Strategic Management of Apple Inc and Samsung Group - Case Study Example

Strategic management of Apple Inc. and Samsung Group. Analysis of business strategies Samsung and Apple clearly use very different business strategies and models in their business operations. Both these companies are having very dominant global presence. Apple believes in innovations rather than inventions and those products are very eagerly accepted by customers around the world. Products are of very premium categories. Samsung believes in filling the market with their products. They offer products ranging from premium to middle targeting customers from all categories. Samsung always maintains good mixture of different products. From the starting point Apple was very focused about its tablet and mobile releases. Their main strategy was elaborated product development cycle which grows on anticipation level among customers. Simultaneously the company showcased their innovations globally very well. Samsung on the other hand used time very well. They always try to make their presence felt in the market. Primary focus of Samsung was to capture low and middle end market. But with the help of fast innovations the company was able to perform well in premium end market also. The company is presently enjoying huge popularity for their products in every segment of global society. Internal capacities of both these two companies are very high. Both companies are having super innovative capabilities. Apple has done a good mixture of both science and arts in their products. Apple over the years has delivered super, elegant and simple experiences out of their products. It has made the organization a dominant player in the smart phone market. Apple is fighting legal battles with Samsung regarding infringement of patent rights. It is a very well thought business strategy from Apple to keep more firm foot on the global mobile industry. In this way Apple is trying to break free from competitions. The mission and vision statement of Apple is very much in line with their long term goals. Apple reinvented mobile phones and brought revolutionary changes in digital music systems. Samsung’s mission and vision statement is also in line with their long term goals. According to the company they believe in devotion of their human resources and their technology for the creation of good quality products and services which would contribute towards global society. Samsung is contributing towards South Korean economy heavily (Jeremy, 2010). SWOT Analysis Samsung Strengths: Samsung has unparallel ability to market their brands. Integration of hardware with many open sources like software and OS is also a great strength for Samsung. Superior product innovations and elegant designing is a significant strength for the company. Product costs are very low and can easily be afforded by all income group customers. Extraordinary engineering systems are also very formidable strength for the organization. Environment friendly products are also strength of the organization. The organization is the market leader in mobile phone industry and in the smart phone market it is in the second place (Tony, 2010). Weaknesses: Low profit margin is a serious weakness for the organization. The company has significant weaknesses regarding infringement of patents. There are lots of OS and software used by the organization but the company possesses very few own OS and software. The company has to give its focus towards different products. It is a serious weakness for the organization. Opportunities: Indian smart phone market is great opportunity for the organization. Tablet market is growing heavily creating huge opportunity for the organization. Demand of quality application processor is growing and creating lots of opportunities for the organization. Threats: In developed countries market of smart phone has already saturated. War of pricing strategy is very fierce. Technology is changing very rapidly. Breach of patents is a serious threat for the organization. Margin on hardware production is declining which is a great threat for the organization (Mike, 2008). Apple Strengths: The organization has got large number loyal customers. The organization is leader in mobile innovation. It is a great strength for the organization. Global brand reputation of the organization is a significant strength. The company has strong financial environment. Advertising and Marketing teams are formidable forces of organization. The organization has huge retail presence across the world (Adam, 2013). Weaknesses: Prices of different products are very high. It is a serious weakness for the organization in comparison to other competitors. Products of the organization are not at all compatible with all operating systems. For the long time organization’s gross margin is declining. It is often being noticed that new products are having some defects in them. It is a serious weakness for the organization. Opportunities: Products like iPhone 5 and mini iPad are having very high demand. Emerging economies like India and China are also real opportunities for the organization. These two countries are having huge market. Launch of iTV is also a great opportunity for the organization. Cloud computing has great demand. It is a big opportunity for the organization. Threats: Apple faces huge threat from technological changes. Increasing tax is also a serious matter of concern for the organization. Apple is facing serious threats from Samsung products. Price effectiveness of Samsung products are making it very popular in the industry. On the other hand Apple is having an unparallel brand image which is making Apple a symbol of status in the industry. Both organizations are facing problems related to patents (Judith, 2013). Managing Cultural differences Over the years the both companies has managed their cultural differences very professionally. Both companies are having global presence. Apple shows huge confidence to every single product. The organization has been able to portray its cultural diversity as a positive aspect. The company has created its own image of global brands. The iPad which is sold in USA the same iPad is being sold in India also. It is a clear cut deliberate strategy of business leaders to promote their brand globally. Apple always maintained single brand for every markets. The organization has very cult image in the mind of its customers. Customers take this strategy very well. Apple has been able to attach a sense of pride with their products. People around the world feel very proud when they purchase any Apple product. So it can be stated that cultural differences hardly matters for the organization. Samsung is a very environment friendly company. It has designed its operation in different countries according to the atmosphere and environment of those countries. Unlike Apple, Samsung has managed cultural differences from a local perspective. It gives importance to local culture. Samsung even launched their mobile phones which are having the facilities of regional languages. The organization has been able to maintain cultural differences with local touches. Hindi is the national language of India. The organization launched some handsets especially for India having facility of Hindi language. Organizational competencies Both Apple and Samsung are having superior organizational competencies. Apple’s capabilities related with entrepreneurship are unquestionable. Over the years the organization has come up with new products. It has a great entrepreneurial mind set and always trying to come up with some new products. The company is a very cash rich corporation so it has high entrepreneurial capacity. The organization has designed their strategies in such a way that employees of the organization feel very excited