Innovation and Technology: Analysis of Samsung and Apple

This report analyzes the current conditions of the challenger industry (Samsung) and the incumbent industry (Apple) in terms of innovation and technology. It includes SWOT analysis, Porter's five force analysis, PESTLE analysis, and McKinsey 7S model. Solutions to the problems faced by Samsung are also provided.

Running Head: INNOVATION AND TECHNOLOGY 0
Innovation and
Technology
Student’s details:

INNOVATION AND TECHNOLOGY 1
Contents
Introduction......................................................................................................................................2
Porter’s five force analysis..............................................................................................................2
Degree of existing rivalry............................................................................................................2
Threat of potential entrants..........................................................................................................3
Bargaining power of suppliers.....................................................................................................3
Bargaining powers of buyers.......................................................................................................3
Threat of substitutes.....................................................................................................................3
Solutions to the problems faced by Samsung..............................................................................3
SWOT Analysis of Samsung...........................................................................................................4
Strengths.......................................................................................................................................4
Weaknesses..................................................................................................................................4
Opportunities................................................................................................................................4
Threats..........................................................................................................................................4
Solutions to the problems faced by Samsung..............................................................................5
PESTLE...........................................................................................................................................5
Political........................................................................................................................................6
Economic.....................................................................................................................................6
Social............................................................................................................................................6
Technological...............................................................................................................................6
Environmental..............................................................................................................................6
Legal.............................................................................................................................................7
Samsung McKinsey 7S Model........................................................................................................7
Hard elements..............................................................................................................................7
Strategy.....................................................................................................................................8
Structure...................................................................................................................................8
System......................................................................................................................................8
Soft element.................................................................................................................................8
Shared Values...........................................................................................................................8
Skills.........................................................................................................................................8

INNOVATION AND TECHNOLOGY 2
Style..........................................................................................................................................9
Staff..........................................................................................................................................9
Conclusion.......................................................................................................................................9
Bibliography..................................................................................................................................10

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Introduction
The following report represents present conditions of a challenger industry over an incumbent
industry. An incumbent sector or industry is a group, which is beaten by another challenger. The
challenger is a group, which is earning profits and success. The report is made up on two mobile
provider companies Samsung and Apple. Herein, Samsung is as incumbent company and Apple
as a challenger company over which analysis will be conducted. The report includes numerous
methods of analysis like SWOT (strength, weakness, opportunity and threat), porter’s five force
model, Pestle (political, economic, social, technological, environmental and legal factors) and
Mc Kinsey’s seven S (strategy, structure, system, shared values, skills, style and staff) models of
analysis. All these models are relevant for performing analysis. After analyzing the current
conditions of incumbent Samsung detailed solutions are provided in relation to the innovation
and disruptive technology. At the end of the report, the reader may get an in depth knowledge
about the ways in which Samsung can deal with the problems.
Porter’s five force analysis
Degree of existing rivalry
The degree of risk from the end of existing rivalry is very high for Samsung as the market is full
of white companies like Nokia, LG, Apple and Motorola. The margins are very less for any of
these firms whereas the competition is very high. In order to reduce this risk Samsung must
introduce technological advancement in its products (Rothaermel, 2016).
Degree of
existing
rivalry
Threat of
potential
entrants
Bargaining
power of
suppliers
Bargaining
powers of
buyers
Threat of
substitutes

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Threat of potential entrants
High barriers characterize the white goods industry, which means there are large numbers of
barriers for entering into the industry. Samsung has managed to enter into different marketplaces
step by step even after facing unprofitability at the marketplace. The company has set up its
targets higher and made efforts in the tech-field to beat the competitors (Tomy, 2019).
Bargaining power of suppliers
Before entering into the market, a company studies about the market setup and the role of
suppliers. The market in which Samsung operates has large number of sellers; this is because the
threat from sellers is less. Even after holding large number of sellers, the firm does not get a
complete hold over sellers. The companies like Samsung cannot make an undue force over the
sellers to move as per their needs. Therefore, the threat of bargaining power of sellers is less and
the companies are required to make an in depth research before entering into the market.
Bargaining powers of buyers
In the sector related to technology and trends, the buyers have thousands of options to choose
from different companies. Therefore, it becomes essential for Samsung to stabilize the prices of
the products and to introduce new advancements in the technology with time (Gaudin, 2017).
Threat of substitutes
Samsung faces a strong threat from its substitutes; the sector in which Samsung deals has large
number of producers which gives the consumers an opportunity to move to another substitute
good if it does not feel satisfied with the products of Samsung. Therefore, Samsung is required to
develop products comprising advanced technology along with developing strong marketing
strategies (Study, 2019).
Solutions to the problems faced by Samsung
In order to remain in the competition Samsung is required to firstly make technological advances
in its products. There are large numbers of competitors who produces substitute goods, which
make sit essential for Samsung to promote its products effectively. Effective promotional
strategies will definitely increase the revenue generated by company (Study, 2019).

