Custom «Apple versus Samsung» Essay Paper

Executive Summary

This report is about Apple Company’s success as compared to Samsung Company. The two companies deal with laptop manufacturers and sales. The report starts with the introduction of the companies’ competition and their strategies. The second part is an overview of market, sales and the market covered by these laptop companies. A literature review includes the research of the two companies; it is in the third part of the report. A critical analysis and discussion of finding show that Samsung Company has succeeded in the sales and production of laptops. The conclusion and recommendations of reports are the last parts of the report. In recommendations, Samsung should include the new strategies other than those applied by competitors. The company should also revise management strategies.

Introduction

Samsung manufactures laptops just as the competitor Apple. Apple Company has succeeded in business due to the application of favourable marketing strategies and the operation system. Apple is a technology firm which produces electronic devices in the market characterized by a huge demand for the technological innovations. The new technology has revolutionized a mode of conducting business and the entertainment sector. Apple’s industry is characterized by the stiff competition with each firm trying to come up with better ideas to outdo the competitor in all the means possible. The players in this industry adopt new technologies, which could enable them to have a competitive advantage in the market. In order to succeed, Samsung should apply the strategies similar to those applied by Apple Company Inc.

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Market Review

Samsung provides products to the whole world. The company has many retail outlets across the world. Each country uses Samsung products. Samsung produces about the fifth of the Korean exports. It has a powerful influence on Korea’s economy. Samsung has helped the government in the creation of employment to the youth. The employees of Samsung pay taxes; also, the company pays taxes for sales. Samsung has about 80 companies dealing with the construction, electronics, shipbuilding and medical as well as financial services. In 2009, it had the revenue of 220 trillion; in 2010, it had - 280 trillion. In one year, the company had made an increase for 60 trillion. The company serves to people of different classes. It manufactures the items of different sizes and prices to ensure that even the low class people are able to buy them. The company has increased its revenue but with the application of systems applied by Apple Samsung can emerge the top company being the laptops and electronics industry. 

In the other hand, Apple has a variety of substitutes with the products being highly differentiated in terms of their features, colours, quality and purposes. The industry mainly uses the computer based technology to develop the products which consumers can enjoy. Especially it tries to compress high levels of technology into the small dimension gadgets. Furthermore, the industry is composed of many buyers and sellers having the adequate knowledge of the products for sale. The buyers of products produced in Apple’s industry have the knowledge on what they specifically require and offer some specifications based on their technological requirements. The firms in Apple industry mostly develop the products to incorporate computer based technologies into simple gadgets such as the mobile phones.

In these laptops, the electronic industry competition is very high with each player trying to get a bigger share of the market. The competition in this industry is purely based on the product differentiation. In addition, the pricing of products is sometimes irrelevant as the consumer usually goes for the most sophisticated product offering maximum results and without paying much attention to the price consideration. For example, in the industry, a new invention will record huge sales regardless of the price because the consumers look for a product that offers the best value for their money. Apple has the largest market share in the industry in terms of technological innovations. It is considered as a market leader.[1] Apple’s major competitors are DELL, Hewlet Packard Co. (HPQ), and Microsoft Corporation.[2]

Literature Review

In order to find the solution for success of Samsung Company is better to compare it with such successful company like Apple. The comparison should figure out the issues like the application of marketing strategies, the formation and management of the company and its financial statements.

Apple’s idea was formulated by two men named Steve Jobs and Steve Wozniak with launching Apple 1 in 1976.The famous logo of this company that is associated with the company was invented and designed by Rob Jannof.[3] Since then, Apple had seen the tremendous changes with the invention of Apple 11 and Apple 111 in later years. The company also recently has launched the Mac OSX which is further sophisticated in terms of technology but is simple to use.[4]

The company currently records the positive returns in the stock market. It still invents new technologies. It has been the objectives and long-term goals of Apple to provide the best quality computing to consumers through the continued innovations and inventions in the efforts to make the customers more comfortable. According to the company’s top executive Steve Job, Apple’s future is bright. The company is putting in place the executive corporate strategies to allow more innovations.[5] Unlike Apple, Samsung does not establish new industries. Samsung should invest into many industries in order to make sure that even when a disaster occurs in one industry other will back up and ensure the continuity.

