Apple vs. Samsung. What does the future hold - Research Paper Example

? Apple vs. Samsung – What does the Future Hold? The fast growth of technological advancement significantly considered as one of the major competitive area that intends to increase the competition among the global technological industries. The organisations of the modern world intend to develop their respective products or services in order to accomplish superior competitive advantage. In order to address the increasing competitive scenario in the technological industries, the report has been designed to briefly discuss the business performance of two major technological industries i.e. Apple Inc. and Samsung Group. A feasible and a short research has been analysed regarding the technological advancement adopts by these two major organisations in terms of offering superior quality of products to their global customers. Moreover, the discussion of this report also made a comparison between Apple and Samsung with respect to their sales, marketing as well as financial performance in the global electronics market. In addition the report has further justified regarding the choice of a healthier organisation amid Apple and Samsung by concerning the aforementioned factors. Introduction With regard to the tremendous development of the information and communication technologies, the modern organisations are continuously developing their product lines with revolutionary features. The organisations involve practicing advanced business strategies concerning innovative technological aspects in order to raise their customer base by a greater extent (Moodley, 2001). With this concern, a close competition among the global organisations has been recognised from the last few years in order to raise the level of customer satisfaction (Kimbell & Seidel, 2008). The main aim of this report is to make an adequate analysis of two major technological organizations i.e. Apple Inc. and Samsung Group which are playing leading role in the business market through offering decent technological products or services. The report will also analyse the business strategies that practice by Apple and Samsung which are merely successful to achieve consumer satisfaction in terms of offering up-to-date products or services. Apple Inc. is regarded as well known multinational corporation which significantly deals with manufacturing, designing along with marketing a large numbers of personal computers (PC), media devices as well as mobile communication and digital media players. Moreover, the company also deals with producing broad assortment of products that are related to software, hardware, networking solutions, peripherals and third-party digital content along with broad range of different application programs. The significant products or services of the company comprise iPad, iPhone, iPod, Macintosh (“Mac”) computers, Apple TV and a wide range of software applications for both consumers as well as professionals. The company provides its multifunctional products or services through its own retail stores, direct selling and online stores along with the different distribution levels such as whole sellers, value-added resellers, retailers and third-party cellular network carriers. Focusing upon innovation and delivering of creative product lines to its customers is viewed as one of the major business strategies of Apple. The company dedicated its best practices and experiences through offering its diverse range of products or services to its valuable buyers (Apple Inc., 2011). Samsung Group is another multinational corporation that offers a broad array of electronic goods to global consumers. The organisation can be characterised into four major industries that include consumer electronics, telecommunication equipment, home appliances and manufacturing of semiconductors. The official headquarters of the company is positioned in Suwon, South Korea and is operated worldwide through its large distribution channels. The organisation offers its vast range of product lines through the execution of different channels that comprise direct selling, whole sellers, value-added resellers, own retail chains along with different third-party cellular networks. According to the present day context, Samsung has been recognised as one of the major and leading organisations that manufacture cellular devices and semiconductor chips around the globe. The organisation can further be considered as one of the largest smart phone manufacturers that contributed Samsung to attain an outstanding economic growth over the last few years. Moreover, the organisation is well-known for its large manufacturing units producing home appliances and other consumer electronic products (SAMSUNG, 2012). Literature Review Apple As per the observation of the annual report of Apple, it can be viewed that the organisation established itself as one of the most reliable and sustainable brands in the electronic industry across the globe. Creativity and manufacturing advanced technological products are identified to be the major contributory aspects for organisations like Apple that effectively supports them to achieve competitive position over their chief business market participants (O'Loughlin, 2010). The company is highly associated with producing benchmarking products through the execution of creative designs, effective development in manufacturing procedure along with strong marketing of its diverse product ranges such as personal computers (PC) interrelated software, network solutions, portable music players, peripherals and other different accessories (Apple Inc., 2011). Moreover, in relation to brand management point of view, as it has been observed from the study made by Kotler (2002), the brand equity of an organization comprises additional values that are offered with the products or services. The supplementary value of the products or service may be reflected according to the feeling and thinking of the buyers concerning brand along with the price of its commodities. More significantly, the brand equity has been viewed as one of the major assets that represent intellectual and financial values to a particular organization (Kotler, 2002). In the context of Apple, the organisation has established significant position in the electronics industry since last few decades and became well-throughout the globe for its creativity and innovative trade activities. Therefore, it can be stated that the company is able to achieve a higher and strong brand image by providing decent products as well as its revolutionary steps in the technology and computer development era (Apple Inc., 2011). In addition, the observation of MarketWatch Inc. has also effectively discussed the financial performance of Apple which can further be considered as a major strength for the organisation to attain continuous success in the electronics market. According to the present financial scenario of Apple, it has been observed that the company encompasses a robust financial structure from the previous few years. The annual sales growth of Apple has been observed to be significantly elevating with 32.48 billion (35.30%) in the year 2008, 42.6 billion (31.17%) in the year 2009, 65.07 billion (52.73%) in the year 2010 and 108.6 billion (66.90%) in the year 2011. The aforementioned figures possess a tremendous growth rate that can be stated as one of the major strengths of Apple relating to financial performance (MarketWatch, Inc., 2012). Furthermore, Lam, Chow, Dabboussi & Lei (2005) also noted that the market and distribution system of Apple is considerably playing an exceptional role towards the increasing sale of the organisation’s products or services. Apple performs its business operations through the execution of different distribution channels that include retail stores, direct sales staffs along with its own third-party cellular arrangement as well as retailers, wholesalers and value-added resellers. The company considers direct selling as a form of effective marketing strategy for directly contacting with its targeted customer segments in order to augment its sales at large (Lam, Chow, Dabboussi & Lei, 2005). Samsung With regard to the sustainability report of Samsung, it can be viewed that the organisation possesses effective and efficient business principles that significantly supports the organisation to accomplish competitive position over its major business market competitors in the electronics market. By implementing cutting-edge technological advancements, the organisation has gained one of the leading global positions in terms of selling different variety of its products that include home appliances such as TVs, refrigerators, air conditioners along with other electronic devices. During the year 2006, the product such as LCD TVs, flat-panel TVs, smart TVs as well as 3D TVs played a major role for Samsung towards attaining leading position and increasing market share in the global electronics industry (Samsung, 2011). According to Samsung Electronics Sustainability Report (2012), it has been observed that its different series of product lines is one of the core resources as well as dynamic capabilities of Samsung by a greater extent. The organisation efficiently performs its different operational functions in accordance with meeting the requirements as well as the desires of the customers at large. In this similar context, the different divisions of its manufacturing units include telecommunication equipments, consumer electronics, home appliances as well as consumer electronic goods. Each of these divisions belonging to Samsung involves advanced technological features and effectual distribution of product lines. It has been viewed that the organisation focuses upon certain significant aspects that include product innovation and developmental procedure as effective business strategies in order to ensure enhanced customer satisfaction and most importantly to accomplish its predetermined business goals (Samsung Electronics Sustainability Report, 2012). As stated by Interbrand (2011), rapid development in the telecommunication devices is also recognised to be a vital aspect for Samsung to attain efficient market position in the global electronic industry. In this similar context, the smart phone business segment of Samsung is regarded as one of the major concerning areas that considerably impacts upon transforming the needs and desires of the customers. The research and development sector of Samsung is one of the key areas that help the organisation to sustain amid the leading computing service providers in the global market. The continuation of developing technologies and innovation of new products are highly considered by the skilled workforce of Samsung (Interbrand, 2011). According toVenkatraman (2005), the effective practice of New Product Development (NPD) can be considered as major advantageous factors for Samsung relating to its different ranges of product lines. The strategy concerning