Apple vs Samsung

Apple consists of significant resources and considerable potential in the business

world. Even though it consists of such capabilities there occur various trends in the
general environment that causes the threats which pull down the progress and
success of the firm. These threats can be marginalised only with the help of
appropriate planning and suitable action which concentrates more on the value
added core competencies in the business. This may lead the company to produce
valuable products and services leads to a mounting opportunity for the shareholders
and customers.
Economic Environment
Booming Global Economy
On revising the past years of global economy the world has attained the complete
progress from recession in recent years. This uncertainty makes people looming of
the money. This makes people to depart from the quality to less expensive products.
The Apple known for its brand, quality, Innovative technology and luxury has mislaid
due to its supreme pricing position paves the way for its competitors the producers
of less expensive products. However the consumers attracted more towards the
valuable Apple's premium products during the economic upturn than its low pricing
competitors.
Political Environment
Potential world-wide climate regulation
One among the serious threat to the potential environment is the global warming.
Several steps have been implemented in reducing the global warming. The
Copenhagen conference has been suggested norms to the companies for the low
co2 emission products which may lead to strictly controlled environment. Thus in
order to manufacture the less emission the Apple must transmits its products.
Suppliers of the apple should have the provision to produce the low emission
products or it has to switch to the other suppliers. This may lead to higher switching
costs between the suppliers and bring changes to the margin of the products when
the manufacturing costs getting higher.
Socio cultural Environment
Increasing desire for Wireless devices
Apple plays at the front position of the wireless transition. As there is a remarkable
increase in the value of the Internet and the wireless connectivity creates a
powerful demand comparatively to the other devices. This is due to its portability
and accessibility everywhere makes these rapid speed wireless technologies
valuable. The devices such as the portable includes the Smart phones and the

tablet computers "wireless-connected devices" allows its user to perform several

operation by the use of internet in the constant and secured manner as wherever
they go. As these devices is highly received by the people than the traditional
computers such as PC or laptops. This technology has been developed widespread
by Apple and its competitive manufacturers such as Google. This technology has
been faced al lot of relevance as all these manufacturers focussed on the
consumer's preference. Among them the Apple differs by its Innovative technology
according to the recent technological landscape. Apple spends its extensive
investment in the field of research and innovative development for the creation of
highly well-liked devices such as the iPhone and i-Pad.
Technological Environment
The world has been going behind the analogue music system Apple made a
revolution through its innovation of iPod. This made a impulsive progress in the
revenue of the Apple. Due its consecutive pioneering researches resulted in the
creation of iPhone. Even though the Apple is younger in the mobile phone industry
comparing the Giants like Samsung, Nokia, HTC and Blackberry it poses a radical
technology. To withstands its market Apple has been spend 3.1 % of its net sales i.e.
almost $ 1,333 million for the Research and Development (apple). The world's
ongoing mobile technology is landed in 3G manufacturing technology. But Apple is
been ahead of them by launching its 4G due to the supremacy of the Apple's R&D.
This makes the Apple withstand as a leader in its high innovation and portability.
Competitive Environment Analysis
Rivalry between Competitors
Technological growth has put forth the electronic industry ahead as it leads to lot of
manufacturers. Due the entry of electronic industry in everyday life the PC's, mobile
phones and laptops has become a commodity product into the people's life. Most
users prefer the business cost than that of the performance of the devices. This may
resulted in the various levels of provider strategies. The providers who provides at
low price may not be able to satisfy the users with the best features. Whereas the
providers such as Hp, Dell, Samsung and Sony Ericson offers the customers a wide
range of options for the varying prices. Apple differs from those of the Providers as
they provide a High Quality and High Cost products but without the diverse models.
For example Apple consists of Single model iPhone varying only in its memory and
its cost whereas the Samsung may vary its product options from the variable
technology by varying its costs .
Supplier Power
Suppliers are those who pose the entire control in manufacturing of computers as
Apple's Mac book or the mobile phones. Apple Suppliers also embark on the special
responsibility for producing the best inputs which is the most challenging for its

