An Analysis of Samsung's Competitive Position and Global Strategies

This report provides a comprehensive analysis of Samsung's competitive position in the global market. It begins with an introduction to Samsung, a multinational corporation and leader in the tech industry, and then proceeds to analyze the company using Porter's Five Forces framework, evaluating the bargaining power of suppliers and customers, the threat of substitutes and new entrants, and the intensity of competitive rivalry. The report then proposes four strategic recommendations for Samsung to maintain its competitive advantage, including the development of Integrated Marketing Communications (IMC), restructuring its product range, implementing a premium pricing strategy, and offering budget-friendly Android phones. The analysis highlights the importance of these strategies for Samsung's continued success in a dynamic and competitive global market. References are provided to support the analysis and recommendations.

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Managing Complexity

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Contents
Introduction...........................................................................................................................................3
Porter’s five forces of Samsung.............................................................................................................4
Four strategies that Samsung could adopt to remain competitive globally............................................5
Conclusion.............................................................................................................................................7
References.............................................................................................................................................8

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Introduction
Samsung is a multinational company of South Korea and it is the largest business of
Korea. There are 20 businesses affiliated with it such as Samsung heavy industries, Samsung
Electronics, Samsung C & T, Samsung life insurance, Samsung Engineering, and many more
others. They are doing high technological advancement in their industry to gain more
customer base and market share. It has around 510 offices that are employing nearly 369,000
employees. Due to its high quality products, it has great market presence all over the world.
Due to this, supplier sticks to this brand for long time even without bargaining (Owler, 2018).
It has various competitors in the market who are also offering innovative products to the
customers. Due to this, Competitive rivalry and bargaining power of customers is high in
Samsung. In the first section of the report, Porter’s five forces of Samsung have been
discussed. In the second section of the report, several strategies are explained from which it
can get the competitive advantage globally.

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Porter’s five forces of Samsung
1. Bargaining power of supplier- Every company require the supplier to obtain raw
material for making the product. They are essential in every company and it seriously affects
the company and its growth. Therefore, higher the bargaining power of supplier lower will be
the competitive advantage of the firm. In Samsung, bargaining power of supplier is low due
to various factors. The first factor is the small size due to which their bargaining power is
less. Secondly, there are various suppliers all over the world. Samsung can easily switch to
the other brand due to its leading brand image and large market segment. Besides this,
Samsung is the only source of income for some of the supplier. Due to this reason also,
supplier bargaining power is low. Samsung has also made the several rules for the suppliers
that are compulsory to follow by these suppliers. It also does time-to-time investigation that
the suppliers are following rules and regulations or not. From sustainability and product
quality to labour welfare, suppliers are required to follow the certain set of rules made by
Samsung. Therefore, these factors clearly state that the bargaining power of supplier is low in
Samsung (Samsung, 2018).
2. Bargaining power of customers- Increasing use of social media and various other
techniques, bargaining power of customer has the continuous rise in today’s time. In 21st
century, all customers are aware about all the brands. In case of Samsung, bargaining power
of customers is moderately high. The reason behind this is that the switching cost for the
customers is too low. Besides this, several other competing brands are offering the similar
products in lower price. Due to this, customers can easily move to that brand by comparing it
with other products and brands. Technological advancement and high competition are also
the reason for increasing bargaining power of customers. Due to this reason only, brands are
spending money on advertising and marketing their products. Each brand is competing with
each other by using marketing hack. All the factors mean the high bargaining power of
customers.
3. Threat of substitute- In Samsung, threat of substitute is moderately high due to
various reasons. Samsung has various competitors. Among all the competitors, LG, Apple,
and Sony are the main competitors of Samsung. All these brands are offering the almost
similar kind of products where customers can avail the services. Besides this, it also has other
international and local brands who pose threat for Samsung (Song & Khanna, 2016). In this
way, customers have various other substitute products and brands. For them, switching cost is

