Existing business strategies, domestic and global environments, as well as organizational capabilities
According to experts, Apple and Samsung have very different business strategies that have helped them to remain relevant, especially in the dynamic smart phone market. When Steve Jobs started Apple, his main focus was to have a product that will satisfy the needs of its customers in a manner that its competitors could not match (Hill & Jones, 2012).
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Studies have established that the differentiation business model adopted by Apple has played a crucial role in giving the company a solid competitive advantage over competitors such as Samsung. This approach has allowed Apple to dominate the market for such a long time because the ability to have unique products of.
Although this strategy backfired terribly in the beginning when Apple was launching its operations, the resilience shown by Steve Jobs to hold onto it proved a worthwhile decision in the long run. At the time, Dell was the biggest competitor that the company had, and jobs did not want to make substandard and low-cost products in order to match the competitor (Hill & Jones, 2012).
Apple’s corporate culture that develops along crucial elements of strategic human with resource management and leadership, as well innovation has played a crucial role in its prolonged success, especially in the international markets. However, the business strategy of Apple has changed a lot since Tim Cook took over the leadership of the company. He is yet to understand the philosophy adopted by Jobs of striving to provide their customers with unique products (Hill & Jones, 2012).
The business strategy used by Samsung develops along a number of pillars that have en withabled it to perform well in both domestic and global markets, as well as become an influential market player. One thing that has helped Samsung to establish its operations in the market has been the ability to be a fast follower by learning from its competitors (Chang, 2011).
Experts argue that Samsung acts like a classic market leader who closely examines the steps made by its competitors, studies their new products, and quickly develops their version of the same products as soon as they start to gain stability in the market. The unique ability to develop products that customers prefer coupled with good marketing has played a crucial role in Samsung’s prolonged success. Second, Samsung is very effective and aggressive in investing money in a business opportunity borrowed from its competitors (Chang, 2011).
For example, Samsung often develops their products by adding features that a competitor like Apple does not have in their latest products. Experts argue that this strategy helps the company to be at par with its competitors in terms of pricing their products and meeting the market demands. Third, Samsung has a much lower production cost compared to Apple (Chang, 2011). Reports indicate that Samsung produces most of the elements in its products.
Lastly, the level of managerial commitment at Samsung has propelled it to global success. Experts argue that one of the best strategies that any company can use to achieve competitiveness in a market is to remain committed to its managerial goals, objectives, and guiding principles. This strategy will be very helpful in the long term because the company will be able to develop products that will change the dynamics of the smart phone market (Chang, 2011).
SWOT analysis and business level strategy
Apple has four major strengths that have made it a market for such a long time. First, it has excellent selling and publicity capabilities. Second, the company has a well-built and a far-reaching supply channel across the United States and the world at large (Prasad, 2002).
Third, the company has over the years demonstrated its good insight in regard to vertical integration of its objectives and business strategies. Fourth, Apple has a good market reputation and brand awareness that has made it very consistent in terms of meeting their customer needs (Prasad, 2002). Apple has four major weaknesses that have affected its ability to achieve its strategic goals objectively.
First, the company lacks diversification in terms of their products and the market pricing strategy. Secondly, the company suffers because of its poorly organized supply chains in India and China, which are its biggest foreign markets (Prasad, 2002). Third, the company is highly dependent on sales made on consumer electronics for revenue that is used to support its other interests.
Lastly, the company’s products are not compatible with the other operating systems used by their competitors, thus reducing the desirability among consumers (Prasad, 2002).
Apple also has a number of opportunities that it can exploit to its advantage. They include venturing into mobile payments service provision and acquisition of valuable companies. Some of the threats that the company needs to address include increased competition and possible future lawsuits in regard to patent infringements and other related violations (Hill & Jones, 2012).
Samsung has a number of strengths that have helped it achieve success for such a long time. First, it has very innovative product designs that consumers can easily relate to. Second, the company promotes environmental stewardship through its production process (Harrison & John, 2007).
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Third, the company’s products are compatible with most of the operating systems currently available in the market. Fourth, Samsung has a very economical production process that helps it to make good revenue from its products by selling them at competitive prices. Fifth, Samsung has a good marketing strategy that helps to attract more consumers to buy their products at the expense of the competitors (Harrison & John, 2007).
