Role Major Key Success Factor For Apple Essay Example
Role Major Key Success Factor For Apple Essay Example

Role Major Key Success Factor For Apple Essay Example

Available Only on StudyHippo
  • Pages: 9 (2269 words)
  • Published: October 6, 2017
  • Type: Essay
View Entire Sample
Text preview

Role of Design and Technology as a Major key success Factor for Apple and Samsung in the Development of Competitive advantage

Marketing Aspects:
Marketing Strategy is the end of increasing gross revenues and accomplishing a competitive advantage through explicating schemes (Baker, 2008), which deals with marketing aspects such as pricing, distribution, design, engineering and publicity (Armstrong P., 2008; Kotler, 2009). As Marketing Strategy is really important for every organization, therefore it is discussed for both Samsung and Apple in the following Section.

Marketing Strategy of Samsung:
The Marketing Strategy of Samsung has evolved over the years and it is defined as follows (Lee, 2005; W.Farris, et al., 2010):

  1. In order to achieve brand leadership, it decided to produce premium brand with consistent individuality and strong emotional bonding, where customer loyalty can be enhanced.
  2. In order to achieve product leadership, it u

    sually focuses on meeting latent consumer needs and to add value in the market by being first-to-market launch.

  3. Finally, in order to achieve customer leadership, it hopes to create long-term customer centric partnership, where collaboration with them could help in creating better products.
  4. Target Market:
    The STP strategy followed by the organization is as follows (Lee, 2005;Kotler (2009) states that Samsung focuses on a specific target market consisting of males aged 25 to 40 who are fashion-conscious, educated, and have mid to high incomes. This target market also includes creative and passionate individuals who value excellence in life and have a strong interest in consumer electronics. To appeal to these customers, Samsung positions its products as innovative and encourages early adoption of new technologies for everyday use.

    In order to implement its marketing strategy, Samsung follows a Marketing mix plan. First, Samsung offers a

View entire sample
Join StudyHippo to see entire essay

wide range of products including tablets, mobile phones, cameras, televisions, and washing machines, creating a diverse product portfolio. The brand's reputation for performance and reliable after-sales service has further strengthened consumer trust. Samsung's flagship models, such as the Samsung S4 and S5, feature a standard hardware design and operate on the Android operating system (Bhasin, 2014; Armstrong, 2008).Pricing: Samsung uses a market planning pricing technique to charge high prices for its products at the beginning, in order to take advantage of profitable opportunities before competitors enter the market. For example, it initially charges high prices for its Samsung Note 3 at its debut phase. However, when it realizes that competition is getting tough, it decides to lower its prices in order to charge competitive prices using a sharp pricing strategy. This pricing strategy has been successful for its mobile phone products, but not for its home devices compared to its rival LG. Samsung then resorts to competitive pricing instead of pursuing a differentiation strategy in terms of design and technology.

Promotions: To increase the sale of its products, Samsung employs various forms of promotion, including offering benefits and discounts to its trade partners. Effective advertising is used to attract customers, while sales promotion is used for pushing the products.With its effective advertisement scheme, which has cost $770 million over the last two years (Dignan, 2014), the company has successfully competed against its rival Apple. To expand its product availability, it utilizes various channels in the market. These channels include the Sales and Service dealers, Modern retail, and distributors. The Sales and Service dealers play a crucial role in maintaining key accounts for the company and achieving

corporate sales (Bhasin, 2014). Apple has a unique and unconventional marketing strategy compared to other companies. In order to become a top player in the mobile industry, Apple avoids traditional marketing methods such as TV ads, newspapers, magazines, SEO, and social media. Instead, it relies on other companies to promote its iPhone products, who not only provide full support but also cover the promotional costs (Baker, 2008).These network providers are typically involved in promoting Apple products but they also face restrictions on the appearance and content of their advertisements, imposed by Apple ( McCormack, 2014). The segmentation of Apple products, specifically iPhone and iPad, targets customers who desire a unique and luxurious lifestyle. The organization captures the psychological concept of these customers by limiting the supply of iPhones, making them available to only a select few. This strategy piques media interest, as customers wait for days and weeks outside iPhone stores, resulting in free publicity for the organization (Promotion). Ultimately, the strategy of restricting iPhone supply creates two distinct groups of customers: those who own an iPhone and feel special as part of an exclusive club, and those who are deprived of it, experiencing envy and creating conflicts. These conflicts generate word-of-mouth advertising through forums, blogs, and other social media platforms (McCormack, 2014).To implement its Marketing Strategy, Apple uses the following Selling mix:

