Apple Inc. VS. Samsung Co., Ltd.
APPLE INC. VS. SAMSUNG CO., LTD
Apple Inc. and Samsung Co. are some of the leading organizations in the entire world. Whereas Apple Inc. is an American international technology firm with its headquarters in California, Samsung Company is a South Korean international technology company with its headquarters in Suwon. Even though these two leading organizations are from the same industry, they have similarities and differences regarding how they are managed. Therefore, this paper aims to compare and contrast the management of these two organizations under the following sections.
Analysis of the Organizations’ Macro-environment
The macro-environment of an organization refers to the external environment that affects the management and performance of the organization. The external environment of an organization mainly includes the economic environment, social environment and the legal environment (Jeyarathnam, 2008). Due to the fact that Apple and Samsung organizations are in the same sector and are also multinational companies, they are somehow sharing the same macro-environment. Therefore, it implies that both organizations operate in somehow the same economic, social and legal environments. Some of the major economic factors that affect both the organizations include taxation policies of the countries where they operate, countries’ exchange rates, average income and inflation. Both Apple and Samsung mainly target the medium and high-class consumers, thus, these organizations are also affected by the purchasing power of the consumers and their ability to buy.
In the social-cultural environment, the two organizations also face the same environmental factors. Some of the common social-cultural factors that these organizations face include changing people’s lifestyles, technological developments and the demographic variables such as people’s age and trends in the countries where they operate. For example, the trend of increased demand of smartphones made the companies start manufacturing phones that have many applications. In the legal environment, there are also some common legal factors that face the two organizations. Therefore, the main legal factors that affect both Apple and Samsung include consumer laws, health laws, safety laws, competition laws of the different countries where they operate. Additionally, the two organizations are affected by the intellectual property and patents laws on the products of a company. The technology industry is developing and changing very fast, and thus the two organizations have also to cope with this nature of the environment (Chen & Ann, 2014).
Analysis of the Internal Environment
Under this section, the comparison of the two organizations will be based on the analysis of the managerial, operational and financial issues impacting the organizations. Although the two organizations are in the same industry, each has different managerial, operational and financial issues affecting them separately. Both Apple and Samsung have been having evolving management styles due to leadership changes the two organizations have been experiencing. For instance, Apple management style has greatly changed particularly under the leadership of Steve Jobs and Tim Cooks. Whereas Jobs demanded excellence and perfection from his staff members, Cook, on the contrary, seeks excellence, but does so with a completely distinct style of management. He emphasizes teamwork and transparency at Apple. He also motivates his employees through an open-door policy and by promoting a collaborative environment at the organization (Chikhale & Mansouri, 2015).
Similarly, Samsung too has been experiencing the evolving style of management. Since being the leader of Samsung, Lee Kun-hee has changed the management style of his late father, Lee Byung-Chul, who was more visionary. The senior Lee also paid close attention to detail than the junior Lee. However, the junior Lee has also an open style of management. For example, he does his best to include the managers, stakeholders and clients in important decisions rather doing things in his own way (Young, 2010). Although Samsung and Apple have somehow the same management style that is open management style, there are still some aspects of their management styles that are different. For instance, they have different decision-making styles, communication styles and promotion policies (Chen & Ann, 2014).
For many years, Apple has developed and refined its corporate culture within its organization. This has helped the leading organization on reflecting its vision and determining how the organization communicates both externally and internally. Apple has remained an organization where there is swift decision-making and communication flows from top to bottom. On the hand, the decision-making process at Samsung is not as fast as Apple since all the stakeholders are involved in the decision-making process. Also, Samsung’s communication style is less formal than Apple’s style of communication. More differences are found in the promotion policies of their respective employees. Whereas both organizations have open-to-all opportunities for promoting their employees, Samsung has better policies relating to employee promotions than Apple (Dissanayake, 2015).
Analysis of the Organizations using the SWOT Tool
Apple and Samsung can further be compared using the SWOT tool. The SWOT tool is an important technique for analyzing an organization’s strengths and weaknesses, and also for evaluating the opportunities and threats of the organization (Jeyarathnam, 2008). Therefore, the following is the comparison of the two organizations based on their SWOT analysis.
Apple and Samsung are among the leading organizations in the entire world. This is simply because of their strengths. Both Apple and Samsung are among the best performing organizations worldwide even though the latter has surpassed the former by reporting a record-breaking profit of $18 billion while Samsung’s profits dropped by 37% in the fourth quarter of the year 2014. Even though Samsung realized loss during this period, it has remained the largest smartphone vendor for the year. Samsung shipped around 307.5 million smartphones whereas Apple shipped about 191.4 million iPhones (Forbes, 2016).
