Apple Inc. And Samsung Case Study Solution
Product Development Strategy:
Apple used product development as its main intensive strategy to increase the growth of organization. For which, the company developed profitable and attractive technological products to grow its share in market and improve the performance of business. It was implemented through bringing innovation in processes of R&D as a critical factor of success and as a competitive advantage.
Corporate level strategy of Samsung
In the establishment of profitable business, Samsung uses diversification strategy by acquiring small companies. In the implementation of diversification strategy, generic competitive strategy of differentiation also required applied strategic alignment and competitiveness among the subsidiaries of Samsung’s business operation.
The revenue growth of Samsung was dependent on the penetration in market from the current product’s sale in the electronics market. Such as the EU market of electronics consumer where the organization has already been operating. Samsung has put major emphasis on flood of products and vertical integration as a chief competitive advantage. Not only this, the business model of Samsung is focused on ramping up production volume and vertically integrating supply chain (ROSS, 2019). In the smartphone game, the success of Samsung is attributed to vertical integration. The company makes several components of smart phone, due to which it has gained the cost advantage.
Product Development:
The strategy of Product development is implemented by Samsung for the growth of business by introducing new products like electronic gadgets. The organization rolls out new model of smartphones like Apple on regular basis. The organizational culture of Samsung significantly affects the effectiveness of operations, efficiencies of value chain, management of supply chain and other activities of business. (MARTIN, 2019)
Business Strategy –Focus Cost and Collaboration
To leverage the business on focus strategy, the organization is required to target a specific niche market through understanding of market dynamics with the consumer needs, by cutting product cost or differentiating offers to capture the maximum share of market. The target market must include customers with innovative and unique demands that would increase the improved product designing for satisfaction of customers and must meet the regulation of government agencies. The system of production and delivery must be different from other segments of the industry,uncovering a unique advantage of cost.
As the development of business is not based on the efforts of one person. Therefore, collaboration with multiple parties is necessary both from inside and outside the organization. The developer of business should have the ability to build a strong relationship with its distribution network, management of conflicts and navigation through politics of office to get things done.
Unethical behavior of Apple’s leaders:
- Violation of laws of labor and rights of employees:Employees worked more than 60 hours a week,and the employment of children age of less than 15 years, which is against the law as well as the acts for children’s right.
- Low Wages: The employees are provided with low wages in comparison to their working hours.
- Engaged with innovation:Employees involved in innovation marketing had faced injury incidences such as exposure to toxic chemicals.
Unethical behavior of Samsung’s Leader:
- Astro-turfing: The organization paid people to their product review, which results in the loss of faith in brand and its products.
- Illegal practices of labor: Employees working 16 hours a day the whole month with only one day off.
- Hiring of underage labor: Samsung hired young employees of age 16 years.
Recommendations:
Samsung and Apple Incorporation should be adopted the new way to trigger its innovations by focusing to satisfy the needs of the people instead of focusing to satisfy the needs of society because people will loved the products if they feel that they are manufactured to satisfying their needs and wants in order to maximize comforts in their lives by decreasing the time that they are spending on unwanted activities and products. Besides this, it has been assumed that this will helps to maintain and develop the trust building customer relationships after manufacturing and offerings the new product in the market. Samsung and Apple Incorporation should use the price skimming strategy along with the competitive pricing strategy to steal customers form the competitors.
As it knows that the Apple Incorporation is following the cost leadership type of business strategy by opening its manufacturing plant in one of the cheap labor cost country named China, Samsung also suggested to change its business strategy form differentiation to cost leadership as well by becoming the lowest cost competitor in the smartphone industry which will also help to fulfill the price skimming strategy by cutting the price in order to get the competitive edge over competitors.
Samsung and Apple Incorporation needs to go with the intensive growth opportunities by following the development of new products with innovative growth strategies such as market penetration and market development which have considered the lower priorities in the smart phones technological enterprise. Market development and market penetration are the two main intensive growth opportunities which can improves the resilience of Apple Incorporation and Samsung companies against its aggressive competitors such as Nokia.
Conclusion:
Both Apple and Samsung are great competitors of one another in the electronics industry.In comparison to Apple’s 13.9% of market share, Samsung is the first leader in the market of smartphones with a market share of about 21.4%. The culture of Apple is associated with the policy to hire best employees from the market maintaining and reinforcing a corporate culture. Samsung’s core competencies mainly involves creation of customer value, innovative organizational culture, technology leadership and creative workforce.
Exhibits
Exhibit – Unethical actions of leaders of Apple and Samsung
| Apple | Samsung |
| Violation of laws of labor and rights of employees | Astro-turfing |
| Low Wages | Illegal practices of labor |
| Engaged with innovation | Hiring of underage labor |
Exhibit – SWOT Analysis of Apple
| Strength | Weakness |
| · 13.9 percent of electronics industry representing a strong brand equity
· Continuous investment and research and development · Develops its own hardware, software and operating system · Strong loyalty of customers |
· Limited network of distribution.
· Product prices are high. · Ineffectively functioning.
|
| Opportunities | Threats |
| · Expansion of distribution network
· Advancement in technology · Development of new products · Improving the relation with retailers |
· Competition is
· Technologies used by Apple are nearly imitable · Struggling to keep its pace in the electronic industry
|
Exhibit – SWOT Analysis of Samsung
| Strength | Weakness |
| · Strong position and reputation
· Innovative variations in designs · Low Production cost |
· Lacks differentiation
· Low profit margin · Infringement of patents |
| Opportunities | Threats |
| · consistent product quality
· Strategic tie-ups will assist in ruling the electronics · Applicator processor manufacturer |
· Threat of substitute
· Rapid changes in technological use · Increased investment in R&D |
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