APPLE AND SAMSUNG

Question 1

Business strategies
Apple employs different strategies to stay on top of the game. First, it prices its products to customer segments. Apple has a tendency to lower the prices of certain products whenever it is launching new products. This enables it to capture new markets for its old products. By doing so, they are sure that products that are still in the market gets sold to those customers who cannot afford it at a higher price. Secondly, Apple listens to its customers. Apple has a tendency to keep avenues open for the consumers to communicate with it. One way it keeps them open is through the use of social media. Once it gets the opinion of consumers, Apple then acts upon the information and implements their concerns into new devices and hence becoming more customer friendly. Third, Apple keeps the eye open to the future. Apple has a tendency to create a euphoria in which consumers always tend to be waiting for the next product launch. This way, consumers at Apple know that Apple will be launching a better product next time and hence look forward to it (Newman, 2013).

Samsung has experienced a lot of growth in the recent past. While it had previously been known to produce cheap, low quality products, it now produces products that compete in the market with those of Apple Inc. The strategies of Samsung are twofold. First, it has decided to create products that inspire digital integration across the entire company. Second the company has improved its marketing strategy to help market to all segments of the company. It intends to produce and market products for all consumers.

Domestic and Global environments

Apple has an impressive relationship with its consumers both locally and internationally. This has led to increased sales, loyal customers everywhere. The company also thrives well in all its environments due to its big profit margin. It is therefore, able to cater for all its markets. Its biggest challenges are low wages for its workers and conflict with environmental bodies over environmental pollution.

Samsung has a good response as well from both the local and international environment. It has cheap products hence its reception in the markets. Its main challenges are its low profit margin and its competition from emerging markets.

Internal capabilities

Apple has the internal capabilities of manufacturing and marketing media and mobile communication devices, Mac computers, music players and their related software, services and applications.

Samsung has an internal capability to manufacture electronics, mobile devices, computers and computer parts, tablets and smart phones. They have an internal capability to perform all this in large scale.

The operations in Apple are mainly done in teamwork. Ideas are obtained from anyone, improved, assessed, and then published. If the ideas are viable for the company, they are adopted. Apple has a culture of innovation and creativity which helps then to work through their projects with much more ease.

Samsung manages its operations through internal competition. Different departments compete with each other hence making progress much faster than would be expected. Internal competition is what fuels external competition for Samsung.

Mission and vision

Apple has a mission to lead in the manufacture and sale of products that are within its profile. Its vision shows a desire to ensure that the customer experience when using their products is incomparable to that of their competitors. Its target market is mainly the students, creative personnel, professionals, and educators. This is in conformity with the goals by Apple to stay in command of their market using their innovation and skills that are only available at Apple

Samsung’s mission is based on inspiration. By inspiring the world, Samsung intends to participate in future creation. The mission is in conformity with Samsung’s commitment to participate in the improvement of the world through the development of creative solutions, new technology and innovative products. Through this vision, Samsung intends to map a difference in the technological world. It has not failed the people in the recent world

Question 2
Apple
Strengths

Escalating closed ecosystem combined with customer loyalty

Innovation – the company has a culture of innovation

Strong financial performance – the company registers revenue of more than 10 billion dollars yearly

Brand equity – their products have a market command and are seen as a sign of class by certain customers

Retail stores – Apple operates a chain of retail stores worldwide

Strong advertising and marketing teams – Apple benefits from very active team advertising and marketing teams

Weaknesses

Highly priced products – Apple is known to price its products up to twenty times its production cost. Its market values are always way higher than those of its competitors

Incompatibility with other operating systems – The OS Apple uses can only operate on their platforms; their devices also don’t use other Oss (Appleyard, 2013).