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also low. In order to minimise this threat, Samsung has also diversified its products that
allows the customers to watch the various programs on television, play games, and many
other applications.
4. Threat of new entrant- In Samsung, threat of new entrant is comparatively low.
Samsung has made many efforts to build its brand image to such a level. Therefore, it is not
easy for any new entrant to enter in the market and reach to that level instantly. For taking
entry into market, there is lot of investment and efforts are required. Besides this, high skilled
labour and enough resource is also needed. In this way, there are various barriers exist for
taking the entry in new market. If then also any competitor enter in market, it will start a local
brand or enter on a small scale. At this level also, it will face the high level of competition
from the well-known companies that already exist in market. Besides all these, there are
various law, rules, and regulations made by the government for entering in any of the sector.
Complying with those rules and regulations are also hard for small-scale companies.
Therefore, overall threat of new entrant for Samsung is low (Haenlein, 2017).
5. Competitive rivalry in the industry- In spite of its great image in the market, it has to
face high competition from some of the companies. It is due to the financial strength and the
size of the company. Among all the competitors, major competitors of Samsung are Apple,
Sony, LG, and Toshiba. All these brands are competing with each other for gaining more
market shares. All firms are adopting new and innovative approach in order to beat each
other. Due to this reason also, new firms finds difficulty in entering to the new market. All
these big brands are well known all over the world by their established and renowned name.
For all these firms, technological innovation is the first and foremost factor of differentiation.
By taking the technological advancement methods, companies differentiate themselves from
their competitors. In this way, the level of competitive rivalry for the Samsung is high.
Four strategies that Samsung could adopt to remain competitive globally
1. Development of IMC- In order to gain competitive advantage, Samsung is required to
give more focus on the development of IMC for the promotion of its brand. Like other
companies such as Sony, Nokia, LG, and Apple, it should also focus more on its brand
promotions. Although it has all the attributes such as market share, revenue, great presence in
the global market. However, it can also achieve the status that Apple is enjoying in the whole
world. Apple has great presence in the market due to its innovative set of products and higher

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standardised products. Apple has great status in the market because of its vision, leadership,
and innovation. This is the main reason due to which Samsung is lagging behind from Apple
in the market (Orazi, Spry, Theilacker & Vredenburg, 2017).
2. Restructuring of its product range- Samsung should restructure its product range by
giving more emphasis on the product range. In various countries, it is not able to serve the
local people who are living there. There are various reasons behind this, such as lack of
power supply in those areas or the rough handling of products by the users. In addition to
this, it could also incorporate the preferences of UK market and European market to gain the
more and more cultural acceptance of people. Risky weather in the countries of Europe and
their necessity to get the products in the wireless network should be considered. Samsung
can start using the advance technology for gaining the more support of customers (Bustinza,
Gomes, Vendrell & Baines, 2017).
3. Premium pricing strategy- It is an appropriate strategy that can be used by Samsung to
gain more advantage that is competitive globally. It can start the premium pricing strategy
without making any impact on its current market segment. By taking the effective use of this
strategy, Samsung can launch the wide range of product with premium quality. After a proper
research and development, it can get the various benefits from this strategy. This strategy can
also create a strong market segment of Samsung in the Asia that has high population with
high disposable income (Nagle & Müller, G. (2017).
4. Budgeted phones in android- It is true that Samsung do not give more focus on the
low price android phone. However, various people prefer keeping one android phone of low
price. Therefore, to meet the needs of customers, it could start selling the low budget android
phone. It will help the company in getting more competitive advantage all over the world.

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Conclusion
In the limelight of above discussion, it can be concluded that Samsung is the leading
company who is serving worldwide. Due to its wide range of products and brand image, it is
able to enjoy the more market share. It is true that suppliers sick to one company due to their
brand image. This is the only reason bargaining power of suppliers in Samsung is low. On the
other hand, customers in today’s time are more aware about the different brands. Therefore,
customers bargaining power is more in Samsung due to availability of various competitors.
Besides this, its promotional strategy and restructuring of product can help the Samsung in
achieving more advantage that is competitive.

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References
Bustinza, O. F., Gomes, E., Vendrell‐Herrero, F., & Baines, T. (2017). Product–service
innovation and performance: the role of collaborative partnerships and R&D
intensity. R&D Management.
Haenlein, M. (2017). How to date your clients in the 21st century: Challenges in managing
customer relationships in today's world. Business Horizons, 60(5), 577-586.
Nagle, T. T., & Müller, G. (2017). The strategy and tactics of pricing: A guide to growing
more profitably. Routledge.
Orazi, D. C., Spry, A., Theilacker, M. N., & Vredenburg, J. (2017). A multi-stakeholder IMC
framework for networked brand identity. European Journal of Marketing, 51(3), 551-
571.
Owler. (2018). Samsung Semiconductor's Competitors, Revenue, Number of Employees,
Funding and Acquisitions. Retrieved from:
https://www.owler.com/company/samsungsemiblog
Samsung. (2018). Samsung annual report 2018. Retrieved from:
https://images.samsung.com/is/content/samsung/p5/ca/aboutsamsung/2017/pdf/about-
us-sustainability-report-and-policy-annual-report-2007-en.pdf
Song, J., Lee, K., & Khanna, T. (2016). Dynamic capabilities at Samsung: Optimizing
internal co-opetition. California Management Review, 58(4), 118-140.