NPD found to be more effective for the organisation that concerns developing new products and it also facilitate to include innovative features within the existing products as well. Developing existing product especially the telecommunication products of the organisation have significantly augmented the overall sales of communication devices around the different regions of the world (Venkatraman, 2005). Discussion As per the rapid modernisation on the technological advancements and increased level of globalisation, the organisations intend to execute effective business strategies. Moreover, the organisations strongly believe that by introducing as well as implementing effectual business strategies, they can enhance their profitability along with productivity by a considerable level (The Centre for Sustainable Design, 1998). The organisations in the present business world are highly focused to develop their respective business strategies in order to attain a feasible business position. Therefore, it can be observed that an increasing competition exist between the organisations especially in the electronics market (Hamelink, 1997). From the perspective of Apple and Samsung, both the organisations significantly offer exceptional and advanced technological products or services as per the needs and desires of their respective global consumers. The following aspects have been taken into concern in order to differentiate the business performances of Apple and Samsung. Sales Difference According to the present day context, both Apple and Samsung can be considered as the leading business organisations particularly in mobile communication devices and other innovative electronic gadgets. Bothe the organisations employ effective business strategies in order to increase the sales of their broad array of product lines. Providing innovative products along with multiple features considerably generates an intensive competition amid the global organisations of electronics industry. Moreover, the increasing demand and expectations of the modern consumers significantly enforces the organisations to adopt advanced strategies in terms of manufacturing different products (Apple Inc., 2011). According to the observation of financial statement of both the organisations, it can be observed that both Apple and Samsung possess distinct approach of selling products to its targeted customer segments. Apple incorporates direct and indirect channels including retail stores, direct sales staffs along with its third-party cellular arrangements as well as retailers, wholesalers and value-added resellers. The company considers direct selling as an effective strategy to effectively and persuasively communicate the product benefits to its customers and provide high-quality services in order to earn a greater degree of customer loyalty. Conversely, Samsung performs its sales through involving effective state-level distribution offices as well as direct dealer interface in terms of offering its electronic products to the global customers (Samsung, 2011). Market Difference The research & development segment of Apple indicates as one of the major influencing factors that support the organisation to sustain among other leading computing service providers in this competitive global market. Notably, it is with the virtues of R&D initiatives that the company has been able to inculcate high degree of innovation in its business operations. This indicates that the market position strategy of Apple highly focuses upon offering advanced electronic products to its broad customer segments. Therefore, the company is also focused to expand its retail stores in the global extend. The increasing number of Apple Store can also be a part of a major opportunity to lead the company in the global context. Moreover, the organisation considers direct selling as one of the effective marketing strategies that supports to mount its customer base and also to enhance productivity along with profitability (Lam, Chow, Dabboussi & Lei, 2005). In the similar context, Samsung also possesses similar marketing strategy that emphasises upon delivering its broad assortment of electronic products through the execution of different distribution channels. The organisation significantly follows effective sales and marketing strategy through employing different advertising and promotional activities. As per the business strategy of the organisation, it can be observed that Samsung incorporates distinct marketing strategy for its different product lines. It has been observed that the organisation practices different strategies in its different business segments such as consumer electronic goods, telecommunication devices and home appliances for the purpose of attaining its expected business goals. The advertising and promotional activities are highly executed by Samsung for its telecommunication devices and home appliances which are promoted through various media sources such as newspapers, television channels and internet. Moreover, the sponsorship activities can be identified as one of the major advertising and promotional initiatives for Samsung that incorporates various programmes throughout the globe. The sponsorship activities can further be regarded as an essential tool that has been found to be quite effective for Samsung to attract a large number of target audience to buy its broad array of technological products (Ming, n.d.). Differentiation in Financial Performance According to the financial performance