Falling market share – The Company is experiencing a lot of competition from other mobile giants like Samsung

Patent wars – the company is always in trouble with other companies over misuse of their patented rights. Recently, Apple sued Samsung over copying of one of their devices

Changing management system – the death of Steve Jobs hit the management of Apple badly

Defects in new products Apple has at points delivered products which turned out to be defective to consumers. In 2013, Apple recalled Macbook Air models after it realized it had released products with a faulty flash storage system

A decreasing gross margin – the company has had decreasing sales and so a decreasing gross profit

Opportunities
An increased demand for the iPad mini and iPhone 5

Launch of new products, iTv which is expected to be a good market for its new product

With the rise in technological advances, Apple is likely to get a provider for application processors and therefore stop buying from Samsung its competitors (Reisinger, 2014)

Growth of tablet and Smartphone markets – the world has become very welcoming to tablets and smartphones by introducing applications that fit into every category of usage. For instance, smartphones are continuously being integrated with payment systems hence making them a very attractive market.

Apple is also likely to make acquisitions that could lead to them obtaining patents – Apple has made a new contract with Intel to use their processors other than those from its competitor, Samsung.

Threats

Fast change in technology The technology is changing at very fast rate hence requiring companies to continuously do research on new products or improving their old products.

Tax increases – 2013 saw to an increase in taxes that are charged to technological firms

Rising pay levels for its workers – Apple has experienced a lot of pressure to increase the pay for its workers. Since 2012, they have had to raise their pays three times.

Apple is being pressurized by Samsung over prices of key components it buys from Samsung

A rising Android OS market which risks loss of market for Apple – the Android system offers competition to its own projects. The Android system often offers to support many external applications hence its suitability

Samsung
Strengths

Samsung is continuously making products that can be integrated into other OS and software. It therefore benefits from its increasing markets

Excellence in production of consumer electronics and hardware parts

Design and innovation – Samsung has some of the most acceptable products in the market

Focus on environment by producing environment friendly products

Low cost of production – Samsung employs methods that are economical and are therefore able to sell their products at prices way below those of their competition

It commands the largest share of the mobile phone market and second largest in Smartphone market

Ability to market the Samsung brand – they have been able to market their products all over the world

Weaknesses

Samsung lacks its own operating system Samsung has to contract other companies to provide it with operating systems. Most famous is the Android OS

Infringement of other companies’ patent rights – recently, Samsung has had problems with the law when they abused their relationship with Apple and copied one of their products

Low profit margins especially compared to those of its competitors

Samsung’s profits are mainly got from its competitors in terms of sales of components. The competitors have an advantage as they may opt to get other people to supply them in the future

Samsung focuses on too many products – Samsung develops products from many categories hence making it hard for them to concentrate on important projects

Opportunities

Growing market for smartphones in India – India, which is one of the biggest Samsung has led to improved sales for Samsung

Growing advertising industry on mobile phones – Phones and other devices are increasingly attracting more people as advertisement platforms

Growing demand for high quality processors which it manufactures

Growth of tablets and smartphones markets

Opportunity to obtain patents through acquisitions

Threats

Developed countries have a saturated smartphone market

Rapid change in technology

Falling markets in hardware creation which provides a big share of Samsung’s profits

Bleached patents from its consumers hence making it hard to tell which companies do not pay fully for its patents

Apple’s iTV launch may hurt Samsung

Price wars with its competitors

A company’s strengths are its advantage. They give it an edge over its competitors. The fact that Samsung produces high quality processors has led to it being able to command most of the other mobile phone produces hence being able to command the prices and increasing their competitive advantage

A company’s weaknesses often lead to slow growth. Sometimes it may lead to high cost of production or low profits. For example, Samsung’s highly priced products make it impossible for them to compete effectively in undeveloped countries. Regardless of their quality products, they can still not make any progress in those countries.

Opportunities, if taken seriously by a company can lead to tremendous growth. If Samsung for example exploits the rising market for smartphones and tablets in Asia, it is likely to show increased sales

Threats should be stemmed as soon as they are identified where possible. Apple should, for example, try to cut business with Samsung. This will require them to acquire their own manufacturing partner who will not pressure them over prices for competitive reasons (Appleyard, 2013).
Question 3

At Apple, cultural diversity is seen as a competitive advantage. Multiple cultures enhance the lives of workers with their diverse composition. Respect of cultural differences is encouraged by the leadership of the company

Samsung contains several methods of cultural integration. First, it encourages its employees to work with each other by training hem about the diversity of their cultures.

