Comparing Apple iPhone4s and Samsung Galaxy S2 - Coursework Example

Comparison of Apple (Iphone4s) and Samsung (Galaxy S2) Executive Summary This report reveals that the consumer electronics products industry is an ever changing industry. The industry keeps changing with technology. The paper also reveals that this industry faces very stiff competition among the manufacturers of products. The products made have the same capabilities and the companies face the daunting task of pleasing their consumers so as to retain existing customers and to attract new ones. In addition, the industry faces the challenge of continuously producing new products that will be suitable to changing needs in the market. These findings have been discussed in the paper which is a comparison of Apple and Samsung. Introduction The consumer electronics industry has been filled up by many companies that are out to make products that will attract their customers (Kaynak et al, 2005). Apple and Samsung are companies that have been producing these products and the competition provided to each other gets stiffer every day. This paper shall compare the products from these two companies. Analysis of the companies shall be done with respect to macro and micro environmental forces. SWOT analysis of the companies shall be done and comparison of the various marketing strategies discussed. Industry background In the present world, the electronics industry has received tremendous developments. The electronics industry keeps changing and since its emergence in the twentieth century, it has been a global industry that is worth several billions of dollars. In fact, it has been reported to be worth about 300 billion dollars. There has been a lot of competition in delivery of products that are pleasing to consumers. For instance, Apple products like the Mac computers, the ipads and iphones have bonded well with the digital world. Other electronic products that form the wider smartphone products have hit the world market and customers strive to get the greatest and latest electronic products. These electronics find their use every day ranging from communication devices like phones, digital cameras, computer products, televisions, video players and recorders among other devices. With the developments in technology, these products have become increasingly based on the digital technology. With every consumer out looking for latest products from the electronics industry, there is bound to be a lot of competition among the electronics companies. The trends in competition sometimes lead to stealing of ideas among the companies. Another trend that has hit the electronics industry is the recycling trend. Just like the global demand for recycling of products, the electronics has been among the leading industries in recycling of products. In fact, in 2012, there were about 585 million pounds electronic products that were recycled (Van Slyke et al, 2011). This means that while the companies are focused on producing products that are attractive to customers, they also have their eyes on recycling of products as a drive towards sustainability of the industry. In addition, the industry also experiences trending competition in development of new technologies that will sell their products to consumers. Therefore, this industry is competitive and its technology keeps changing (BusinessWire, 2012). Company background Samsung Samsung has been in business for more than seventy years. The company has ventured in various industries including the electronics industry, plant and sky scraper construction, finance, medicine, hotels, fashion and petrochemicals industry. It is purported that Samsung Electronics is at the top of the global market in in manufacturing of high tech electronics and digital media. Samsung business entails a range of businesses that harness creativity, speed and efficiency to innovate and invent. Samsung engages most of its employees in research and development so as to discover new products, technologies and services that can be used by the company to open up a new world of possibilities for the people who use the products. The company receives its guidance from a simple philosophy that entails keeping high ethical standards and embracing strong values that will inform their work on a daily basis. The company strives to help its customers to live a better life. To achieve this, the company has set its vision on being dedicated to the development of efficient processes and innovative technologies. This is channeled towards ensuring that people’s lives are enriched and to make the company the world leader in digital technology (Samsung, 2013). Samsung’s market share is about 70.7 million units. The main product segments of Samsung include television, mobile phones and semiconductors. Apple The company was founded by Steve Jobs and Steve Wozniak in 1970. Apple Inc. was incorporated in 1977. It designs and manufactures various products. It also markets the products. These products include personal computers, mobile communication, media services and portable digital players. In addition, the company also sells various types of related software, peripherals, services and networking solutions along with third party applications and digital content. Their services and products include the iphone, ipad, ipod, Apple TV, iOS, OS X Operating Systems, icloud and a portfolio of software applications for consumers and professionals. The mission statement of Apple appears to have been drawn from what was stated by one of the founders, Steve Jobs, stating that it is man who can create change in the world. This quote stated that man should be above the systems and structures and should not be subordinate to them. The company is therefore committed to bring the best experience of personal computing to educators, students, consumers and creative professionals around the world through the innovative software, hardware and internet offerings (O’grady, 2009). The company’s headquarters is in California. The market share of apple is about 37.4 million units. The three product segments that are most important to Apple are the iphone which covers 53 % of the stock value of the company; Mackintosh, which covers 17 % of the company stock value and the ipad which takes 7 %. Macro environmental forces in the electronics industry The electronics industry is faced by various external forces that influence the way it operates. A PEST analysis of these forces reveals how these external factors influence the electronics industry. Political factors The main political factor that influences the electronics industry is the regulatory compliance. The industry is tasked with the responsibility of eliminating materials that are potentially hazardous. This therefore requires that the industry recycles its products when they come to their end of life. Manufacturers and distributors are required to have the complete history of their products and materials through tracking. The responsibilities of these companies have expanded because of the Restriction of Hazardous Substances which is