of Apple, it can be identified that the organisation has significantly achieved a feasible height in collecting higher revenue from its innovative and decent computing products and services. As per the financial statement of the organisation, it has been observed that continuous development have been witnessed since past 3 years. The organisation is significantly performing incredible effort that resulted as an efficient financial growth since the last few years. According to the annual sales report of Apple, it can be observed that it has elevated its financial position through a robust growth rate in each fiscal year. The organisation has achieved 31.17% annual return in the year 2009and experienced 52.73% in the year 2010 and 66.90% in the year 2011 relating to annual sales growth. Therefore, it can be identified that the financial performance of the organisation significantly depicts extensive financial growth that ensures higher profitability and healthy as compared to others (Apple Inc., 2011). From the perspective of financial performance of Samsung, it can be viewed that the organisation has achieved KRW 9.8 trillion in the year 2009 and experienced healthy growth of accomplishing KRW 16.7 trillion in the year 2010. However, the financial performance of the organisation incurred its profit rate to KRW 13.7 trillion during the year 2011 (SAMSUNG, 2012). Therefore, it can be identified that the financial performance of the organisation has been experienced instability position that has been witnessed from the financial statement of the organisation. Justification On the basis of the above discussion, it can be affirmed that both the organisations are playing imperative part in terms of business growth concerning different levels of their business performances. The organisations also emphasises upon initiating advanced research and development initiatives as well as effective marketing and advertising approaches in order to ensure substantial growth in the global electronics industry. Furthermore, considerable differences have been viewed between Apple and Samsung in terms of overall sales as well as profit. Apple is considerably performing robust elevation of its financial position with increasing growth rate in its annual turnover and profit level. Therefore, it can be stated that Apple significantly found to be healthier than Samsung in the electronic market due to its superior performance in terms of business strategy, product design as well as financial performance that ensures to form new customer segments in the business market. Moreover, Apple has successfully achieved worldwide sensation with its offering of consumer electronics and valuable products or services. The vibrant business performance of Apple in terms of providing innovative products with creative features ultimately supported the company to become much healthier as compared to others by a certain extent. With this concern, the development of new brand within the product line of Apple can be regarded as a beneficial step for the company in terms of serving its customers with more updated and developed products at large (Suh & Park, 2009). Conclusion As per the present continuous development of technological advancements, Apple and Samsung can be considered as most competitive organisations in terms of offering advanced technological equipments and effective business strategies. According to the sales and marketing strategy as well as financial performance of both the organisations, it can be recognised that both Apple and Samsung are the major dominant competitors in the worldwide electronics industry. However, the business performances of both the organisation are observed to be quite different from each other that differentiate in their quality business performances. In the context of Samsung, the organisation incorporates a large number of electronic products including consumer electronics, household appliances as well as telecommunication and computing equipments through forming different business divisions. The business strategy of Apple significantly focuses upon delivering superior quality of products to its customers by implementing advanced technologies. As per the observation based on sales differences among Apple and Samsung, it can be observed that the sales strategy practiced by Samsung focuses upon increasing its sales through augmenting new customer segments. Conversely, the customer-centric business market and distribution process of Apple ultimately makes the company to become quite healthier as compared to others. References Apple Inc. (2011). Form 10K (Annual Report). Retrieved from http://files.shareholder.com/downloads/AAPL/1352035942x0xS1193125-10-238044/320193/filing.pdf Hamelink, C. J. (1997). New information and communication technologies, social development and cultural change. Retrieved from http://dare.uva.nl/document/14111 Interbrand. (2011). Best global brands 2011. 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The Centre for Sustainable Design. (1998). Analysis. The Journal of Sustainable Product Design (7), pp. 1-66. Venkatraman, R. (2005). Role of design service firms in product innovation. Retrieved from https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&ved=0CFUQFjAC&url=http%3A%2F%2Fciteseerx.ist.psu.edu%2Fviewdoc%2Fdownload%3Fdoi%3D10.1.1.98.8439%26rep%3Drep1%26type%3Dpdf&ei=SpvRUOGgHpCnrAfOsYGoDA&usg=AFQjCNHC-oD1bls549AzO222gJRZAD4QRg&sig2=VelJDyBPx4mML6FUPy8ewA&bvm=bv.1355534169,d.bmk&cad=rja Read More