Samsung Porter’s 5 Five Forces: 2022 Detailed Overview

Porter’s Five Forces Analysis of Samsung



Key Facts


Name Samsung Electronics Co Ltd
Industry Semiconductors, Electronics, Electrical Engineering, Technology Hardware & Equipment
Founded January 13, 1969
Headquarters Suwon-si, South Korea
Founder Lee Byung-chul
CEOs Dr. Kye Hyun Kyung
Revenues US $ 244.388billion for 2021(audited) and for 3rd quarter Sept,2022 US $ 182.881 billion(reviewed)
Profit US $34.301 billion for 2021(audited) and for 3rd quarter Sept,2022 US $ 24.64 billion(reviewed)
Year end 31st December
Competitors D-Link, Cisco, Huawei, Dell Technologies, NETGEAR, ZTE, Alcatel-Lucent Enterprise, Fortinet.




Company Overview


Samsung Electronics was founded in 1969 and quickly became a major manufacturer in the Korean market.During this initial period a burst of growth came from the burgeoning home electronics business and the company began exporting its products for the first time. Samsung Electronics also acquired a 50 percent stake in Korea Semiconductor; further solidifying Samsung Electronics’ position as a leader in semiconductor manufacturing.The company reported annual revenue for 2021 is US $ 244.388 billion and annual net profit for 2021 is US $ 24.64 billion. Samsung has a brand value of US $74.64 billion as per Statista. The company has net assets worth US $266.49 billion in 2021.


Porter’s Five Forces Analysis


Porter’s Five Forces Analysis is a widely used model to evaluate companies’ strategies in reference to its industry for neutralizing the competition and increase the margins, it is developed by Professor Michael E. Porter in 1979, at Harvard Business School.


Samsung Rivalry among Existing Competitor


  • Samsung Business Segments: Samsung Electronics has four major divisions including digital media, semiconductor, telecommunication network, and LCD digital appliances. With 32 factories in 14 countries around the globe. In 2021, the Korean conglomerate Samsung had 266,673 employees worldwide. At its headquarter in South Korea alone, Samsung employed more than a hundred thousand workers as of September 2021.
  • Samsung Global Operations Year 2021: Global smartphone sales reached 1.43 billion units during 2021, showing signs of recovery following a considerable drop in sales in 2020 attributable to the COVID-19 pandemic. In the fourth quarter of 2021, Samsung sold nearly 69 million smartphones to end users worldwide. As of 2021, Samsung held 30.8 percent of the global TV market share. As of 2021, global mobile phone shipmentstotaled over 1.67 billion units; in that same period Samsung’s smartphone shipments amounted to almost 70 million units.

The highest revenue generated from America 35%, Europe second largest market 18%, China 16.3 % , Korea 15.7%  and Asia and Africa 15%.


Cisco is also proved to be one of key players by giving a record sale of US $ 51.557 billion and a US $11.812 billion net profit of for the year ended 31 July 2022.Total revenue increased by 3% compared with fiscal 2021. Within total revenue, product revenue increased by 6% and servicerevenue decreased by 2%. In fiscal 2022, total software revenue was flat at $15.1 billion across all product areas and service. Within total software revenue, subscription revenue increased 3%.

From a product category perspective, total product revenue increased 6% year over year, driven by growth in revenue in Secure,Agile Networks of 5%; Internet for the Future of 17%; End-to-End Security of 9% and Optimized Application Experiences of11%; partially offset by a product revenue decline in Collaboration of 5%.

In terms of our geographic segments, revenue from the Americas increased by $0.7 billion, EMEA revenue increased by$0.8 billion and revenue in our APJC segment increased by $0.3 billion.

Philips is also one of the competitors, generating sales of €17.156 billion, with a net income of €3.319 billion in 2021. During the year, most revenues were generated in the United States with approximately 6.4 billion euros of sales. In China Philips had roughly 2.3 billion euros of sales, whereas Japan had approximately 1.1 billion sales and had the biggest sales of Europe. Philips’ country of origin, which is the Netherlands, had 570 million euros of sales in 2021, Philips generated approximately 8.6 billion euros in sales from its diagnosis and treatment segment. This was an increase in comparison to the sales value from the preceding two years. Within the diagnostic and treatment segment, sales of diagnostic imaging products accounted for 40 percent of all revenues. Furthermore, personal health accounted for 5.4 billion euros of sales in 2020  as per Statista.In France, Philips and Rennes University Hospital signed a 5-year technology, research and innovation partnership to advance patient care

Investment in Research & Development-Marketing Cost and Brand Image: The existing battles among the competitors with a challenge of changing trend towards technological advancement, high quality but low prices and being environmental friendly requires high investments in research and development to better design the product for an accelerated customer satisfaction. Samsung also needs to focus the marketing cost to increase the brand image and better customer loyalty.


