Strategic Management of Apple Inc. and Samsung Group - Assignment Example

Strategic Management of Apple Inc. and Samsung Group Introduction Businesses are established in order to achieve the set goals and objectives in their mission and vision statements. Business owners and managers always ensure that they do not spare any activity and strategy that can make them achieve their set goals and objectives. They often try to adopt strategies that inspire their human resources effectively so that they deliver their ultimate best for the success of the organization. Additionally, they are always keen on any changes in the business environment, which they can use to enhance their success and effective performance. Strategic management, as used in most businesses simply refers to the process of identifying and describing the strategies that managers use in achieving better performance and competitive advantages for their business organizations (Jeyarathnam, 2008). A business can be described as having competitive advantages when its profitability at the end of the trading period is higher when compared to average profitability for other businesses in the same industry (Markides, 2008). Strategic management can be described as a set of acts and decisions that managers undertake that results in the firm’s effective performance (Jeyarathnam, 2008). The manager is expected to have a comprehensive analysis and knowledge of the competitive and general business environment in order to arrive at right decisions that enhance the success of the organization. In doing this, managers are supposed to conduct a SWOT analysis of their organizations consistently (David, 2005). From the SWOT analysis, they are able to effectively utilize their strengths for better performance and success, minimize their weaknesses, and exploit the opportunities identified in the business environment (Jeffs, 2008). Additionally, the SWOT analysis helps them to identify their threats, thus establishing better strategies and approaches they can use to remain competitive. From this process, it can be deduced that strategic management, as applied in business organizations, involves much planning about many predictable and unfeasible contingencies (Markides, 2008). The process applies for small, medium and large organizations, because even small organizations often face competition just like other businesses (Jeyarathnam, 2008). This paper examines the concept of strategic management as it applies at Apple Inc., and Samsung, which are among the world’s largest renowned companies in the manufacture and sale of consumer electronics. Apple Inc. Apple has been a successful company since its in 1976. The company has been characterized by different revolutions in the manufacture of various technologies that have changes people’s experiences across the world (Lashinsky, 2012). Apple is said to have changed the lives of many ordinary people, helping them to do many extra-ordinary things with their products. The company has helped elevate the appreciation of the public of technology by creating technologies that have the best design and are easy to use. The company has managed to change purchase behaviors of its customers as well as its competitors, influencing them in the design of their products. Apple has changed the way businesses approach the design and production of their products, managing to put quality first above everything else. Currently, many consumers have been looking for “i” products, most of which have been associated with the company. Samsung Group Samsung is a multinational South Korean Company with its world headquarters in the Seoul City. The company, boasting of excellent marketing and management, has managed to build several subsidiaries and many affiliated business, which have played a crucial role towards the growth and success of the company (Michell, 2010). All the subsidiary companies that Samsung has managed to establish using its brand name, Samsung have all been doing well in their respective industries. Samsung was established in 1938 by Lee Byung as a mere trading company dealing in a variety of products. The success of the company in the three decades that followed saw it diversify its operations to include insurance services, securities, textiles, food processing, various other kinds of retail services (Michell, 2010). Later, the company decided to join the electronics world towards the end of the 1960s. It is important to note that Samsung has effectively managed to globalize its activities, especially, the electronics that it manufactures. In fact, Samsung electronics has managed to become an important source of income to Samsung Company, which has been manufacturing different kinds of mobile phones and other electronics that many people want to identify with (Michell, 2010). The company has built its brand name successfully, becoming a giant in the world’s consumer technologies. One of the most notable subsidiary company of Samsung includes the Samsung Electronics Company. Currently, this subsidiary has become one of the largest IT companies in the world, when measured in terms of revenue (Michell, 2010). In the same way, Samsung Heavy Industry has also been very successful, becoming the second largest