Operations Strategy and Key Operational Performance Objectives in Apple and Samsung - Essay Example

Business Report: Comparison of Operations Strategy and the key Operational Performance Objectives between Apple and Samsung. Institution: Date: EXECUTIVE SUMMARY Samsung is the world’s leading information technology company in terms of revenue with its main competitor Apple coming second. This article compares operation strategies of the companies with a particular attention to its operation performance objectives. The presence of an enormous competition means that the two firms have to make a close follow up of the market requirements, make necessary changes and set operation performance goals and objectives. Apple has been the leader in innovation whereas Samsung focused on diversification of its products. Times have changed, and this report shows the level of flexibility undertaken by the two companies in effort to try and win the global market. The report reviews some of the recent product release from the two companies and how well they have been used to meet market requirements; release of iPhone watch and the latest Samsung Galaxy S6 and Galaxy S6 edge. TABLE OF CONTENTS Executive Summary.............................................................................. 2 Table of contents................................................................................. 3 Introduction........................................................................................... 4 Operations Strategies............................................................................ 5 Operations performance objectives...................................................... 6 Quality.................................................................................................. 7 Flexibility............................................................................................. 8 Speed................................................................................................... 9 Cost..................................................................................................... 10 Customization..................................................................................... 10 Conclusion.......................................................................................... 11 Reference ........................................................................................... 12 Introduction Apple and Samsung are the world’s leading electronic manufacturers. Both companies have been on the front row in technological advances since their inception. Apple was established in 1976, 38 years after the establishment of Samsung. There is no doubt that the two giants are the top competitors for the huge global market. Apple is world’s second largest technology company by revenue slightly behind Samsung. The two companies have diversified their products and services over times as means of keeping up with emerging markets and customer requirements. Apple’s main source of income is the sale of iPhone. (Fig. 1) Apple’s revenues source distribution. In March 2015, during the annual Mobile Word Congress held in Barcelona Spain, Apple was conspicuously absent but this did not stop the global debate on the rivalry of the two companies, and particularly their difference in cost of the products. According to Wood (2015) analysts agree that the iPhone is too expensive for every business to offer it to every employee. The two companies have adopted different operations management plans and overall strategy. Apple, for a long time has been known to manufacture products for the high end consumers with prices that are relatively high in the market. This has changed over time and due to changes in the global market, they have had to incorporate emergent strategies. Samsung has been keen to maximize cost leadership and product differentiation and for a while, this has put the company on the front line. Every year, there is a global anxiety as the two giants prepare to launch their latest products and services. The operation strategies used by the two companies are to be associated to their success. One thing quite clear is the fact that these two companies are major competitors. They tend to release products almost the same time to ensure that they do not overshadow each other. According to Spence (2015) Samsung plans to release its latest Samsung Galaxy S6 later April 2015.At the same time, Apple is making plans to release it iWatch. Operations strategies Apple has been known to be the leading innovative IT product manufacturer. After first personal computer the Macintosh, the company has continued to introduce new products and services that have kept their customers waiting for the next big thing. The customers were not disappointed with the introduction of iPod, Mac book and iPad. The changes in time, has seen Apple slightly shift its operation strategy to global standardization of its products. Unlike other manufacturers who use multi-domestic strategies, Apple is putting much emphasis on the availability of a standard product in the global market. Apple uses a single source for its designs and manufacturing. Mtvan (2014) says that Apple international strategy is a Global strategy of standardized products. For years, Apple has been modifying the power source of their products because of the different power voltage in different countries. Samsung has put much focus on global market needs. Every year, Samsung releases multiple models for their products, with different features, for different markets at different prices. Samsung has actively studied the market needs and has developed variety of products for all customers. The huge variety of products has seen Samsung capture majority of the global market. According to Mack (2014) Samsung’s success can be linked to high marketing budget, a global presence. It