Porter’s 5 forces analysis

Porter’s 5 forces analysis

Potential entrants (threat)

• Samsung as mobile company is not even frightened of new entrants, because the capital needed to invest in this kind of industry is extremely high, which means that no too many investors try to gain a market share in mobile environment.

• This kind of threat is very low, with a high invest in R&D for the creation and innovation of unique products that exceed the consumer’s expectations and brand loyalty of their mobile phones.

• The customers generally remain with a brand they know, is will be very difficult to get accepted if the brand is not even known, the costs of this and the development of distribution channels or infrastructure are extremely high, making it a strong barrier to break.

• With the government policies, the threat is really high, as the government usually allows the entry of mobile devices of almost all known brands; the rivalry in this case with Samsung is imminent.

• A threat could only be considered if a well known brand, specialized in technological products, decides to invest in the mobile industry, such as Samsung and LG did years ago.

Suppliers (bargaining power)

• Samsung’s bargaining power is extremely low certainly null, because its operational suppliers are almost owned by itself, so it doesn’t need a negotiation with its own producers.

• It is completely self-sufficient in terms of raw materials supplies; it is vertically integrated giving it the advantage of non-dependence to another supplier.

• Samsung has the technological leadership with a worldwide recognition, this means each device it manufactures its completely owned all over the supply-chain, only adding value from its own industrial sectors.

Substitutes (threat)

• The customer can substitute the Samsung’s mobile phones (Galaxy) with any mobile phone with the same functions; this includes all operating systems like Android, Microsoft, Apple, etc.; so the threat is as high as possible.

• As for the price, the customer can replace your Samsung mobile device by any other mobile device that is in the same range as the Galaxy. Some examples of prices which can be a threat are:

o The Motorola MotoX which has a great design and best quality is the price is $ 199 dlls.

o iPhone 5S, with a new processor (A7) and new iOS7. Prices vary depending on the storage capacity.

 iPhone 5S 16 GB $649 dlls.

 iPhone 5S 32 GB $749 dlls.

 iPhone 5S 64 GB $849 dlls.

• The availability of substitute products is an important factor. Apple is positioned in second place with 31.9 million iphone equipment sales, third LG with 11.4 million sales Samsung being first with 71.4 million devices.

• Another important aspect is quality. Samsung has been positioned in the first places in sales of smartphones and its new Galaxy S4 features improvements such as the battery, memory as like the iphone is available as an 8GB, 16GB and 32GB besides the Galaxy S4 can expand its memory to 64GB. The 5-inch screen with a resolution of 1920x1080. The new Apple iphone 5S comes with new enhancements such as the new A7 processor and its new operating system iOS7. The screen is 4 inches so that many consumers prefer this type screen. A new iSight camera captures a greater amount of light. Another new feature is that iphone 5S has a fingerprint reader which is good in terms of the safety

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