Competitive Strategy Assignment: Case Study Analysis On Apple V/S Samsung
This competitive strategy assignment aims at ensuring that students have familiarised themselves with at least one significant case study and are able to apply the relevant foundational strategy development models that are applicable to the case.
Select any case from the nine cases listed from Tutorial Cases found in the Lecture Notes file, select from the following aspects of competitive strategy and apply the theories of strategy development and implementation as relevant to the case you choose:
- Business Strategy
- Competitive Dynamics
- Corporate Strategy
- Acquisitions and Structure
- International Strategy
In this report, the use of sub-headings is essential.
Be sure to use paragraphing.
Be sure to reference your sources in-text and provide a list of references at the end, all in Harvard style
The case study titled Apple V/S Samsung has presented facts which puts Apple as the market leader and innovator while Samsung as the closest competitor and a perfect imitator. The competitive strategy assignment which is focused on the Business Strategy has identified using the generic strategy model that Apple follows a differentiated business strategy while Samsung has been using the limited growth strategy. Further in the report balanced scorecard framework has been used to evaluate the mission, vision and the financial, growth, customer and operational perspective for both the companies.
Brief Summary to the Case
The first thing which strikes on hearing the word Apple is, the story of how Newton discovered the gravity when the fruit fell from the tree on his head, the gravitational theory then became the center of many ground breaking theories propounded by many evolutionary scientist. The second thing which strikes on hearing the word Apple is either “Steve Jobs” or “Innovation”. Both these words are used synonymously when somebody describes Apple. In the similar manner, on hearing the word Samsung, most of the world intuitively hears how perfectly the company imitates Apple’s product, technology and other aspects of its designing and be the perfect challenger, while Apple still remains the leader. This brings us to the preamble of the case study “Apple V/s Samsung: Apple Differentiates & Samsung Perfectly imitates”.
The case study describes Apple in the highest possible light for any business entity by putting out the Technology Company as just not the product innovator but also as a company which has been known for creating new markets and taking the first mover advantage of the same (Evelyn, 2019). This, strategy of Creating New Markets is coined as Blue Ocean Strategy, this strategy has been particularly helpful in creating new markets in order to do away with the existing competition. The Trillion-dollar tech company did this by its plethora of its products such as IPod, IPhone & IPad and none of its competitors like HP, Dell, Blackberry could even offer Apple a challenge (Sun, Tan & Hou, 2019). However, the South Korean Multinational Conglomerate has been the closest challenger to Apple. The rivalry between both these giants have been so much that both the companies have been fighting various lawsuits on patent infringement, of which Apple has won 5 lawsuits while Samsung won only 2. Both these companies besides fighting in the court, also have been fighting the war of words. The implication from the section of the case here is the rivalry between both the giants, and Samsung being labelled as the challenger to Apple (Lvque, 2019).
The second section of the case describes the vast spend done by Samsung on its R&D, it has been estimated that the company invests 5.4% of its annual revenue on R&D, whereas these figures for Apple are low at just 2.2% of its sales. It is due to the excellent marketing strategy of Samsung that it has been identified as the “fast second mover in existing markets”. Samsung has been really successful not in just imitating but adding plethora of features to its product, which gets the attention of its customers (Schwartz & Giroud, 2020). However, the rivalry between both the giants as of now is mostly focused to create dominant designs. Samsung recently got none other than Chirs Bangle (Famously known as the man behind the designs of Cars at BMW) to design its Smart watches, Smart TV and other products. Towards the end, the case has been concluded by claiming that although Samsung is a close competitor of Apple, the company is literally far behind when it comes to sales and profit made per unit of product. Overall, Apple has been declared the winner on the basis of its strategy based on differentiation, its larger than life brand image and its R&D (Alkhawajah, 2019).
Within the purview of the report here, business strategy of both the companies will be identified with reference to the use of business model and other strategies in terms of its business model and strategic issues in the way of the company’s expansion. Towards the end, a conclusion will summarize the study conducted in the report.
Identification of Strategic Issues
(Arora, Srivastava & Bansal, 2019)
The Generic strategy model of business here shows the different strategies the businesses might adopt to sustain or change their position in the industry. Apple clearly follows the differentiation strategy as it focused on differentiation whilst focusing on the broad markets. The company’s product is expensive than Samsung, however the superior product quality compensates for the high price of its product (Sharma & Sharma, 2019). The issues here are highlighted using the Generic model of Strategy and the excerpts from the case recorded in the introduction section of the report.
