Abstract
A comparative analysis of the two largest smartphone manufacturers, Apple and Samsung, is presented in the paper. A general description of these businesses is provided, examining diverse corporations in the smartphone industry, and describing their market segments and respective shares. Furthermore, the analysis involves a comparison of key metrics among these corporations, including sales revenue, net profit, smartphone sales volume, and net profitability.
The results indicate that while Samsung leads in smartphone market sales, Apple stands out as the more profitable company. Moreover, Apple’s net return on sales is higher than Samsung’s. Key metrics, such as organizational structure and leadership, have been compared, except for the financial analysis. The findings indicate that Apple favors a centralized, tightly controlled approach, whereas Samsung emphasizes a flexible, diverse matrix structure. Despite the significant differences, both organizations are undisputed leaders in their respective markets.
Introduction
For over a decade, Samsung and Apple have been the undisputed leaders in the global mobile device market. The philosophy of these brands is to create the most innovative, functional, and high-quality products (Tien & Chi, 2019). They have been irreconcilable competitors for many years.
In their time, each of the above brands has had a significant impact on shaping the current mobile device market. Over the last decade, they have consistently ranked at the top of the global list of mobile device manufacturers. At the same time, they are very different companies with different approaches to what smartphones should be and how business should be conducted. Against this background, comparing these brands on various indicators will be pretty reasonable.
Comparison and Contrast of Assortment and Financial Performance of Corporations
Apple Inc. and Samsung Electronics operate in the global technology industry characterized by rapid innovation, dynamic consumer preferences, and intense competition. Apple’s hardware, software, and services ecosystem creates a seamless user experience. According to consulting firm PwC, Apple is the world’s second-largest company by market capitalization as of July 2019 (Jiang et al., 2019). Apple is an innovative leader in the application of high technology, and its core products include Mac, MacBook, iMac, iPhone, iPod, and iPad.
On the other hand, Samsung Electronics has a broader product portfolio that includes smartphones, televisions, home appliances, and semiconductor components. Nowadays, Samsung has 200 subsidiaries in nearly 80 countries (Podolny & Hansen, 2020). It is expanding through acquisitions of other technologically advanced industries.
At the same time, Apple has chosen a different path of development, building its own ecosystem. In 2019, Apple Music, Apple TV+, and Apple Arcade services were launched, designed to provide iPhone owners with a comprehensive range of music, TV series, and games (Deserti & Rizzo, 2019). Given the large number of users who already have iOS devices in their hands, Apple’s services initially have a broad customer base.
To assess the companies’ production scale, it is essential to compare their primary financial indicators, using the example of sales of their main product, a cell phone, for both corporations. The data in Tables 1 and 2 show that Apple is more profitable despite Samsung selling significantly more smartphones (see Appendix). In 2018, Apple earned $265,595 million, with revenues up $36,361 million compared to 2017 (Deserti & Rizzo, 2019). At the same time, the number of smartphones sold decreased in 2018 compared to 2017. In the US, the company’s net income increased by $11,880 million to $59,531 million (Haizar et al., 2020).
Analyzing Samsung’s key financials, one can state that the company’s revenues increased in 2018 compared to 2017, but not as significantly as Apple’s. Revenues grew by $3,434 million to $199,269 million in the US (Tien, 2019). At the same time, there was a decrease in sales of more than three times that of Apple.
The smartphone segment in which Apple operates is more resistant to market fluctuations (Green, 2023). Thus, Apple’s efficiency is higher than that of Samsung. Accordingly, the net return on sales, defined as the ratio of net profit to sales revenue, Apple’s net profit margin amounted to 22.4% in 2018, while Samsung’s was 18.2% (Iwai, 2020). These ratios are a factor in Apple’s market value being higher than Samsung’s despite fluctuating market conditions.