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SWOT Analysis of Samsung
Strengths
Strengths refer to the factors, which make san organization different from other organizations.
Samsung has numerous strengths to be in the market like its strong brand image as large number
of people praises the products offered by brand because of their durability and performance.
Samsung holds a loyal customer base that is ready to the prices quoted by the brand. One of most
vital strength of Samsung is the wide range of products offered by the company i.e. home
appliances, semiconductors and electronic devices like mobiles, TVs, refrigerators and air
conditioners (Omer, 2019).
Weaknesses
Samsung suffers from various weaknesses, which restricts it to perform in the way it should
perform. For instance, high diverse portfolio of Samsung, the brand has numerous products to
offer to the customers, thus it becomes difficult for the customers to promote each of its product.
Samsung has failed to create a strong brand positioning like Apple and hence it has substantially
failed to maintain a loyal base of customers (Rani, 2016).
Opportunities
Opportunities are the factors, which can be used by Samsung to deal effectively with the
competitors and will be helpful in expanding the market share of brand. Here are some the
opportunities of which Samsung can make full use- expanding the brand to new geographies,
which will increase the market of brand, endow comprehensively in research and development
that will lead to know the preferences of the consumers. In addition, it can target the middle class
section of the society who is able to afford the products. Therefore, it can be stated that Samsung
has to evaluate the factors of growth and work upon them meritoriously (Rani, 2016).
Threats
Threats refer to the factors, which acts as a hurdle in the growth of Samsung. There are various
threats to Samsung like emergence of new brands in the market and threat of existing firms for
example Apple, LG and Nokia who divides the share of revenues of Samsung. The quality of
products offered by these brands are virtuous, in order to beat these firms it is necessary for
Samsung to improvise the level of technology provided in its products. Another solution for this
problem is advancement and upgrading the applications present in the mobile phones. Mobile

INNOVATION AND TECHNOLOGY 6
phones are the most sold electronic device throughout the world , therefore Samsung should
work upon the quality and features provided in the phones (Kim, 2018).
Solutions to the problems faced by Samsung
From the SWOT analysis, it can be stated that firstly Samsung should try to analyze the strength
factors, which are common in Samsung and challenger company Apple Inc. This will help
Samsung in knowing how it can work upon its strength factors. One of the most important
solution for major problem which makes Samsung incumbent in the market is its deficient
technological and innovation advancement. Hence, Samsung should work on developing new
applications which will provide the consumer services which are not provided by other substitute
firms.
Strength Weakness
Opportunities Threat

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PESTLE
Political
The political factors are not that influential in the business cycles of well-rooted companies like
Samsung, the organizations like are well established and are already working in accordance to
the rules mentioned by state government. Sometimes, the implementation of new trade laws and
regulations affects the productivity and ratio of revenue generated by the firms. There should be
political stability in every country and its business sector to maintain a peaceful and healthy
environment (Dawn, 2019).
PoliticalEconomicSocialTechnologicalEnvironmental

INNOVATION AND TECHNOLOGY 8
Economic
Economic factors can be beneficiary for the companies like Samsung. The economic status of a
state defines the ratio of sales of products in the market. More the growing economy more will
be the demand of new products manufactured by Samsung. Good GDP of a company defines that
people have more money to spend. This will surely increase the total profits of company and will
help the company to grow at global level. It should be noted that the economic crisis also leaves
an impact over the all over sales of the company (Fam, et al., 2017).
Social
The social factor, which may affect the sales and productivity of Samsung, is the change in taste
and preference of people, change in cultural thoughts and beliefs. When a company goes through
such issues, it may take flexible actions in reforming the policies of the company. it is a natural
and unforeseen change which takes place with time & cannot be controlled (Widya Yudha,
2019).
Technological
Samsung is a world famous brand in the name of launching new innovative techniques in the
devices. Almost all the products produced by company are technological hence, it is more
important for the company to understand the needs of the consumer before drafting /chalking the
policies (Nandonde, 2019).
Environmental
The environmental factors are those, which are in concern of environment. The consumers
always are in favor of a company, which take steps towards making the environment green.
Thus, Samsung must develop strategies, which are helpful for nature. The sources of energy used
in production should be renewable which will not harm the sustainability of the environment.
External and internal factors affect the position of a company (Umunakwe, 2019)..
Legal
For a multinational company like Samsung it is difficult to maintain a position in the market with
large number of rivals like Apple, LG and Nokia. Thus, Samsung should ensure that it should not
break any of the rules. Earlier Apple has blamed Samsung for copying or imitating their design
and features. Samsung must abide all the rules and legal regulations to maintain a good image in
market (Dawn, 2019).

