Porters 5 Forces

Sonia’s smoothies 1) Nick calculated that of 200 customers who completed the questionnaire at the rock festival, the mean age was 23. The age distribution conformed to a curve of normal distribution with a standard deviation of 5. Calculate the number of customers aged 33 and over who featured in Sonia’s survey (33-23)? 5 = 2 2% of 200= 4 Answer= 4 2) With reference to the report on the UK smoothie market (appendix 2) analyse two limitations of using secondary sources as the basis of Sonia's decision making. Secondary research is one that is carried by a third party and not yourself.The information is collected as it may serve propose in the information you need even though it may have been collected for a different research. There are however some limitations of Sonia using this secondary research whilst making a decision on what smoothie flavours to bring out. In this essay I will discuss these and give my opinion on whether Sonia should or shouldn’t solely bas e the decision on this information. The first limitation of using secondary research is that it may be several years old and may not reflect the current market conditions.If this is the case for Sonia then it would mean that she may be releasing a flavour into a market that no longer exists. This would mean that her sales will not be as high as she would of hoped, it would also mean that her costs will rise as she would be producing smoothies unaware that these are not going to sell. The impact of both of these things happening will result in Sonia losing profit. This one example shows that for Sonia to solely base her decision on secondary research it would not be good for her business as she could lose out on a lot of potential customers.The second limitation of using secondary research is that it may not be accurate and reliable as it may be biased. If this does happen then it would mean that Sonia would be making a decision on information that is not 100% accurate and true. This would be misleading for her as she would be making a decision based upon something which is not going to benefit her at all. This would result in her again losing profits as her costing will rise through producing the goods and sales being low. This again shows us that if Sonia does make a decision solely based on the secondary research it may result in failure of the product she releases.In conclusion I think that Sonia should use secondary research as it gives her a basic idea about what is happening or has happened in the market which will give her a slight idea but it should be used in conjunction with some primary research such as questionnaires so Sonia 100% accurate data and knowledge. If this is done then it would ensure that the decision being made will be the correct one resulting in the success of the product she releases. 3) Discuss why nick might have recommended that Sonia should not base any decisions on the rock festival research.The rock festival research is a type of primary research. Primary research is one that is collected by yourself. In this essay I am going to discuss the reasons why Nick may have recommended Sonia do not make decisions solely based on the rock festival research, I will then come to a conclusion as to what Sonia should do to ensure the decision being made is the right one. Firstly by carrying out the rock festival research it means only targeting one group of people, therefore other groups such as families and children would be missed out.The consequence of Sonia making her decisions on just the rock festival research could be misleading as she has not taken into consideration groups that may be her major customers. For example families may be her major target audience and if Sonia makes a decision based on a group other than the families she could release a non desirable flavour. If this does happen then it would mean that she could be releasing a flavour that is not in demand which would result in less sales and this less potential profits.It would also mean that her costs will rise through production and this would be wasted money as she may not be able to sell these products. Secondly the response that Sonia may get from the people attending the rock festival may not be 100% accurate as they may not give the correct answers as they will want to enjoy the event itself. For example Sonia may approach an attendee at the rock festival and ask them questions but they may not give thought out answers as they are focusing on the music itself.If this does occur and Sonia does make a decision on this information it could mean that she is making a product which is based on incorrect data which could affect her sales which will make the released product less profitable. I think that Sonia should not base her decisions solely based on the rock festival. I however do think using a method of primary research is a good start to making a decision but she could have thought out where the questionnaires would be conducted a little better. For example she could have done it in a high street where there is a variety of people which would give her better feedback.For Sonia to base her decision solely on this it may result in her getting inaccurate results which would mean that the product released may not be as successful as it could be. I think that if Sonia wants to make the product as effective as it can be she should take do the primary research (questionnaire) in a more suitable place such as the high street. I also think that it should be used in conjunction with another type of research such as the secondary research that she had collected before.By using both types of information it will give her more of an understanding as to what a customer wants and it would make her decision making process a lot more easy and accurate. 