Analyzing How Porter’s Five Forces Helped Samsung Electronics To Succeed

Understanding Porter’s Five Forces Model

In the year 1969, Samsung electronics industry corporation was created which is division group of Samsung (Bakator and Petrovi? 2016). Later on, in the year 1984, the name of the corporation was changed to the present name that is Samsung. The organization mainly manufactures and exports various electronics products like electronic calculator, color TV, an electronic cash register (Julia and Rodrigues 2016). With the passage of time, the organization has grown a lot and is considered to be as one of the leading electronic organization with its branches all over the world. At present, Samsung electronics products are being manufactured and sold on daily basis. Samsung comes up with one of the best inventory management systems, supply and distribution chain in the globe (Zhao et al. 2016). The organization comes up with some unique products which are durable with efficient workforce.

In the coming pages of the essay, two important aspects that are Porter five forces and competitive advantage for Samsung has been discussed in details. Four strategies which Samsung can adopt has been discussed in brief.

Porter Five Forces for Samsung

Porter Five Forces are mainly used for analyzing the business strategy of organization like Samsung. It is a well-known tool which is used for analyzing market drivers that can impact organization like Samsung (Porter and Heppelmann 2014). Depending on the market analysis, the business strategy of Samsung can be changed or altered. Organization like Samsung are very much known to easily study about the market which they want to approach thoroughly and in more deep way.

Industry Rivalry: This particular element is considered to be important for Samsung as other organization like LG, Motorola and lastly Nokia are involved in competitive rivalry (Molina-Azorín et al. 2015). Organization like Samsung cannot take its position in the market for granted as the margin is tight and the competition is very much intense. Samsung is encountering wars in emerging markets where it has to compete with some domestic players. It has ultimately impacted the overall dimension which has been considered strong for Samsung (Brea?Solís, Casadesus?Masanell and Grifell?Tatjé 2015). At the time of considering direct rivals with Samsung like Motorola and Dell, these are well-established organization in the industry. It is likely to coexist with discipline competition which can have code of conduct among themselves.

Barriers to Entry and Exit: The whole white good industry is characterized by proper barriers which can result in high barrier to entry and low barrier to exit. It is mainly seen where global organization like Samsung (Al Shobaki and Naser 2017). It is considered to be very much difficult in some of the growing industry which tends to host a large number of developing factors. It is mainly taken into consideration for large number of setting up of distribution networks and supply chain. Some of the global organization can easily exit in emerging markets as it can take the handover. It can sell the business to domestic or even foreign players in the matter of decline or even false selling (Salavou 2015). It merely highlights the fact that Samsung has entered emerging market through step by step method. It has also excited the market which is considered to be unprofitable. This is the main reason where various big organization like Samsung can due diligence before entering the growing markets.

Analyzing Samsung Electronics’ Success

Buying Power: Buyer is considered to be driving force for any organization inclusive of electronics sectors (Huang et al. 2015). The behavior of buyers is taken to be a part of whole market strategy. Apart from this, in-depth studies and research is needed for understanding the behaviors of buyers. For organization like Samsung electronics, the brand strength creates a radical change which can easily create a large base for customers which are loyal. It is seen that there have been radical design changes that can help in product line for Samsung. Samsung can be considered to have set trends in the market (Harzing and Giroud 2014). It can be considered to be powerful position which can easily allow some control over the direction of upcoming trends and future. It is considered to be strong kind of competition from the rivals which easily ensure the changes and lose some of customers in the opposition.

Power of Suppliers: Supplier is considered to be base or foundation of any industry as it can easily supply raw materials, labor components and another kind of supplies (Rani et al. 2016). It is considered to be important for a business which has healthy relationship along with large number of supplies. It mainly focusses on smooth and efficient cohesion with the suppliers. The overall power of suppliers tends to depend on large number of factors like if the product is standardized then the given suppliers can become weak (Choong et al. 2014). If it is electronics industry, then it can be silicon manufacturers. In the current market where Samsung operates, there is large number of suppliers who can easily provide services at much discount rate as the sector is deep. It does not highlight the fact organization can exact force over the given suppliers as soon as the supply chain is established. It generally requires very large amount of undo for building new supply chain (Bakator and Petrovi? 2016). It is the main reason behind good makers like Samsung can set up to shop. It can also take help of various consultancies for decision making.
Threat of Substitutes: It is considered to be high for the market of white goods which comes up with many substitutes. It comes up with many substitutes for large number of consumer which is considered to be durable for long-term purchase for organization like Samsung (Julia and Rodrigues 2016). It is considered to be careful for some of the appropriate market strategies. It is the main reason for differentiating price as it can attract large number of customers from the income pyramid. This particular element is considered to be important for some of the emerging markets which can provide dependency on some white goods (Zhao et al. 2016). However, it is rapidly changing as the women are entering workforce in the market which makes it necessary for the use of gadgets and other appliances.

Impact of the Five Forces on Samsung Electronics

Samsung is considered to be as one of the best electronics organization in the world. At present, it is considered to be as one of the largest organization in terms of wealth (Porter and Heppelmann 2014). The organization has attained this position just because of competitive advantage. Samsung has become as one of the leaders in term in the domain of innovation. The organization has achieved this position in their products because of skills and technology (Molina-Azorín et al. 2015). In order to hold their position in the market, they need to achieve more than their rivals in terms of competitive advantage.

Better Research and Development: Samsung always focused on searching and looking for the requirements of the consumers a step ahead of their rivals. They have researched and looked for demands of their worldwide consumers (Brea?Solís, Casadesus?Masanell and Grifell?Tatjé 2015). Engineers at Samsung focus on developing products which can easily meet the needs of the customers. They are also working with certain technologies which can easily lead the future market. Samsung responds to the voice of customers by proper design and testing of new products. The organization invests around eighty percent of total revenue into R&D activities (Choong et al. 2014). As the organization focus on increasing the expenditure on R&D, their commitment to technology standards and intellect property tends to remain strong.  Innovation and Design of products: Samsung comes up with capability of doing well in terms of design and friendly products (Al Shobaki and Naser 2017). Samsung has received many awards for its innovative and well design products. The organization is committed to producing environmentally friendly products (Rani et al. 2016). The main notion of the organization is to decrease the emission of greenhouse gases which has been recognized on global platform.

Combination of strategies of Japanese and America: The third biggest competitive advantage of Samsung is all about combining strategy of both Japanese and America (Salavou 2015). Japanese organization is more prone to offer a large number of products while on the contrary American organization are very focused on selective range of products. By proper combination of these two strategies, Samsung makes use of both diversification and integration (Harzing and Giroud 2014). It merely highlights the fact Samsung is diversified with range of products but they have specialized in manufacturing also.

Good financial position: The last strength of Samsung is that it can easily hold financial position in the market (Huang et al. 2015). From the financial view, Samsung has easily held financial structure in 2017 also.

Conclusion

From the above pages, it can be easily stated that this report is all about Samsung. The organization makes use of corporate global competitive advantage for maintaining its position in the market. The organization has successfully maintained its reputation for many years of being largest organization in technology industry. In the matter of revenue, Samsung remains ahead of its competitors like LG. The incorporation of massive screen of gadgets which is produced by the organization has been main reasons for beating the competitors. New features which are being in Samsung appliances has made its product attractive and favorable in market. 

References

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