about their works resulting in increased performance and high profitability. Apple is planning to open more and more outlets in China. It is a great example for Apple’s organizational competency related with entrepreneurial capabilities. Samsung has very strategic capacity. The organization has mastered itself in making local market strategies. The organization’s strategy related to new product development is also very good. The organization develops products for people of all income groups. It has significant competitive advantages than its competitors. Its pricing strategies are very attractive for each segment of the society. It has very high organizational designing capabilities. The company has become very formidable and one of the major players in the mobile phone industry. Its entrepreneurial capabilities and organizational design capabilities are helping the organization to enhance its performance and enjoying good profit within very small time. Samsung is still manufacturing bars mobile phone for targeting low income people it is a clear example of its strategic capabilities. New business strategy Apple may go for price discounting strategy. The organization is having one issue that prices of their products are very high. Their business is very much dependent on huge loyal customer base around the world. General people around the world cannot afford Apple products very easily. It is a very important for Apple to look into this matter. If the organization lowers its product’s price it would attract more people around the world. Its customer base would increase. Apple has very prominent brand name around the world. It would be icing on the cake for both organizations and its customers if prices are reduced. Pricing is an aspect where Apple is losing its competitive edge a little bit. If prices are reduced then certainly the organization would enjoy significant competitive advantage. Samsung has great brand reputation around the world. Product prices are also within the reach of common people. The organization enjoys huge global customer base. It is a good for the organization to come up with business diversification strategy. It may come up with new products like vacuum cleaner. It would help the organization to get more and more customers. It would help the organization to get more market share in consumer durable industry. Product diversification strategy would not be that much risky for the organization as the brand is very famous and global markets are ready. Corporate-level strategies Apple has followed horizontal integration strategy very well. All its required components were imported from China. Prices of Chinese components were very low. At that point of time the company was adding to its product line but production facilities were missing. It made the company more dependent on others. The organization has vertical integration better than any other organization in the world. It controls every steps starting from research and development and ending with user experience. Different organizations like Google, Microsoft and Amazon are taking leaf out of Apple’s vertical integrations. The organization has done very strategic out sourcing for its different products like iPhone, iPods and iPod minis. It helps the organization in terms of cost. The organization has done very successful diversifications over the years starting from Mac computers, iPod, iPhone and iPad. In the last 10 years company has diversified itself from a computer making organization to a real consumer brand. Apple’s vertical integration strategy has given the company most profitability. It lowered dependency of the organization. It gives the organization a complete feeling. It gives the organization total control over its each and every product. It may be costly but very effective for Apple. Samsung has followed all different corporate level strategies very successfully. Launching smart camera by Samsung is great horizontal integration of Samsung. The organization over the years successfully followed vertical integration. It produces consumer electronic items and also produces different components needed for those final products. Recently the organization is trying to do vertical integration in terms of LED lights. Strategic out sourcing is also being done by the company. It has contract with Accenture for delivering, developing and managing a mobile platform of Samsung. According to me Samsung got most profitability out of horizontal integration. It saves lots of time, money and energy for the organization. As the organization is having huge range of products to manage. Leadership against unethical behaviors Apple faced lot of problems regarding different ethical issues in the organization. The organization very intelligently designed different strategies for fighting those unethical behaviors. Apple has made its leadership strategy according to the atmosphere and culture of different countries. Apple has created guide lines of standard and regulation for their vendors and work forces. The leaders have created an environment of equal treatment for each labor. Discrimination at any level is clearly forbidden. Underage labors are not allowed at all. Labors must get minimum wages set by different governing bodies in different countries. Internal leadership of Samsung has designed great suitable strategies to fight ethical issues in the organization. The organization has very well designed worldwide code of conducts which are being followed by every level of the organization. In the year 2005 the company came up with global code of conduct for Samsung Electronics. That code of conduct helps the organization to fight against different ethical issues. The organization has very clear cut management principles. These principles are very effective to fight against unethical behaviors. The organization has a very powerful audit committee to control unethical behaviors in the organization (Anthony, 2011). Organizational change Apple must bring changes in its pricing strategy. It would give the organization more customers and will get more competitive advantage in the market. Apple must target ever-growing middle income segment of the market. It needs to implement change in its targeted segment. Currently the organization is targeting higher end customers in the market. The organization has very slow innovations. Innovations should be faster which would help the organization to minimize competitions (Daniel, 2001). Samsung must focus on its profit margin. The organization is highly dependent on the volume of sales. It must reduce this over dependency. The organization has a controversial reputation regarding patent infringement. The organization has to be free from all controversies and must focus on blue ocean strategy. This strategy would help the organization immensely in terms of competition. The organization must come up with its own OS and software. It would give the organization huge advantage (Reuvid, 2012). References Adam, T. (2013). Apple SWOT Analysis. London: GRIN Verlag. Anthony, M. (2011). Samsung Electronics and the Struggle for Leadership of the Electronics Industry. New York: John Wiley & Sons. Daniel, R. D. (2001). Managing Organizational Change in Transition Economies. London: Lawrence Erlbaum Associates. Jeremy, K. (2010). Business Strategy: A Guide to Effective Decision-making (Google eBook). London: Profile Books. Judith, Z.W. (2013). Business Analysis of Apple Inc (Google eBook). London: GRIN Verlag. Mike, P. (2008). Global Strategy. London: Cengage Learning. Reuvid, J. (2012). Managing Business Risk: A Practical Guide to Protecting Your Business. New York: Kogan Page Publishers. Tony, M. (2010). Samsung Electronics: And the Struggle For Leadership of the Electronics Industry. Singapore: John Wiley & Sons. Read More