1. Smartphone Landscape: Background
Mobility has come to be (and is more likely to continue to be) a defining feature of current and future consumption of web-mediated and multimedia content propagated over numerous applications and platforms. If anything, big and small companies are investing in mobility devices and applications in order to cater to increasing consumer needs. Given current mobility landscape at a global scale, big players dominate global markets in numerous areas including, most notably, product design and concept, built-in platforms and applications (which are provided based on broad supplier networks) and, not least, physical stories in premium global locations (in addition to innovative online retail business models). Two companies are, for current purposes, are compared in order to assess each company's strategic market positioning at a global scale namely, Samsung and Apple. Both companies are global players in mobile manufacturing and applications. Given enormity of scope, specific areas are examined in order to better focus on each company's ability to enhance (or not) strategic market competitiveness. This analysis aims, hence, to compare competitive strategies of Samsung and Apple in areas of areas of leadership, market expansion, innovation, supplier networks and store experience in order to weigh each company's current and future market positioning.
This analysis is made up of three sections in addition to Background: (1) Apple & Samsung Smarphones: Current Market Positioning, (2) Apple & Samsung: Strategic Decision Analysis and (3) Apple & Samsung: Future Market Competitive Pattern. The "Apple & Samsung Smarphones: Current Market Positioning" section explores strategic marketing positioning of each company as per recent market data and analysis. The "Apple & Samsung: Strategic Decision Analysis" section offers an analysis of key strategic decisions made in recent years by both companies in order to enhance market positioning, enter new markets or enhance brand positioning. The "Apple & Samsung: Future Market Competitive Pattern" section is a prediction of future market patterns for each company based on analysis.
2. Apple & Samsung Smarphones: Current Market Positioning
Samsung and Apple are world's number one and two, respectively, in mobile device sales by end of 2015 (Jones). Apple is followed by Chinese Huawei which has witnessed sliding market shares for four consecutive quarters. This market positioning reflects a set of strategic decisions and moves at a global scale as shown in more detail in next section. One interesting pattern in financial performance of Samsung and Apple is that, although Samsung has shown a notable increase in market share, Apple has shown a far bigger rise in profitability (Jones). This differential market performance poses big challenges for investors in each company. One central question investors are apt to ask is whether investment in a company of bigger market share or in one growing rapidly in profitability a more sound investment strategy over short, medium and long ranges.
Yet, financial performance, albeit a major indicator of market positioning, is not enough alone to assess each company's strategic market positioning. More specifically, Samsung and Apple are at odds, one believes, when brand equity and management are factored in.
Apple remains a premier brand of higher equity standing compared to Samsung. This is evident, for example, in how each company communicates innovation for customers and broader stakeholders at large. Notably, Apple's communication channels, particularly corporate website, is content rich and acts as an exclusive hub for company's brand image in addition, of course, to Apple's flagship physical retail stores, as discussed in further detail in next section. More specifically, Apple's commendable commitment to consumer's usability preferences and lifestyle is evident in detailed updates which immerse consumers / users into a unique Apple experience. For example, in a recent update to Apple's GarageBand for iOS 2.2 & Logic Pro X 10.3 features, a detailed description of update is offered accompanied by visual-rich content featuring different usability controls and options ("GarageBand and Logic Pro X music apps get major updates").
In contrast, Samsung historical innovation remains vulnerable to a chronic marketing challenge. In spite of Samsung's recent increase in market shares, introduction and emergence of Samsung's Galaxy series has been highlighted by Younghee Lee, Executive Vice President of Global Marketing, Mobile Communications Business at Samsung Electronics. According to Lee, Samsung has been able to reverse her brand management fortunes only recently by re-shifting focus from Samsung's technical prowess per se into a simple, consumer language which addresses daily needs (O'Leary). Indeed, Samsung's brand image, as perceived by consumers, is one of price and "extra" features (particularly in emerging markets where customers are price sensitive) as opposed to Apple's premium image both in price and quality.
In balance, Samsung and Apple remain close, global competitors whose business practices can be better understood (and probably better predicted) by a deeper analysis of each company's key strategic decisions which are next section's main focus.
3. Apple & Samsung: Strategic Decision Analysis
The market shares and brand equity discussed above as part of Samsung's and Apple's strategic market positioning can be better understood by a deeper analysis of key decisions. For current purposes, key decisions in areas of leadership, innovation, supplier networks and store experience are discussed.