Question 4

Both Samsung and Apple have always had an entrepreneurial culture. Entrepreneurial culture motivates different departments of a company to take risks for the company while researching on new ideas. Often, the company views failures as opportunities to learn. This method is however sometimes controlled to ensure the company takes only those risks that have a good chance of success. Too many risks may also jeopardize profits (Nusca, 2014).

Both companies also employ the method of creating superior design products. Apple for example, has been producing a new product every season. This motivates their consumers to watch out for what will be next. Samsung is often making a products to compete with their competitors.

Apple has often had to produce a new product to compete with what their competitors are producing. By doing so, they ensure they have a product with which their competitors cant keep up with. A good example is how Apple produced the iPhone 5 after Samsung produced its Galaxy SIII.

Question 5

Apple should commit to create its own processors. Apple gets processors from its competitors. If it was able to manufacture them, it would stop bearing the pressure it bears from them for price increases (Guglielmo, 2014).

Samsung should work on its marketing capability to ensure it is able to enter big and new markets and increase sales.

Question 6

Apple competes with other companies using its corporate strategy on different strategies. First, it designs all its products in such a way that the same technology can be used for most of the devices it manufactures. Second, Apple has invested with retail stores worldwide. This makes Apple accessible to consumers firsthand (Guglielmo 2014).

Samsung on the other hand has a corporate strategy of learning new methods from its competitors and adopting them with a twist. Often, they just employ innovation to improve the innovation presented by the product in question. Samsung is also willing to invest in new ventures more readily than Apple. While Apple prefers to hoard its proceeds, Samsung prefers to invest in new ventures. These new ventures are then pushed into the market. If the products succeed, they are pumped up and reproduced, if they fail, production is discontinued. Samsung is also a big supplier of chips to other technology companies. It taps this market and uses its proceeds to improve other projects (Samsung Telecommunications America, 2014).

Question 7

Apple has negotiated with its manufacturing companies to ensure that they do not undermine their workers. This has prevented their companies from being unethical. Apple also discourages unethical practices by ensuring that those caught with unethical behavior are corrected. Apple is also known to have employed an external investigator to investigate cases of child labor, overtime hours, and other unethical issues in 2012.

Samsung creates products that are environment friendly to cater for the environment conscious products hence preventing the unethical practice of destroying the environment. It also has a pledge which is signed by all the employees who work for it. The company also gets its executives trained once a year and tested to ensure they understand ethical practices.

Question 8

Samsung should identify a core market and service it exclusively, this way, they will know exactly which products are requires by their core market other than using trial and error in their production

Samsung should become a more vibrant retailer and create retail stores like Apple

Samsung should invest more in environmental protection by supporting environmental organizations and producing more environment friendly products (Lev-Ram 2013)

Apple should resume the culture of creating new products once every year rather than improving their old products the way they are currently doing

Apple should work on paying dividends to its investors more promptly hence enabling them to attract more investors. This way, their shares will rise in demand hence prompting a rise in share prices and consumer confidence.

Apple should ensure that the working conditions of its workers are proper and internationally acceptable

References

Appleyard, B. (2013). Is Apple dying? Steve Jobs’s creation, long thought to be the smartest company in the world, is in danger of falling behind Google and Facebook in the race to be the internet platform of the future. New Statesman (1996), (5185). 26.

Guglielmo, C. (2014). Macintosh At 30: Interesting, Profound And Curious Things Said About Apple’s ‘Insanely Great’ Computer. Forbes.Com, 6.

Lev-Ram, M. (2013). Samsung’s Road to Mobile Domination. Fortune, 167(2), 98.

Newman, J. (2013). Apple’s 2014 in Rumors: Big Changes for Mac and a Sharper iPad. Time.Com, 1.

Nusca, A. (2014). Samsung’s Galaxy S5: Why it matters. Fortune.Com, 1.

Reisinger, D. (2014). Apple Won’t Introduce a Phablet: 10 Reasons Why. Eweek, 1.

Samsung Telecommunications America, L. (2014, June). Samsung Mobile Fortifies Enterprise Leadership Position with New Comprehensive Services and Solutions for Businesses. Business Wire (English).