4) If Sonia decides to use a market research agency to investigate the new smoothie flavours, analyse two ways they might use a quota sample. Quota sampling is a sample created by gathering a predefined number of participants from each of several predetermined categories, for example choosing 25 people both from the categories male and female.There are many advantages of using quota sampling one of which is that it clearly shows the demand from each of the categories. Sonia may want to decide to use a market research agency to investigate new smoothie flavours. I am going to analyse two reasons why they may use quota sampling whilst doing the research for Sonia. The first reason why the market research agency may use quota sampling is so that they can determine clearly what each group of people would like. For example once the research has been done using the groups male and female they can determine what each group wants and can look at the rends. By having this type of sampling it would give Sonia an idea of the wants of each group and she can then make her decision based upon this. I think that this type of sampling would be very good for Sonia as the market she is entering is one which is different according to people’s personal preferences and by understanding what each category wants she can make a decision so that she can cater for all of them. The second reason why quota sampling may be done is because it is a cheaper method as opposed to taster sampling.Taster sampling is when samples are given out to random customers to get their opinion on things, this means that the costs involved are very high as products are actually given away. By doing quota sampling it means that the cost of actually giving out products is avoided, this would mean that the cost that Sonia has to pay the agency will be less meaning her costs will stay down. 5) Discuss methods of primary research the market research agency might use to investigate new smoothie flavours for Sonia’s smoothies.Primary research is one that is done and collected by yourself, primary research can be split into three categories; test marketing, su rveys and observations, these can be then split even further into the actual activities. There are many types of primary research that can be undertaken and in this essay I am going to discuss some that the research agency may take up in order to investigate new smoothie flavours for Sonia’s smoothies. The first type of primary research that can be done is questionnaires; these are types of surveys.This method is a very good way of getting back answers from the customers as it can be both qualitative information and quantative information. Questionnaires can be either done in person but can also be done through post. Questionnaires are the most common type and I think that for Sonia smoothies it would be a very good method as she can get a lot of feedback from potential customers. this information would give her a very good idea of what the customers will want and it would help her make the correct decision.The correct decision will intern help her make profit as she knows sh e has the right product for the right market. However whilst doing questionnaires they will have to make sure that they do not annoy the potential customers through a lot of phone calls etc as this could result in the business losing its reputation and potential sales. The second type of primary research that the market research agency may undertake is consumer panels. A consumer panel is a group meeting that is held whereby questions are asked and noted to give the results.The advantage of consumer panels is that the information is likely to be accurate as the people attending it will have a lot of time to answer the questions meaning that they can thoroughly answer them. The disadvantage is that this type of research is that it may be more costly as the premises etc will have to be organised. This is a very good type of research as it allows qualitative information to be collected as well as opinions however I do not think that it is entirely suitable for Sonia smoothies as she do es not necessarily need discussions to take place as all she wants is opinions of flavours and what customers want.Therefore I think that this method is not entirely suitable for Sonia smoothies. Another type of primary research that can be undertaken is taster sampling. This is when samples are given of the product and feedback is received by potential customers. This type of method is very good for a product that people will have different opinions on as it allows feedback from all types of people. Although there is a short term cost of actually producing these samples the long term affect it could have is a positive one as it would mean that the right product is being sold to the customers thus increasing sales and profits.I think that this is a very suitable type of research that can be done by the market research agency as it would not only allow Sonia to get feedback for certain flavours it will also increase brand awareness which would help her in the long run. Furthermore th e market research agency may ask supermarkets about the best selling smoothies in their stores. This is a method of primary research as it will be done by themselves. This is a fairly cheap method of research as all it involves is contacting the supermarket with what they need.I think that this is a very good method of research for the market research agency to use as it will help Sonia identify which are the best selling types of products and she could use this information whilst making hers. However Sonia wants to create a new smoothie flavour so copying other flavours may not necessarily be the best option. A way in which Sonia could avoid copying is to maybe mix the two top selling smoothies in the store for example mango and peach flavoured smoothie; this would be different and unique. As a whole I think this method s fairly good in helping Sonia identify what flavours the customer tend to buy. As you can see there are various types or primary research methods that the market r esearch agency can undertake for Sonia smoothies. I think Sonia should use a combination of these. Firstly she should use questionnaires to ask the potential customers what types of flavours that they would like. Once this is done she can begin to make the samples for taster sampling which will then give her brand reputation as well as the opinion of customers. By doing this it would ensure that the research done is thorough helping her make her final decisions.As a whole I think to maximise effectiveness Sonia should use a combination of research methods to get a lot of peoples opinions. 