Beruflich Dokumente
Kultur Dokumente
1. Analyze the existing business strategies, domestic and global environments, industry, and internal capabilities for
both Apple and Samsung. Assess the significant manner in which each company’s mission and vision align with the
long-terms goals and strategic direction of the organization.
2. Analyze the business-level strategy of each company by conducting a SWOT (Strengths, Weaknesses,
Opportunities, and Threats) analysis. Next, determine the fundamental way in which each sector influences its
competitive position within the industry. Provide rationale to support the response.
3. Analyze the central manner in which the strategies of each company’s business leaders have adapted to cultural
differences in order to both facilitate effective operations within global markets and drive new strategic initiatives with
improved innovation excellence. Provide one (1) example of such strategies in use from each company to support
the response.
4. Evaluate the superiority of each company’s organizational competencies in terms of entrepreneurial capabilities,
organizational design capabilities, and strategic capabilities geared toward increased performance and profitability.
Include one (1) example of such superiority from each company to support the response.
5. Recommend one (1) appropriate new business strategy for each company that may maximize profitability and
improved competitiveness in the industry. Provide a detailed rationale for this strategy.
6. Evaluate the success of both companies’ corporate-level strategies in terms of horizontal integration, vertical
integration, strategic outsourcing, or diversification. Next, determine the type of strategy that contributed most
effectively to the creation of a successful and profitable multibusiness model. Provide a detailed rationale to support
the response.
7. Analyze the strategies that the internal leadership of both Apple and Samsung has taken to discourage unethical
behaviors. Provide at least three (3) examples of such leadership in action from both companies to support the
response.
8. Assume that both Apple and Samsung are in need of organizational change and must alter existing strategies.
Recommend three (3) specific ways in which Apple and Samsung could change functional, business, and corporate
strategies, as well as organizational structure and control in order to improve business performance and
competitiveness in their industry. Provide a rationale to support the response.
9. Use at least six (6) quality academic resources in this assignment. Note: Wikipedia and other Websites do not qualify
as academic resources.
Executive Summary
The mobile phone industry as a whole is a one of the fastest growing industries in the world
and expanding globally rapidly as developing countries emerge. Cell phones have gone
through major changes since their introduction in 1994, are constantly evolving to meet
customer expectations. In January 2009 the total number of mobile phone subscriptions in the
world reached over 4 billion. Worldwide, sales to end users in first quarter of 2010 totalled
over 314 million units recording a 17% surge compared to the same period in 2009 from a
recent Gartner report. This growth was majorly driven by double-digit growth of smart phone
sales in more mature markets. According to a recent analysis, IDC has predicted that “the
sales of cell phones are going to grow by an additional 11% – 12% in the coming few
year(s).”
moderate/low, threat of new entrants is low, substitutes are low, and rivalry is high.
The global mobile phone industry is best defined by overall market share and price based
upon product type. The industry can be further defined into three different segments: low-
end, middle, and high-end. In the global mobile industry, scale and market share are
everything. The ability to expand globally is crucial as emerging markets arise and new
potential customers come forth. However, it is still possible to be profitable in the market
Samsung has upheld its mission statement that responds both to its own change, and to new
determination to contribute directly to the prosperity of people all over the world.
culture is contributed to its inability to deliver phones to market as quickly as competitors and
Answer 5
Provide latest in technology, innovation, and product design concerning smart phone
Compete for market share on a global level while recognizing potential of emerging
markets
emerging markets
Answer 1 and Answer 7
Apple and Samsung, notably, utilize very different business strategies and models within the
marketplace; Apple releases few but highly anticipated high-end products while Samsung
In the beginning, Apple was very careful about its mobile and tablet releases by originally
allowing for long development cycles that grow anticipation and showcased new innovations.
Dr. Panos Mourdoukoutas, a Professor and Chair of the Department of Economics at LIU
Post, succinctly describes the business model developed and utilized by Steve Jobs as, “based
on Schumpeterian entrepreneurship and churned out families of radically new products that
marry art and technology; and turning market niches into mass markets.”