Comparison of Organizational Structure of Leadership and Personnel
The features of organizational structure are equally important in the context of comparing companies. Organizational culture has a profound impact on the variety of an organization’s processes, employees, and performance (Pathiranage, 2019). Therefore, to understand the nature of a company’s governance, it is necessary to start specifically with the type of structure. Apple is known for its functional organizational structure, in which the roles and responsibilities of the business units are divided into design, development, marketing, manufacturing, and other areas (Tien & Chi, 2019). This structure allows Apple to focus on every aspect of producing and selling its products.
However, it is worth noting that Apple is distinguished by strong centralization in strategic decision-making (Table 3). Judgments are made at a higher management level, especially under the leadership of the CEO. Under the CEO, Apple has a Senior Leadership Team (SLT) comprising key executives responsible for various aspects of the company (Tien, 2019). These executives report directly to the CEO and play a crucial role in shaping Apple’s product strategy and business operations. It allows the company to maintain a consistent style and quality standards for its products, but it can slow innovation and responsiveness to market demands.
Unlike Apple, Samsung uses a matrix management structure. The company is divided into various divisions and units, each managed independently and with its own functions and goals (Podolny & Hansen, 2020). These workers have significant autonomy within their respective divisions, allowing Samsung to operate as a conglomerate with diverse business interests, including electronics, semiconductors, construction, and more (Munir & Putra, 2019).
Samsung’s organizational structure promotes innovation and a diverse product portfolio. However, it may lead to less control over quality and brand identity, as Apple does (Table 4). Both approaches have their advantages and disadvantages, and the success of companies largely depends on their ability to adapt to a rapidly changing market and meet the evolving needs of consumers.
Conclusion
Therefore, it can be concluded that both corporations employ specialized business techniques and approaches, positioning them as the undisputed leaders in the mobile device market. The financial comparison reveals that Apple is more advantageous and efficient in utilizing its resources, despite Samsung selling more smartphones. Apple offers premium products to its customers, unlike Samsung’s more affordable devices—Apple bets on high prices and iconic brands, which allows it to keep margins high.
Moreover, the organizational structure and leadership in both companies are distinct. A centralized and controlled approach can characterize Apple, while Samsung focuses on a flexible and diverse matrix structure. Apple and Samsung continue to compete in the mobile device market, and their business philosophies and attitudes toward smartphone manufacturing differ. Nevertheless, both companies remain essential players in the industry and continue influencing the shaping of the fast-changing mobile device market.
References
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Green, S. (2023). Apple. Bellwether Media.
Haizar, N. F. B. M., Kee, D. M. H., Chong, L. M., & Chong, J. H. (2020). The impact of innovation strategy on organizational success: A study of Samsung. Asia Pacific Journal of Management and Education (APJME), 3(2), 93-104.
Iwai, H. (2020). Practicing the company philosophy to survive: The competitive world of Samsung Group. Cultural Translation of Management Philosophy in Asian Companies: Its Emergence, Transmission, and Diffusion in the Global Era, 121-135.
Jiang, P., Chen, Y., Liu, B., He, D., & Liang, C. (2019). Real-time detection of apple leaf diseases using deep learning approach based on improved convolutional neural networks. IEEE Access, 7, 59069-59080.
Munir, M., & Putra, A. R. (2021). The Influence of Brand Image and Product Quality of Samsung Brand Washing Machine on Brand Loyalty. Journal of Marketing and Business Research (MARK), 1(2), 83-92.
Pathiranage, J. (2019). Organizational culture and business performance: an empirical study. International Journal of Economics and Management, 24(2), 264-278.
Podolny, J. M., & Hansen, M. T. (2020). How Apple is organized for innovation. Harvard Business Review, 98(6), 86-95.
Tien, N. H. (2019). International distribution policy comparative analysis between Samsung and Apple. International Journal of Research in Marketing Management and Sales, 2020(1), 2.
Tien, N. H., Dat, N., & Chi, D. T. P. (2019). Product policy in international marketing comparative analysis between Samsung and Apple. International Journal of Research in Marketing Management and Sales, 1, 129-133.
Appendix
Table 1. Samsung Financial Analysis
Table 2. Apple Financial Analysis
Table 3. Personnel Structures: Apple and Samsung
Table 4. Key Leader Organizational Structures: Apple and Samsung