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Running head: FIVE FORCES ASSIGNMENT

Five Forces Assignment An Assignment Submitted by Name of Student Name of Establishment Class XXXX, Section XXXX, Fall 2012

FIVE FORCES ASSIGNMENT Five Forces Assignment Introduction The five forces model is a framework that is used to carry out analysis of an industry and to develop the strategies of a business. It explains some of the forces that can be used to predict the nature and the intensity of competition in an industry or market, and thus its attractiveness (Cunningham & Harney, 2012). The electronic industry is growing at a faster pace and competition among the firms is very stiff. This paper covers the growing industry of Samsung and analyzes the number and size of distribution of the company, the nature, and height of barriers to entry and the extent of product differentiation. The number and size distribution of the company Samsung is a multilateral company that operates in over 100 countries of the world. The company has its head office in South Korea, but with over eighty subsidiaries. It is a worlds leader in consumer electronics. It is forms the worlds largest conglomerate in terms of revenue and exports. In fact, it forms about 20% of the South Koreas exports (Lero, 2008). As a result, the company enjoys economies of scale which help it reduce its overall costs. This has enabled it to achieve competitive advantage over its rivals who are experiencing high costs. In addition, the company has acquired a number of companies in order to consolidate the market. Nature of barriers to entry Samsung is not the only company dealing in consumer electronics. It faces fierce and intense competition from such companies as LG, Motorola, Nokia and Ben Q. The intense competition is experienced mostly in the new markets such as India. As a result,

FIVE FORCES ASSIGNMENT these companies continuously engage in sponsorship of sports wars which have resulted into blockage of some firms in the market (Prahalad, 2007). The huge expenditures create a very great barrier to entry of firms in the industry. It is imperative for Samsung group to increase such expenditures to gain more competitive markets like that of India. The height of barriers to entry Samsung has so far experienced rivalry from other players in the market. The company has been able to penetrate such markets as India and China. However, it faces challenge of protectionist policies being formulated to block its entry in other markets (Cunningham & Harney, 2012). To counter this, the company can partner with other companies in the new markets to be exploited. Samsung needs to consider such legislations in the new markets and seek those that favour its chances of gaining competitive advantage. The extent of products differentiation The industry is very dynamic, since Samsungs competitors continuously introduce products that are similar to Samsungs products. The company responded fast to counter the effects of competitors strategies. Samsung group has taken the lead in being innovative, thus enabling it to produce better quality, and differentiated products (Boone & Kurtz, 2011). It is worth noting that Samsung deals in a variety of products that are differentiated. Differentiation creates customers loyalty which is very crucial in the competitive market. Conclusion In a nutshell, Samsung group is experiencing increasing intensity of competition in the market. It has gained competitive advantage over its rivals because of

FIVE FORCES ASSIGNMENT diversification of products. However, it faces a great challenge arising from restrictive practices, especially in the new markets. Therefore, the company must develop strategies to counter competitors strategies. It should ensure that its products are differentiated so as to create customer loyalty and gain competitive advantage in the industry. Otherwise, Samsung group may lose to competitors.

FIVE FORCES ASSIGNMENT References Boone, L., & Kurtz, D. (2011). Contemporary Marketing. Connecticut: Cengage Learning. Cunningham, J., & Harney, B. (2012). Strategy and Strategists. Oxford: Oxford University Press. Lero, N. (2008). A Brief History of The Samsung Company. Retrieved on 30th October 2012 from: http://www.articleclick.com/Article/A-Brief-History-of-the-SamsungCompany/990103 Prahalad, C.(2007). The Fortune at the Bottom of the Pyramid. New York: Simon and Schuster.

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