Apple’s major market is digital music customers. It has enabled with the invention of their iphone and itune products.[6] The company has achieved the large market share covering Microsoft in terms of its sales’ volumes, thus, becoming the market leader.[7] Moreover, the company is eying on the new markets which include the recording of radio presentations to allow consumers to listen to the shows recorded earlier. The company intends to achieve this through the Podcasts technology incorporated in itunes.[8] The research supports the assertion that Apple is the leading company in terms of its market share due to its effective marketing strategies. Apple uses its advertising strategies to persuade customers on the need to purchase Mac as opposed to the common PC.[9] This is evident through the massive and highly attracting advertisements placed on such easily accessible channels as the company’s website and other print media. In the advertisements, the consumer sees the need for owning Mac, which is a product of Apple by comparing a long list of benefits of upgrading to Mac other than simply upgrading a simple component of your PC.[10] This is a very innovative marketing strategy that has enforced Apple’s volumes of sales.

Apple is headed by the very intelligent top executives under the stewardship of Steve Jobs, the company’s chief executive and the company’s founders. Steve has a wide positive reputation of being a wise leader and a corporate figure. Steve has a track record of co-founding several other companies, such as Pixar Animation Studios. There the contributions towards the success of the firm have been highly felt.[11] Furthermore, following the merging of the company with the world renowned Walt Disney’s in the year 2006, Jobs was appointed to serve as one of its board members in Disney’s board. Currently, Jobs is a director of the company leading in the provision of the entertainment products and services.[12] Based on a wide range of experience and a positive reputation attributed to Steve, it can be assumed that he is a right man for the job as a Head of Apple. In regard to the future of the company, the CEO comments that the company still engages into the initiatives to launch the new products in the market.[13] The effectiveness of top management especially of the chief executive officer of Apple can be identified through the CEO’s commitment to the company’s success. As evidently seen the company has launched the iphone, Steve Jobs takes the pride in achieving attributes by the success to the high levels of innovativeness and dedication of the company’s employees.[14] It is, therefore, appropriate to conclude that the top management of Apple is committed to the achievement of the company. Furthermore, the involvement of employees during the formulation of a final outlook of the iPod, the management exhibits high levels of the management democratic style, whereby the leader considers the individual opinions of employees in the organization’s action committees before passing any crucial decisions to the firm.[15]

The management style adopted by the company’s chief executive officer is a hierarchy. This is proved by the delegation of powers from the top management to the lower level managers that can make decisions independently. [16] This system of governance has enabled the company to delegate effectively managing the affairs of the company. Steve Jobs, the company’s CEO, adopts the measure, in which he closely monitors progress of the organization in the weekly evaluation of the company’s management of affairs by junior employees. Steve conducts these reviews on Mondays to assess the progress of the organization.[17]

Apple has a deep-rooted connection with all employees and clients. It is within the organization’s corporate culture to create a positively reinforced relationship between the staff and customers through an interaction process that leaves both parties satisfied. Moreover, the most unique feature in the success story of Apple is the secrecy of its strategies.[18] The management of Apple does not reveal the secrets on how it intends to launch the product or even the technology used. This information is treated with high degrees of secrecy to the levels that even junior field employees cannot gain the access to it.[19] The details are only shared among top managers and the actual teams behind the implementation. This is one of strategies in Apple’s corporate culture. It has given the company an upper hand in the technology market. On the contrary, if such information has leaked outside the organization and landed into the hands of competitors, they would use the details against Apple, the occurrence that Apple has completely hedged against. Moreover, Apple incorporates in its culture the fact that the company has the responsibility to define the requirements of consumers. But the consumers do not define what they require.[20] The top management in Apple advocates for a continuous innovation process so as to define new boundaries in the technology industry. This is a major positive attitude that the firm has used for identifying the new ways of inventing and producing a new product. This can evidently be supported by launching of the IPod and the itune products. This was a major revolution of the technology industry through the invention of new ways for downloading music and pictures for increasing in storage capacities of the iPod.[21]