  1. Merchandise: Apple provides its users with the IOS operating system on both Macbook and iPhone to ensure good quality over time. The hardware of the products is designed for efficiency and compatibility with the software, allowing the IOS to run smoothly. In addition, Apple operates its own music and application

shops, known as "iTunes" and "Apple Store" respectively, which are popular among users for their high quality compared to competitors like Google Play Store (Bhasin, 2014). These measures aim to differentiate Apple's products and provide a superior experience to customers (Nair, 2014; Moorman, 2012; W. Farris et al., 2010).

  • Pricing: Apple prices its products, such as the iPhone, at a premium to reflect their luxury status. Despite this higher pricing, Apple has managed to attract a loyal customer base. The organization's pricing policy is to maintain a standard price across the market (Bhasin, 2014; Nair, 2014).
  • The organization is present in major cities of different countries, providing an excellent service for premium clients. Its I-Stores are mainly found in high-end locations and malls, and products are distributed to modern retail stores through a carrying and forwarding agent. The I-Store is the exclusive showroom for offering products at the best prices, as it receives them directly from the company with discounts. To prevent competition between stores, the organization enforces a minimum advertised price (MAP) on retailers by offering monetary incentives. In terms of promotions, while the organization mainly focuses on word-of-mouth advertising and media promotion to create desirability for its products, it also utilizes above-the-line (ATL) platforms such as radio, television, and magazines to target its premium clients.

    1. Supply Chain and Distribution: The management of the flow of information, products, and money in the supply chain and distribution process is crucial for organizations. It helps them address challenges such as product cost, working capital requirements, time to market and customer service. To achieve efficiency or responsiveness, the supply chain can be customized accordingly

  • (Perez, 2013; Easton, 2011).

    Supply Chain Management by Samsung: Samsung has implemented a collaborative program to promote growth and stability among its suppliers. This involved shifting their growth plan to smaller companies and emphasizing green supply chain objectives. As part of this program, Samsung has established a win-win fund for partner companies, provided support for indirect suppliers, set up a joint technology development center, incorporated natural material price changes in purchasing prices, and implemented a temporary registration scheme to facilitate e-transactions. These efforts have resulted in maintaining a strong and loyal network of partners (Joel Wisner, 2015).The organization implemented a Collaborative Planning, Forecasting and Replenishment (CPFR) plan to improve its supply chain management. This involved partnering with various stakeholders to meet customer demand and resulted in cost savings in marketing, inventory, logistics, and transportation. Additionally, the organization made agreements with other companies to monitor market demands, gather customer feedback, and reduce operating costs.

    Given the complexity of Samsung's global supply chain, the organization decided to implement a quality control program called Six Sigma. This initiative focused on aligning customer needs with products and services using lean manufacturing methods to improve profitability and reduce costs. To guide their Six Sigma projects, the organization followed the following principles:

    1. Emphasize global optimization to ensure improvements are made on a global scale rather than locally.
    2. Systemization is a critical component of Six Sigma.

  • Five Design Parameters that qualify the alterations requiring direction.
  • Process KPI Mapping is necessary to specify the objectives and monitor the progress of the direction improvement program.
  • Therefore, Samsung has maintained its position as a global leader in consumer electronics by implementing

    supply chain improvement processes such as Fast follower, CPFR, and six sigma.

    Supply Chain Management of Apple:

    Apple's goal is to develop innovative solutions, and they are accelerating their product launches by acquiring third-party businesses and licenses. They also prioritize identifying potential quality defects, managing production incline issues, providing software for raw materials, maintaining appropriate inventory levels, determining launch quantity, making prepayments to suppliers to secure orders, resolving backlogs, reviewing inventory levels, adjusting demand forecasts, monitoring current sales levels, and tracking component cost trends.