shipbuilder in the world as at the revenue analysis of 2010. The other subsidiaries of the company like Samsung C&T and Samsung Engineering are all very successful in product design and development. Business Strategies at Apple and Samsung The success of Apple Inc., and Samsung companies has relied on effective business models and strategies. Apple often creates and releases few high-end products to the market while Samsung takes a different approach; in most instances, it floods the market with varieties of products so that their customers can choose on them. However, in as much as the business strategies are dissimilar for the two companies, they have helped them establish competitive advantages. Initially, Apple Inc., tried to be much careful about its tablet and mobile releases; this was by allowing long development phases that create anticipation among the public. Additionally, the company’s business strategies advocated for new innovations that followed any new releases under the company’s CEO Steve Jobs (Lashinsky, 2012). The strategies created and used by Steve Jobs involved developing and selling new and innovative products that effectively blended technology and art for provision of simple and many streamlined user experiences. These strategies worked in favor of Apple by skyrocketing it to the frontline in terms of smart phones. This move made Apple to establish itself as a major force to reckon with, which started with the release of iPhone brand back in 2007 (Lashinsky, 2012). Apple continued with its growth following the release of the iPhone; the company went on to develop and release different smart phones and tablets, something that people overwhelmingly embraced. What followed was establishment of an effective and loyal client base that appreciated and used the company’s products. Apple decided to develop and use long and extensive product cycles that led to the release of new innovations in each of the cycles. Apple would then release products in the yearly selling periods while marketing the new models at extremely fair and affordable prices. The strategy by Samsung to flood the market with various business strategies gave its clients an array of products to choose from including various kinds of tablets, smart phones, and cell phones. These products were priced in such a way that they would best appeal to the low and high end products, something that ensured they at least sold their products (Bender, 2009). By using this approach, Samsung has managed to appeal to low end clients, who make the majority in most countries. It is believed that the success of Samsung Company was largely attributed to its large numbers of devices when compared to those of apple and other business rivals in the same industry. In fact, the use of this strategy saw Samsung sell many smart phones compared to Apple in 2012, especially in the second water (Lashinsky, 2012). After the launch of iPhone, Samsung’s answer was the development and launch of Galaxy S III, which increased its sales significantly. It is important to note that Samsung is among the biggest adopters of Android Software, which is powered by Google (Michell 2010). Additionally, the company also has smart phones that operate on the windows Operating System. Apple has restricted itself to using its operating system in the manufacture of smart phones, on the other hand, Samsung has not been held back by such boundaries. In this case Samsung’s approach to flooding the market with different products works in its favor since it does not only spread its hardware, but also the software used in running those smart phones. SWOT Analysis of Apple and Samsung The SWOT analysis is an important tool that has supported the success of strategic management at both Apple and Samsung. These companies have been keen on identifying new marketing opportunities that have increased the number of consumers in their respective market share while working on their weaknesses. It is believed that with increases in the number of consumers using smart phones, these companies’ business strategies will enable them increase their market share. Strengths One of the strengths that Apple prides itself in is a good customer loyalty that effectively combines with a growing and closed operating structure. In the first place, the closed ecosystem seemed to be unsuccessful for the company but with time, it has enabled Apple to create an array of software, apps and products that are carefully interlinked to support each other. Another strength that continues to push the success of Apple is the fact that the company has established itself as the market leader in terms of mobile device innovations. This has been a central competency that has helped Apple in its innovativeness a strength that it builds on for its success and growth. For Samsung, one of the strengths that it has continued to rely on is a hardware integration that works well with open source software and operating systems. In this case, the company has been active in developing different kinds of hardware that can work with different operating systems and software effectively (Fisk, 2010). This feature actually gives products made by these company a competitive edge over Apple, which is confined