved assignments and past papers for students.

Business Level Strategy 1
Business Level Strategies

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Contents
Introduction.................................................................................................................................................3
Five forces of Samsung Electronics.............................................................................................................3
Four strategies of Samsung Electronics.......................................................................................................7
Conclusion...................................................................................................................................................9
References.................................................................................................................................................10

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Introduction
Samsung Electronics Ltd is the South Korean multinational company that headquartered is
situated in South Korea. It is the flagship company of the Samsung Chaebol which is accounting
for 70% of the revenue of the group in 2012. The understanding of the organization into new
structure and method has been talked about under this report. Alongside that, the organization
has stepped up with regards to make utilization of various plans for attaining the competitive
advantages. The report will portray the five powers of Samsung Electronics that shape the
organization to achieve the competitive advantage successfully.
Five forces of Samsung Electronics
Bargaining power of Suppliers
The role of the suppliers in the Samsung Company is huge as they are the source by which the
companies get the raw material for developing the products. This factor of the Porter's five forces
s importance for the company as it affects the positioning of the company in the view of the
marketers. In the context of the Samsung Company, it has been analyzed that the bargaining
power of the company is not high due to the scattered supplier around the world and the
company has various option to switch to another supplier for developing the electronics products
(Cho, Kim and Kim, 2015). It is the company that has belief in the innovation and suppliers of
the company are earning more due to the access production of the products of the company.
Hence, the company develops the rules and the policies for the supplier so that the arrangement

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of the raw material can be done with an efficient manner in which the company does continuous
improvement.
With regards to the effect of bargaining power of suppliers, it has been discovered that the job of
the plan can incorporate the incentive to even the most ordinary object (Choi and Park, 2016).
The job of the plan keeps immense significance on account of buyer gadgets. There are various
providers who offer the services at markdown costs by which the organization accomplishes the
competitive advantages by moving toward an expansive populace at sensible costs (Khan, Alam,
and Alam, 2015).
Bargaining power of Customers
Technology has become advanced nowadays and the attention of the customers is increased
towards buying the new products. Increased access to information regarding the products is
liable to lead a constant rise in the bargaining power of the consumers (Leonidou, Fotiadis,
Christodoulides, Spyropoulou and Katsikeas, 2015). The bargaining power of Samsung
Company is comparatively high because of the switching cost for the customers because they
have the right to switch from one company to another due to effective price and good quality.
Brands are investigating a massive in advertising and promotion in order to be a focus for new
customers.
In the context of the case study, it has been found that the company did many mistakes which
had become the reason of switching the customer from Samsung to other company. The
company had focused on gaining insights design delivery process and focus on the importance of
the design in the customer products. It has been analyzed that the Samsung electronics are
considered as the competitive company as it won various silver and gold medals due to

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innovative design thinking. It had enhanced the great competitors for the company. It was
required for the company to keep the focus on improving their products in order to survive in the
competitive advantages
Threat of substitutes
It has been analyzed that the substitute brands and items represent a sensible upper level of
danger to the Samsung Brand. Samsung electronics have the number of contenders that deal in a
similar business and these are Apple, Sony, and LG. Alongside that, there are different
contenders too in the market as a nearby and worldwide contender that pose the competitive
threat (Moon, Hur, Yin and Helm, 2014). Hence, whole customers have a number of substitute
brands and products that is why the switching cost of the company is low.
With respect to the case study, it has been found that the risk was low of substitute and the
company had no issues in developing and funding in the design infrastructure but it faced a hard
task in persuasive the rank and file at the organization that design was required for endurance
and development (Jung, 2014). It has been found through the case study that the number of
employees of the company was more concerned regarding the volumes and the costs than design.
To increase the sale of the products, the company focused on making new designs in the
company.
The threat of new entrants
The threat of new entrants in the context of Samsung Electronics Ltd is low as it is not simple to
generate the massive brand in an effective manner. A new entrant needs a lot of investment while
opening a new company of electronics (Animesh, Viswanathan and Agarwal, 2011). There are

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many barriers of entry in the new market such as laws and legislation, strict policy, huge
investment, right guidance, correct mode of entry and many more.
As per the case study, it has been found that Samsung Electronics Company was maintaining a
high level of creativity. This kind of activity shows that Samsung had created competition for
new entrants.
Rivalry substitutes
There is a number of competitors of the company which makes the huge competition. These are
Apple, Sony, LG, Apple and many more that are competing for the market share. It has been
found through the case study that the main focus of the company was on making products with
an attractive design which create huge complexity and company needed to increase the prices of
the product. It was not possible for everyone to buy Samsung’s product and they started to
switch to other electronic’s company product which increases the intensive competition for the
company.

