Bargaining power of suppliers:

Suppliers are the sources from which the companies obtain raw material for making products.
They are an important group and their bargaining power an important force affecting the position
of a company. If the suppliers have higher bargaining power, the competitive strength of the
company will remain low and vice versa. In the case of Samsung, its suppliers’ bargaining power
is low because of several important factors. First is their small size due to which their bargaining
strength is low. Next, these suppliers are scattered all over the world and Samsung can easily
switch to a new one. However, Samsung being a major source of income for these suppliers, they
cannot easily switch to another brand. So, Samsung makes the rules that the suppliers are
required to follow and it conducts regular investigations to see if the suppliers are adhering to the
rules and regulations. From labor welfare to product quality and sustainability, the suppliers are
required to follow the set rules in all these areas. Thus, you can see that all these factors keep the
overall bargaining power of suppliers minimized. If some of the suppliers are able to exercise
some bargaining power then it is because of their size and financial clout.

Bargaining power of customers:

Increased access to quality information has led to a continuous rise in the bargaining power of
the customers in the 21st century. The overall bargaining power of customers is moderately high
in case of Samsung. The reason is that while the switching costs are very low for the customers
and they can easily switch to any of the competing brands, customers can easily compare brands
and their products and read feedback from other customers. Higher competition, prolific use of
technology and other reasons too are behind the rising influence of the customers. Brands are
investing a lot in marketing and advertising to attract new customers. Every competing brand is
so aggressive about marketing to hack into its rival’s customer’s base. All these factors mean
higher bargaining power of the customers. The factors that moderate their influence include the
market image of a brand, quality of its products and financial clout as well as similar more
factors.

Threat from substitutes:

Substitute brands and products pose a moderately high threat to the Samsung brand. The brand
has several competitors. The most important ones are SONY, LG, and Apple. Apart from these
there are other local and international brands too that pose a competitive threat. So, overall
customers have several substitute brands and products before them. The switching costs are also
low. A good brad image, technological innovation and similar other factors moderate this treat to
some extent.

Threat of new entrants:

The threat of new entrants is low for Samsung. Building such a large brand is not easy. There is a
lot of financial investment plus marketing and a need for highly skilled human resources. So, the
barriers to entry are high. One can enter at a smaller scale and raise a local brand, but then the
level of competition from the well known brands is very high. Moreover, legal and regulatory
pressures also act to raise the barriers to entry.
Level of Rivalry in the Industry:

The electronics industry sees intense competition because of the large number of competing
brands and their size and financial strength. From LG to Apple, Apple, SONY, Toshiba, there are
several brands that are competing for market share. It is also why entry for new brands becomes
difficult. These large players are well known brands with an established brand image.
Technological innovation becomes the primary differentiating factor. Overall, the level of
competitive rivalry in the electronics industry remains high.