to its operating system. Secondly, Samsung prides itself in having engineers that can produce consumer electronics and different kinds of hardware. This has made the company to establish itself as the leader in terms of mobile phones and television sales. The achievement of this milestone is attributed to the company’s excellent engineers as well as effective and efficient production. Weaknesses One of the weaknesses that Apple Company has been facing is a decreasing market share. This may have been motivated by the fact that the smart phones market has been flooded with from companies that often sell them at considerably cheaper prices. If Apple can be fast enough to influence these customers to use its closed system, then it can save some of its dwindling market fortunes Secondly, the company has been suffering from extreme patent infringements. In this case, Apple has on several occasions been accused of infringing on the patent rights of other companies and even lost some of the trials. This is something that has played a huge role in damaging the company’s brand and financial position. Samsung has also suffered from issues of patent infringement, where it has been accused of infringing on Apple’s products as well as those of other firms. Besides ruining the company’s brand image, these issues of patent infringements have required the company to pay large amounts of money for damages suffered, which would have been used in its growth and expansion. Additionally, the company’s idea of flooding the market with an array of products has meant that it adopts a low price approach in order to appeal to clients (Fisk, 2010). This means that the company gets low gross and net profit margins. Even though the company’s smart phones have been profitable, its profit margins have reduced because of its aggressive price-cuts and semiconductor sales. Opportunities Apple has an opportunity of increasing its market share following the increasing demand for iPhone 6and iPad mini. It is believed that the sale of these products will enable Apple to cement itself as the all-time producer of successful innovations that enhance customer’s experience. These products are thought to increase the company’s competitive advantage. The launch of the iTV is also thought to be an important strategy that will increase the sales of the company and its product ecosystem. Additionally, the growth of smart phones and tablets market will also present an important opportunity for Apple to create and diversify its market share. Another important approach that will provide Apple with important growth opportunities involves obtaining patents for some of its products through acquisitions. One way of getting these patents is buying the companies that have them (Fisk, 2010). Additionally, this approach will enable the company to learn how to develop new skills and other competencies that will aid it in its growth. For Samsung one of its important opportunities emanates from the fastest growing smart phone market in India. It is important to realize that India has been one of markets that has been least penetrated among the Asia/ Pacific markets. Samsung, unlike Apple, has a strong presence in India, which it can rely on as an important opportunity for expanding its sales (Baltzan & Phillips, 2009). Additionally the fast growing field of mobile advertisement could prove to be an important opportunity for Samsung. The company can use this developing trend in creating an effective advertisement platform for its clients to use in expanding their businesses. Threats Some of the threats that Apple is facing includes the behavior of breaching and infringing on its IP rights. While companies are benefiting from these illegal rights, it is Apple that ends up suffering. These breaches weaken Apple Inc’s competitive advantages because they end up pricing their products low compared to Apple Inc., Another threat that the company has been facing is pressures from Samsung about some key components and products. Samsung has on several occasions requested Apple to pay heftily in order to use the application processors it has made. Because of intense competition and lack of viable substitutes Apple shouldn’t be surprised to be asked to pay even higher prices for these products (Jones, 2012). Samsung has also been facing some serious threats in its growth and expansion. This follows the fact that in developed countries, smart phones have saturated the market. The effect of this development is that the anticipated growth for the company cannot happen as intended, prompting the need for development of other competitive approaches (Brett, 2007). Additionally, the modern business environment has been facing rapid growth and development in terms of business strategies. The same is the case for technology, which is said to be a very perishable resource. The rapid change in technology is not only affecting Samsung but also other tech-based companies (Jones, 2012). This dynamism puts a lot of pressure on companies for them to develop new products at a much faster pace in order to stay ahead of others in terms of competition. In this competition, the company that cannot keep with the pace soon fails; this is often hard for businesses that are planning