The strategy of Apple was to develop and sell brand new, innovative products of which
blended art and technology in order to provide a simple and streamlined user experience; the
business strategy skyrocketed Apple to the forefront of smart phones making Apple a force to
be reckoned with beginning with their original release of the iPhone in 2007.
Apple’s strategy during Steve Jobs reign as Chief Executive Officer (CEO) was to use a long
development cycle that produced at least one large innovation each cycle. They would release
these products usually in a yearly selling period, while still marketing the earlier models at
cheaper prices. This allowed Apple to gain a large amount of anticipation for new products,
as consumers were expecting something new and innovative each time a new product was
announced while still offering cheaper alternatives to consumers via their old smart phone
models. Apple was also able to attract and keep many consumers by bundling their other
product offerings, such as iTunes, together with the use of the iPhone and iPad; the iPhone
Tim Cook who has seemingly adopted a new business model for Apple that is not necessarily
akin to Steve Jobs. While Tim Cook also believes in Steve Jobs’ former method of new and
innovative products, he has been utilizing Apple’s significantly sized market share of loyal
customers in order to provide only incrementally changed products while knowing the
company’s large and loyal user base will upgrade to the newest devices being produced. The
business model of Apple has shifted from the Steve Jobs to the Tim Cook era; Steve Jobs
emphasized the construction of brand new innovative technologies whereas Tim Cook has
Under Tim Cook, Apple has focused more on strengthening its already created products. For
example, instead of having any true innovation with the newly released iPhone 5, Cook
focused on tightening up many aspects of the existing smart-phone model, i.e. the iPhone 4;
he increased its size, allowing it to compete with other larger phones such as those created by
rival Samsung and cut Apple’s contract with Google for its Maps service and replaced it with
As a result of these two differing philosophies, a pattern has arisen within Apple, which has
turned into a 2-3 year cycle for significantly new and improved products. The first product
that is released is the large new hardware upgrade. This upgrade brings new changes such as
larger screen, better camera, faster processor, etc. Around a year later, Apple then releases an
updated version of this hardware, mostly consisting of slight upgrades and new chips. Apple
often adds a keynote new feature to each iPhone release along with a hardware upgrade, e.g.
Siri, cloud storage, etc. In essence, the 2-3 year cycle of large hardware upgrades is
products in a short period of time. Samsung appeals to more markets by providing a plethora
of gadgets such as cell phones, smart-phones, tablets, etc. to both low and high-end markets
Samsung has done well in the low-end market, but has only recently begun increasing its
presence in the smart-phone market and has enjoyed a good amount of success thus far as a
result. Samsung’s rapid market share increase in the smart-phone marketplace can be
partially attributed to Samsung’s large amount of different devices as compared to Apple and
other competitors. Lastly, Samsung is not only the biggest adopter of Google’s Android
software, but they also have smart-phones running the Windows Phone OS as well. While
Apple is narrowed to its own iOS, Samsung is not held by these same boundaries; Samsung’s
flood the market strategy works so well because they are able to not only diversify their
Apple is earning greater operating profits than all of Samsung Electronics, despite the fact
that Samsung operates across a lot of other businesses. Apple sets aside more for taxes, so it’s
reported net profit is slightly but not significantly lower, at least in the current currency
exchange. Samsung further breaks its overall earnings into three market segments: Consumer
Electronics (TVs and appliances), IT & Mobile communications (which includes handsets,
smartphones, tablets, PCs and network equipment) and Device Solutions (which includes
LCD and OLED screens, memory, and System LSI, the fab that builds Apple's A-series chips
Answer 2
Best designed phone in the market resulting in novelty factor for the phone
Launch of latest operating system in a timely manner to keep the interest e.g. iOS 7
Apple's Weaknesses
Decline in PC sales.
Battery is Fixed
Expensive accessories
Apple's Opportunities
Apple's Threats
Samsung's Strengths
o Mobile Phones
o Tablet
o Home Appliances
Focus on environment.
Samsung's Weaknesses
Patent Infringement.
Increasing competition.
