Marketing presentation on porter 5 forces.

Marketing Porter 5 forces

1. External Environment (Opportunity and Threat) Analysis A business unit must monitor key macroenvironment forces and significant microenvironment factors that affect its ability to earn profits. It should set up a marketing intelligence system to track trends and important developments and any related opportunities and threats. Good marketing is the art of finding, developing, and profiting from these opportunities. A marketing opportunity is an area of buyer need and interest that a company has a high probability of profitably satisfying. There are three main sources of market opportunities. The first is to offer something that is in short supply. This requires little marketing talent, as the need is fairly obvious. The second is to supply an existing product or service in a new or superior way. How? The problem detection method asks consumers for their suggestions, the ideal method has them imagine an ideal version of the product or service, and the consumption chain method asks them to chart their steps in acquiring, using, and disposing of a product. This last method can often lead to a totally new product or service, which is the third main source of market opportunities. Marketers need to be good at spotting opportunities. Consider the following: • A company may benefit from converging industry trends and introduce hybrid products or services new to the market. Cell phone manufacturers have released phones with digital photo and video capabilities, Global Positioning Systems (GPS), and so on. • A company may make a buying process more convenient or efficient. Mobil introduced Speed Pass, one of the first widely deployed RFID (radio-frequency identification) payment systems, to allow consumers to quickly and easily pay for gas at the pump. • A company can meet the need for more information and advice. Angie’s List connects individuals with local home improvement and other services that have been reviewed by others. • A company can customize a product or service. Timberland allows customers to choose colors for different parts of their boots, add initials or numbers, and select different stitching and embroidery. • A company can introduce a new capability. Consumers can create and edit digital “ iMovies ” with the iMac and upload them to an Apple Web server or Web site such as YouTube to share with friends around the world. • A company may be able to deliver a product or service faster. FedEx discovered a way to deliver mail and packages much more quickly than the U.S. Postal Service. • A company may be able to offer a product at a much lower price. Pharmaceutical firms have created generic versions of brand-name drugs, and mail-order drug companies often sell for less.m

2. Porters 5 Forces for Samsung Galaxy Competitive Rivals Competition is the key factor for business. Sometimes Competitive rivalry are so influential for. Such rivalries can lead to price wars, high-priced marketing battles, and races for slight advances that could mean a competitive advantage. These tactics can stimulate companies to make ever better products but also erode profits and market stability.

3. Threat of intense segment rivalry— A segment is unattractive if it already contains numerous, strong, or aggressive competitors. It’s even more unattractive if it’s stable or declining, if plant capacity must be added in large increments, if fixed costs or exit barriers are high, or if competitors have high stakes in staying in the segment. These conditions will lead to frequent price wars, advertising battles, and new-product introductions and will make it expensive to compete. The mobile phone market has seen fierce competition due to segment rivalry.  

4. The competitive environment for Samsung Galaxy remains tough, with Apple and Google launching innovative products like the iPhone 16 and Pixel 9. competition is fierce, especially with Apple and new Android brands. Samsung must focus on innovation and competitive pricing to stay ahead. i ) Samsung faces strong competition from Apple and Google, who release phones with advanced features. New innovations from these brands keep the pressure on Samsung. ii) Samsung’s Galaxy S and Z series stand out with top displays and foldable designs. Its One UI software adds a smooth user experience. iii) The main rivals of Samsung Galaxy are Apple’s iPhone and Android brands like Google Pixel and Xiaomi. These brands offer high-performance alternatives to Samsung. iv) Despite competition, Samsung has grown its global user base, especially with its affordable Galaxy A series. The premium S series continues to attract many customers. v) Cheaper brands like Xiaomi and Realme offer phones starting from 7,000 INR, while Samsung’s Galaxy devices are priced higher. This makes budget buyers lean toward lower-priced alternatives. vi) Samsung benefits from millions of apps available on the Google Play Store. Unique features like Samsung DeX and Bixby help it stand out from competitors. vii) Samsung wasn’t dominant when Apple first launched the iPhone, but Android’s growth has made it a global leader. By 2024, Samsung remains a top player in both the mid-range and premium markets.

5. Threat of new entrants —The most attractive segment is one in which entry barriers are high and exit barriers are low. Few new firms can enter the industry, and poorly performing firms can easily exit. When both entry and exit barriers are high, profit potential is high, but firms face more risk because poorer-performing firms stay in and fight it out. When both entry and exit barriers are low, firms easily enter and leave the industry, and returns are stable but low. The worst case occurs when entry barriers are low and exit barriers are high: Here firms enter during good times but find it hard to leave during bad times. The result is chronic overcapacity and depressed earnings for all. The airline industry has low entry barriers but high exit barriers, leaving all carriers struggling during economic downturns.