competitors. In the computer manufacturing industry Intel and Advanced Micro

devices (AMD) are the two suppliers of the processors. Both of the chips have their
own unified motherboard. They are incompatible with one another as they cannot
be swapped with the other parts of the device. If Apple has to switch their processor
it is also essential to modify their motherboards too resulting in high switching
costs. This may results in high supplier power as the company has to rely on them.
Buyer Power
Almost all the industry consists of buyers who have high influence on their
manufacturers. Each buyer has their own choice of the product needs. This leads
the company to launch the wide variety of products into the market. Thus power of
the buyers has influences on the bargaining in the Quality, Price, and the Service.
Apple exclusive products such as IMac and IBook are unique from its competitors in
features of highly technological operation system, innovative functionality and
brand value attracts the customers by avoiding them to switch to its competitors.
Even though it has attracted the customers through its functionality there arose a
chance to switch to its competitors if there is no product differentiation.
Threat of new entrants
Every business has own threat of new entrants. The field of Computer market has
the highest possibility of new entrants. The portable pc's market is widespread
effortlessly paves the way for the new entrants. Despite the possibilities it also
consists of several hindrances from its successful entrants. Apple have been deep
rooted in field of computers and mobile products by its substantial recognition, own
innovative technology and royalty among the other manufacturers. It has been a
high challenging to the entrants in order to make its brand successful and stable in
the competitive market. Apple maintains their price of the products based on the
economies of scale which is not possible by the new entrants without the huge
investment.
Even though it has the high possibilities of hindrances to entry it consists of some
successful possibilities of entry which can be listed as follows.
1. There is a chance of suppliers to enter the field of manufacturing
2. A well established giants of some other field of computer can also deep routed in
this field as they have a well established familiarisation in the market.
Threat of substitutes
Recent Development of the technology makes the computing products handy. As
every features and functionality of the computers has been substitute by the tablet
pc's or smart phones. Time has changed where the users rely on the stable pc but
now it has been grown substantially the computers are back behind the users and
posses wide variety of application than pc's by means of wireless internet

technology. This occurs in the case of Apple as due to the entry of the Smart phones
the buyers of Mac pc are apparently reduced. Thus these show the change for
substitutes of the consumers. Considerably Apple has been analysed all these cases
and introduced the iPhone and iPad to satisfy its consumers who are in search of
substitutes to a new technology.
alue added core competencies
Value added core competencies of Apple includes its highly Innovative ideas,
featured design, well known brand, and critical creativity as all these united to make
the company a most competitive advantage among its competitors. Thus Apple has
almost set all these strategies to the company in order to withstand its high position
in the competitive market.
Risks of the apple have been initiated with its supplier and foreign factories. Apple
has its own guidelines for its suppliers in manufacturing its product they don't have
the direct control of their suppliers. The suppliers derived their profits based on the
high volume low margin. Thus in order to increase the profit the suppliers produces
the goods by low quality raw materials. As a result of this the quality of the Apple
products has been diminished. Thus in order to rectify these defects Apple have
been undergone the mutual understanding of its suppliers to retain its quality
Administration
Eco- Friendly Apple
Apple has always been intense on the environment factors in its manufacturing.
Apple has been taken several steps to avoid the usage of harmful chemicals in
manufacturing of its product. Shipment of the products plays a vital role in emitting
combustion during its transportation. Thus in order to reduce the emission of Co2
Apple considers the portable packaging result in the less transportation and less
combustion.
Strong cash position
Apple has less long term debits and run its business efficiently without the financial
intervention by means of its own cash. The financial status of Apple helps its
business to run efficiently as it may not depend on any of the creditors in terms of
the decision making such as the financial capital purchases, decision on expansion.
Human resource management
Hiring process
Apple recruits its employee by means of Selective hiring. It highly picks up the
persons based on their innovative skills and high creative skills rather than by

recruiting process. It focuses more on the well experienced professionals and

innovative freshers rather by trainees.
Employ benefits and appraisals
Apple places a leading role in motivating its employees by means of high benefits
and appraisals. It possesses a high role in the employee satisfaction. The benefitted
employees provide full support and dedication to the company by means of their
highly innovative ideas.
Technological Development
Research and Development
Apple believes the research and development is one of the key factors of the
success of its organisation. As it believes analysis on various factors determines the
current requirement of the product have been pushed towards the new innovative
product which paves a way for non competitive industry. It has been estimated that
Apple spends around $1.3 million for its research and development.
Procurement
Relationship with suppliers
Apple has maintained the good relationship with its suppliers. As it manufacturing
its product based on the low cost and high quality. Despite it sets the high marginal
cost for its product whereas in turn it spends its profit for the research and
development. It also concurrently updates about its new technology to its suppliers
by means of short courses and practical classes.
Inbound Logistics
Apple maintains a highly automated system for placing goods. The stock has been
ordered to its suppliers in JIT process i.e. Just in Time when there is an reduction of
the stocks it will be ordered automatically to its suppliers this may helps in avoiding
the overstocks. Thus it hoard the cost spend for the stock management system.
Operations
Design of the product is been implemented by the Apple and hence it outsources its
production to several factories in china by implementing its design. This may results
in the reduction of risk factors as it is apart from its firm. Thus it modifies its
management and Economy scale according to its outsourcing.
Outbound Logistics
Apple has its production department in china whereas the goods have been
transferred to various countries from china rather than bringing to US the head

