Competition between Giant Smartphone Companies - Case Study Example

Case study Introduction Evidently, Samsung is among one of the best telecommunication business franchise in the world. On the same note, the company majorly focuses on the production of electronics for instance television sets, computers among others. However, in this paper we are going to focus on the Samsung Company in the area of communication particularly on the computers and the mobile smart phones. Essentially, the headquarters of this company is located in Suwon in South Korea. It is worth noting that in the year 2007, the Samsung telecommunication business recorded a huge growth approximated at about 40%. Consequently, following this development, it was documented as the second largest mobile device manufacturing company in the globe. Apparently, its market share rose from 11.3% in 2006 to an estimated 14% in the following year(Canfield, 1968). Furthermore, it was recorded that an estimated 300million mobile devices were sold towards the end of the year of 2011 which was closer to their competitor’s nokia who sold slightly more that year. In addition to that, as of the year 2012, Samsung was the largest device manufacture of mobile phone running on the Google android with a 46% of the market share(Hendrix, 1988). Evidently, it is worth noting that the Samsung Company is a successful business venture that has recorded huge profits from the sale of mobile devices all over the world. On the contrary, this paper strives to highlight some of the communication strategies put in place by the company in order to attract more customers to buying their products as opposed to those from their rivals who are the apple company(Jones, 1960). On that note, in the subsequent sections of this paper we are going to decisively discuss the strategies adopted in relation to the market and establish how effective are the strategies towards the development and growth of the business as a whole. Moreover, the paper will also document the efficiency of the company and at the same time document the response of the apple company to the insurgence of the Samsung devices in the market. On the contrary, it is worth noting that the telecommunication industry, particularly the mobile phone industry as a whole has recorded an average percentage annual growth of approximately 57.3 between the periods of 1996 to 2002(Hendrix, 1988). However, it is important to note in 2002 the rate dropped as a result of a number of factors. On that note, the recession of the united states economy, reluctance on the part of the global information technology and lastly the late launching of the 3G based services in the market(Jones, 1960). Notably, over the years to come the industry has recorded significant growth attributed to the rise in the demand form customers particularly, those purchasing the merchandise for the first time in the rising market globally(Canfield, 1968). Consequently, as a result of the increased complexity of the phones as a result of new innovations the growth of this particular area of business is destined to reach unbearable growth margins as a result of the demand for the smart phones in the world thus the need to adopt appropriate business strategies. First and foremost, one of the strategies adopted by Samsung is the competitive advantage. On the same point, this strategy can be described as a product that the customers of the organization value as highly than similar offering from its competitors. In simple terms this can be described as having something that your competitor lacks in the particular area of interest(Hendrix, 1988). Apparently, in this case the Samsung Company offers a variety of phone models as compared to their competitors Apple. However, it is worth noting that the mobile devices manufactured by the Samsung Company are affordable in terms of cost and offer a wide range and even at some instances more features as compared to their competitor models, Apple. In addition to that, the competitive strategy is normally a temporary occurrence since the competitor in most cases strives to work to curb this deficit by trying to duplicate the competitive advantage to work in their favor(Jones, 1960). Therefore, in order to be ahead in the market with respect to the competitor, organizations have to continuously come up with new competitive advantages. Notably, the Samsung Company has strived to put the competitive advantage to their advantage through the adoption of the following competitive policies, namely; First of all, the cost leadership is one of the competitive policies adopted by the Samsung Company in a bid to stay ahead of their competitors who are the apple company(Canfield, 1968). On the same note, this entails the organization utilizes information system to shift the interest and the cost of the operating the business, in other words, the cost of the business processes is reduced tremendously with the aid of the online business models which include the relationship between the suppliers and the customers(Jones, 1960). Essentially, in a bid to cut the cost of marketing the merchandise produced by the Samsung company, the company has adopted the online marketing strategies which can be used to reach to a large number of the market, particularly the suppliers and the customers as compared to the hiring of individuals to market their merchandise . Evidently, though the incorporation of the e-procurement systems serves to reduce the cost of running the company. Consequently, this has served to improve the profits of the sales since fewer funds are utilized in the operating of the business and yet more income is recorded on the long run(Hendrix, 1988). In addition to that, the second competitive strategy adopted by the Samsung Company in a bid to boost its line of business is the differentiation. Apparently, this entails the development and the utilization of the differentiated systems in order to reduce the differentiation advantage of the competitor company. On the same note, it is evident that the Samsung Company has been able to use the chatting rooms and social media for instance twitter and Facebook in a bid to build the customer manufacturer relationship. In addition to that, through the aid of these online social sites, the company has been able to acquire feedback pertaining to their product and therefore modify them in order to suite the particular customer needs(Jones, 1960). Furthermore, the company has also been able to use this social sites to their advantage by marketing their new products for instance the launching of a new mobile smart phone device. Moreover, the company has also used these sites to create a forum in which they can communicate to their suppliers and dealers thus reducing the operation cost of