European mandated. There is also another regulation by the Waste Electronics and Electrical Equipment and other laws. Many manufacturers find it difficult to comply with these regulations especially when their consumers demand faster adoption of products than is required by the law. It also requires that suppliers be very close partners since they might face higher risks if they are not close. The companies are required to segment their inventory through certification or through suspicion of counterfeit products and through serial tracking. They should also manage their regulatory data and have documentation that shows proof of compliance (Industry Directions, 2000). Economic Factors The global economic competition greatly affects the electronics industry. Kozmetsky and Yue (1997) stated that the economic fortunes of a country are determined by the success of the country on world markets. This same hypothesis can be used with companies and in the electronics industry; its economic success is determined by how it performs in the market. In the same manner, the performance of the world economy also has its effects on the performance of the electronics industry. For instance, when the economic times in the world change due to recession and depression, the performance of the electronics industry faces a deep. This is because the economy affects the demand and supply of products. Additionally, the marginal and total utility that is experienced by consumers’ affects the industry since after the utility has been attained, the industry has to come up with new products that will meet the new desires from the consumers. The general economic growth and development of the world and the country affects the electronics industry. Social factors Social factors play a very important role in the electronics industry. This is because the industry is sensitive to social matters. Majority of the products are utilized by people based on how well they find the products suitable to them in addition, they use the product based on what they hear about the product. This implies that the influence they get from other people really matters in the selection of their products. The recent trends by companies to use Groupons in increasing their sales are an indication that social groups have a major impact in the industry. The Groupons offer discounts for anything that is bought. However, the demand for the product has to be high for the discount to work. Additionally, the general habits and trends in the society affect the type of product that the electronics industry produces. These trends are determined by the tastes that the society feels suitable for them at the time. The present times demand that people get mobile and this has been facilitated by the products of the electronics industry. The products made also have to be used in targeting groups of people. By and large, the products have been made for every group of people and any changes in the trends and habits of the society have their effects on the companies’ products and this requires the introduction of new products that will suit the new changes (Sehgal, 2011). Technological factors The electronics industry is basically a technology industry. Therefore, the industry is greatly affected by technological trends. This industry has to change continually based on the available technology. In addition, the industry has to change its technology time and again so as to come up with products that will continually meet the needs of consumers. With new developments in the digital world, it means that the industry has to keep adapting the developments and even come up with new technology that will be suitable for the industry. The demand to remain sustainable also calls for development of new technology that will continually preserve the environment. Technology changes at a fast speed. This means that for the industry to be competitive, it has to change with the technology. The industry has to develop more sophisticated technology that will provide more efficient services to consumers. Micro environmental forces affecting the companies: Porters five forces analysis This section will provide three of the five Porter’s forces Samsung Suppliers The bargaining power by Samsung suppliers is limited since there are many suppliers of consumer electronics in the market. In South Korea, there are more than 1000 suppliers. The suppliers get their advantage from the fact that they make unique parts for each appliance. In this case, they cannot be ignored. The industry of consumer electronics requires a variety of consumers and Samsung uses them for the delivery of its various products. Power of buyers Buyers of any products have a variety of products from which to choose. Various models of mobile phones, computers and other electronic gadgets are available and this gives buyers strong power because they can choose to buy from other companies. Samsung has been engaged in various price wars and this indicates that the consumer electronics company has a lot of players. Samsung buyers cannot switch products immediately. They take time in adjusting and it is only when they are completely dissatisfied with the products do they switch their brands. This works to the advantage of Samsung. Threat of substitutes Samsung faces a high threat from substitute products. There is intense competition in this market, with competitors bringing in products that re similar to those from Samsung and have regular frequency. There are also various clone products that are similar to those available from Samsung. This requires that the company keeps working to provide products that will fight off this threat. Apple Suppliers Apple does not face any threat from its suppliers. This is because the design, innovation of products and their production is done from within the company. In addition, the company uses forward integration which involves vertical integration that means the company acquires the distribution channels of its products larger economies of scale and higher market share. Power of buyers The power of buyers is high because there is low switching cost in changing of brands. In addition, the pc tablets that are in the market are almost similar in performance and in the features. This gives buyers a variety of choices to make when selecting their desired products. Threat of substitutes Substitute products are plenty and the threat faced by these products is high. This is because consumers can easily switch to other mobile phones or to other personal computers other than Apple products. The competitors have similar products like the tablets from Samsung and Windows. This gives the threat a high force since the selection of the product by consumers is not limited to one product. It is the duty of Apple to make their products the most attractive to them so as to attract the attention of these consumers. SWOT Analysis Samsung Strengths The main strengths of Samsung include its high focus on the high end of the market place so as to keep providing products that are appealing and competitive. They have also