Apple has used outsourcing from various computer technology providers such as Intel and IBM to provide the technology based support for the computers they produce. Apple has also partnered with the NIVIDA, a chip manufacturing company to help in the fixation of chips of Apple’s products such as the IPhone.[22] Outsourcing of these services by Apple helps in the reduction of production costs because the cost of producing chips in the firm will be much higher than acquiring the services from other companies. In addition, Apple has used other companies such as the AT&T, T- Mobile and other companies such as Verizon to improve the market base of the iphone.[23] Through this initiative, the company is able to lure more customers into using its products, thus, increasing the profitability. Apple makes IPhones being compatible to the technology used by the companies. It has outsourced to do so that the users of phones from these companies can enjoy the services of the IPhone, thus, creating the greater brand awareness. Apple has been outsourcing for a long time now but the need for outsourcing, developed following launching its IPhone product in the market.[24] This was a major development in the company’s history. It has played a major role in escalating the company to the market position enjoyed today. In this regard, the company’s chief executive officer, Steve Jobs, thought it to be wise to contract with other companies in the technology industry. This will help Apple to increases its presence in the market place. Furthermore, Apple has considered outsourcing of services outside the United States to other countries such as India. This is evident through the company’s establishment of the operation base in India in May, 2006.[25] This initiative shows the extent to which Apple has put in place the efforts to globalize in terms of market share and brand awareness. To ensure that the quality of services provided through outsourcing does not interfere with the current trend of the company in regard to the market position and the quality of products offered. Apple hires the highly qualified staff even from other countries that will deliver the required services at the demanded levels of quality.[26]

Apple understands that there is the need for measures to have a little manufacturing fee through the use of cheap labour force to produce the products. However, the company does not do so at the expense of quality of its products.[27] It can be assumed that Apple values the quality of its products very much. It would stop at nothing to ensure that the quality of products is not jeopardized by the efforts to cut costs. The company also has a great value for its employees. The policy has helped to retain a large number of its staff. It is important for such companies as Apple which deals with technology based products to adopt the policies which will help in making employees feel as a part of the companies’ success. Thus, they feel proud to serve as one of the company’s employees. If such firm does not adopt motivational strategies to help in retaining the employees, it would result to loss the technology expertise, which may be hard to acquire especially the similar quality.

Samsung Company should also use some management accounting practices used by Apple. Apple uses a variance analysis to compare between the budgeted cost of manufactory process and the labour used in the certain production period. In order to ensure that the company does not get inappropriate sums, it uses the variance analysis together with a lifecycle cost analysis and sometimes the activity based costing. They use those two because they are designed with the mind of modern business. In the activity based costing (ABC), the company evaluates the manufacturing cost in respect of some activities like the number of production in a month or the amount of production of certain electronics in a certain period. The company has succeeded in business due to the application of those accounting management practices. It has been able to manage the expense and income. The company does not work out of budget. It has few ones instead of the money misuse.

Analysis and Discussion

Samsung has progressed in the market without the application of some strategies applied by Apple. The company has managed to establish over 80 industries. The company has also managed to provide the market to almost each country in the world. The company was formed in 1969 in Southern Korea. It has managed to provide the services to the whole world. Samsung applies the technology in marketing of products. It uses such social media like Facebook and Twitter among others. In marketing, it also uses the television in creating the awareness to people. The marketing department also considers people that do not have the access to media services. They post a bill board in the street and remote areas to create the awareness of the product existence. Some of the strategies applied by Apple are also applied by Samsung. It should use other strategies to ensure the success over Apple.

Conclusion

In conclusion, Apple’s success story can be attributed to its innovative strategies especially in the marketing field. In addition, the secret embodied in its production methods as the part of its corporate culture has reinforced the company’s market leadership. Furthermore, the company’s inspirational CEO, Steve Jobs, has been a major inspiration to the company’s innovations. Finally, the outsourcing methods adopted by the company have also been a catalyst in boosting the company’s revenues. Samsung should also apply marketing strategies similar to those of Apple. It should also include the new strategies other than those used by Apple in order to win in the sales’ competition. The two companies have the health competition. It is that what should exist in marketing. Samsung managers should work with the focus of beating all competitors including Apple.

Recommendations

Samsung should establish a head office in each country or in the certain region to monitor and manage the operations. The manager should take care of sales and production of new laptops. The price of products should vary from a region to a region. This is because some regions have many manufactures of laptops, while others have less. In the areas with few competitors, the company should sell products at higher prices, while in the area with many competitors it should sell at low prices in comparison with competitors. The strategies and operation systems applied by Apple should be incorporated in Samsung because Apple has succeeded in business. The top managers should be educated and able to give the new business ideas. The managers should hold meetings to discuss the progress and put down new strategies. The evaluation of the company should be done yearly or after six months to determine the procedure for work and that may fail. In case of determining the failing strategy another should be incorporated.