6) Evaluate the importance of market research for Sonia’s smoothies LTD in making decisions over expansion. Market research is a systematic, objective collection and analysis of data about a particular market. There are many ways to carry out market research. In this essay I will evaluate the importance of Sonia’s smoothies using market research and will give my opinion of how it shou ld be carried out.Sonia smoothies has three man ways that she has identified so that the business can expand further, these are; expanding geographically, by seeking to distribute through a wider range of outlets and lastly expanding the range of flavours that they have. Firstly I am going to talk about the importance of using market research for the third aim of expanding its range of flavours. I think it is very important for Sonia smoothies to use market research as the smoothie market is one which is ever changing through new flavours and changing external factors such as health issues.By doing market research before releasing the product it would help the business understand the current market so that when they do release the new products they know that it is going to work in this market. By ensuring that the product being released is current it would help them increase their sales and profits, intern this would also have a knock on effect on helping them to achieve their first aim of expanding geographically as they will now have the money to do so. Secondly having the arket research can not only be a method for the company to release new products but it can also increase brand awareness as doing things like taster research will make people more aware of the company. If this happens then it could help them with their sales as people would be more aware and will be more confident in buying the product as they have already tasted it. By increasing the brand awareness it would mean that the sales will increase thus helping their profits. As you can see market research has more purpose for Sonia smoothies than just helping them to release new products.It is very important that Sonia’s smoothie takes out the necessary research so that they are successful in achieving their aims. Although market research brings a short term cost in the long run these costs will be covered by the success of the product depending on how well the research is done. Secondly is Sonia smoothie’s aim of distributing their products through a wider range of outlets than just health foods shops and events. There are many ways that market research will enable Sonia smoothies whilst making a decision as to what retailers to choose.Firstly market research can help them to choose the most effective shop. for example it can be used to see which shop has the least competition in it. By using market research to look at such things then it will help the success of the product as they will know that they do not have a lot of competition meaning that their product is more likely to be successful. This type of market research is vital as the market is always changing and the competition is always changing so for Sonia smoothies to have a competitive edge they will have to ensure that they have more sales.This is very important because if there are a lot of competitors it would reduce sales and intern decrease the amount of profits that are made. The second way that the market research may be used for this aim is to look at what retailers sell the most smoothies. By looking at this it will ensure that the smoothies that are made have the necessary demand. This is very important as it would ensure that sales can be made. Increased sales would mean bigger profits. however whilst doing this they will also have to look at the level of competition.As you can see market research is again very important in helping Sonia smoothies in their aim of expanding the number of retailers that they sell in. by increasing this it would help them increase brand awareness which will this increase the sales and profit. An increase in profit will help the business as it would mean that it will help them with their first aim of expanding geographically. Lastly Sonia smoothies has a aim of expanding the geographical area in which the smoothies are sold.This is linked to the second aim of selling through more retailers as that could help them do this. Market resea rch again plays a vital role in making the decision as to where to expand. For example market research can be used to see where there are there is the largest number of children for example (using children as Sonia smoothie’s main customers) by doing this it would give them a good perspective as to where there is a large number of their target audience. By having a lot of people that they can sell to it will increase their sales which will intern increase their profits.Market research is very important in using this as the market is ever changing and there is no point of geographically expanding into an area where the sales are not likely to be high as it would be a waste of money. In conclusion the importance of market research is very high as it could help the business achieve all of their aims that they have set. All the aims are interlinked for example increasing the range of flavours and selling these flavours through more retailers would mean increased sales, increased sales would result in higher profits which can then be used to fund for the geographical expansion.Because of this Sonia smoothies will have to ensure whilst doing the market research that it is done thoroughly, however they also have to keep an eye on the cost of the market research as they do not want to do it in such a depth where it costs them too much. If Sonia smoothies takes out the necessary market research then it could help them achieve all of their objectives of expansion, without market research the