Although, Google’s operating system Android” allowed for any manufacturers to use and modify the SO for free (pig) the leading smartened companies had acquired patented technologies through mergers and acquisitions; technologies which would be used in the manufacturing of a smartened. (pig) The industry leaders share their technologies amongst themselves but would not make them available to new entrants into the market, most likely due to the fact that the new companies would not bring significant resources to the table to exchange patented technology with.
Another reason a new entrant would not be not able to enter the industry is because Of ongoing legal battles between the industry leaders for patent infringements, which means that new entrants must have significant capital to protect themselves if a legal battle were to start and also they were infringing on the patents they would have to also have enough capital to pay for the damages they would cause. In my opinion brand loyalty is also a factor that limits new companies from emerging in this industry due to the fact that the industry leaders spend billions on advertising and creating a community of loyal brand enthusiasts.
They also create products that work in sync with one another such as the phone, pod, and pad created by apple (pig), this makes the users decision to switch brands a very costly one and most of them choose to not switch companies for this reason. It will also be very costly to switch consumer’s opinions about the brand they have and trust versus a new company without much credibility. Based on these facts the threat of new entrants in the smartened industry is very low.
Threat of Us busiest The threat of substitutes in the smartened industry is extremely high, the main reason being that most of the phones are almost identical especially in the case of companies that use the Android SO with the exception of some differences in hardware amongst them (pig), because of this reason the brand Of the company is easily substitutable in the eyes Of the consumer because the features offered are very similar.
Although the leading companies always try to come up with new technologies and features they are quickly copied by rivals who make almost all smartness easily substitutable. There is also another substitute that already exists in the arrest which is the basic cell phone whose only functions are calling and testing. Many customers prefer the basic cell phone because it has a low cost and is not as costly to operate as a smartened which requires a data plan.
Bargaining power of Customers The bargaining power of customers in the smartened industry is medium, mostly due to the fact that the customers main focus is not the price but rather the new features and functionality of the device and also the status symbol it carries, a good example of this is customers choosing to buy phones over the next leading competitor, although they have almost identical features, customers buy the phone for its social status and prestige appeal.
On the other hand the industry is extremely competitive and the way companies differentiate their products is through the features it offers (pig); the choice in features gives the customer leverage against the smartened producers when they are buying a new phone. Bargaining power of Suppliers The bargaining power of suppliers for Samsung is extremely low but is very high in the smartened industry, the reason being that Samsung is its own supplier for almost all of the components that go into the production of the marathoner and even sell their component products to their rivals. pig 1) On the other hand, most of the other smartened companies are not vertically integrated the way Samsung is and therefore would not even exist were it not for their suppliers. Also the fact that there are a limited number of component suppliers with patented technologies (pig) gives the suppliers even more leverage over their customers.
Industry Rivalry Industry rivalry is extremely high mainly due to the fact that competitive advantage in the industry only last for a short period of time, because the impasses compete on product differentiation, when one company introduces a new technology in the market that new feature is quickly imitated by the competitors, an example of this would be the fingerprint scanner on the Phone as which was copied by Samsung in their Galaxy 55 model.
Also the fact that all the companies spend a lot of resources in R&D means that they are all aware of what the customer is looking for in a smartened and try to differentiate their product accordingly but because all the companies are doing so means that any competitive advantage they gain room a new feature will not last very long. 2. The generic competitive strategy that Samsung pursued was vertical integration and price/product differentiation. They produced their own components which helped them lower manufacturing costs for the smartness.
This allowed them to have a lower price for their products than that of their competitors but still offering the same features at a lower price point, they also have low-cost products that meet the requirements of most individuals at different and more affordable price points. Samsung also incorporates the latest technologies in heir new products to gain a competitive advantage over its rivals. The viability of this strategy was put to the test and Samsung emerged on top of the industry with highest worldwide market share and revenues. . Resources Competitive Advantage Sustainable Competitive Advantage Product Attractiveness o Employees Yes, because the more employees a company has the stronger it is in all aspects of the business Yes, because the more employees a company has the stronger it is in all aspects of the business Product attractiveness increases when more employees pursue a common goal, such as production of the lightship phone. Yes NO Yes Capital Yes, it allows the company to acquire new technologies without hindrance.
The more capital is spend on R&D the better the product turns out to be Yes No Capabilities In-house manufacturing Yes, lowers costs for company and customers Yes, because no Other company manufactures their own components Yes, the product is more attractive because it is manufactured from start to finish under one entity and those standards are applied throughout Yes Research and Development Yes, creates innovation which consumers demand No, because all companies allocate some resources to
Yes the product is more attractive because it was made with the final customer in mind based on the R&D Yes 4. In my opinion there are three main steps that Samsung should take in order to retain and gain even more worldwide market share. The first step the company should take is to strengthen its relationship with Google, the success of the Samsung SO was a collaborated effort between the two companies with excellent returns, by maintaining a strong relationship with Google the company can continue to create products that are innovative and appeal to the masses.
Also the fact that they own the operating system that lowed Samsung to reach new heights means that a bad relationship can take Samsung completely out of the game on the other hand a good relationship could lead to endless possibilities such as the development Of a new SO specifically for Samsung by Google.