seeks to meet all need of its consumer. This has been made possible by diversification of their products. With huge revenue and operations resource capabilities, the two companies have been on a race that has given the customers a wide range of variety in terms of products and services. The stiff competition on the other hand has forced the companies to compromise some of their operations strategies as a means of trying to win the market. Operations performance objective The aim of any company is to improve its services and quality of products with time. While doing that, it is important to realize the market requirements and feedback. In efforts to add values to their products and services, Apple and Samsung have set performance objectives to ensure that value adding does occur in the transformation of inputs into outputs. Apple has set up goals that have seen them change from single-line manufacturers of computers to a global incorporation that manufactures a wide range of electronic devices, computers softwares and internet services. Samsung has also come a long way. Established as a trading company, Samsung has diversified over years and this has seen it transform to a multinational conglomerate company. Samsung entered electronic industry in the1960 and has developed to Samsung Electronic which is currently the world’s leading information Technology Company. The two companies use a number of factors in setting performance objectives. Quality Since its inception, Apple has not only been known for innovation but also high quality products and services. Apple smartphones in particular have had a reputation of uniqueness in their design and also material used for production. This has enabled Apple to win a huge market number of people who would rather go for quality other than any other factor. While talking about Jonathan Ive; Apple’s senior vice president of industrial design Solon (2012) says that Apple returned from a near bankruptcy in the 1990s. The return of Steve Jobs in 1997 brought a different perspective to turn the company back to its glory, which had focused first and foremost on cost savings and revenue generation. Samsung has been known to be one of the lead suppliers to Apple for some phone components including memory chips. Samsung take this as a business plan and has put much focus on trying to improve the quality of its products. According to Hughes (2013) Apple has been working on reducing its dependence on Samsung for other parts like flash memory found in the iPhone. Grobart (2013) says when Samsung embarks on expanding operations and start competing with the companies it has been supplying, it makes investments in and technologies, leveraging its foothold into a position that other companies with minimal chance of matching This is part of Samsungs plan: supply components to others which gives it a scale to produce its own products at an affordable rate. According to Samsung Electronics Co. Ltd, (2014) the company has stuck to smart strategies and a desire to deliver high-quality, reliable products. As a result, its quarterly smartphones shipments have dwarfed even the mighty Apples. Flexibility After the introduction of iPods, every company thought Apple would maximize on profits from the sale of the product. Strangely, Apple introduced the iPhone. The iPhone led to the decline of the iPod. Apple was flexible enough to introduce a new product that would kill their existing product. The important thing to note is iPhone became more acceptable because of its multi-capabilities and features According to Freelancer Consulting (2011) Apple is a notable example of a company that had successfully adopted a flexible strategy. Samsung Electronics Co. Ltd. (2009) explains how Samsung in todays fast growing global economy, change has been constant and innovation is critical to a companys survival. For over 70 years, the company has set our sights on the future, focusing on market needs and demands so to move company toward long-term prosperity. Speed Every year, after Apple announces its new iPhone, a global wave of suspense and anxiety builds up to the day of firs sale. Apple has been using this strategy by allowing people to pre-order this phone. The other plan is to release the iPhone on different dates from different places. This has been seen to be a brilliant plan but people have been complaining to how long it takes for them to purchase the product and when they are able to have it. Yona (2014) explains how anxious crowds piled up outside stores overnight waiting for the first sale of iPhone 6. Relatively, Samsung has ensured that upon launch, their products are widely available worldwide. This has been done through high manufacture of its products. Unlike most manufacturers, Samsung has selected distribution dealers from all over the world. The dealers get all Samsung products and in return supply to the rest of the market. This ensures that the dealers are able to supply to the rest of the retailers in time. The process of Samsung distributing to a huge list of retailers has been reduced and this saves time for product delivery. Bhasin (2014) says that Samsungs distribution network has been established in several cities with single distributors who distribute throughout the region. The distributors have substantial investment in Samsung and both, the distributor Samsung, participate in the sale of Samsung’s products. In return, Samsung will supply its products to one distributor who will then sell to all the retailers. Cost Apple manufactures some of the highly priced products in the world. IPhone 6, the latest Apple mobile device, was released at USD 849. The high cost of Apple products has given them a standard that has led to many believing that purchasing an iPhone is a luxury. Individuals seen with iPhone; especially the latest model, are highly regarded. Samsung