In spite of Samsung's leadership in revenue (so far) and market share at a global scale, Samsung's recent leadership change reflects internal struggles. More specifically, Samsung has changed company's CEO in November 2015 in response to stockholder pressure as well as to Apple's stellar performance in profitability (Jones). The company's leadership change has been followed by major strategic changes in order to re-emphasize company's market positioning at global scale. More specifically, Samsung announced a "Comprehensive Roadmap" on November 29, 2016 in order to enhance shareholder returns policy, capital management and operation of Board of Directors ("Samsung Electronics Announces Comprehensive Roadmap"). Moreover, Samsung's Comprehensive Roadmap aims to better manage company's investment resources and to drive future growth. The effect of leadership change and executive decisions remains to be seen in medium and short ranges.
In a similar fashion, albeit in a less radical strategic pattern, Apple has had her share of leadership change since Jobs' demise in 2012. The changes have not been, in fact, radical but reflect new strategic directions. For example, Apple's appointment of Angela Ahrendts as Senior Vice President for Retail reflects Apple's new focus on in-store consumer experience, one which is re-designed to be seamless with Apple's digital presence ("Angela Ahrendts"). Indeed, Apple's investment in physical store experience, an area to be discussed in further detail shortly, caters to a growing need by company's consumers to "digitize" a physical experience in order to merge into a digital one Apple's consumers experience frequently.
In innovation area, Apple shows more alignment to consumer needs compared to Samsung. As noted above, Apple's exclusivity makes company's website (as well as physical stores, as shown shortly) central to information about company's products and events. Indeed, Apple can be said to be a more personalized company compared to Samsung. This does not mean, of course, Samsung does not innovate in comparative areas.
In response to a growing pattern of in-store retail experience, Samsung offers solutions for retailers in order to enhance in-store experience ("Samsung Announces New Retail Solutions"). This strategic move reflects Samsung's emphasis on business partnerships compared to Apple which is more interested, strategically, in personalized computing and digital offerings to individual consumers.
In supplier networks area, Samsung and Apple adopt differential strategies. Long criticized for her supplier and manufacturer unfavorable record in labor compensations and human rights, particularly emerging markets, Apple has re-polished her communication message addressing partner supplier relations. More specifically, Apple produced a tenth annual Supplier Responsibility report emphasizing areas of accountability, labor and human rights, empowering workers, and Environment, Health and Safety ("Supplier Responsibility").
In contrast, Samsung recent reversal of fortunes can be attributed, in part, to company's innovation (introducing Galaxy series in particular) but also, more importantly, to company's more involvement with suppliers compared to Apple. More specifically, where Samsung has managed to develop a systematized and effective supplier network at a global scale by which Samsung is more involved in manufacturing, Apple has abandoned subparts production and beside design in order to focus more on user experience (Lee J., Lee K. and Heo).
In store experience area, Samsung and Apple appear to be tête-à-tête, particularly in European markets. As noted above, in-store experience has come to be an increasingly important area in consumer overall brand experience. Thus, instead of conventional showrooms in which products are showcased, newly re-designed stores by Samsung and Apple reflect new sensibilities to consumer's digital experience online which she wishes to sustain in actual, physical settings. This is evident, for example, in Apple's store in Marché Saint-Germain, Paris, France ("Apple Marché Saint-Germain opens in Paris") and in Regent Street, London, UK ("Apple Regent Street to reopen with new design") as
well as in Samsung's Boulevard Malesherbes, Paris, Île-de-France ("Samsung Experience Store" and Vivien) and 125 Oxford St, Soho, London (Kuntz) stores.
4. Apple & Samsung: Future Market Competitive Pattern
Based on above analysis, Samsung and Apple can be projected to continue to enhance marketing positioning based on each company's strengths. For Apple, user experience will continue to be definitive of company's efforts to expand on market share and enhance positioning for existing shares. Confident in premium pricing and strong consumer loyalty, Apple is apt to remain a market leader for at least foreseeable future. For Samsung, market share expansion, driven by lower pricing combined by functionality (both primary in emerging markets), will remain critical to sustain company's current world leadership. On another hand, Apple needs to further differentiate her product offerings but should be careful not to dilute brand in order to expand into more markets. Meanwhile, Samsung needs to further focus on user experience and usability in general in order to enhance brand's image and ensure consumer loyalty as opposed to consumer's price sensitivity.
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