INDUSTRY ANALYSIS:

SAMSUNG
SMARTPHONE
Aisha Pradnya Paramita - 15/375493/EK/20194
Maria Arsita Clara Vania - 14/365432/EK/36615
Muhammad Rayyan Fahmi- 15/375471/EK/20172
Ahmad Yusuf S - 15/377180/Ek/20230
Gede Satria Wiryapradnya - 15/381724/EK/20446
Hayat Zoheir MEB2913
 PRESENTATION OUTLINE

Industry
Overview Product Conclusion

Company 5 FORCES
Overview ANALYSIS

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Industry Overview
MARKET SHARE

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 MARKET SHARE

● Global market grew by 9.1%

● Samsung and Apple remain In the lead but they are losing market share as Chinese smartphone
manufacturers ( Xiaomi, Lenovo, Oppo and Vivo are driving sales with their competitively priced,
high quality smartphones equipped with innovative features
● In aggregate they make up 30.2% of actively used mobile devices in the world today, versus Apple’s
34.8% and samsung 23.5%

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Production Units

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Samsung Company Overview
SAMSUNG

our office

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 COMPANY OVERVIEW

PRODUCTS

FOUNDED Smartphones, CEO

1938 Home Appliances, Jong-Kyun Shin
TV, other
electronics

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Product Line

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 Advertising Video

Samsung Galaxy S8 and 8+

https://www.youtube.com/watch?v=D8Ert5yjMV4

Samsung Galaxy Note 8

https://www.youtube.com/watch?v=RKYjdTiMkXM

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Product: Smartphones
 WHY SMARTPHONES?

SMARTPHONES MAKE UP A LARGE PORTION OF

SAMSUNG’S SALES & PROFIT
Porter’s Five Forces Analysis
PORTER’S FIVE FORCES ANALYSIS

Threat of New Entrants

Bargaining Power of Internal Bargaining Power of Buyer

Supplier Rivalry

Substitutes &
Complements
Internal Rivalry

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 COMPETITION

● Intense competition with a few and concentrated firm in the business

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 PRICE WARS

● Intense competition with a few and concentrated firm in the business

○ Top Players: iPhone and Chinese mobile phone
○ Market Share Data

● Price wars
○ pricing on Galaxy S models in Asia have dropped by nearly 50% to combat upstart brands
like Micromax and Karbonn

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 BRAND

“THE NEXT BIG THING”

 BRAND LOYALTY

“About 58% of Samsung users

who upgraded chose a new
Samsung device in 2013”

HIGH BRAND LOYALTY

Source: Business Insider 23

 TECHNOLOGY

Companies races to implement it technology to improve its feature such as :

● Screen
● Battery life
● Operating speed
● Audio quality

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Internal rivalry is:

HIGH

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Threat of New
Entrants
 PRODUCT DIFFERENTIATION

A SERIES J SERIES S SERIES

PRODUCTS ARE PRODUCT DIFFERENTIATION

DIFFERENTIATED IS SHORT-LIVED
S SERIES LINEUP - INNOVATION

Galaxy S Galaxy S II Galaxy S III Galaxy S4

Release: June 2010 Release: April 2011 Release: May 2012 Release: April 2013
1GHz Processor 1.2GHz Processor 1.4GHz Processor 1.9GHz Processor
0.5GB RAM 0.75GB RAM 1.0GB RAM 2.0GB RAM
5 megapixel Camera 8 megapixel Camera 8 megapixel Camera 13 megapixel Camera

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S SERIES LINEUP - INNOVATION

Galaxy S5 Galaxy S6 | S6 Edge Galaxy S7 | S7 Edge

Release: April 2014 Release: April 2015 Release: February 2016
2.5GHz Processor Octa-Core Processor Octa-Core Processor
2GB RAM 3GB RAM 3GB RAM
16 megapixel Camera 16 megapixel Camera Additional dual-pixel
lowlight Camera
PRODUCT PROFILE
Samsung Galaxy S8 | S8+

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 CAPITAL REQUIREMENT

● Smartphone companies require large capital to enter and remain in the market

● Samsung’s production is capital-intensive

● Is dependent on high-end technology and innovation

25.5 Trillion KRW

CAPITAL EXPENDITURE (2015)

Source: Samsung Newsroom, The Guardian

 SWITCHING COST

● Users face relatively high switching cost.

● SAMSUNG owners are considered loyal to their brand.

● SAMSUNG has integrated different aspects of consumers’ lives with their product
 GOVERNMENT POLICIES
● The Indonesian National Research
Committee is demanding an act on
technological innovation, forbidding
R&D budget cuts.
● The Government is compiling Rencana
Induk Riset Nasional with 10 focuses on
strategic technological research
Source: Beritasatu, ZDnet
The Government Policy in Indonesia is
now growing to be even more
supportive of technological
developments in Indonesia, including
support towards the smartphone
industry
threat of new entrants is:

LOW

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Bargaining Power
of Supplier
 NUMBER OF SUPPLIERS

● Depends only on one Operating System: Android Google

● Android Google partners with many electronics companies, but Samsung is the
largest partner of Android Google

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 SUPPLIER PRODUCTS

● SAMSUNG is its own supplier for most of its components

● These include components such as processors, memory and storage components, as well
as raw materials

● SAMSUNG even supplies some components for its competitors

 Bargaining power of suppliers is:

MEDIUM - LOW

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Bargaining Power
of Buyer
 BARGAINING POWER OF BUYER

● Product differentiation of Samsung is easily copied by competitors, with the exception of newly
developed technology

● Companies differentiate their product in terms of hardware and operating system,

Camera quality, screen size, resolution, Design

● Buyers have substantial access to market information

● Buyers have a lot of choices in the market

 BARGAINING POWER OF BUYER

● Competition between existing firms is also very tight

● Other companies can sell at lower prices

Oppo Apple Huawei

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Bargaining power of buyers is:

HIGH

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Substitutes and
Complements
 Similarity in Function

- Communication;
- Landlines, Internet services (E-mail, social media…), “Dumb-phone”

- Instant access to and distribution of information;

- Laptops, Tablets, Print media (Newspapers, Magazines…)

- Photography
- Cameras

- Planning
- Agendas, Calendars, Smart watches

- All functions of the mobile phone can be carried out by other individual products which
are globally available in either physical or virtual stores.
- Therefore, the closest substitutes from a functional perspective would be tablets.
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 Similarity in Function

AR glass is being developed by Facebook.

Using Brain-computer-interface (BCI)
Technology.

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Threat of substitutes is:

Medium

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Conclusion
CONCLUSION

Force Threat to Profits

Internal Rivalry HIGH

Threat of New Entrants LOW

Bargaining Power of Supplier MEDIUM - LOW

Bargaining Power of Buyer HIGH

Substitutes/Complements MEDIUM

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CONCLUSION

- Main issue; the high level of rivalry in the smartphone market

- Recommendations; Samsung pay a close attention to competitor’s new product and

marketing strategy. Read the market’s to develop the right kind of technology that can appeal to
customers and applying it correctly avoiding their mistake with the note 7.

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CONCLUSION

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Thank You!