As a result, Apple reported an increase in its annual sales. It is not a magical formula, Nokia was almost as integrated before being steamrolled by Apple and Samsung, but Samsung controls some logistical certainty in a way that Apple does not. Product differentiation can be measurablelike price or calorie countor subjective. In the course of their meeting, he pulled out the NAND flash memory, as it was called, and put it on the table. This paper compares the business strategies of both companies and reveals that their production, human resource and marketing strategies are inherently similar. Consider the almost unprecedented legal wars taking place between Samsung and Apple, which span four continents and billions of dollars in awarded damages. Before 2017, I considered Samsung's marketing of their devices anemic at best. However, both companies have pursued different strategies to achieve their success. Geoffrey Cain is a foreign correspondent and author who has covered Asia and technology for The Economist, The Wall Street Journal, Time, The New Republic, and other publications. Kelton, D, Sadowski, R & Zupick, N 2014, Simulation with arena, McGraw-Hill, Pennsylvania, PA. Kushida, K 2015, The politics of commoditisation in global ICT industries: A political economy explanation of the rise of Apple, Google, and industry disruptors, Journal of Industry, Competition and Trade, vol. Lawsuits are a common strategy from Apple, which is one of the most legally aggressive firms in the world, but the focus on Samsung is particularly repetitive and intense. Lastly, Apple generates its competitive advantage through its manufacturing and machinery assets and distribution channels which are acquired through its partners (Lashinsky, 2013). It talks about Apple going towards a greener approach. We will sell close to 3 billion smartphones in 2021 and a micro-percentage of them will be folding models. Samsung applied this strategy when entering the television market. It was up to Todds team to make the leap and take the risk. 56, no. Four days before, January 4, 2007 . This case is slightly contrasted from rival companies who are seen as cautious when investing in new technologies. Ximnez, J & Sanz, L 2014, Financial decision-making in a high-growth company: the case of Apple incorporated, Management Decision, vol. And product designs that deliver what they promise. Apple and Samsung are the biggest smartphone companies operating worldwide. A passerby photographs an Apple store logo with his Samsung Galaxy phone on the morning iPhone 5 went on sale to the public in central Sydney Sept. 21, 2012. With that, Samsung had a launchpad from which to eventually get into smartphones, when they came out. Its a giant phone that Steve Jobs made fun of. But for now, lets quickly look at a few things that Apple does differently when compared to Samsung. Both companies have undertaken various steps to remain competitive in the market. I advised against it then as I felt that this first model would underperform based on their needs. Samsung not only competes with Apple in the notebook, tablets, and smartphones market, It also supplies Apple with crucial items for iPhones like OLED display and flash drive memory chip for storage. Pendletons team convinced Dale Sohn to reverse the figures: to put 70 percent behind Samsungs own efforts and devote 30 percent to the carriers. . Cusumano, M 2013, The Apple-Samsung lawsuits, Communications of the ACM, vol. Apple recognises the key role played by technology in maintaining a competitive edge in the Smartphone market. Able to suppress R&D costs by outsourcing hardware component production and assembly, Apple's CapEx looks radically different from Samsung's. I expect us to be number one in a couple years.. After following the path of intensive innovation, it would take years before the company launched any new product in the market. The result is often that Samsung can compete regarding price by selling at a lower cost relative to its rivals (Chen & Ann 2016). Despite the additional layer in the copy, the overall design still stays true to the brand and thats one thing to remember when you create ads. Or the aggressive, political election-style marketing campaigns that are reminiscent of the Ford versus Chevy attack ads. 15, no. In this regard, product models are viewed as efficient, exclusive and expensive. While I do miss the in-person events, I am much more inclined to want these events just streamed in real-time in the future. With the holiday shopping season closing in, the only solution was to chop up and redo the film then and there. Big brands that have been head-to-head for the market-leader position are known to adopt this strategy now and then. Samsung finds creative ways to market its products. Customised Android OS and display screen evidence this strategy. From a business model perspective, the two companies are constantly converging and modifying, although stark contrasts remain. Apple has managed to maintain a niche in the consumer electronics field by producing Smartphones that address the needs of the population. Apple and Samsung have achieved high levels of business success over the years. We are going to patent it all, Jobs once said. Neither Samsung nor Apple has made any statements about future live events, but if this last year has taught us anything, using streaming video events to launch new products accomplishes much of the same results that an in-person event does, minus the immediate hands-on experiences. 