Human Resources: Comparision Between Apple and Samsung - Case Study Example

HUMAN RESOURCES: COMPARISION BETWEEN APPLE AND SAMSUNG Table of Contents Table of Contents 2 Introduction 3 Internal Analysis of Apple and Samsung: SWOT Analysis 3 Environmental Analysis 4 Issues faced by the Companies 5 Company Culture and performance 5 Promotion Policies 6 Strategic Decision Making 6 Management and leadership style 7 Communication style 7 Operations strategy 8 Change Factors and their influence 8 Conclusion 9 References 9 Introduction The mobile phone sector is among the most competitive sectors in the business world. The tug of war between the mobile giants Apple Inc. and Samsung Group have taken the level of competition to a higher ground (Hall, 2011). This report will focus on comparing the business aspects of both Apple and Samsung in context of their organizational excellence and the challenges faced by them. Internal Analysis of Apple and Samsung: SWOT Analysis SWOT Apple Inc Samsung Group Strengths High brand value and equity Influential advertising and promotional concepts Vertical integration Extensive product range Known for quality products and services Huge brand value in international market High market share in emerging countries such as China and India Weaknesses Limited differentiations in product offerings Limited compatibility with other products Lack of innovation Complex technology usage Patent infringement issues Low pricing hampering customer brand perception Opportunities Emerging markets such as India and China New acquisitions of emerging companies Introduce differentiation in product features Demand for products in mobile markets Threats Strong competition in technology industry Legal issues related to patent infringements (Lavie1, Haunschild and Khanna, 2012) Lack of internal integration can hamper growth Rapid entry of new firms New entrants like Micromax reducing market share of Samsung (Morris, Schindehutte and Allen, 2011) Environmental Analysis Economic: The global financial meltdown of 2007-08 has influenced the economic stability of Apple Inc. US market suffered due to lack of capital and their micro-credit mechanism. The inflation rate of the nation increased reducing the spending power of the consumers. Apple having the reputation of a luxury brand experienced a dip in their sales figures (Lavie1, Haunschild & Khanna, 2012). Furthermore, the fluctuating currency rate of US is also hampering the revenue collected from the international market. The growth of export in South Korea has increased the value of Samsung products in the foreign markets. However, the import level has reduced which has increased the cost of production and procurement from foreign suppliers (Morris, Schindehutte & Allen, 2011). Diminishing FDIs in the country is also another source of worry for Samsung. Social: The key strength of Apple Inc. is the unique design and features of the products. Globalization has helped the company in reflecting these features to the global consumer base. The consumer purchasing power is increasing in the emerging markets of the company (Kourdi, 2009). Apple has established themselves as a status symbol and gained the confidence of the consumers. The growing cyber space and music industry has also helped them in enhancing their market share (Kourdi, 2009). In case of Samsung, they focus on the ability of their employee base for enhancing organizational performance and brand value. They have a highly educated workforce that understands the requirements of the company and are being compensated accordingly by the company (Dess & Lumpkin, 2009). However, Samsung is not known for their social contribution which is reducing their brand influence among the consumers. Moreover, slow transformation of society in domestic market can hamper the growth of the company (Chesbrough, 2009). Legal: The key legal issues faced by Apple are related to the patent infringements of the company. The much highlighted case against Samsung in context of iPhone and Samsung Galaxy mobiles has influenced their brand reputation all over the globe (Lavie1, Haunschild & Khanna, 2012). Samsung’s legal issues mainly relate to their domestic market where lack of regulatory authorities is creating problems for managing their employee base. This is hampering the internal managerial mechanism of the company led to influence the overall organizational performance. Issues faced by the Companies Company Culture and performance The organizational culture of Apple is mainly focused on innovation and they motivate their employees to achieve the organizational objectives with the help of transparent and thorough communication system. Being the largest market holder in the mobile market and third largest in the PC market, Apple is known as a trend setter of the industry (Lymbersky, 2009). On the other hand, Samsung has a customized work culture where the decision making is done by the top authority while the work process is decided by the employees. Samsung tries to occupy the market by adapting to the trends of the market and creating excellent marketing mix strategies (Chesbrough, 2009). Promotion Policies Dess & Lumpkin (2009) emphasized that Apple’s promotional policies have a strong influence and contribution in their success. Apple mainly tries to reflect their core value to their customers for familiarizing the company. They focus on creating a halo effect inspite of reflecting their product features in the market. Samsung’s promotional activities are more related to their products and services. They try to attract the consumers with the help of their pricing strategy and the high end features included in the products (albertacanada.com, 2012). Strategic Decision Making The decision making process of Apple is participative which is related to their management style and work culture. Although the strategic decisions are formulated by the top authorities but the employees are given a chance to modify and review the decisions (Newburry, 2010). The decision making style of Samsung is authoritative in nature (Dess & Lumpkin, 2009). The