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Samsung McKinsey 7S Model
The model attempts to explain the conditions of Samsung with the help of seven individual
elements present in McKinney 7S model. The change in one of the element marks a change over
all other elements.
Hard elements
The hard elements include strategy, structure and system. Let us see how these factors have an
influence on the productivity and collections of Samsung.
Strategy
The business strategy of Samsung is based on market readership. It is been observed that
Samsung focuses on replicating the features and innovations offered and developed by
companies like Apple. In order to have a separate customer base it is necessary for Samsung to
develop its own ideas of putting innovation in the products (Almutairi, 2019).
shared
values
structure
system
style
staff
skills
strategy

INNOVATION AND TECHNOLOGY 10
Structure
The structure of business followed by Samsung is divisional. The company has presently three
divisions i.e. IT and mobile communications, device solutions and consumer electronics.
Different teams handle all of these divisions, which reduces the chances of duplicity and clashes.
The technological development in the sector has increased the rate of functioning and made the
things simpler for staff (Chang, 2018).
System
Samsung has long-term development prospects hinge on smooth function of a extensive range of
systems. It includes employee recruitment and system selection, developing skilled team,
orientation system, system for customer relationship management, system for business
intelligence, system for knowledge management and others. In the following evaluation at came
into the frame that Samsung conducts Samsung conducts assessment of all these systems at
regular intervals (Chang, 2018).
Soft element
The soft elements include four elements i.e. shared values, skills, style and staff.
Shared Values
The values on which Samsung works are excellence, integrity, co-prosperity, change and
veracity. Samsung works for people and believes in delivering best services to the people, this is
helpful in maintaining the list of consumers. It is essential for Samsung to stick to the values to
beat the competitors like Apple (Lee, 2019).
Skills
The skills which should be required by the Samsung to recruit an employee are as follows- firstly
the employee should be good at communication skills as good communication of the employee
will help the to manipulate and attract the consumers towards Samsung. People of an
organization should be cooperative; the teamwork of employees can take the companies to
another level (Lee, 2019)
Style
Samsung follows emperor model of functioning, the company has witnessed immense growth rate after
the year 1990s. The company managed to grow at rapid rates because of its popularity among people. The
technological advancement developed by skilled workers of Samsung in its products has attracted large

INNOVATION AND TECHNOLOGY 11
number of buyers. Giant companies like Apple have already acquired large section of market with its high
tech products (Lynch, 2019).
Staff
Staff in an organization is considered as the backbone of an organization. Similarly, Samsung
also takes care of its employees at immense rate. Happiness and satisfaction of the staff is
essential for having good productivity. Samsung has taken similar steps like other large
organizations (Lynch, 2019).
Conclusion
As per the above report it can concluded that innovation and technology has become an essential
component of today’s world. To understand the business conditions of Samsung an analysis is
performed. This examination of Samsung is made with the help of four different models, which
are porter’s five-force analysis, SWOT, PESTLE and McKinsey’s 7S model. As per these
models, Samsung faces an immediate need to make developmental plans for regaining its
position in market. Samsung should stop the process of replication of ideas from big brands
rather it should look forward towards hiring a skillful team to developers who are efficient
enough to take the company from the position of Incumbent to challenger.

INNOVATION AND TECHNOLOGY 12
Mind Map
Apple VS
Samsung
Technological
Advancement
Skill
development of
staff members
Strategic application
of marketing policies
Modifying
products as per
consumer
needs
Developing
new
applications
Discounts/
attractive
offers
Training
Knowledge
regarding
products
manufactured
Good
camera
quality

INNOVATION AND TECHNOLOGY 13
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