has put more focus on cost leading. The prices of its products are relatively low. The quality of the products is however not compromised. The latest model of Samsung, Samsung Galaxy S6 is set to be released early May. Comparison of the Galaxy S6 and iPhone 6 puts Galaxy on a better level with latest features. The release price for the Galaxy S6 is estimated to be around USD 699. This is a lower price compared to iPhone 6 which was released lSamsung has been cost conscious while putting its products out in the market. This has increased its retails sales worldwide. Chowdhry (2015) says that T-Mobile had indicated that the price of the 32GB Galaxy S6 will be about $699. Customization This means the ability of business operations to tackle the needs of its customers. It entails the ability of a business to customise its products or service to suit the needs of the customer. This has relatively been easy for Apple and Samsung especially in software development and mobile features improvement. Apple has just announced its watch which has customer friendly features. The main aim of this watch is to connect the user to the iPhone. Price (2015), comments about the latest Apple Watch which connects to customer’s phone through Bluetooth and Wi-Fi allows the user to answer phone calls and read emails. A sketch feature allows the user to draw on the watch. In sports app it allows the user to keep track of your favourite teams. The watch also allows the connectivity to the social media. The latest Samsung Galaxy S6 has introduced a Mobile Payment feature. This will allow mobile owners with Visa accounts make payments directly by bring their phones close to the payment terminal. Popoola (2015) talks about Samsung Pay services, which will allow users to select preferred Visa account and bring the device near a payment terminal. Conclusion The two companies have both proven to be flexible by introducing new products and also going out of their traditional way of running business. The information technology is advancing at a high rate. This means that the two companies face new challenges to improve their products daily. Apple focuses on standardizing its products, and Samsung seems to have perfected the art of diversification. We expect new and variable products from both companies. It is also important to note that there are other emerging companies whose potential is without doubt going to be a huge threat to the two companies. The rise of Huawei, Sony among others will give the two companies a run for their money. In conclusion, more focus needs to be put on operations performance objectives as a means of meeting market requirements. References Bhasin, H. (n.d.). Marketing mix of Samsung – 4P of Samsung. Retrieved March 15, 2015, from Marketing 91: http://www.marketing91.com/marketing-mix-of-samsung/ Chowdhry, A. (2015, March 9). Verizon To Start Galaxy S6 And S6 Edge Pre-Orders On April 1st. Retrieved March 10, 2015, from Forbes: http://www.forbes.com/sites/amitchowdhry/2015/03/09/verizon-galaxy-s6-preorders-april-1/ Freelancer COnsulting. (2011). Emergent Strategy in Uncertainty. Retrieved March 10, 2015, from Freelancer Consulting: http://freelancerconsulting.com/consulting-articles/flexible-emergent-strategy-in-uncertainty.html Grobart, S. (2013, March 28). How Samsung Became the Worlds No. 1 Smartphone Maker. Retrieved March 10, 2015, from Bloomberg Business: http://www.bloomberg.com/bw/articles/2013-03-28/how-samsung-became-the-worlds-no-dot-1-smartphone-maker Hughes, N. (2013, September 20). Samsung confirmed to be manufacturer of Apples new A7 chip in iPhone 5s. Retrieved March 10, 2015, from AppleInsider: http://appleinsider.com/articles/13/09/20/samsung-confirmed-to-be-manufacturer-of-apples-new-a7-chip-in-iphone-5s Mack, E. (20114, April 30). Samsung Is Undisputed King Of Smartphones; Apple Still Distant Second. Retrieved March 10, 2015, from Forbes: http://www.forbes.com/sites/ericmack/2014/04/30/samsung-is-undisputed-king-of-smartphones-apple-still-distant-second/ Mtvan, H. (n.d.). Strategic Management. Retrieved March 10, 2015, from MTVANHELDER: http://mtvanhelder.tumblr.com/ Popoola, B. (2015, March 9). Visa and Samsung Add Mobile Payment Feature to the New Samsung Galaxy S6. Retrieved March 10, 2015, from Techcabal: http://techcabal.com/2015/03/09/visa-and-samsung-adds-mobile-payment-feature-to-the-new-samsung-galaxy-s6/ Price, E. (2015, March 09). The First Official Look at the Apple Watch, Including New Features, Apps and Details. Retrieved March 10, 2015, from Entrepreneur: http://www.entrepreneur.com/article/243763 Samsung Elctronic Co. Ltd. (2009). NEW & EXISTING PRODUCTS OF SAMSUNG MOBILE. Retrieved March 10, 2015, from Products of Samsung: http://productsofsamsung.blogspot.com/2012_06_01_archive.html Samsung Electronics Co. Ltd. (2014, January 24). Samsung Electronics Announces Fourth Quarter & FY 2013 Results. Retrieved March 10, 2015, from Samsung: http://www.samsung.com/za/news/global/samsung-electronics-announces-fourth-quarter-and-fy-2013-results Solon, O. (2012, July 30). Jonathan Ive: Apples goal isnt to make money. Retrieved March 10, 2015, from Wired: http://www.wired.co.uk/news/archive/2012-07/30/jonathan-ive-revenue-good-design Spence, I. (2015, March 1). How Apple Will Undermine The Samsung Galaxy S6. Retrieved March 10, 2015, from Forbes: http://www.forbes.com/sites/ewanspence/2015/03/01/apple-watch-mobile-world-congress/ Wood, M. (2015, March 5). Technology. Retrieved March 10, 2015, from New York Times: http://www.nytimes.com/2015/03/05/technology/personaltech/in-chase-of-apple-smartphone-makers-shift-strategies.html?_r=0 Yona, G. (2014, Septmeber 19). Crowds wait overnight at Bayshore Town Center Apple store for new iPhone 6. Retrieved March 10, 2015, from Journal Communications: http://www.jrn.com/tmj4/news/iPhone-6-sales-begin-today-275721181.html Read More