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Four strategies of Samsung Electronics
The company could make various decisions to increase the attractiveness of the products.
However, the company had made a design philosophy which supported manufacturing process of
the products of the company. The Syncmaster series of LCD monitors is the example of
attractive design products which was known for its simple design.
Innovative Strategy
Innovation can bring huge changes in the organization in a positive manner that is why Samsung
had focused on this factor but not entirely. The main focal point of the company was in the
design of the product. It was required by the company to focus on the usage of the products in a
different way at affordable prices which could have been helpful for the company to attain
competitive advantages (Garfinkle, 2018). Due to the lack of innovation strategy, the company
had to face an embarrassing situation many times.
Cost Leadership Strategy
Cost leadership strategy is an effective Porter’s generic strategy that elaborates how companies
can gain competitive advantages by lowering their pricing strategy. This strategy should have
been adopted by the company. It is the strategy that helps in reducing the costs and develops the
least expensive goods in a market for the purpose of gaining the market share. This strategy
could develop the attention of the customer towards the products. It has been found that the
businesses that have the least production costs can provide a similar level of the quality of the
product compared to their competitor for least price.
Differentiation Strategy

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Differentiation strategy helps in setting the company as it distinguishes the brand from all others
(Spencer, Joiner and Salmon, 2009). This strategy should have been adopted by the company to
attain competitive advantages. It has been found from the case study that the designers of the
company was appointed for getting new approaches in design for which design philosophy has
been made by the company.
Adaptability Competitive Advantages
According to this strategy, it is necessary for the company to be flexible by means of the
economic situation and other aspects of marketing as these can have adverse effects on the
margins of the company (Banker, Mashruwala and Tripathy, 2014). It has been found that the
company could beat the competitors if they focused on the value of the customers like the design
of the products in the company was not that much effective as per the criticism due to lack of
coherent design.

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Conclusion
It can be concluded from the above discussion that business level strategy keeps huge importance
in the company but it should be handled in an effective manner. This report is made on Samsung
Electronics Ltd on which the discussion has been made by taking consideration of Porter’s Five
Forces. It has been found that the company should have been adopted the cost leadership
strategy, differentiation strategy, innovation strategy and adaptability in competitive advantages
strategy for propose of getting huge advantages at that time.

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References
Animesh, A., Viswanathan, S. and Agarwal, R., 2011. Competing “creatively” in sponsored
search markets: The effect of rank, differentiation strategy, and competition on
performance. Information Systems Research, 22(1), pp.153-169.
Cho, Y., Kim, E. and Kim, W., 2015. Strategy transformation under technological convergence:
evidence from the printed electronics industry. International Journal of Technology
Management, 67(2-4), pp.106-131.
Choi, S. and Park, H., 2016. Investigation of strategic changes using patent co-inventor network
analysis: The case of samsung electronics. Sustainability, 8(12), p.1315.
D. Banker, R., Mashruwala, R. and Tripathy, A., 2014. Does a differentiation strategy lead to
more sustainable financial performance than a cost leadership strategy?. Management
Decision, 52(5), pp.872-896.
Garfinkle, J. 2018. 7 Strategies to Define your Competitive Advantage. Available [online]: .
Accessed on 26 Oct 2018.
Jung, S.C., 2014. The analysis of strategic management of samsung electronics company through
the generic value chain model. International Journal of Software Engineering and Its
Applications, 8(12), pp.133-142.
Khan, U.A., Alam, M.N. and Alam, S., 2015. A critical analysis of internal and external
environment of Apple Inc. International Journal of Economics, Commerce and
Management, 3(6), pp.955-961.

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Leonidou, L.C., Fotiadis, T.A., Christodoulides, P., Spyropoulou, S. and Katsikeas, C.S., 2015.
Environmentally friendly export business strategy: Its determinants and effects on competitive
advantage and performance. International Business Review, 24(5), pp.798-811.
Moon, H.C., Hur, Y.K., Yin, W. and Helm, C., 2014. Extending Porter’s generic strategies: from
three to eight. European Journal of International Management, 8(2), pp.205-225.
Spencer, X.S.Y., Joiner, T.A. and Salmon, S., 2009. Differentiation strategy, performance
measurement systems and organizational performance: Evidence from Australia. International
Journal of Business, 14(1), p.83.