- Inability to Differentiate the Brand Offering-Apple has been targeting a broad marketing with uniqueness thus creating a strategy based on differentiation, which serves the company a competitive advantage in the existing market. On the other hand, although Samsung in the last couple of years came with plethora of new smartphones, tablets, wearable technology, laptops etc. with new design and new features. Still, the company is seen as a close challenger and hasn’t earned the reputation as an innovator or a differentiator. Samsung has to start innovating and not just imitating with what Apple has been doing (Jang, Lee, Kim & Choi, 2019). The battle especially in the smartphone category in the current state has been intensified, especially with the foray of number of Chinese manufacturers such as Oppo, Vivo, Realme and many other. One Plus however has been gaining the market share slowly and is rapidly eating up on the revenues of both Samsung and Apple. Samsung is more affected by growth of other players due to its undifferentiated strategy, Apple however seems to be not impacted much by other players in the industry. Moreover, Chinese phone manufacturers seem to be in the same bracket in terms of cost and features as that of Samsung. Hence, until and unless the company comes up with innovation and differentiation in its product, the company would pile up in losses (Geradin & Katsifis, 2020).
- Coming forward from being a challenger to a leader-As mentioned earlier in the case study, Samsung spends over 5.4% of its sales on the research & development when it comes to the product, its technology and other specification. The company also hired Chris Bangle to help with the designing of its new products (Wulf et.,al 2019). Thus, it implies the multinational conglomerate electronics company has all the capability in terms of its human, financial, technological department to build a superior product that attracts the customers. Its newly launched S-Series had been applauded for its technical masterpiece and its design. There has been news of Samsung coming up with 100% folded screen smartphone, which would further revolutionize the industry (Smith-Diitzio & Smith, 2019). Thus, the time here is to lead the market by consistently innovating, understanding the customer behavior, engage with its customers and build hard core loyal, just the way Apple does it(Kim, 2019).
The focus of the assignment will be understanding the business strategies of both the companies by applying a business strategy model. But, before doing that it is important to understand what strategy actually means for the business and what makes it so important.
Business strategy in simple words or in the context of management can be understood as the working plan of the business outlining its mission, vision, short & long terms goals and objectives with a financial plan in place(Lyneis, 2020). In short business strategy can be understood as its blueprint on the future plans of action to achieve its long terms business goals and objectives while staying true to its vision. Business strategy of Samsung & Apple can be understood by applying the Balanced Scorecard Framework would be applied to both these companies.
BSC-Balanced Score Card Framework
(Saviano et.,al 2019)
Balanced scorecard has 4 important perspective, which are interrelated to each other. For instance, change in the organizational capacity will impact the company’s process, further impacting customers and driving financial results for the business (Vicente, 2020). A quick study of the BSC perspective will give a better understanding with the application of the model on Samsung & Apple.
Hence, the four perspectives of BSC can be summarized as:
Financial: This perspective is mostly related with how the shareholders looks at the company. This kind of perspective is the easiest to define. This perspective however helps the company to clearly define the profits and revenue which it wants to achieve in the future (Zandieh, Shariat, Rebieh & Tootooni, 2020).
Customer: This perspective helps to view at the company from the standpoint of the customers. The question answered here is how do the customers sees the company? This perspective helps to make the business understand what the customers wants from them, and having a knowledge of such information helps business to create products and services which satisfy them (Yilmaz & Antmen, 2019).
Internal Process: Internal process is one of the most important focus areas for the business, this process helps to bring down a reduction in the cost for business. Having a close look at the process which is guiding the operations and other aspects of business helps to look out for the gap in the existing process and fill it accordingly (Arora, 2020).
Organizational Capacity: The last perspective deals with how well the people perform in the organization, their skills, training, company culture, leadership and their knowledge base. This is the area which helps to understand where the business should invest in order to be more profitable (Alipour, Sangari & Nazari-Shirkouhi, 2019).
Having developed the understanding of the model, we would now be applying this model to both Samsung & Apple and see how their business strategy differs from each other.
Balanced Scorecard- Apple
Mission Statement- Creating and giving the finest and best experience to its customers through its superior and innovative software and creatively designed hardware and services (Edge & Trouton, 2020).
Vision Statement- The vision as defined by Tim Cook in the year 2009 “ Apple is on the face of the earth to make great products, and that is not changing”(Dudic et.,al 2020).