to introduce new products in the market. New and competitive business strategies for Apple and Samsung The need to stay ahead of others in terms of competition is always the goal for business managers at Apple and Samsung. Both of these companies have been involved in serious competition trying to outdo each other. However, it is important to realize that the in order to remain successful, these companies need to create and implement new strategies. One of the ways to achieve these strategies is creating reliable succession planning and talent management strategies (Noe & Noe, 2012). Apple and Samsung have engineers working round the clock to ensure that the develop products that appeal to the customer needs. For this reason, creating strategies that can empower their staff is essential in ensuring continuity and success of their strategies (Baltzan & Phillips, 2009). It is important for these companies to realize that the success of companies depends on the creating and persistent use of effective business strategies (Noe & Noe, 2012). For this reason effective talent creation and management will ensure that their strategies and approaches can be maintained in the development and sale of their products. Conclusion In conclusion, it is important to acknowledge that Samsung and Apple have been successful companies that have continued to influence the smart phone industry as well as other kinds of consumer technologies. The extreme competition emanating from the strategies developed by these two companies have benefited customers who continue to enjoy quality goods and services. These companies need to avoid any incidences of unhealthy business competition in the process of creating reliable business strategies. In this case, the companies need to ensure they create consistent market research in order and keep pace with the changing market trends. For companies dealing in tech-based products, it is always important that they keep abreast with the changes in customer tastes and preferences as well as the techniques in producing different products. This way, they always be assured of competitive advantages especially in a market characterized by a rapid increase in the number of companies offering similar products and services.   References Baltzan, P., & Phillips, A. (2009). Business driven technology (3rd ed., International student ed.). Boston: McGraw-Hill Irwin. Bender, D. (2009). 15th annual institute on intellectual property law. New York, NY: Practising Law Institute. Brett, J. (2007). Negotiating globally: How to negotiate deals, resolve disputes, and make decisions across cultural boundaries (2nd ed.). San Francisco: Jossey-Bass. David, F. (2005). Strategic management: Concepts and cases (10th ed.). Upper Saddle River, N.J.: Pearson Prentice Hall. Fisk, P. (2010). People, Planet, Profit How to Embrace Sustainability for Innovation and Business Growth. London: Kogan Page. Jeffs, C. (2008). Strategic management. Los Angeles: SAGE. Jeyarathnam, M. (2008). Strategic management (Rev. ed.). Mumbai: Himalaya Pub. House Jones, T. (2012). Growth champions the battle for sustained innovation leadership: The growth agenda (2nd ed.). Chichester, West Sussex, U.K.: Wiley. Lashinsky, A. (2012). Inside Apple: How America's most admired-and secretive-company really works. New York: Business Plus. Noe, R., & Noe, R. (2012). Human resource management: Gaining a competitive advantage (8th ed. ; Global ed.). New York: McGraw-Hill Irwin. Markides, C. (2008). Game-changing strategies: How to create new market space in established industries by breaking the rules. San Francisco, Calif: Jossey-Bass. Michell, T. (2010). Samsung Electronics and the struggle for leadership of the electronics industry. Singapore: Wiley.   References Baltzan, P., & Phillips, A. (2009). Business driven technology (3rd ed., International student ed.). Boston: McGraw-Hill Irwin. Bender, D. (2009). 15th annual institute on intellectual property law. New York, NY: Practising Law Institute. Brett, J. (2007). Negotiating globally: How to negotiate deals, resolve disputes, and make decisions across cultural boundaries (2nd ed.). San Francisco: Jossey-Bass. David, F. (2005). Strategic management: Concepts and cases (10th ed.). Upper Saddle River, N.J.: Pearson Prentice Hall. Fisk, P. (2010). People, Planet, Profit How to Embrace Sustainability for Innovation and Business Growth. London: Kogan Page. Jeffs, C. (2008). Strategic management. Los Angeles: SAGE. Jeyarathnam, M. (2008). Strategic management (Rev. ed.). Mumbai: Himalaya Pub. House Jones, T. (2012). Growth champions the battle for sustained innovation leadership: The growth agenda (2nd ed.). Chichester, West Sussex, U.K.: Wiley. Lashinsky, A. (2012). Inside Apple: How America's most admired-and secretive-company really works. New York: Business Plus. Noe, R., & Noe, R. (2012). Human resource management: Gaining a competitive advantage (8th ed. ; Global ed.). New York: McGraw-Hill Irwin. Markides, C. (2008). Game-changing strategies: How to create new market space in established industries by breaking the rules. San Francisco, Calif: Jossey-Bass. Michell, T. (2010). Samsung Electronics and the struggle for leadership of the electronics industry. Singapore: Wiley. Read More