business cannot achieve their aims as effectively. Porters 5 Forces PORTER’S FIVE FORCES 4 Power of Suppliers Criteria Level Effect on Power Effect on Profit Difference of Inputs High Increases Decreases Cost of Switching Suppliers High Increases Decreases Threat of Forward Integration High Increases Decreases Supplier Concentration High Increases Decreases Difference of Inputs ?Product differentiation within inputs in the tech industry is largely dependent on how recently the input has been developed (the extent of which it is considered cutting edge). In cases where component innovations are the property of the supplier prices increase to compensate.However, in cases where products are low tech, older innovations, product differentiation is minimal. In some cases the differentiation between products may be so extreme that companies are forced to buy components from a direct competitor, just as Apple purchased roughly $8 billion worth of parts from Samsung last year (Levine 2013). Since newer, more recent technology is where the vast majority of profits are in the tech sector the level of difference of inputs is going to be considered high.This then increases the level of the bargaining power of suppliers put pressure on the company’s profit margin. Cost of Switching Suppliers ?Companies within the tech sector design their products around certain components, impacting size, shape, weight and function. If a company is to change their component supplier then the product will have to be reengineered, costing the company time and resources that could be allocated elsewhere. These then threatens the company’s ability to compete, stay relevant and develop newer products in a market with a high product turnover rate.Thus company’s have a high cost of switching suppliers, which in turn increases the bargaining power of suppliers which puts pressure on the buy’s margin and profitability. Threat of Forward Integration ?Forward integration, the ability of a supplier to enter a state of competition with their buyer (â€Å"Porter's Five Forces† 2012) is extremely high in the tech sector. For instance, MSI and ASUS, two long time component suppliers have both entered a state of direct competition with companies such as HP and Dell, who they still supply components for (â€Å"ASUS† 2012).Because component suppliers often have a majority of all of needed parts to make the final product they can easily enter the market, and while their products may not be on the cutting edge they are solid competitors. This threat of forward integration increases the bargaining power of suppliers, which decreases the profitability of the buyer. Supplier Concentration ?Supplier concentration refers to the strength of market share the top suppliers in the industry have in relation to the total industry (â€Å"Porter Model – Suppliers † 2010).Many of the larger tech companies have large market shares in their specific specialization, for instance Samsung has 97% of the world mar ket share in OLEDs (Choi 2011), 40. 4% in DRAM (Liu 2010), and 40. 4% in NAND flash (â€Å"Samsung Expands† 2012). ASUS currently controls 40% of the world’s motherboard market (â€Å"ASUS† 2012), while Intel controls 82. 3% of the global processor market (Shilov 2012). This extremely high supplier concentration results in a very large increase in supplier power, which drastically decreases buyer profitability. Summary The technology sector is rather brutal on buyers when it comes to their relationship with suppliers, who have a disproportionate amount of bargaining power with every category going in their favor. The difference in inputs, cost of switching suppliers, threat of forward integration and supplier concentration all favor an increase in supplier bargaining power and a decrease in buyer profitability. With all these factors considered it comes as no surprise that many companies make and develop their own components or are previous suppliers who have un dergone forward integration.Power of Buyers Criteria Level Effect on Power Effect on Profit Product Differentiation Low Low Decreases Number of Buyers/Sellers High High Increases Switching Costs Low High Limits Profitability Access to Information High High Degreases Access to Information ?The more information the buyers have, the better the bargaining power they are in. With all of the product information that can be accessed via the Internet, it gives the buyers added bargaining power. The Internet is a powerful tool for consumers.Buyers can easily use the Internet to compare prices, features, packages, and find great deals at the time of a purchase. There are many buyers who use the internet to access information and the effect on power is very strong which leads to having decreasing profitability for the whole industry. Switching Costs ?Buyers who can switch brands at any given time due to a low switching cost have more leverage than buyers who have high switching costs. The swit ching costs for this industry are low and have a high effect on bargaining leverage for the buyer. This leads to having limiting profitability for the industry.It limits the profitability because in principle, it puts a cap on how much producers can raise or reduce quality before they will lose the buyers business. However, in a few cases the switching costs can be high. When buyers purchase a phone, they can be purchased at a low price but with that it comes with a 2 or 3 year contract with a given provider. If this contract is breached, large fees are usually acquired by the customer. During this contract if a customer would like to purchase a new phone then they will have to pay full price for their purchase if their provider does not allow non-contract purchases.Product Differentiation ?In certain industries buyers will make their selection based on prices — which would increase price completion among companies. When the products are differentiated then the buyer’s options will be limited. Unfortunately, in the industry Samsung is currently in the product differentiation is low. This has a strong impact on buyer bargaining power and results in lower