Samsung's Opportunities
Samsung's Threats
- Rise of open source software - Market dominated by top 3 - 2 Categories (Carriers and 3rd party
- Many hardware manufacturers - Niche markets retailers)
- Ever-changing market
- No threat of forward or backward integration - Buyer has superior knowledge
- Rivalry is moderate/high
- Supplier power is moderate/low - Early termination fees
- Buyer Power is moderate/low
Substitutes:
The overall threat of new entrants in global mobile phone industry as a whole is low. The
Capital requirements for a start-up company are high as a large sum of money must be
heavily invested to be able to attain economies of scale that leading companies thrive on
dominating over 76% of the market (Chen, 2006). Much capital needs to be invested into
research and development, technology, and production facilities which in turn would be
The easiest way for a company to enter the market would be if the company was involved in
similar operations and diversify into mobile production. This would reduce the impact of
spreading the company’s assets too thin and keeping its structure stable. Also, most raw
materials used in production are the same (Marketline, 2009). This strategy has best been
demonstrated by Apple in 2007 with addition of the iPhone into the marketplace, targeting
One major absolute cost advantage in the industry is a patent. Patents are abundant in the
mobile phone industry. All top competitors hold various patents, and continue to invest in
intellectual property to stay competitive. Apple’s iPhone is a recent and a prime example of
cost advantages through patent holding with recent lawsuits against HTC for infringing on 20
different Apple patents related to the iPhone’s user interface, underlying architecture and
hardware. “We think competition is healthy, but competitors should create their own original
technology, not steal ours,” said Steve Jobs CEO of Apple (Dowling, 2010). Patents add to
the high barrier of entry for the industry, are the core technology around mobile phones, and
Hardware differentiation has played a decreasing role in the value of mobile phones and
towards the development trends of smart phones. The major emphasis has recently been put
have also become popular with Apple’s ‘App Store’ leading the way. The application store
business strategy is to compete for developers by making them money off your popularity
and high user base and to obtain competitive advantages in content and services (My News
Desk, 2010). Manufacturers have the ability to use their own proprietary software packages
and software platforms also adding to the high barrier of entry (Foxtrot, 2009).
Chipsets for mobile phones are developed and processed by multiple companies which
normally do not exclusively manufacture for a given cell phone manufacturer until recently.
Apple in the past year has started making in-house processors for its mobile devices.
Trademarked as the ‘A4,’ Apple’s processor boasts a 1GHZ speed, over 10 hours of battery
Exit barriers are somewhat high based on the high costs that are involved with attempting to
exit out of this industry. This in turn increases rivalry (Foxtrot, 2009). Specialized assets
such as early mentioned spectrum licensees for network providers maintain a high resale
value, though from a manufacturing standpoint high exit costs exist and a merger has never
The biggest and most influential resources for Samsung are the expertise of its employees and
the determination of its management. As stated before, Samsung takes massive pride in its
employees and their contributions to the company. Samsung’s talented employees utilize the
resources and assets they are given efficiently and effectively leading to such positive ROA
and R&D as a % Sales ratio for the company. The result is their extensive list of innovative
and state of the art products. Samsung has even established an educational system for the
entire company that touches on all aspects of the environment, products, and facilities further
pushes the cost driver, economies of learning. Fields of study include but are not limited to:
environmental awareness, legal education, and job-specific education. This in turn cultivates
a common ground and instills a Green Management mindset in all of Samsung employees
Samsung to excel in the industry. Creativity, collaboration, and excellence are the hallmarks
world’s most talented, and continuously evolve the company’s culture to support them. It is
management’s belief that this will bring innovative ideas that advance technology and the
company’s strategy of creating the newest products that improve every day the life of
Samsung customers.
Value Chain
The key success factors of the industry are: technology, marketing, skill, and distribution.