Samsung Threat of New Entrants


  • Global Consumer Electronics and SemiconductorIndustry: Revenue in the Consumer Electronics market amounts to US$1,103.00bn in 2023. The market is expected to grow annually by 2.17% (CAGR 2023-2027).The market’s largest segment is the segment Telephony with a market volume of US$498.30bn in 2023.

Revenue in the Semiconductors market is projected to reach US$599.80bn in 2023.The market’s largest segment is Integrated Circuits with a projected market volume of US$488.80bn in 2023. Revenue is expected to show an annual growth rate (CAGR 2023-2027) of 8.09%, resulting in a market volume of US$818.60bn by 2027.

  • High Capital Investment- Trained Human Resources:The new entrant will be requiring high capital investment, with extensive and sophisticated manufacturing-assembling structure so it is discouraging barrier for any new entrant. As due to the specialized nature of the product only limited human resource can handle such high-end products.
  • High Research & Development Cost:High research and development cost is required for launching any new product in the current engineering and technological industry.
  • Technological Advancement:Due to the changing trend in consumer electronic, semiconductor and engineering industry towards technological advancement, only high technological advance companies or groups can enter such a market.


Samsung Bargaining Power of Suppliers


  • Large Number of Suppliers: There is low level of differentiation and there are many suppliers in the industry. Majority of the manufacturing operations are outsourced to under developed countries, where suppliers strive to get contract with big brands. Therefore; suppliers have less influence.


  • Suppliers Collaboration:Samsung Electronics has an enormous supply chain consisting of some 2,500 suppliers with 32 factories in 14 countries around the globe. The company has close ties and collaboration with the suppliers and practices Green Management with its suppliers


Samsung Bargaining Power of Buyers


  • Low Product Differentiation: The buyers of consumer electronics industry holds low power. When shifting from one leading brand to another customers may receive similar quality and price ,thus switching does not bring a significant change in the product that customer needs due to low product differentiation.


  • Customer Satisfaction – After Sales Services: The requirements of the after sales services include prompt reply to complaints, timely return and exchange etc.Customer feedback, customer satisfaction and continuous innovation is important to retain the market share.In 2022, Apple and Samsung received an American customer satisfaction index score of 80 out of 100 for cellular telephone/smartphone manufacturers/brands in the United States.In February 2022, the smartphone giant Samsung was the mobile device brand with the highest customer satisfaction in Nigeria, with 88 percent of participants involved in a survey indicating to be satisfied with their products.
  • Government Rules & Regulations: Changing government rules and regulations are formulated in the favor of customers which added in the buying bargain power.


Samsung Threat of Substitute Products or Services


  • Brand Loyalty:The substitute for Samsung products are the competitors within the industry as customer can easily switch from one brand to another with low switching cost, usually because of lower prices but poor quality, so any substitution can only be replaced at the cost of brand loyalty.





  1. Leading brands worldwide in 2021, by brand value(Jan 6, 2023)| Available at Statista
  2. Number of Samsung Electronics employees worldwide from 2009 to 2021(Aug 12, 2022)| Available at Statista
  3. Samsung Electronics’ global revenue from 2005 to 2021(Jul 27, 2022)| Available at Statista
  4. 3 Must-Haves For Intelligent Manufacturing| Available at Forbes
  5. Samsung History| Available at Samsung
  6. Basic information about Samsung| Available at Forbes
  7. Leading brands worldwide in 2021, by brand value(Jan 6, 2023)| Available at Statista
  8. Customer satisfaction of selected mobile device brands in Nigeria in February 2022(Jan 18, 2023)| Available at Statista
  9. American customer satisfaction index scores for cellular telephone/smartphone manufacturers/brands in the United States from 2018 to 2022(Oct 18, 2022)| Available at Statista
  10. Samsung 3rd Quarter financial report 2022| Available at Samsung
  11. Samsung annual financial report 2022| Available at Samsung
  12. Consumer Electronics – Worldwide| Available at Statista
  13. Forecast number of mobile devices worldwide from 2020 to 2025 (in billions)(Oct 18, 2022)| Available at Statista
  14. Semiconductors – Worldwide| Available at Statista
  15. Smartphone unit shipments of Samsung worldwide by quarter from 1st quarter 2010 to 2nd quarter 2022(Nov 24, 2022)| Available at Statista
  16. Samsung Electronics’ global revenue from 2005 to 2021(Jul 27, 2022)| Available at Statista
  17. Cisco annual financial report 2022| Available at Cisco


Recent Posts