Samsung also has a number of weaknesses that it should address in order to achieve dominance over its numerous markets. Some of these weaknesses include low profit margins despite making the most money from sales, a very large portfolio of products, patent infringement, and partnership with its main competitors. Samsung also has a number of opportunities that it can exploit and achieve market dominance.
They include the fast growing smart phone market in Asia, the emerging trend of mobile advertising, acquiring valuable entities, growing demand for tablets, and the need for processors to service the fast-growing number of mobile applications (Harrison & John, 2007). To benefit from these opportunities, Samsung needs to address several threats that are likely to affect its business strategy.
These threats include the raging price wars with its competitors, breached patents, the dynamic nature of technological advancements, and the flooded smartphone market, especially in developed countries (Harrison & John, 2007). The ability of Samsung to remain competitive will depend on how it will reorient the corporate culture with its business strategies to meet the growing demands in every industry (Chang, 2011).
Strategies of the business leaders at Apple and Samsung group
Strategic leadership plays a crucial role in organizational success. Steve Jobs played a pivotal role in the stability of Apple in the global market. Experts often describe Jobs as one of the most strategic business leaders that have influenced technological development across the world (Prasad, 2002).
He preferred to think differently from his competitors by developing unique and quality products. One of the things that Jobs did at Apple was to empower the company’s employees to make a difference. Steve Jobs also set a good foundation for the company by using good human resource management strategies that compel employees to value the most important elements of their work and specialize in them. Jobs believed in giving the employees enough freedom and flexibility, as long as they meet their goals.
Other strategies that Steve Jobs used in helping Apple succeed in various markets include good marketing, consistency, having a different thinking approach, as well as good communication and public relations with all their partners. For example, Steve Jobs was reluctant to develop low-quality products to match their biggest competitors when they ventured into the market (Hill & Jones, 2012). Tim cook has continued with the same philosophy since taking over as the company’s leadership.
Business leaders at Samsung have also been effective in their approach to strategic management. One of the biggest reputations that Samsung has built over the years is its ability to have product designs with a global appeal and adapting to local business environments across its various markets (Harrison & John, 2007). Under the leadership of Lee Kun Hee, Samsung has effectively managed to give its customers a variety of products that meet their needs.
Samsung understands the importance of having cultural competent products, as the competition for market control keeps growing every year. Culture affects important market determiners such as customer preferences, attitude, and desire for change regarding products available in their local market (Stead, 2013). The company’s business leaders have invested a lot of resources in fulfilling their customer needs and working towards becoming the leading electronics brand in the world. Samsung has been excellent in localizing its products to suit the needs of every market.
For example, recently, Samsung created five lifestyle research laboratories in various parts of the world as part of their strategy to achieve market dominance and promote innovation (Stead, 2013). Experts argue that these labs will help Samsung to have better performance in foreign markets because of improved understanding of the emerging trends and the way consumers are likely to respond (Harrison & John, 2007).
The superiority of organizational competencies
Apple and Samsung have superior organizational competencies that have helped them to exploit their innovative capacities, develop effective organizational designs, and strategic capacities for improved success and more revenue. The biggest competency that has made Apple to have prolonged success has been its ability to develop unique products and adapt a different thinking approach compared to its competitors (Prasad, 2002).
Experts argue that the confidence that Steve Jobs had in his workforce helped to build a lot of motivation and believe in the validity of their objectives. The company also can identify market elements that are pivotal in achieving high profitability. For example, Apple has well-built and far-reaching supply channels across the United States and the world that help to make their products accessible to its consumers (Prasad, 2002).
On the other hand, Samsung has built a lot on its ability to identify emerging market trends by closely studying moves by its competitors. The company has a lot of received numerous applauds for its global branding and diversification strategy (Harrison & John, 2007). Samsung currently serves four major industries with numerous products designed to meet the needs of specific local markets.
Also, the fact that most Samsung products are compatible with most operating systems available in the market makes it easier for their customers to benefit from their numerous features (Stead, 2013). Consumers prefer to buy products that are easy to use, meet their needs, and help to boost their image.
