University Case Study: Samsung's Competitive Advantage and Strategies

This case study examines Samsung Electronics through the lens of Porter's Five Forces, analyzing the competitive dynamics within the electronics industry. It assesses the intensity of rivalry among major players like Apple, Sony, and LG, highlighting the constant need for innovation and customer satisfaction. The analysis explores the bargaining power of customers, which is moderately high due to readily available information and the ability to switch brands. The study finds that suppliers have low bargaining power due to Samsung's size and diverse sourcing options. The threat of new entrants is low due to high barriers to entry, while the threat from substitute products, primarily from other global and local brands, is significant. The case study concludes by suggesting strategies for Samsung to maintain its competitive advantage, including leveraging technological innovations, providing excellent customer service, employing highly skilled employees, and upholding its core values. The analysis is supported by relevant academic references.

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CASE STUDY
Name of the University
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Author Note

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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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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

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to make several investments in many sectors of the business such as advertising, marketing,
recruitment, human resources and others to ensure that a strong brand is being built with
time. Due to these reasons, the barrier to new entry of companies in this sector is very high,
and Samsung does not have to face much threat of any new company taking their place or
even establishing themselves in the market. Smaller business can enter the market as local
brands. However, they would not be able to reach the position and the competition level
which is enjoyed by Samsung. The new brand would be lesser as compared to Samsung
which will not be seen as a threat by the company. If the new brand wants to reach the level
of business that is enjoyed by Samsung, then they have to invest more in their business and
marketing to make themselves visible among the people. However, this is not always possible
by the new brands and remains a rare case scenario (Porter and Heppelmann 2014). There are
other factors as well the which can act as a barrier to the entry of new companies such as
legal and regulatory issues.
Lastly, Samsung has several competitors in the global market which provides a threat
to them to a great extent such as LG, Sony, Apple and others. This competition between the
brands leads to a high level of threat in case of substitute products. Along with these high end
global brands, there are also certain international and local brands as well which might prove
to be a great competition for the company. The competitive threat that is possessed by these
different brands puts a great impact on Samsung (Jarzabkowski and Kaplan 2015). Therefore,
the customers have a huge choice of brands and products to choose from, and this possesses a
threat to Samsung. They would have to ensure that they can retain their customers so that
they do not substitute the products of other companies for their own.
Samsung Electronic could adopt different strategies which would help them to create
a sustainable competitive advantage in the global market. Firstly, Samsung is well-known for
their technological innovations and advancement through their products. Samsung could put

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this to the use by ensuring that the products that they manufacture have the budding
technological innovations that they have promised to the customers. This would help them to
stay in the same position in the market (Lasserre 2017). Secondly, they should adopt good
customer service relations so that their customers would be able to get prompt services in an
emergency. Since the products of Samsung are relatively of high price, it is of utmost
importance to ensure that the issues are handled with care so that the customers do not feel
dissatisfied with the company and their service. Thirdly, the people who are working in the
company should be extremely knowledgeable and trained so that they can manufacture
extremely high-value products which would be favoured by the customers. The good quality
of products would be able to appeal to the customers and would help them to make a choice
which consists of purchasing the products of Samsung Electronics over other brands. Lastly,
Samsung Electronics should always follow their core values which have been expressed by
them so that the customers have complete faith over the brand and therefore their products
(Samsung.com 2018). Following the core values would lead the company to become a global
success with the faith and the trust of the people.

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Reference
E. Dobbs, M., 2014. Guidelines for applying Porter's five forces framework: a set of industry
analysis templates. Competitiveness Review, 24(1), pp.32-45.
Jarzabkowski, P. and Kaplan, S., 2015. Strategy tools‐in‐use: A framework for understanding
“technologies of rationality” in practice. Strategic Management Journal, 36(4), pp.537-558.
Johnson, M.L.L.S.F., 2014. The five competitive forces framework in a technology mediated
environment: do these forces still hold in the industry of the 21st century? (Bachelor's thesis,
University of Twente).
Lasserre, P., 2017. Global strategic management. Macmillan International Higher Education.
Porter, M.E. and Heppelmann, J.E., 2014. How smart, connected products are transforming
competition. Harvard business review, 92(11), pp.64-88.
Samsung.com (2018). Strategy | Sustainability | Samsung US. [online] Samsung.com.
Available at: https://www.samsung.com/us/aboutsamsung/sustainability/strategy/ [Accessed
15 Nov. 2018].
Van Alstyne, M.W., Parker, G.G. and Choudary, S.P., 2016. Pipelines, platforms, and the
new rules of strategy. Harvard business review, 94(4), pp.54-62.