• Organizations’ Weaknesses
Although these two organizations have different strengths that make them be the leading organizations worldwide, they too have some weaknesses. Both organizations have premium pricing. However, the prices of Apple’s products are comparatively higher than those of Samsung. Even though the high price is more a weakness of Apple than Samsung, many consumers still view Apple’s products as more dependable and advanced than Samsung products.
• Organizations’ Opportunities
Both organizations have the opportunities of growing markets. It can be argued that Samsung has limited potential for growth since it is heavily relying on consumer electronics sales as opposed to Apple that has a broad range of products. On the contrary, it can also be argued that Samsung has a better market growth in the middle-class people since it focuses more on this growing market than Apple.
• Organizations’ Threats
Also, these two organizations suffer common threats. For instance, both suffer from the high levels of competition that is being experienced in this industry. However, Apple has come up with high competitive strategies such as high level of quality and reliability making the organization experience lower levels of competition than Samsung (Forbes, 2016).
Analysis of the Organizations Using Operations Strategy Framework
Even though Apple and Samsung are in the same industry, they have different operations strategy frameworks. An organization operations strategy framework helps in setting out the policies and procedures of the organization, for instance, a management structure. Apple’s management structure is considered to be more effective in supporting business performance to ensure leadership in the industry. However, compared to that of Samsung, it has a lower flexibility and has a stronger control. Apple’s management structure empowers top leaders such as Tim Cook to have control over everything that happens in the organization (Dissanayake, 2015).
Analysis of how the Organizations’ Overall Management Teams have performed
Generally, the Apple and Samsung management teams have been performing the four management functions quite well. As a result, the two organizations are not only leading in their industry but the entire world. The four main functions of management include planning, organizing, leading and controlling (Jeyarathnam, 2008). Even though the management teams of the two organizations have been performing quite well regarding the four management functions, the management team of Apple has done better than that of Samsung. This explains why Apple has been of late performing better than Samsung. It implies that Apple’s management team has been generally able to plan, organize, lead and control Apple better than how the Management team of Samsung has carried out these management functions.
The Strong Points of the Organizations’ Managers
The management of both Apple and Samsung, especially the senior management has their strong points that have their respective organizations to be successful. One of the strong points that the managers of these two organizations have made is the promotion of teamwork within their organizations. Even though there was teamwork in these organizations even before, the level of teamwork has significantly improved currently due to the management. Additionally, both Mr. Cook and Mr. Lee have ensured that there is an open-door policy in their organizations. Cook, for instance, encourages a collaborative work environment at Apple. Similarly, Lee is a more down-to-earth leader and also encourages a collaborative work environment that is inclusive (Dissanayake, 2015).
Areas in which Improvements are needed
Although the two organizations are among the leading organizations in the entire world, there are areas that need to be improved for them to perform even better. Apple, for instance, needs to improve on its communication style. The company uses a more formal communication style whereby the communication only flows from the top to the bottom. This style of communication is not favorable for the effective management of the organization. Additionally, the management of the Apple needs to involve all the stakeholders in the decision-making process. Currently, decision-making at Apple mainly involves the managers. However, this should not be the case, and thus other stakeholders such as the employees should be also involved in the process.
On the other hand, Samsung should improve its decision-making speed. Being in a fast changing and developing industry, the organization needs to increase even its speed of decision-making. Although Samsung decision-making is more inclusive than Apple’s, it needs to carry out the process in a swift manner to cope better with the industry demands. Also, Samsung needs to change its method of hiring its top leadership. The company has been led by one family. Although it might work well especially if the family members are good managers, most of the times it works negatively due to lack of change.
References
Chen, C., & Ann, B. (2014). Efficiencies vs. importance-performance analysis for the leading smartphone brands of Apple, Samsung and HTC. Management & Business Excellence, 1-23.
Chikhale, M., & Mansouri, M. (2015). An Agile and Collaborative Framework for Effective Governance to Enhance Management in Large-Scale Enterprise Business Systems: The Case of Apple Inc. Global Journal of Flexible Systems Management, 16(3), 283-293.
Dissanayake, D. (2015). Role of brand identity in developing global brands: a literature-based review on case comparison between Apple iPhone vs. Samsung smartphone brands. Press academia, 2(3), 430-439.
Forbes.com,. (2016). Forbes Welcome. Retrieved 1 February 2016, from http://www.forbes.com/sites/amitchowdhry/2015/03/04/apple-passes-samsung/#31ffdaf0350e
Jeyarathnam, M. (2008). Strategic management. Mumbai: Himalaya Pub. House.
Young Jin Ahn,. (2010). Samsung Electronic Service - Leader in Service Innovation. Journal of Korea service management society, 11(4), 115-133.