27, no. We have a whole blog on the strategies that have helped Apple become an icon in branding and building brand image. During a press conference, Steve Jobs, when questioned about bigger phones from rival brands, commented that big phones can help but no ones going to buy that. Want to create such simple impactful ads for your brand? Information from GSM arena shows than Samsung released 54 new phone models in 2014 , compared with 24 by HTC , 11 Motorola and 2 by Apple, leading to increased production costs and lack focus on a specific customer segments thereby losing some of its competitive advantage (GSM Arena , 2015 . They wanted us to use butterflies, said former marketing vice president Clyde Roberson. The other had a Samsung phone. Who was right? Because Apple was an important Samsung customer, the executives at headquarters were pushing for a cautious approach. If you have to compare the smartphone market share, back in 2009, Apple was at 16.1% and Samsung a mere 3.3%. Five bucks? Oneguy offered his half-eaten ice cream cone. ! But how do you attack Apple without looking petty, without giving it free advertising, without acting like the smaller dog in the pack who barks the loudest and then gets laughed at? Geoffrey Cain's Samsung Rising hits shelves on March 17, 2020. More importantly, Apple's competitive climate is also analyzed against Samsung, which is the company's primary rival. A Kimp Graphics subscription takes care of all of these promotional print designs for your brand, plus the digital designs for social media promotions as well. The company has managed to employ both the cost leadership and differentiation strategies to increase profitability and/or achieve a higher market share. Have you ever seen two Apple ads and thought that they do not look similar? Need help aligning your branding and marketing designs with your brands personality? And with all of its product lines, the brand has continued to hold on to these values. Android people consider themselves to be smarter than Apple people, a marketer under Todd concluded from his data. He annoyed Samsung headquarters by going around their established Madison Avenue and Seoul agencies and instead putting in a call to relative newcomer 72andSunny, a boutique advertising firm with offices in Los Angeles, New York, and Amsterdam that had a special zing for cultural marketing. Were not going to get into that. The first smartphone from Apple, the original iPhone from 2007, created a buzz in the world of communication devices. And this is a packaging box from recent times. Suhana and AbRam were spotted in the . In other words, consumers saw Samsung as having little of either. It was designed by Pendleton to get the South Korean executives to grasp the size of the problem. This is possible when you clearly define your brands personality and values and take measured steps toward conveying them to your customers. Jobs was prepared to sue. Five days later, theyd still heard nothing back. As a result, Kapferer (2012) asserts that Apples market share increased by $143 million. At the time, Samsung was putting about 70 percent of its U.S. smartphone budget in so-called marketing development funds (MDFs), which were cash piles allocated to the carriers for advertising and rebates. A competitive advantage stems from strengths the organization possesses and weakness the competitor possesses (Ferrell & Hartline, 2014). Web. Id give you ten thousand dollars. The product became a success because it could be sold as a brand independently of the existing brands. Of course, there are many other smartphone brands out there but Apple and Samsung often rule the charts. Pendleton had been an unconventional marketer at Nike, an impresario and master brand builder. In the past days, Apple invested colossal sums of money in innovation aimed at creating new products. In brief talks with Apple execs over the years about foldable devices, the question of the business case keeps coming up. Dale reported to mobile chief J.K. Shin. A good example of this is all those images we see floating on the internet about celebrities endorsing other brands and then posting the respective Tweets from an iPhone. Right at that moment, Samsung used this remark in one of its campaigns for the Galaxy Note 4. This inflates margins and boosts AAPL stock, and is one of the chief reasons Apple can grow at astounding clips. Introduction. Weve got a campaign!. Apple drafted a proposal to license some of its patents to Samsung for $30 per smartphone and $40 per tablet, with a 20 percent discount for cross-licensing Samsungs portfolio back to Apple. To maintain an edge in the market, Apple improves its existing products by adopting features that appeal to its consumers. Apple had a 20.5% share of the market in comparison to 19% last year. 3- Galaxy Buds 2, with active noise canceling at $149 makes these types of earbuds much more consumer-friendly. Pendleton showed his colleagues side-by-side hardware comparisons between the iPhone and the Galaxy phone in The Wall Street Journal, which showed Samsung leading in a number of areas. A Kimp Graphics + Video subscription is just what you need. For Todd Pendleton, it was alarming. The figures have changed over the years with Apple at 18% and Samsung at 23.4% in the first quarter of 2022. They operate at the international level with branches in numerous countries. Kimp helps Professional Services maintain polished and professional branding. In April 2011, Apple filed multiple lawsuits, spanning dozens of countries, against Samsung for patent infringement. There was this growing base of Android users who could become a tribe, Brian Wallace said, crunching a new trend in the social-media chatter. It remains to be seen if this third version can fit the needs of enterprise customers. Shai Agassi is an Israeli entrepreneur and founder of Better Place, a battery charging service for electric cars. For one thing, Samsungs prices are high. They are in a worldwide corporate battle that started in 2010 when Samsung, then an Apple supplier, released a very iPhone-like product through its Galaxy lineup. According to Barnes (2008), a proper operational strategy is essential for operating in the global market. We also saw that Samsung has a bigger market share in the smartphone segment. Apple's interest in Samsung's stronger commitment to mobile innovation and creative marketing is a good thing. And thats creativity at its best. This is a BETA experience. For example, Apple had a commanding 58.46% share of the U.S. market as of May 2020, while Samsung settled for 25.11%. Lets look at the marketing strategies of Apple and Samsung. Now, that's a big gain for Apple and a massive drop for Samsung, but understand that on a global. I met him with the solution to Apples life-or-death problem hidden deep in my pocket, Hwang wrote. To redirect Samsungs marketing budget. They proceeded to leak the film to the popular tech and culture website Mashable, which unveiled it on November 22, 2011, before Samsung posted it officially on its Facebook page later that day. They were worried