profitability. When we take a look at Samsung’s Galaxy Tablet compared with the ipad, we can see many similarities among the two products.The price is very similar, size, as well as features, and even the battery life. Number of Buyers ?In this industry, there are many buyers that it can attract. Since Samsung makes products such as mobile phones, tablets, laptops, TV’s, cameras, and much more they have many buyers since most of the items mentioned everyone has. The more buyers in a given industry results in more sellers the company will have to compete with and more alternatives a buyer can choose from. The larger the buyers as well as the number of sellers, means the customer is more important to the sellers business.Summary ?The overall buyer bargaining power for the industry that Samsung is in would be labeled as high. This creates a few challenges for Samsung as it makes the market very competitive, leaves little room for error, and creating a following for the company. With the buyers having most of the power the chances for profitability can be difficult to reach but Samsung has done a great job reaching good profitability. They have handled the high effects of buyer bargaining power very well and have been gaining more buyer loyalty. Threat of SubstitutesCriteria Level Effect on Threat Effect on Profit Relative Price of Substitutes Low Increases Threat Decreases Profitability Relative Performance of Substitutes High Increases Threat Decreases Profitability Switching Costs High Decrease Threat Increases Profitability Buyer Propensity to Substitute Low Decreases Threat Increases Profitability Relative Price of Substitutes ?When it comes to the price of substitutes in the electronics industry, it really depends on the particular product being considered, b ut overall, they are fairly low.For example, if someone is looking to replace their laptop and is looking for a product that can satisfy their need to access the internet and communicate with others, they could consider purchasing a tablet, which is fairly inexpensive compared to the price of some computers. (Spoonauer 2011) The low cost of substitutes increases the threat on businesses because they are at risk of losing customers to the businesses that are offering lower priced substitutes. This loss of business would decrease their profitability. Relative Performance of Substitutes As with the price of substitutes, the performance of substitutes also depends on the particular products being considered, but overall the performance is fairly high. Technology has rapidly advanced throughout the past few years, which has led companies to create devices that allow users to complete many tasks on one device, rather than have separate devices for each task. Someone that normally uses a l aptop to access their email and chat with friends on social networking websites can now access those same things on a tablet, which is a much smaller and convenient device. Biggs 2011) The high performance of substitutes leads to increased threat, because customers are more likely to switch to a product that is high quality and extremely convenient. The increased threat would ultimately decrease the profitability, because it would be difficult for them to compete with a company that is offering a higher quality product. Switching Costs ?Depending on the individual customer, switching costs could be high or low. Switching costs tend to be high with electronics, because making the decision to purchase a new product usually takes some time and research. Chen 2000) It is risky to purchase an electronic device without looking up product information and customer reviews beforehand. Switching costs can also be high because it takes time to get used to a new product and figure out all of th e capabilities and features. This can be a time consuming as well as frustrating process. High switching costs leads to a decrease in overall threat, because many customers do not want to switch products if it involves a lot of time and effort. It is much easier to stick with a product that is familiar rather than try to learn something completely new.This will lead to an increase in profitability because customers won't want to switch to a new product offering from a different company. Buyer Propensity to Substitute ?Overall, buyer propensity to substitute is fairly low, with a few exceptions. Most people are satisfied with the products they are using and are not looking to switch products all the time and look for the most recent technology. Many people who have laptops would never consider buying a tablet, because a laptop does everything a tablet does, minus the convenient size. But there are people who are always looking for the most echnologically advanced products and they ar e more than willing to substitute their products. Some people like the convenience of a tablet and would gladly replace their bulky laptop with it. (Adhi Techno 2012) Because buyer propensity to substitute is fairly low, it decreases the threat of substitution, since most people don't have a need to switch out their current products. This ultimately increases profitability, because customers are remaining with that product rather than switching to a company that offers something else. Overall Threat of Substitution Overall, the threat of substitution has roughly the same negative and positive impact on profitability. The low price and high performance of substitutes draws customers away from the business and encourages them to look to those substitutes to satisfy their needs, thus decreasing profitability. High switching costs and low buyer propensity to substitute have a positive impact on profitability, because customers would rather stick with their products rather than take the time and effort to find a new product to satisfy their needs. Threat of New Entrants Criteria Level Effect on Power Effect on Profit Product Differentiation High HighHigh Diversity of Competition Moderate Moderate Low Start-up Costs High High High Distribution High High High Product Differentiation ?According to Randy Khoo, author of â€Å"Why Apple is Very Afraid of Samsung,† Samsung carries itself through many different production areas even though most people believe Samsung only dabbles in the electronics market. At this time Samsung has 6. 