office of the Apple. This may leads to the reduction of shipment cost and the
warehousing cost.
Marketing and Sales
Apple uses the television advertisements as their marketing strategy by comparing
its features and functionality of the product towards its competitive products. It also
brings its own marketing strategy by means of the customer attraction towards the
product. Apple discloses the new launch of the product which in turn acts as an
indirect marketing which pulls the customers to know about its launched products.
Service
Apple genius is a person acts as a tech assistant in considering the consumers
problem and rectify them. Apple provides a extended warranty to their customers
within 90 days of product shipment also poses an opportunity of replacement within
the given time.
Limitations
Recommendations

MICRO ENVIRONMENT ANALYSIS OF SAMSUNG

Strength
Samsung is the second biggest telecommunication industry in the world
through its innovation smart phone.
Samsung has wide range of product includes Cell phones, Tables, Tv's
Cameras, Home appliances, laptops, etc.
Samsung have increase their brand value in this past three to four years
Samsung is leading in design features. For example Samsung is the first one
to produce dual screen phones, and they have a thinnest and lightest note
pad ever.
Their design are attractive and stylish at the result their sales are moving in
high volumes
2.2 Weakness
Their prices are low, hence their product loss value easy in the market
They launch a new phone after another that can cause confusion to the
customers.
Poor creativity in terms of software, mostly they steal Apples software ideas
Their products are not use friendly, as compare to Nokia phones
They are leading in hardware but they have too much dependence for their
software from other parts.

EXTERNAL ENVIRONMENT ANALYSIS OF SAMSUNG

Threats
Low cost competitors from China can affect Samsung
All Samsung competitors bought their product parts in Chine that can lead a
future fall to Samsung.
The war between Samsung and Apple might contaminate the image of
Samsung
Samsung was banned from importing their products in a Euro Zone that left a
bad image of Samsung in that zone
Apple is dominating in South and North America, and builds its brand to make
any new difficult to operate there.
Apple and Nokia they are in a process of merging, that could be a threat to
Samsung because Nokia has built its brand already especial in Africa, which is
Nokia can just take its customers
In Australia, Google Nexus 7 have a market lion share which make Samsung
straggle to penetrate the market smoothly because Australia does not see big
difference Samsung tablets and Nexus 7
Sony has release a new tablet which has almost the same feature which
Apple and Samsung have.
In German, Samsung is straggling to penetrate the market because they
believe that Samsung is incompetent, is copying from Apple iPod.
(www.marketing91.com)
3.2 Opportunity
Samsung need to introduce user friendly products and educate their market
about their product, because there is a big market in Africa yet the majority is
uneducated,
Here in South Africa they need to open their own stores, whereby they go to
sell only their own products
Samsung could launch no name brand like MTN and Vodafone whereby they
will take the out date old model, change only a cover and sell with cheaper
price.
PESTEL ANALYSIS
''The PESTEL analysis is an analysis of the external macro environment in which an
which an organization operates. These are often factors which are beyond the
control or influence the business (RapidBi, 2013).
PESTEL will be used as a tool to analyze the Macro environment of Samsung.
Political environment