Both firms utilize all four categories, but distribute different weight to each factor to achieve
their strategic fit. Samsung heavily relies on technology and innovation as it such an
important aspect to achieve success in the industry especially concerning smart phones. This
strategy is put forth in their recent Galaxy S line, releasing a top of the line smart phone on
every major U.S. carrier (Verizon, AT&T, Sprint, and T-Mobile). With customization of
open source Android software and in-house product design, Samsung is able to set itself apart
from the rest of the competition in the industry by continually innovating and product
differentiation. This competitive advantage is sustainable as long as the capital and resources
are available. All of this is able to be achieved through its skill, or employee expertise,
another key success factor in the industry and heavy spending on research and development
which can be seen as a comparative advantage for Samsung. Samsung’s employee’s have a
strong since of nationalism which helps contribute to their dedication and effectiveness in the
Answer 4
Provide latest in technology, innovation, and product design concerning smart phone
Compete for market share on a global level while recognizing potential of emerging
markets
Samsung’s patent application has been increasing sharply in the field of Wireless
Communication Networks (IPC code: H04W), whereas similar uptrend can be seen in
Apple’s Touch-Screen Display and Icons (including User Interface technology) patent
Samsung filed a total of 1,142 cases of patent application in the field of Wireless
Communication Networks during the last ten-years. During 2007 to 2011, the number of
Wireless Communication Networks patent applications was nearly 14 times more than during
2002 to 2006. It is a radical growth size in this field compared to Samsung’s semiconductor
technology.
Samsung semiconductor technology is the main business activity of Samsung, but its patent
application has decreased by 74% during the year 2002 to 2006. Instead of the
Web Browsing Technology (WAP), have increased during those 5 years. It is also worth
noting that fields such as Fuel Cell, Robot, Image Processing, and Nanotechnologies have
also increased rapidly. These technologies are highly related to Samsung’s top five future
business activities, namely Solar Cell, Automobile, Battery, LED, Bio-medicine, and Medical
Devices applications.
In contrast, Apple has been concentrating on securing design patent rights after launching i-
Phone. Apple applied 99 cases of patents related to screen displays and icon design field
(Locarno Classification 14-04) and 186 cases of patents relating to data processing equipment
as well as peripheral apparatus and devices design field (Locarno Classification 14-02) for
the last ten years. It is worth noting that the design patent including UI parts has increased 9
Answer 3
While having higher market share of any given market is not necessarily the best strategy, not
having a mid-priced smart-phone will hamper Apple’s ability to get users into the Apple
ecosystem. Since its users have a high likelihood of sticking with Apple, the potential
September 10 announcement of a more entry level smartphone could have major long-term
One of the biggest game changers is Apple striking a deal with China Mobile CHL +1.05%
for the carrier to support the iPhone. While there are probably over 20 million China Mobile
customers who have bought an iPhone and hacked it onto China Mobile’s system the iPhones
run at 2G speeds for a suboptimal experience. If Apple can get China Mobile to carry the
iPhone, it will help stem market share losses to Android and create tens of millions of long-
term customers.
In 1990, Samsung was struggling to expand into overseas markets even though its products
were technologically equal to its competitors. The problem was that most of Samsung’s
managers were either unaware of or denied the existence of negative consumer perceptions
abroad, largely because Samsung’s products were doing so well in Korea. To force the
company to deal with the problem, chairman Kun-Hee Lee flew 100 senior managers to the
United States to show them how Samsung’s products were being treated. The visit was
traumatic. In prominent storefronts were Sony, Panasonic, Toshiba and other prestigious
companies. Samsung was located in the back of the store on the bargain sale tables gathering
dust. The moment of truth arrived and the executives immediately initiated a series of actions
that eventually led to a major turnaround of Samsung’s global consumer products business.
If companies are to use international expansion as part of their business plan, they also need
to invest in the management capabilities of their overseas units to provide pull from abroad.
Companies need offshore champions—often senior executives from the target market—who
can provide expertise with credibility and confidence, both internally and externally. Strong
and credible voices from abroad can greatly increase the likelihood that emerging
multinationals will have the courage to transfer organizational assets, resources, and
Answer 6
Vertical and Horizontal Strategies
Vertical integration dictates that one company controls the end product as well as its
component parts. In technology, Apple for 35 years has championed a vertical model, which
features an integrated hardware and software approach. For instance, the iPhone and iPad
have hardware and software designed by Apple, which also designed its own processors for
the devices. This integration has allowed Apple to set the pace for mobile computing. This
integration involves hardware and software different competencies and skill-sets in areas
The tech industry’s success in this type of integration is mixed. Samsung, a large technology
conglomerate, has thrived by making everything from LCD panels to processors, televisions
and smart-phones.