6. The mobile phone industry is already a well established market and the threat of a new entrant is quite low because Capital requirement is very high to compete in the market like huge manufacturing costs, high Research and development costs etc. Barriers like patents make it difficult for new competitors, because the best methods are patented. Costumers loyalty towards existing brands. Advanced technologies make it difficult for new competitors to enter the market because they have to develop those technologies before effectively competing. All leading companies are fighting a fierce battle to gain more market share, so there will be heavy retaliation towards any new entry. There is a constant push to innovate and launch new products. There are always possible threats of new entrants in the Phone industry, not necessarily a threat of a new phone company but of new products from established companies. So the company has less danger of further new entrants but it has to be focused on the existing enemies.

7. Threat of substitute products —A segment is unattractive when there are actual or potential substitutes for the product. Substitutes place a limit on prices and on profits. If technology advances or competition increases in these substitute industries, prices and profits are likely to fall.

8. While specialized devices and cheaper alternatives pose a moderate threat, smartphones’ versatility makes complete substitution unlikely. Samsung must balance innovation with competitive pricing to stay ahead. Moderate Power of Substitutes : The threat from substitutes is moderate, as they don't fully replace smartphones. However, these alternatives could pressure Samsung to stay competitive in pricing. Core Functions and Integration : Smartphones combine communication, information access, and entertainment into one device. Substitutes like landlines or social media handle specific functions but lack this integration. Function-Specific Substitutes : Specialized devices like cameras or laptops outperform smartphones in specific tasks. However, carrying multiple devices is impractical, making smartphones more convenient overall. Operating System Competition : Apple’s iOS and other Android devices offer similar features, posing a threat. Samsung must innovate to differentiate and maintain its market share. Economic Downturns and Cheaper Alternatives : In tough economies, basic phones become more appealing to budget-conscious consumers. Yet, smartphones’ superior functionality keeps them attractive when budgets allow.

9. Threat of buyers’ growing bargaining power —A segment is unattractive if buyers possess strong or growing bargaining power. The rise of retail giants such as Walmart has led some analysts to conclude that the potential profitability of packaged-goods companies will become curtailed. Buyers’ bargaining power grows when they become more concentrated or organized, when the product represents a significant fraction of their costs, when the product is undifferentiated, when buyers’ switching costs are low, or when they can integrate upstream. To protect themselves, sellers might select buyers who have the least power to negotiate or switch suppliers. A better defense is developing superior offers that strong buyers cannot refuse.

10. Bargaining Power of Customers (Buyers) – High The bargaining power of buyers in the smartphone industry remains high, and for Samsung Galaxy, product differentiation is crucial to retain market share. The following factors contribute to this: Increased Choices in the Market : With a wide range of alternatives like Apple, Xiaomi, and OnePlus, customers have many options. This forces Samsung to compete heavily on features and price to retain buyers. Access to Information : Consumers have easy access to detailed reviews and comparisons online, reducing information gaps. This allows buyers to make informed decisions and seek out the best value. High Price Sensitivity : The smartphone market is extremely price-sensitive, with customers comparing similar models from different brands. This forces Samsung to frequently offer discounts and promotions to stay competitive. Low Switching Costs : Switching between smartphones is easy due to cloud storage and universal apps. Consumers can move from Samsung Galaxy to other brands with little hassle, increasing their power. Economic Sensitivity : Demand for premium models like Samsung Galaxy fluctuates with the economy. Customers delay purchases during economic downturns, waiting for discounts or more affordable models.

11. Threat of suppliers’ growing bargaining power —A segment is unattractive if the company’s suppliers are able to raise prices or reduce quantity supplied. Suppliers tend to be powerful when they are concentrated or organized, when they can integrate downstream, when there are few substitutes, when the supplied product is an important input, and when the costs of switching suppliers are high. The best defenses are to build win-win relationships with suppliers or use multiple supply sources.

12. The bargaining power of suppliers for Samsung Galaxy is moderate, influenced by two main supplier categories: hardware manufacturers and software developers. 1.Hardware Suppliers: Samsung Galaxy depends on various hardware manufacturers for smartphone components. However, the company has plenty of alternative suppliers it can switch to if needed, ensuring flexibility in its supply chain. 2.Strong Negotiating Power: As a global leader in the smartphone industry, Samsung holds significant leverage when negotiating with suppliers. Its large market share gives it the upper hand in securing favorable deals. 3.Multiple Supplier Options: Samsung has access to a wide range of equipment suppliers, making it less reliant on any single one. This availability allows it to negotiate better prices and terms. 4.Global Influence: Being a renowned global brand, Samsung is a key customer for many suppliers. Losing Samsung’s business would have a significant impact on these suppliers, giving Samsung a strong position in negotiations. 5.Low Software Supplier Power: Samsung’s use of the open-source Android operating system gives it many software options. This reduces the bargaining power of software suppliers as Samsung is not tied to any proprietary software. 6.Supplier Competition: The intense competition among component suppliers keeps prices competitive. This helps Samsung negotiate better terms, lowering costs and improving supply chain efficiency.