Samsung has mastered the value of meeting these needs in all its products. For example, Samsung has a very economical production process that helps it to make good revenue from its products by selling them at competitive prices (Stead, 2013).
New business strategies for Apple and Samsung group
One business strategy that Apple can use to increase its profitability and competitiveness in the industry is developing products for customers of different socioeconomic classes (Hill & Jones, 2012). Apple has been criticized for developing products that do not cater to the needs of people in the lower social and economic classes. Experts believe that this strategy can help Apple to have a wider clientele, which will result in maximum profitability due to increased sales.
Designing products that meet the specific needs of every market will definitely make the company to be more competitive because more consumers will start considering their goods and services (Prasad, 2002).
An appropriate strategy that Samsung can use to increase profitability and be more competitive is to have a more independent production process by developing an operating system for its products (Stead, 2013). However, it should ensure that the operating system is compatible with others. This strategy will definitely increase the competitiveness and profitability of Samsung because their products will be more marketable.
Success of corporate level strategies
Apple and Samsung have had varied success in the implementation of their corporate level strategies. Both companies have not been effective in their integration efforts. Apple turned down an offer to partner with established entities when they launched their operations (Taylor, 2012).
Apple has over the years, believed in its capacity to meet its objectives without the need to have partnerships, especially those relating to the production process. Apple has always embodied vertical integration because it allows it to have more control over its operations, its less rigorous, and also encourages efficiency over flexibility (Taylor, 2012).
This means that Apple does not consider strategic outsourcing as an option for meeting its goals. The strategy that has helped Apple to create a successful business model has been its desire to have a different thinking approach.
On the other hand, Samsung has, over the years, embodied the concept of horizontal integration and strategic outsourcing. Samsung has numerous partners that supply it with most of the components used in developing its products. Some of the reasons as to why Samsung has used this strategy include low capital requirements and the ability to benefit from the success of everyone in the value chain (Stead, 2013).
However, this strategy has limited the ability of Samsung to achieve market dominance because it depends a lot on others to play their part to sell their products, there is less efficiency, and issues of trust often arise due to numerous collaborations (Stead, 2013). The strategy that has helped Samsung a lot in building a successful business model a clear understanding of the customer needs in every market coupled with effective marketing (Harrison & John, 2007).
Strategies for discouraging unethical behavior
One strategy used by Apple in discouraging unethical behavior is a written code of conduct. The second strategy used by Apple is training employees on the value of upholding ethics in their work (Prasad, 2002). For example, Apple always gives their new employees an orientation that entails training about the importance of upholding ethical behavior.
On the other hand, Samsung also has several strategies for discouraging unethical behavior. One of the strategies used at the company is a check and balance system that encourages employees to consider the consequences of their actions.
The second strategy used in the company is a corporate culture that develops along with the values of simplicity, candidness, communication, and inclusion of employees in major processes such as decision-making (Stead, 2013). The other strategy used by Samsung is workplace policies to promote ethical behavior.
Changing functional, business, and corporate strategies
Apple and Samsung can use several ways to change their strategies to achieve better performance and increased competition in the market. First, both companies can reorient their production processes in a manner that allows them to identify any emerging market trends and the best ways of meeting new customer needs. Second, both companies can reorient their business leadership approaches in a manner that allows for purposeful progress instead of rushing through decisions in a bid to counter competition.
This means that both companies should adapt a leadership structure that allows its employees to be involved in the decision-making process. Third, both companies should adapt a business strategy that encourages change and allows it to be implemented systematically taking into account the dynamic nature of customer needs and preferences.
Chang, S. (2011). Sony vs. Samsung: The Inside Story of the Electronics Giants Battle for Global Supremacy. New York: John Wiley & Sons.
Harrison, J., & John, C. S. (2007). Foundations in Strategic Management. New York: Cengage Learning.
Hill, C., & Jones, G. (2012). Strategic Management: An Integrated Approach. New York: Cengage Learning.
Prasad, A. (2002). Extremely Short Cases on Strategic Management. San Francisco: Excel Books India.
Stead, J. G. (2013). Sustainable Strategic Management. California: M.E Sharpe.
Taylor, T. (2012). Vertical vs. Horizontal Integration: Which is a Better Operations Strategy? Web.