invested heavily on technology and this enables the company to produce products that are up to date with new technology. The staff at Samsung is well acquainted with new technology and this makes them produce to the expected standards of technology. Their drive towards innovation makes their products competitive. Weaknesses The Samsung products are not friendly to their consumers. In addition, their products appear to be low quality in their outside image. This does not attract when compared to other products. Further, the company is not proactive in making new products. Opportunities Samsung has the opportunity of introducing unique products and a variety of existing products. They can also introduce new mobile phones and other products at affordable prices. The company can also launch sub brands to it. Samsung also has the opportunity of opening up new stores. Threats One of the threats faced by Samsung is competition from other electronic companies like Nokia and Apple, Sony, Panasonic, LG and other consumer electronics companies. The company also lacks a fashion statement and this threatens its ability to advertise. The advertisements made by its competitors also provide a threat to Samsung. Apple Strengths Apple has a strong brand that guarantees the return of its customers. This saves on the cost since keeping existing customers is cheaper than attracting new ones. Apple also has a strong and reliable operating system. The Mac OS has the reputation of being virus free. The gadgets produced by Apple are easy to use because of their excellent designs. In addition, Apple products’ integration is high and this attracts most consumers. Weaknesses The Mac OS from Apple does not have gaming capabilities. This does not bond well with the young generation. In addition, their computers are not upgradable. Their products are also limited in range and the company has to rely on high end products. Opportunities Apple has the opportunity to diversify its products. It can branch out and collude with other software developers to make more applications. In addition, the negative perception by the public over Windows Vista is an opportunity for Apple to intensely campaign for its OSX. The company can also make products that are upgradable. Threats The threat of competition from companies that sell similar products is high. In addition, the volatility of the economy could cause a dip in the market of Apple. There is also improving technology by competitors and this threatens the Apple company. Further, there is a leadership gap after the demise of the co-founder, Steve Jobs. Market segmentation The market segmentation of these companies involves demographic and geographic segmentation. This enables the companies to distribute their products to various geographic locations and across the demographical distribution of age. Behavioristic variables also play a part since the trends determine the end use. The last variable is the psychographic variable which entails lifestyle. Target markets The target markets for Apple and Samsung products are people in the middle class and upper income people who can pay more for better experience. They also target people who like having fun with new technology. These products are targeted to music enthusiasts aged between 12 and 35. The other target group is professionals in business and in the media and design industry. Segmentation variable Characteristics Demographic The target age varies between 12 and 35 for entertainment products. The older folks are targeted through professional consumer products Geographic The targeted regions are worldwide. Products are spread across the globe Psychographic The lifestyle of people is suited suing most products by development of new products that utilize new technology Behavioristic variable The volume of usage and the sensitivity of prices determine how the products sell. Targeting strategy Samsung uses a differentiation strategy where its products are differentiated into three different products as product attributes, firm linkages and firm-customer relationships. Through this strategy, Samsung reaches out to the various segments in the market. Similarly, Apple uses differentiation strategy because the company wants to utilize the conceptual distinctions that are obtained in product differentiation. Apple uses product mix, product features and links made with other firms together with its reputation in reaching out to its targets. The easy-to-use products cover a wide range of segments (Benner, 2001). Positioning strategy Karadeniz (2009) stated that the positional strategy of a company determines where it places itself before its consumers. Samsung has positioned itself as a company with a wide variety of products that are of good quality and can be obtained at an affordable price. This has positioned the company’s reputation at a great position on consideration of the existing customers. Apple has placed itself as a company that provides attractive products and this is the reason as to why it has very loyal customers. Recommendations Samsung has the opportunity to expand its products. Through this, it can reach out to new markets. In addition, the company can use less priced products so as to reach out to the low class users who cannot afford the high priced products. This is because the current products are only affordable by the middle class and the high income individuals. On the other hand, Apple products have been known to be un-upgradable. They should be made to have the ability to be upgraded so that consumers have the opportunity to retain the products for long. This will eliminate their desire to shift to products from other companies. Bibliography Benner, M. (2001). Moving Technologies to Greater Heights: Analysis of the Advancements of the Apple Company. New York: Touchstone. BusinessWire, (2012). CE Industry Sees 27 Percent Increase in Responsible Recycling in 2012. Retrieved on April 27, 2013 from . Industry Directions. (2000). Critical Success Factors for Electronics and Appliances Companies: Companies to Meet Today’s Top 3 Issues. Sage Softwares. Karadeniz, M. (2009). Product Positioning Strategy in Marketing Management. Journal of Naval Science and Engineering, Vol. 5, No 2, pp. 98-110. Kaynak, E., Tatoglu, E. & Kula, V. (2005). An analysis of the factors affecting the adoption of electronic commerce by SMEs: Evidence from an emerging market. International Marketing Review, Vol 22, NO. 6, pp. 623-640. Kozmetsky, G. & Yue, P. (1997). Global Economic Competition: Today's Warfare in Global Electronics Industries and Companies, London, Kluwer Academic Publishers. O’Grady, J. (2009). Apple Inc. USA: Greenhouse Publishing Group. Samsung (2013) Corporate Profile, Retrieved on April 27, 2013 from . Sehgal, V. (2011). Supply Chain as Strategic Asset: The Key to Reaching Business Goals, New Jersey: John Willey and Sons. Van Slyke, C., France, B. and Varadharajen, S. 2005, “A comparison of American and Indian Consumers Perceptions of Electronic Commerce”, Information Resources Management Journal, Vol. 18 No. 2, pp. 24-41. Read More