Understanding the mission and vision statement actually helps in setting the objectives in the short and long run. Breaking the mission and vision statement to further understand its elements:
- Provide Best User Experience
- Innovative Hardware
- Innovative Services & Software
- Creating and Designing Great Products
- Focus on Innovation
- Excellence to be Standard
- Simplicity in lieu of complexity
Strategy of Apple
The company’s strategy is focused upon its UVP (Unique Value Proposition) which in the case of Apple is creative and beautiful design working right out of the box with its ever small packaging. Apple’s business strategy is based on product differentiation as mentioned earlier in the case. First mover’s advantage being the second element of company’s business strategy (Teece, 2019).
Financial Measures & Objectives
- Ensure a healthy return on the capital of its shareholders
- Maintain a healthy cash flow (In order to ensure smooth operations at any given point in time)
- Keep the Project profitability in mind (This was added after the company had troubles with some of its project earlier in the day).
- Performance reliability (Teece, 2019).
- Provide an unbeatable and unmatched experienced to its customers through its product & service offering. The I Store are beautifully made, spacious with latest technology and great customer service representatives to ensure its customers have a good time at the stores(Moller & Haas, 2019).
- Customer empowerment through feedback
- Online reputation management programs for customers.
- Innovative products and services for the customers.
- Hassle free relationship with customers.
- Shaping the requirement of customers through efficient listening
- Quality service & superior operational management in all the plants.
- Ensuring health & safety of the workers
- 6 sigma operation process
- Just In Time delivery for Asian Markets ( India & China)
- Continuous improvement program at Apple
- R&D investment at all its centres
- Empowered and Engineered work force
- Continuous Product & Safety Innovation (Moller & Haas, 2019).
The ambitious vision of Samsung is “usage of Innovative technology and efficient operations to create new markets and enrich the lives of the people and be the digital leader in the industry”. (Arora, 2020).
Mission Statement- The mission statement of Samsung relates with its business philosophy, implying devoting all the talent and technology the company has to create superior products and contribute to the world (Arora, 2020).
Looking closely at the vision and mission statement of Apple & Samsung, it can be said that both the companies want to be digital leader by leveraging superior technology and innovation in its product and services (Arora, 2020).
Business Strategy of Samsung
Samsung has been using the limited growth strategy, it implies that the organization is focused on its current products which are targeted in the market it has the presence. In this kind of market and strategy, the only way to grow is by making the company’s product more innovative. The company has been adding innovative elements in its products either through its designing, increasing the size of its product or even making a Stylus pen to attract its customers (Chen, Cha & Kim, 2019).
- Increase the profitability of its Smartphones, Tablets & Laptops by 15% YOY.
- Increase in stockholder quality, net sales and net income
- Increase from $489/Share to $510/Share (Chen, Cha & Kim, 2019).
- Increase the Positive share of voice of Samsung on social media.
- Build on brand loyalty programs in all product categories
- Analyze the customer base of the competitors and innovating product for the customers (Chen, Cha & Kim, 2019).
- Double and sustain the customer success scores.
- Making operations efficient and reducing costs.
- Get into aggressive marketing campaign strategy
- Coming up with more success research based projects in R&D
- Improvement in its innovation capital (Chen, Cha & Kim, 2019).
- 6 Mn Twitter followers and 40 Mn Facebook followers
- Aggressive recruitment & retention program.
- Focused approach for the emerging economies ( Asian )
- Growth in the brand presence and brand voice (Chen, Cha & Kim, 2019).
Looking at the Balanced score card of Samsung and Apple, it is clear that both the companies have locked heads with each other many a times. They are still fighting for a bigger share in the market. US market has already been saturated for both Samsun and Apple, and Asian economies are looking promising to both tech giants. Keeping in mind the competition, both these companies have to come up with their strategies to retain the customers as well as acquire new customers to keep up the momentum of growth.
The case study Apple V/S Samsung shows Samsung as the imitator and Apple the leading innovator through its differentiation strategy and first mover’s advantage. It has been observed that Samsung has been investing opulent sum of money in R&D, the efforts of its closest competitor, Apple, are more in the right direction. The strategy for Samsung has been identified as limited growth strategy, where it believes in adding innovation to its existing products to acquire a large market share in the existing markets. Last word of advice for Apple is to keep innovating and improve the customer experience through its great customer’s service. Whilst Samsung has to creating its own focused differentiation approach and take the first movers advantage by bringing out new and innovative products. Until then, Apple is the undisputed leader with a Trillion dollar market capitalization, and being the first technology company ever to achieve this feet.
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