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Competitive Strategy of Apple and Samsung

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Holmes Institute Sydney

   

Competitive Strategy (HI6006)

   

Added on  2020-03-02

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In this document, we will discuss the Competitive Strategy of Apple and Samsung. Apple was incorporated in the year 1976. Likened one of the giants in the Silicon industry, advertising for mobile communication, media devices, computers, and handy music players. Samsung is the world's second-largest IT company and Samsung's revenue itself comprises a major chunk of total South Korea's GDP. 

Competitive Strategy of Apple and Samsung

   

Holmes Institute Sydney

   

Competitive Strategy (HI6006)

   Added on 2020-03-02

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Competitive Strategy
Competitive Strategy of Apple and Samsung_1
AppleApple Inc. was incorporated in the year 1976. Likened to one of the giants in Siliconindustry, it designs, builds and does advertising of mobile communication, media devices,computers and handy music players. It also merchandises a range of linked software,accessories, facilities, third-party digital content, apps as well as networking solutions. It isspread all over Europe, America, China, Japan etc. Some of the most famous Apple productsare iPhone, iPad, Mac, Apple Watch, Apple TV etc., several specialized software and appsplus a range of accessories, service and support services. It stands #9 in Global Forbes Listand is worth US$752 billion as of today.Apple enjoys its status because of its thirst to always innovate. This provided it with theneeded competitive advantage. Let us discuss the competitive strategy of Apple using Porter'sfive forces to understand better. This analysis shows that industry competition and bargainingpower of buyers are two of the strongest forces influencing Apple's profitability. Whereas,bargaining power of suppliers, availability of substitute products and the threat of newentrants are comparatively weaker rudiments amongst industrial forces. To elaborate, let usevaluate the competition in the industry for Apple. The competition is immense withcompetitors like Google, Samsung, Amazon etc. this is because the cost to switch brands forthe customer is not much, example a customer opting to but Amazon Kindle instead of iPad.Apple has however built a unique product and made it synonymous with ‘posh image' with alot of celebrity endorsements and offering niche product (Rao, 2017). The bargaining powerof buyers is high because of low switching costs among its competitors. Apple counters thisthread by continuous R&D, releasing new products which are also unique, example AppleWatch and Apple Pay. This is how it has gained a loyal base of large followers. This isevident by how much news customers make when the new iPhone hits the stores (Straker andWrigley, 2016). When talking about the threat of new entrants, the chances are slim of this
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cause to be of worry as it would require a lot of investment and time to make that reputation.Similarly, the bargaining power of suppliers is also a weak component in Porter's five forcesfor Apple. This is because there are lots of suppliers waiting to carve a deal with Apple andthe current supply is already high. The switching cost of Apple from one supplier to anotheris very low and as a customer, the reputation is very high to lose. This puts Apple in quite astrong position. When considering the threat of buyers opting for a substitute product, it is nota real threat. iPhone is not just a simple telephone, it is much more than that for a customerwho would rather use a landline if he saw it that way. Those who have the taste of iPhonedon't like to use any popular Android phones as well. This is simply due to the addition ofusing the technology which is very simple, good looking and innovative at the same time.
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