strategic decisions formulated on the basis of the market demands and nature (Chesbrough, 2009). They identify the key trends in the market, the consumer needs and develop their organizational objectives on that basis. Unlike Apple, the role of the employees in Samsung is during the initial stage of the decision making process. It can be observed that the decision making process in Samsung is a customization of autocratic and democratic style where every individual has a role to play (albertacanada.com, 2012). Management and leadership style Lavie1, Haunschild & Khanna (2012) reflected that the existing management and leadership style of Apple is influenced by the leadership style of their Late CEO Steve Jobs. Steve Jobs was a visionary leader and demanded the best from his employees (investor.apple.com 2014). He was open with criticisms and took full responsibility of the organizational activities. In the contemporary scenario, the role of employees has enhanced as they are included in the decision making process (investor.apple.com 2014). The leadership style is also participative which helps them in optimal utilization of the human resource of the company (Newburry, 2010). The managerial culture of Samsung is more focused on developing an open managerial style. The company has authorized their shareholders, investors and employees to participate in the management of the company and create a transparent business process. The key decisions are made by the top authority with the help of the employees and the external stakeholders review and confirm the business decisions (Lymbersky, 2009). They aim to bring accuracy and develop long term relationships with open management. The leadership style of Samsung is also participative which motivates the employees to contribute to the organizational growth and development. Communication style The communication style of Apple is a blend of assertive and co-operative communication styles. They try to maintain the authority of the management while motivating the employees to enhance their productivity and co-operation (Chesbrough, 2009). Apple also focuses on developing a collaborative work force which is why it is essential for them to get connected with their workforce and stakeholders. The communication style of Samsung is somewhat similar to Apple, however with the introduction of open management in the Group they are creating a fully co-operative communication throughout their stakeholder base. Operations strategy The operational strategy of Apple is based on their concept of vertical integration of resources. They have developed their products in a manner so that they are compatible with each other and gathered resources for providing the consumers an enhanced level of satisfaction. Apple has developed services in their company that are required for procurement, logistics and manufacturing. Also extra benefits provided to the consumers have been integrated within the operational functions of the company (Lavie1, Haunschild & Khanna, 2012). As opposed to Apple, Samsung’s operation is based on virtual integration. Samsung tries to establish long term relationships with their functional departments for streamlining their service delivery process. Thorough network of distributors and suppliers connected with the internal production process and R&D department have enabled them to meet the market demands successfully (albertacanada.com, 2012). Change Factors and their influence The business scenario has changed with the growth of competition and technology. Competition and technology are the driving the growth and development of organizations all over the world. Apple has tried to adapt to these technological changes for ensuring greater sustainability while Samsung focuses on dominating the market and increasing their market share for spreading their presence (Newburry, 2010). Apart from these, changes in consumer behavior have also initiated changes in the operational process and business management functions (Dess & Lumpkin, 2009). The concept of vertical and virtual integration adopted by Apple and Samsung for providing better services to their customers and establishes brand loyalty. Legal issues between Apple and Samsung have also hampered the brand image of both the firms. Conclusion This study has been developed by comparing the organizational functions of Apple Inc. and Samsung Group. The business aspects of both the selected companies such as strategic decision making, promotional activities, communication, operational strategies, etc have been evaluated in the report. Although Apple and Samsung differ in their adoption of policies and strategies, both the companies aim to be the market leaders in their respective segments. Changes in the external factors have also influenced the business process of the firms and profit making is not only objective of Apple and Samsung. They try to generate sustainable business processes for enhancing their brand equity and reputation. References Albertacanada.com (2012) Global value chain analysis on Samsung Electronics. Retrieved from: http://albertacanada.com/korea/images/GlobalValueChainAnalysisSamsungElectronics.pdf Chesbrough, H. W. (2009) Business model innovation: It’s not just about technology anymore. Strategy and Leadership, 35: 12-17. Dess, G. & Lumpkin, G. (2009) Strategic Management: Creating Competitive Advantages. 6th ed. London: McGraw-Hill Education. Hall, R. (2011) .The strategic analysis of intangible resources" Strategic Management Journal, 13, 135-144. Investor.apple.com (2014). Leadership & Governance Retrieved from: http://investor.apple.com/corporate-governance.cfm, Kourdi, J. (2009) Business Strategy: A Guide to Taking Your Business Forward (5th ed.). Oxford: Blackwell Publishing. Lavie1, D., Haunschild, P. R. & Khanna, P. (2012) Organizational differences, relational mechanisms, and alliance performance, Strategic Management Journal, 33(13), 1453–1479. Lymbersky, C. (2009). Market Entry Strategies: Text, Cases and Readings in Market Entry Management (5th ed.). 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