Competetive Strategy Analysis - Samsung Essay Example | Topics and Well Written Essays - 3000 words

Competetive Strategy Analysis - Samsung - Essay Example The current status of the firm’s competitiveness is evaluated using three strategic tools: the Five Forces model, the Value Chain analysis framework, and the Strategic Clock. The first two models were developed by Porter while the Strategic Clock has been designed by Bowman. These theoretical models allow the identification of all aspects of the firm’s strategic position in the global market. In this way, the understanding of the firm’s current position towards its rivals and of its future prospects in the particular industry becomes easier. Porter’s Five Forces Literature review The Five Forces model of Porter (see Figure 1 below) highlights the forces that a firm is likely to face when developing its daily activities. The identification and the evaluation of these forces are necessary in order to check whether a firm has prospects in its industry or not (Hill and Jones 2009). The forces included in the Five Forces model of Porter are the following: †˜a) new entrants, b) suppliers, c) buyers, d) substitute products, e) industry competition’ (Henry 2008, p.69). The analysis of this model’s elements would help to understand its value for evaluating the potentials of Samsung in the global electronics industry. ... The power of suppliers to ask for increase in prices is higher as the material/ product delivered to the client is rare and cannot be easily located through other suppliers (Roy 2011). This phenomenon is known as the bargaining power of suppliers (Roy 2011). In sectors that are critical in terms of the material used in products, the bargaining power of suppliers can be high: for example, the pharmaceutical industry or the luxury cars industry (Roy 2011). At the next level, reference should be made to the other element of Porter’s model: customers. Customers are able to press firms to proceed to the reduction of their prices in the following case: when the products/ services provided by a firm become common in the market, the customers of a firm may decide to leave their firm and prefer the products of a rival that are at lower price (Gordon 2004). The specific potential of customers can exist only if a product is widely expanded in the market or if a new entrant that offers th e same product at lower price has appeared in the local market (Gordon 2004). The term ‘substitute products’ is used for describing the products with similar characteristics but of lower quality (Ungson and Wong 2008). These products can be available at lower price since their production cost is significantly lower than that of the products with similar characteristics but of high quality (Ungson and Wong 2008). Consumers may prefer these products instead of those that used to buy until now in order to save money (Ungson and Wong 2008). Substitute products cannot particularly threaten a firm that offers products that cannot be easily replicated (Alrawashdeh 2013); Finally, reference should be