Michael porter's five competitive forces and generetic strategies, market segmentation strategy and case study of competition in global smartphone manufacturing industry

Abstract

As per Porters five competitive strategies, to sustainably operate profitably, it is necessary for organizations to strategically deal with competition from both direct and indirect competitors who can affect the organization like influential customers, influential suppliers, new entrants, and substitute products. Market segmentation has proved to be an effective strategy in marketing of technology based products like smartphones. It was observed that the smartphone industry has a few players in manufacturing and with heavy capital costs limiting entry. The market is characterized by plenty of innovation through research and development which also increases the entry costs and harden exit for the players, the manufacturers are relatively few but competition can be said to be falling between intense and low. The suppliers have generally a lower bargaining power except for the software suppliers like google who have higher bargaining power. Smartphone manufacturers develop wide range of products targeting different market segments and in some cases phones with unique features are developed by various manufacturers as well as smartphones with different prices to suit different market segments. An analysis of the smartphone market shows that the market is approaching saturation in developed countries which also provide market for most of the smartphone sales but the developing countries like India and China have huge and fast market growth rates making the smartphone market growth to remain high globally. A combination of these factors and competitive forces show that the smartphone market is of moderate rivalry intensity and manufacturers can use a combination of different strategies to remain competitive. Market segmentation can facilitate implementation of the Porters generic strategies by smartphone manufacturers.