about meddling from South Koreas bureaucracy. Samsung was right., We need more creativity! Dale Sohn, the CEO of Samsung Telecommunications America, the Texas mobile phone office, exclaimed in a meeting in 2010, according to a senior manager who was present. The costly legal lawsuit between Samsung and Apple went on for several years. Cost leadership has also enabled the use of vertical integration in all its production facilities. (2023) 'Apple vs Samsung as Blue & Red Ocean Strategy Examples'. Check out these samples of our video design work to see what we can do for you. The company aligns its business strategy to both marketing and production. From roasting Apple to challenging the common smartphone norms, the brand has its own style of creating content that people talk about. He agreed to make Samsung the sole supplier of flash memory for the iPod. I do not believe Apple is high on foldable form factors at all. And if it failed, theyd have to answer for it. The creative executives at 72andSunny got to work and churned out their first approach for Pendleton, who was present at the shoots and the editing, eager to maintain his creative hand. I dont know. Apple started the smartphone revolution in 2007 but Samsung, using their version of Android, joined the smartphone race shortly after and has made serious inroads into this lucrative mid to. As observed earlier, Samsungs chief strategy involves capitalising on the weaknesses of its rivals. Samsung didnt use people in its commercialsjust product and voiceover and talking about the product benefit, said Samsungs chief marketing officer, Todd Pendleton. So, want to create illustrations and illustrated videos to promote your brand and engage your audience? References Akwetey, L. M. (2015). 359-378. Its a giant fuckin phone that Steve Jobs made fun of. Samsungs management understands that a formidable reputation for the company will depend on its ability to produce new products that are differentiated from those of its competitors. Samsung employs the red ocean strategy, which involves observing the existing competitors, identifying their weaknesses, and building on the faults (Chandrakala & Devaru 2013). The researchthe field testinghad been done for internal consumption only. He also blatantly mocked Samsung and other competitors, calling their larger phones Hummers. No ones going to buy that, he said at a press conference in July 2010. 48, no. Apple has made a business strategy of focusing on design and user experience while outsourcing elements such as manufacturing. 1591-1610. End of an Era for Samsung (and the Start of Uncertainty), Inside Intel: A Look at the Mega Chip Maker, BlackBerry: A Story Of Constant Success & Failure, How Apple and Samsung Compareand Coexist. The Game : Patent Wars Player 1 : Apple Innovated the smartphone industries and the tablet industry, targets premium users with high prices to fund R&D and innovation. Apple has a narrow product line, which if diversified can lead to tarnishing its premium images. Walmart Stores Organization: Evaluation and Analysis, Why Apple Is Winning: Innovation, Opportunity and Execution. Suddenly Pendleton had their ear. Nisen, M 2013, Samsung has a totally different strategy from Apple, and its working great, Web. Apple does not race to be first; it lets other companies spend time on R&D and early market development before swooping in and improving everything. He called the ads Hello Kitty., I am talking to you on a phone right now that Apple just copied, said Brian Wallace, Samsungs former vice president for strategic marketing. I have either been to, or watched all of Samsung's Unpacked events since they debuted, and marvel each time at the innovation they continue to bring to their devices. In this type of strategy, a company gains competitive advantage by venturing into an existing market and building on the weaknesses of its competitors. Kimp helps design and marketing agencies design more to keep up with clients. He shortened the time frame to two years, on orders from Samsung headquarters. While Apple still imports billions of dollars' worth of components from its rival every year, Samsung is beholden to nobody. Buisson, B & Silberzahn, P 2010, Blue ocean or fast-second innovation? Vergara (2012) asserts that the company has also used product differentiation to maintain a competitive advantage in the Smartphone market. The Samsung we know today has not been constant as we consider its long history. Samsung has also been described as an avid spender. When Dale put out a call for a new chief marketing officer, a headhunter zeroed in on Pendleton. Finally, the paper compares the tactics mentioned above and the fast and slow cycle economies. Indeed, Samsung is a worldwide industrial and consumer products company whose mobile division has become one of its greatest success stories and cash cows. Often, a customer uses a blend of both measurable and subjective factors to decide on a . Apple focuses on pricing and marketing to compete with its rivals. The team turned to a consultant named Joe Crump, senior vice president for strategy and planning at Razorfish, one of the worlds largest interactive agencies, to help them convey the depth of the brand problem in America to Samsungs senior executives. More urgent was the big-picture narrative; that is what built emotional appeal for the customer. Print banners to flyers that communicate your message, signage that conveys the idea there are many ways to provide a wholesome experience. Book a call with the Kimp team now. Entrepreneurs love using Kimp to design, launch and scale their unique brands. The Galaxy Z Fold3 starts at $1799. The company spends a fortune on research and development (R&D) and capital expenditures (CapEx). And Apples Instagram page only shows the photos captured on iPhones. This strategy is aimed at ensuring the company comes up with unique products so that it may not be seen as a copycat. 10, no. "Apple vs Samsung as Blue & Red Ocean Strategy Examples." This has only been possible because of marketing designs that accurately resonate with the brand values. Barry Jaruzelsky describes the company as being great at learning from its competitors (Nisen 2013). God damn! Todd exclaimed after looking at it. 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