"Strategic Management at Apple and Samsung" Capstone Project

 
 Introduction Strategic management is an important aspect which is undertaken by every business in the present scenario. Business strategies are formulated on the basis of various external factors which positively or negatively affects an organization. It is often observed that competitive advantage is achieved by a company through innovative strategies which are implemented by the management. These strategies differ from one organization to another as in certain cases differentiation is appropriate for a firm to gain profit margins while for some companies cost leadership strategy proves to be more beneficial. Apple and Samsung have been able to set its mark in the industry through their wide range of strategies which they modify as per external environmental conditions. Analysis 1. Business strategies of Apple and Samsung Apple has a unique position in the market place and the company’s business strategies are aligned towards developing a high end product which would create a memorable experience for all its customers. As per the management of the company the major aim of their business was not to manufacture low priced products and capture huge market share but they focused towards innovative products for certain segment of consumer market. Steve Jobs had figured out all possible ways to launch such products at lowest cost possible in order to gain high profit margins. Their main business strategy for both domestic as well as international markets is to offer high end products and focus on small range of products but incorporate differentiation and this strategy cannot be easily imitated by other players. The company even gives priority to profit margins over market share and believes in creating a halo effect amongst customers which would make them wait for products to be launched by Apple. On the other hand Samsung has different business strategy in which it does not only encompass creativity or innovation but also encompass people, change, integrity, excellence and co-prosperity. The business strategy of this company is all about analyzing the consumer market demand and offering products as per the demand. Mission and vision of Samsung is strongly aligned with its strategic directions as they inspires the world through their innovative products and builds a beautiful future (Neil, 2010). Their product line and pricing strategy states that they have the major goal of becoming the best company across the globe. On the other hand Apple’s mission and vision guides its overall operations through providing value added services and sustaining its market position for long run to gain high profit margins and be the first preference of customers. 2. SWOT analysis of the companies SWOT analysis is an effective tool which helps to identify the competencies which are possessed by an organization. The major strength of Samsung is its hardware integration and encompasses many open source software and operating system. It even holds excellence in manufacturing consumer electronics and hardware parts. The production costs of this company are low with focus towards innovation and external environment. Other strengths are its capabilities to promote the brand and occupy a large market share in mobile phone segment. Samsung is considered to be the second most powerful player in Smartphone market in terms of sales. On the other hand Apple possesses the major strength of advertising and marketing capabilities with strong distribution channel in United States. The strong brand name forms strength of the company. Another factor of strength is its vertical integration mechanism. There are certain weakness which is possessed by Samsung such as focus on wide range of products, low profit margins, patent infringement and lack in its own software and operating software. This proves that to some extent business strategy of the company is failing to generate desirable revenue. Apple also possess weakness in the form of high dependency on iPad and iPhone sales, incompatibility with other software which are easily available, lack of wider range products or price differentiation and weak distribution channels in India and China. This states that the company being focused on innovation is not able to satisfy the hidden demand of market. It gives more attention to its domestic markets in comparison to international markets. For Samsung the opportunities are majorly in emerging Smartphone market such as in India. There is a high growth in industry of mobile advertising which can be explored by the company. The other opportunities are gaining patents through various acquisitions, growing market demand for tablet and quality application processor. Apple has opportunities in the form of acquisitions of different valuable organization, launching wearable gadgets and providing a medium for mobile payments. On the other hand threats for Samsung are launch of iTV by Apple, rising price wars between different players in the industry, rapid change in technology, saturated markets for Smartphone in developed regions, reducing margins in relation to hardware production and breached patents. The major threats for Apple are lawsuits against patent infringement, rising competition and strong or powerful US dollars. All these factors state that in certain aspect both the companies are outperforming the rest in terms of competitive strategies but in some cases they even do possess loophole which would be a major issue in long term. Samsung has been able to gain its competitive position in the industry with the support of wide array of products ranging from Smartphone to insurance. The company majorly focuses on offering different price points to satisfy large base of customers and this observed in pricing strategy of its Smartphone where some are priced as high ended products and some are low priced products (Pringle, 2008). On the other hand Apple is able to create a competitive position through focused differentiation strategy where it offers limited product range at high prices for specific customers such as its iPhones, iPads, etc. However the innovative technology which is incorporated by the company in its devices cannot be imitated easily by other players proving it to be a major competency for the company. 3. Adoption of cultural differences by business leaders Business leaders can be considered to be the strong pillars which drive growth and success of a company. Apple and Samsung have different goals and objectives which are highly reflected in their competitive business strategies. On one end Apple gives more importance to acquiring high profit margins through launching innovative and technologically advanced products and on the other end Samsung aims at gaining economies of scale by controlling their production costs and offering wide range of products at competitive prices. Steve Jobs during his tenure in the company has always set goals to facilitate innovation and considered all the team members to be an integral part for reaching that desired goal. The leaders of this company do not believe in following an autocratic approach where the supreme power and decision making capabilities lies on certain individuals. In this organization innovative skills are appreciated by leaders and they give equal opportunities to team members in terms of enhancing skills and taking strategic decisions. These leaders adjust to cultural differences by involving individuals from different culture and setting forth a common platform for promoting and launching products (Hoskisson, Hitt, Duane & Harrison, 2007). This is highly observed in pricing of Apple’s products which does not vary as per culture or country. On the contrary business leaders of Samsung facilitate strategic innovation through training team members and focusing on delivering excellence. The most prominent example of this company adopting cultural differences is in terms of its wide array of products which are differentiated as per consumer market demand and affordability of target market. 4. Organizational competencies of Apple and Samsung Organizational competencies are often considered to be the most important factor which helps to achieve the desired objective. There are several factors which are associated with organizational competencies such as entrepreneurial capabilities, strategic capabilities and organizational design capabilities. Entrepreneurial capabilities are the competencies which are possessed by the organizational leader. Steve Jobs possessed high degree of innovation capability. There were certain unique entrepreneurial capabilities which were incorporated in the organization such as providing space to employees to do creative thinking, offering dreams to customer rather than products and creating unique experiences both for team members as well as customers. Opportunity recognition is the major entrepreneurial capability which is possessed by leaders of Samsung. The company has even enhanced this competency by setting up centers of excellence across the globe. Strategic capabilities in case of Apple are its strong financial arm and narrow focus on product range. This company has been able to create a strong brand image in the market and this saves a lot of time and cost in relation to promotional activities or advertising. On the other hand Samsung possess strategic capabilities in the form of wide range of market share and extended product portfolio (Mcfarlin & Sweeney, 2008). They operate over large number of industry segments so loss from one business can be easily compensated with profit from the other business. Apple has been able to come up with unique functionality and designs due to flat organizational structure which is implemented in the organization. In this organization innovative and creative skill is given importance which is not restricted in the form of strict regulations or wide array of hierarchies. However the organizational design is not the same in case of Samsung as there are too many hierarchies in the system and collaborative working has not gained importance in the organization. Organizational competencies of Apple is observed in the form of rising market demand with the launch of iPhone and on similar context