Porters five forces model

1. Amit Kumar
MBM – 542
DHA - 2
Roll No - 1853362

2. Case Study Observation
According to my observation I analysed that this case
belongs to an Electronic Gadgets industry, Such as
Mobile Phones. The reasons where I find that it might
belong to Mobile Phone Industry are:-
• This industry is largely leaded by Technology
As we all know that in this sector new technology had
always be appreciated by Customers. Technology
moved very fast from Keypad to Touchscreen, from
Finger Print sensor to high speed Processor or from
good camera quality to Storage which help this
industry to attract their customers

3. Case Study Observation
• The Basic product remained same
• No easy substitute is there therefore they have to
buy this product for their needs
• Buyers are brand conscious
• Price sensitivity
• The big players have exclusive outlets to show their
Product range and for brand building
• They aggressively do advertisement to attract their
customers

4. Case Study Observation
• Any significant difference in price leads to buyers
switching Brands
Just like xiaomi Mobile Phone- This Company is
providing many features at such an affordable rate
• To attract customers they give exchange offer, Easy
EMI offers etc.
• Distribution of this industry is largely non-exclusive
& easy to enter in the market
• Significant capital is required to enter in terms of
inventory, bills receivable, manpower, supply chain,
advertising costs, after sales service set up costs

5. Case Study Observation
• Many companies manufacture the product
themselves but some company contact suppliers to
make their product
Example – Big Player APPLE manufacture the
product themselves and
Small Player like INTEX contact different
suppliers to make their product
available for them
• Customer base is largely made of individual buyers

6. Case Study Observation
• Five large players – APPLE , SAMSUNG, Huawei,
OnePlus, Lenovo
• Small Players – INTEX,
JIO,MICROMAX,LAVA,CARBON
• Major players sell their product in the entire world
& smaller players sell their products in specific
country markets
• Companies had come up with new features time to
time

7. Case Study Observation
• The industry is growing at a good pace of 20% per
annum
• According to my observation I found that – MOBILE
PHONE INDUSTRY has grown up by 18.4% CAGR in
2019
https://www.alliedmarketresearch.com/mobile-application-market
• I Planned to map SAMSUNG company
and its product on Porter’s five forces
model

8. What is Porter’s five forces model
• Michael Porter's Five Forces is a framework for
analyzing a company's competitive environment.
The number and power of a company's
competitive rivals, potential new market entrants,
suppliers, customers, and substitute products
influence a company's profitability.
• These Five Forces are :- Threat of new market
players, Threat of substitute products, Bargaining
power of Buyers, Bargaining power of suppliers,
industry rivalry which determines the competitive
intensity and attractiveness of a market.

9. Porter’s five forces model
Rivalry
among
Existing
competitors
Threat of
New
Entrants
Bargaining
Power of
Buyers
Threat of
Substitute
Products
Bargaining
Power of
Suppliers

10. Porter’s five forces model of Samsung
• Samsung is a well known electronics brand. It is
globally popular for its smartphones and
televisions and several more products like
cameras and wearable devices.
• This brand is also known for its focus on
Technological Innovation.
• The most important factor of higher sales is
Artificial intelligence (AI).
• Porter’s five forces analysis of Samsung analyses
five important factors that affect the competitive
position and market share of companies.

11. Samsung & its Products
• Smartphones – Samsung Galaxy S Series,
Samsung Galaxy Note, Samsung Galaxy A Series.
• Smart Watches
• Laptops
• Televisions
• computer chips

12. Porter’s five forces model of Samsung
Threat of New Entrants
• The threat of new entrants is low for Samsung
• Expensive to enter in the industry due to a lot of
financial investment plus marketing skills & R&D
is required
• Difficult to set up distribution channel
• One can enter at a smaller scale and raise a local
brand
• But then the level of competition is very high
• from market-leading brands competitor
• High threat of competitor Retaliation

13. Porter’s five forces model of Samsung
Bargaining Power of Buyers
• Increased access to quality information has led to
a continuous rise in the bargaining power of the
Buyer
• In the case of Samsung bargaining power of Buyer
is moderately high
• Reason is Products standardization & Quality
• Price sensitivity

14. Porter’s five forces model of Samsung
Threat of Substitute Products
• Substitute brands and products pose a moderately
high threat to the Samsung brand
• The brand has several competitors in the market like
Apple, Huawei, OnePlus, Lenovo, SONY, LG, Realme,
xiaomi
• Switching costs are also low
• Strong brand image, Technological innovation and
similar other factors make buyer to move from one
brand to other brand for some extent.
• For Samsung Products , There are several substitutes
available in the market except for the computer chips

15. Porter’s five forces model of Samsung
Bargaining Power of Suppliers
• Suppliers are the sources from which the companies obtain the raw
material for making products
• Bargaining power of Supplier is an important force affecting the position
of a company.
• Because If the Supplier have a higher bargaining power, the competitive
strength of the company will remain low and vice versa.
• Samsung, suppliers bargaining power is low because products are
smaller in size due to which their bargaining strength is low , and other
factor is suppliers are scattered all over in the world.
• Samsung being a major source of income for these suppliers
• Samsung makes the rules that the suppliers are required to follow. It
conducts regular investigations to see if suppliers are working according
to the rules and regulations. From labor welfare to product quality and
sustainability, the Samsung suppliers are required to follow the rules in
all these areas.
• These factors keep the overall bargaining power of suppliers minimized
for Samsung.
• Major Group of suppliers dependent on Nokia

16. Conclusion
• Thus, Porters Model of Five Competitive Forces is
a simple but powerful tool for understanding
where power lies in a business situation.
• It helps to understand both the strength of your
current competitive position & the strength of a
position you are looking to move into.