Looking at the political environment, how the impact of politics affecting Samsung
globally, As much as Samsung is a good company not everybody see like that, due
to the strong competition between Apple and Samsung it ended up involving
government in other countries. American government trying to stop Samsung
influences the Euro zone to block Samsung to have market around Europe.
Specifically in German Samsung was forced to withdraw its Galaxy tablet. Also
South Korea stops Samsung to operate in there due to the political differences
between Japan and South Korean government.
Economic environment
Samsung has expanded its business to more than 58 countries. Samsung mostly
they invest heavily to the infrastructure in each end every country they have a
business in. Here in South Africa they bought a land whereby they going to build the
big plant, whereby it will manufacture or assemble its products for whole Africa, it
means there are employment opportunities coming and there is an opportunity for
South African economy. This plant is expected to employ more than 3000 people.
Social Environment
Social trend in South African environment are constantly changing as new
innovation technology and services have impact to the needs and wants of South
African communities. The stats show that there is an increase attraction to the
technology which has become the primary means of communication. Samsung find
that gaps to improving people's lives. The challenge is that many people do not
know how to use Samsung products in a proper way especially these new tablet
phones. People steal need to be educated on how to use these tablets phone that is
a challenge of our societies.
Technological environment
Technology in South Africa has advance and grown rapidly over the years and has
affected the way we do things here in South Africa. Technology has change the way
the business is done as social media has a crucial role in sustainability strategy of
most businesses. Samsung find a way of take a business out of the building
structure to the pocket. By introducing Galaxy Note 2 is more tablet like than phone
like, it mean that you can do you work in the public transport, in the restaurants,
anywhere, without filling intermediated of carrying big machine.
Ecological environment
Samsung Electronics is operating its own voluntary take-back system across Korea
(Republic), using a network of 130 of service centers and Anycall Plaza retail outlets
(exclusive outlets for Samsung's 'Any call' brand). End of Life mobile phones are
collected either free of charge, or in some cases with a customer reward. The
returned phones are then sorted and transported to recycling facilities for

scrapping. They makes an effort to develop environment-friendly product that

minimizing an impact to environment through whole process from getting raw
materials, production, transportation, usage and end-of-life disposal by adding
'environment' on function, price, quality, design that were the essence for product
development, Samsung reporting the recycling amounts for Korea and Japan from
2004, for Europe from 2005, and for the United States from 2006. For 2006, they
have forecasted an estimate of volumes they expecting to recycle this year.
(www.samsung.com)
Legal environment
The South African government has decided in April of 2011, the Consumer
Protection Act68 of 2008 should come in operation. This might have a negative
impact to the company like Samsung because they have a tendency of dumping
their low quality product in third world country to maximize their profit as they did
in India. There are strong labour laws in South Africa which might have a strong
negative impact to Samsung operating in South Africa as they intend to open a big
factory in Johannesburg as a distribution center for Africa; it will be a challenge to
them if they think they are going to exploit people in South Africa.
MARKETING ENVIRONMENT
This section will be focusing on the Marketing Environment in which Samsung
operates and I will be evaluating its effects on the new Tablet in term of the
competitive in the industry.
Industrial Challenges
This section will be broken into three parts: Porters 5 forces, competitive analysis by
comparison and industry trend
4.1.1 Michael porter's porters fives forces
The threat of potential new entrants
capital is required to compete in technology industry. Capital to buy the equipment's
and capital to carry out the marketing activities and other expenses should be
available. However, Microsoft will release its new first Tablet soon, this mean
Microsoft will be a new threat to Samsung. Microsoft will lavage on the success of
their software
Product Differentiation
So far there's no different on how the market design its software, hence the market
hope that Microsoft will bring something new in the market, if not they will not
survive in this industry because this only way they can differentiate themselves

Even then, overcoming issues such as customer loyalty and switching costs would
be another large barrier to entry such as Microsoft.
The threat of substitutes
The threat of substitute products within the industry, however, is low.
Even though there is an increased popularity of Tablets, they are busy doing same
thing. However Samsung is the one who inventing a new trend that shift from tablet
to galaxy phone which it have all feature that tablets has and smart phone features.
This is the only direction the market goes.
The bargaining power of buyers
Reliability is one of the area the companies should concentrate in, however if an
organisation loss its focus on customer wants, it is easy for customer to move to
another company. Companies should know how much the customer is will to pay.
Buyers easily switch cost with the increased of choices of mobile companies
because this products are similar to one another; If the company does not beat
market, the buyer will switch to those companies that have better features or better
price. However Samsung is sitting on top of the game, they always want to beat the
market by releasing designs and they consider their prices they offer their
customers, even now Samsung is the one have a cheaper tablet in the market.
Bargaining power of supplier
Samsung is its own supplier of most components. Samsung also happens to be its
own supplier for raw materials and they design for themselves. The bargaining
power of suppliers is high because suppliers' goods are critical to the buyers'
marketplace success, for example Samsung is a supplier of Apple which is the have
a significant role in Apple prices.
INDUSTRY LEADERS
Industry leaders are brands, products or companies that have power in the industry.