5% of the IT Hardware market share, 7. 1% of the peripheral market share, 8. 5% of the converged devices market share and 5. 2% of the personal computer market share (Khoo, R). This means that the company’s ability to spread over a broad span of products is immense.According to Khoo, Samsung’s power could one day take over Apple’s entire market share. Diversity of Competition ?According to the U. S. Patent and Trad emark Office’s records from 2011, Samsung applied for the second most patents in the Nation. In 2011 alone, they applied for and were granted 4,868 patents, right behind International Business Machines Corporation, who were granted 6,148 patents. Samsung’s closest competitor, Panasonic Corporation, raked forth with 2,533 patents granted (Patenting by Organizations, 2011). Start-up Costs ?As for all electronics, start-up costs are extremely high.According to Craig Kuhn, author of â€Å"Barriers to Entry,† the start up costs for firms selling electronics are extremely high due to the amount of technology and materials needed to create a marketable product. ?Another aspect new firms need to think about is their incoming reputation when attempting to compete with very popular firms. These existing firms are knowledgeable about the industry and already maintain relationships with key manufactures and the biggest retailers. These new firms need to infiltrate these rel ationships in order to make way into the market, which isn’t easy (Kuhn, C).Distribution ?Randy Khoo, author of â€Å"Why Apple is Very Afraid of Samsung,† states that Samsung’s ability to sell their products anywhere is enormous. Since Apple strictly sells their products in their stores, through their website and through their strict distribution channels, Samsung has the ability to take over the market by selling their products anywhere that will accept them. â€Å"Samsung also has an existing distribution network from their existing businesses. This is of tremendous value†¦These distribution channels will also be there for the future dissemination of other Samsung products.This means that if they want to, it’s easy for them to market more than just electronics (Khoo, R). † Intensity of Rivalry Supposed to have four criteria. Criteria Level Effect on Power Effect on Profit Product Differentiation High Decrease Power Increase Switching Cost H igh Decrease Power Increase Diversity of Competitors High Decrease Power Increase Cost Product differentiation: ?According to Arthur Thompson, in his article, â€Å"Crafting and Executing Strategy,† â€Å"the essence if a broad differentiation strategy is to be unique in way that are valuable to a wide range of customers† (Thompson 2010).He also mentioned that, â€Å"a focused strategy to focus keyed to differentiation aim at securing a competitive advantage with product offering carefully designed to appeal to the unique preference and needs of a narrow, well defined group of buyers† (Thompson 2010). Broadly, Samsung faces many competitors who produce a wide range of electrical appliances. They have competitors like LG, Panasonic, GE and so on. In a small niche, differentiation is still a major factor that influences the sales of certain products.For example, in the cell phone industry, there is a lot of differentiation constantly appearing in the cell phone co mpetition, because differentiation can gain more advantage to their products. Therefore, the more differentiation their rivals make on their products, the less power Samsung has, and the more they will have to increase the cost of their phones. Switching cost: ?The majority of Samsung’s products are electrical appliances which require relatively high switching cost. According to Samsung, the common price of high tech products, like cell phone or tablet, is around $500.The price of big electrical appliances is usually more than $1,000 (Samsung, 2012). Compared to other low switching cost products, the majority of Samsung’s products have higher switching costs. Also, the life cycle of those products are long, which means as long as customers buy the products, it is not easy for them to switch. Therefore, there will be more competition to attract customers. That would decrease Samsung’s power, and they would drive up cost to make their products more attractive. Div ersity of competitors: ?There are many competitors in the electrical appliance industry.In the high tech industry, there are also many different competing companies. Apple is one of the main competitors in the high tech industry. According to Vaughan-Nichols, â€Å"Apple has sued Samsung around the world. Apple has made the same lousy patent design claims: Samsung has stolen the look and feel of its iPhone and iPad† (Vaughan-Nichols 2012). The more competitors an industry has, the more the companies will spend to compete against rivals. Apple is only one of those competitors. As the industry becomes more mature, the diversity of competitors becomes wider. Therefore, the effectiveness of Samsung’s power in the industry will decrease.In addition, the more competitors the industry has, the more money each competitor will put into the production and marketing of goods in order to increase brand identity and image. Therefore, the cost goes up. Overall Power of Rivalry: ?Ove rall, the power of rivalry would have a negative effect on Samsung. The influence would be losing power in the market and driving up costs. The major influence from rivalries would be differentiation of products, high switching costs and diversity of competitors. RESOURCES Adhi Techno (2012) â€Å"Top Five Reasons Tablets Will Substitute Laptops, Cellular Cell phones, and Pcs† Accessed 15 February 2013. ttp://adhi-id. blogspot. com/2012/04/top-five- reasons-tablets-will. html. ASUS, â€Å"ASUS. † Last modified 2012. Accessed February 18, 2013. http://www. asus. com/About_ASUS/Marks_in_History_ASUS_Motherboards/. 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