In its current form, Apple has found a way to balance vertical integration with an outsourcing
model. For instance, Apple focuses on design and integration. Apple has deployed a hybrid
model, where it has control over the product and supply chain, but uses contractors in many
areas.
Apple: Because it places such high value on brand image, Apple carefully controls what its
customers see in every country. To illustrate, here’s a little Steve Jobs story from the days of
“Think different.” Apple has a unique advertisement and creative ideas which reflect the
Samsung: Samsung does not share this value. The ad has virtually nothing in common with
Adapting to the differences in culture is not very easy and some manufacturers are trying to
build value into their company name. This is being done in hopes that branding will
eventually equate with honesty, integrity, quality, and good service so that storefronts will not
be as necessary as they presenting are. Apple computer began opening storefronts in the
United States in effort to compete against the PC based companies. Their thought is that by
having it available for the customers some will eventually make the switch away from the
PC-based systems.
The largest socio-cultural hurdle for companies such as Apple is the lower educational
standards of many countries. While many are making great progress, they are limited in
number. Those that are progressing can take advantage of the outsourcing that is being done
by American companies.
Apple is the most successful service company on the planet. Samsung is a manufacturing and
innovation powerhouse.
1. Business is about the platform: Apple is no longer a product business, despite the
apparent dependency on the iPhone. It is a platform business and its leadership lies in
continuously developing the potential of its platform. Apple continues to win on profits
because it has mastered, indeed is inventing, platform and ecosystem business strategy.
Apple is innovating the platform and it has not been swayed by criticism of the product.
revenue streams built around platform and ecosystems where possible. It’s a really durable
2. Samsung has created an entirely new pace of innovation in hardware, turning technical
novelty into a commodity that only it has mastered. To do that though requires big calls on
future technologies. Samsung took 10 years to develop efficient production of OLED, its
display technology. The investments the company makes are mind-boggling, dwarfing Apple
and every other company. Its technology investment for 2012 was $41 billion according to
Reuters. OLED factories cost billions to set up and run. But investment muscle is sometimes
There is still scope for hardware innovation but the commitments are huge, beyond the
willingness of many western business leaders. Bigger investment risks need to come back on
the agenda.
Companies can’t afford to overlook great design but nor can they rely on it. Good leaders will
be looking for the next design advantage – integrating service, software, hardware and
connection.
4. A development that is difficult for some Apple observers to accept is that the company is
going from strength to strength without the charismatic leadership of Steve Jobs. Tim Cook
has done a great job at Apple, involving teams to help him turn the tanker slowly around.
Samsung is able to respond because of its broad-based innovation capabilities. It can innovate
across chips, materials, displays, production processes, design, all with a view to
compensating for its lack of service skills. Those latter however have to be put in place soon
or Samsung will miss the value it is creating in its customer base. Both companies are
Innovation is a broadly based skill set, far removed from the old days when a good product
could meet a big marketing budget and win markets. It’s no longer about charisma either but
The mission of both the companies involves the innovation and strong leadership.
Samsung driving innovation through highly involved employees invest in their employees,
promote empowerment and facilitate teamwork. They ensure freedom and capability to
innovation timeout can be great for employees to play with new ideas.
implementation of creative ideas. To foster consistency to support strengths in the other areas
Creative individuals need support from others and a system to realize their ideas.
culture traits can foster innovation and help achieve better business outcomes.
If innovation is the goal, learning leaders could benefit from adding culture interventions to
their toolbox. By doing so, they can expand upon the impact of their work and add creative
References
Byles, D. C. (2006, May 1). Vodafone Air Touch: The Acquisition of Mannesmann.
Dowling, S. (2010, March 2). Apple Sues HTC for Patent Infringement. Retrieved
http://www.apple.com/pr/library/2010/03/02patents.html
Marketline. (2009, December). Global Mobile Phones. New York City, 245 Fifth
Miller, P. (2010, January 27). iPad powered by custom 1GHz Apple A4 chip.
http://www.engadget.com/2010/01/27/ipad-powered-by-custom-1ghz-apple-a4-chip/
My News Desk. (2010, October 9). China Mobile Phone Design Industry Report,
http://www.mynewsdesk.com/us/view/pressrelease/china-mobile-phone-design-
industry-report-2009-2010-492604