their business. Evidently, by the use with this online technology, huge profits have been generated as compared to their competitors the apple company. In contradiction the apple company has retaliated to that fact by also opening their social; site account to achieve the same goal as that of the Samsung Company(Canfield, 1968). Thirdly, innovation is another factor of competitive strategy that has been adopted by the Samsung Company. Evidently, this strategy entails the usage of the information system to identify and generate new products and services in a bid to cater for the new market demands of the customers. Evidently, utilizing digital simulations and modeling to aid in the innovation of new phone models in a bid to be on the upper hand on the market with respect to the competitors(Hendrix, 1988). Notably, the use of the digital modeling and simulations is aimed at reducing the time taken and the cost of manufacturing the product thus reducing the overall cost repercussions on the market and company as a whole. On the same note, the Samsung Company with the aid of the digital modeling simulation has been able to come up with new products within a short span of time thus getting the market as compared to their competitors the apple company whom take along duration before coming up with a new product. Consequently as a result of this fact, the Samsung Company has been able to attract more customers as compared to their rivals due to the frequency of the innovations of new smart phone devices(Jones, 1960). On the other hand, this particular business strategy aims at utilizing the new initiatives for instance the establishment of online businesses. This has also served to increase the revenue of the company. In addition to that, the area of telecommunication and networking has also offered a huge potential in the innovation sector thus the company, in other words Samsung is bound to benefit from. Despite all this, the apple company has been able to respond appropriately to this new challenges posed on their way(Hendrix, 1988). Apparently, the apple company has been able to diversify their business scope for instance delve in the development of for instance online business in a bid to seek for an untapped market in which they can generate extra income as opposed to the manufacturing of the smart phone and computer electronics. Furthermore, the company has also strived to incorporate the simulation and digital designs of their products in a bid to be at per with the changing technological advancements being experienced in the area oftelecommunication. Furthermore, growth which is inclusive of the mergers and acquisitions is another strategy adopted in order to boost the business of the Samsung Company. Apparently, this strategy postulates the role of information technology in the expansion of the international business operations(Canfield, 1968). On that note, the establishment of global intranet and global platforms which are mandated with the task of overseeing the business transactions carried out across the borders. Evidently, the Samsung telecommunication company has been able to achieve this through the establishment of both the online which at time is referred to as the digital and the offline channels which are mandated with the task of overlooking the business activities depending on the jurisdiction and geography. It is important to note, that this is one of the reasons as to why the Samsung franchise has been able to span vastly over the globe and as a result earn huge returns in terms of revenues and capital. On the other hand it is worth noting that the Apple Company’s products are not as well diversified in the globe as compared to their counterparts Samsung(Jones, 1960). This can be attributed to the fact that the marketing and the operation manual of the apple company is not as efficient as compared to that of their business rivals. In addition to that, the other reason could be because apple products and merchandise are not selling since they are expensive as compared to Samsung yet the smart phones poses the same features and services hence customers opt for cheap but satisfies the need as opposed to the expensive one. In summation, the apple company needs to revise their business operations in a bid to be at the same level in terms of the profit gained in the market as their rival in the smart phone and computer electronics devices. Lastly, there is the strategic alliance which is another competitive strategy adopted by the Samsung company in a bid to boost business. Evidently, this strategy highlights on the need to cooperate with other stake holders in the market in a bid to boost the business as a whole. Evidently, the Samsung Company has been able to record huge profit levels as a result of a number of factors for instance the business convergence(Canfield, 1968). Apparently, the digital convergence can be described as the incorporation of the a number of features in the manufacturing of a mobile device for instance, a combination of computing, networking and communication appliance are to be manufactured in a bid to satisfy the user need or the demand in the market(Hendrix, 1988). Apparently, in simple terms the success of the Samsung Company in the area of manufacturing of the mobile phone can be attributed to the nature of the products they produce. Essentially, the demand on the current market requires that the kind of the mobile phone to be manufactured requires to perform a variety of tasks for instance the primary role of the mobile phone is communication, in addition to that entertainment utilities for instance games among other features for instance ability to access wireless networks need to be included in the manufacturing of the company(Canfield, 1968). Evidently, a phone with such diverse functionality in the apple company and other competitors for instance Nokia, is very expensive, in fact way over the affordability of the middle class and the low class people in the society(Hendrix, 1988). It is due to this fact that Samsung has been able to attract a huge customer base since they offer smart phone with all manner of diverse functionality at affordable prices at the same time they are classic phones thus there target population is the middle and the lower class individual in the society. Therefore, since this is the majority of the population in the world, they have been able to reap maximum benefit from the sale of their mobile devices in the globe. Moreover, the company’s success can also be attributed to the good reputation they have been able to build through their products which are of high quality. Although the digital convergence allows for the provision of great opportunities since convergence devices and services span vastly over a large population thus a huge market base(Jones, 1960). Evidently, this is not the case since the companies in this line of business must tackle the issue of competition from rival companies for instance Apple company in this context. However, Samsung has been able to survive in this highly competitive area of business since they have been able come up with their own core technology for instance nearly all Samsung smart phone use the Google android which has served as the distinguishing factor from others in the market(Canfield, 1968). On the same note, through this fact they have been able to reap maximum benefits pertaining to the usage of the Google android since in the event that any other mobile manufacturer delves to use the same technology, they will not reap as much profit as compared to the Samsung since there product will be considered as an imitation of the Samsung brand thus no customers as compared to the pioneer. In simple terms, the digital convergence stipulates the simple idea that the brand definition of a particular manufacturing company needs to be unique in order to cut through the highly competitive market of the mobile phone market. Although the Samsung company enjoys huge profit margins and the business is expanding rapidly, it has encountered a number challenges along the way(Jones, 1960). Firstly, as a result of the reduction in the entry barriers into the mobile manufacturing industry, stiff competition is expected in the market since this will facilitate more companies to join into the lucrative market and therefore with the aid of the digital convergence companies in the area of personal computers and networks will w given the mandate to compete directly with the Samsung enterprise thus this will serve to reduce the income since some of the Samsung customers may opt for the other companies products. In addition to that, the high end strategy which gives an account of the building of the Samsung brand of the Samsung business is under sharp criticism(Hendrix, 1988). Apparently, the margins of the profit level of the company are comparable to that of other mobile manufacturers for instance nokia. Evidently, due to the high prices of nokia devicesthey have been able to march the profit margins through the sale of just a few of their merchandise as compared to the large number of Samsung devices sold globally(Jones, 1960). Moreover, for the first time users, they may prefer cheap and affordable phone as compared to the Samsung products which are relatively expensive and this might serve to cripple the business of the Samsung enterprise. Furthermore, the Samsung technology used in the mobile devices is highly dependent on foreign companies for instance QUALCOMM among others. Notably, the cost implications are bound to increase in future as a result of the royalty payment if the Samsung Company does not come up with their own technology(Canfield, 1968). In summation, the Samsung Company has tried to respond to some of the challenges through the setting up and implementation of appropriate strategies to look into the matter. On that note, the challenges are bound to be resolved in the mere future since there implications are more of future as opposed to the current. However, it is worth noting that the company is still lucrative as compared to its rival apple, but this can change in the instant that the apple company implement the appropriate strategies in response to the Samsung’s insurgence into the market. Evidently, in response to the business strategies of the Samsung Company, Apple has embarked into trying to salvage the situation. Apparently, Apple has opened online social media accounts in a bid to gather information and get the required feedback pertaining to the specific interest of the market(Canfield, 1968). On that note, this is aimed at getting the requirement of the market thus producing products that suit the specific requirements of the customers and the market as a whole(Hendrix, 1988). In addition to that, this is also aimed at the creating a relationship between the manufacturer and the customers and the suppliers all over the globe. In turn, this has been able to reduce the operation cost of running the business since the internet has been used as a platform to market their goods as opposed to the hiring of marketing individuals which is expensive and also limited to the geography covered. In addition, in response to the price and the affordability of the phone manufactured. The company is still in the process of overseeing the reduction in the prices of the products. This can be achieved through the reduction of the operation cost in other words, the reduction in the capital required for the manufacture and the availing of the product to the market on time though the advocating for an automated form of running the business(Jones, 1960). In general the apple company also generates profits comparable to those generated by the Samsung Company. This can be argued by the fact that with the sale of a few of their products since they are expensive, it is comparable to the profit generated by the sale of huge number of the Samsung merchandise(Canfield, 1968). However, the company can make even more profits if the appropriate strategies in addition to the ones stated above are implemented. In conclusion, the Samsung and the apple companies are an example of a competitive and challenging business endeavor thus the need to be innovative. On that note, it is evident that the Samsung Company has grown tremendously since it was first founded in the year 1983 as highlighted in the previous section. Apparently, it is worth appreciating the role of information technology which has served to improve the terms of business in both the Samsung and the apple companies. On that note, with the aid of the internet the apple company has been able to oversee their business transactions over the world among other application that has been stated in the previous section of this text. Furthermore, it is worth noting that with the adoption of the appropriate business strategies and the company image and reputation, the Samsung Company is bound to rise and record even more profits that the current. On the contrary, the apple company is also bound to expand even more if they counter implement strategies that are meant to place them ahead of their rivals the Samsung Company. To this end, it is mandatory to understand the efficiency of the strategies of the Samsung Company in a bid to understand their success in the mobile manufacturing industry. Reference  Canfield, B. R. (1968). Public relations; principles, cases, and problems, (5th ed.). Homewood, Ill.: R.D. Irwin. Hendrix, J. A. (1988). Public relations cases. Belmont, Calif.: Wadsworth Pub. 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