    In addition, Apple is considered more efficient than Amazon with a stock inventory turnover of 59 compared to Amazon's 10. Apple has one main warehouse in California, while Amazon has 28 warehouses across the country. Apple synchronizes data between its central warehouse and over 246 stores to achieve efficiency. (Supply Chain 247, 2015)The organization's main objective is to offer high-quality products to premium customers at premium prices, while keeping costs as low as possible. To achieve this goal, the organization has not only chosen overseas suppliers for production, but has also formed strategic partnerships with other manufacturers who understand its product differentiation strategy. In order to establish exclusive agreements with these suppliers in exchange for volume guarantees, the organization has set a formal list of expectations for them.

    Building relationships with suppliers has allowed the organization to quickly scale its operations to meet customer demand for both existing and new products. Working with supply chain partners has also helped the organization develop innovative manufacturing processes. Additionally, by placing high-volume pre-orders and investing heavily in production capacity, the organization ensures that it has enough resources to meet demand while preventing competitors from

    accessing the same manufacturing resources.

    However, Apple has faced criticism regarding working conditions in its supplier's factories and warehouses.In 2012, the organization announced plans to resume production in the United States after a 10-year hiatus. Some industry analysts attribute this decision to rising prices for natural gas and oil in China, as well as other developments and decreasing wage gaps between US and overseas workers (University of San Francisco, 2015; C.M.Harland, 2005; Meindl, 2013; Horvath, 2001). According to Bloomberg Business (2011), Apple has created a closed ecosystem where it has control over nearly every aspect of its supply chain, from design to retail stores. This allows the company to negotiate significant discounts on components, manufacturing capacity, and air freight. The Apple Website (2015) states that the company is on the verge of integrating its employees to promote equality, human rights, and environmental respect throughout the entire supply chain. As part of their commitment to high environmental standards in manufacturing, the organization publicly shares guidelines and suppliers for all to see (Apple, 2015).

    Apple, 2015. Supplier Responsibility. [Online] Available at: hypertext transfer protocol: // [Accessed 2 Jan 2015].
    Armstrong P., S.G., ;.V., 2008. Principles of Marketing.London: Prentice Hall.Baker, M., 2008. The Strategic Marketing Plan Adit. s.l.: s.n.Bhasin, H., 2014. Apple iPhone selling mix. [Online] Available at: hypertext transfer protocol:// [Accessed 15 Jan 2015].Bhasin, H., 2014. Marketing mix of Samsung – 4P of Samsung.[Online] Available at: hypertext transfer protocol:// [Accessed 11 Feb 2015].Burrows, A. S. a.P., 2011. Apple's Supply-Chain Secret? Hoard Lasers.[Online] Available at: hypertext transfer protocol:// [Accessed 27 Jan 2015].C.M.Harland, 2005. Supply Chain Management: Relationships, Chains and Networks.British Journal of Management, 7 (Supplement S1), pp.63-80.Dignan, L., 2014. Samsung's marketing

    blitz vs. Apple: Effective, but big data would help.[Online] Available at: hypertext transfer protocol:// [Accessed 12 Feb 2015].Easton, C.R.C. a.P.L., 2011. Sustainable supply chain management: development and future directions.International Journal of Physical Distribution & Logistics Management,41 (1), pp.46-62.Hong Mo Yang, B.S.C.H.J.P.M.S.S.a.B.(.C., 2007."Supply Chain Management Six Sigma: a Management invention methodological analysis at the Samsung Group." (Supply Chain Management: An International Journal, 12 (2)).

    "Collaboration: the key to value creative activity in supply concatenation direction." (Supply Chain Management: An International Journal, 6 (5), pp.205-207).

    "Principles of Supply Chain Management: A Balanced Approach." 4th erectile dysfunction. s.l.: Cengage Learning. Joel Wisner, K.-C. T. G. L., 2015.

    "Marketing Management." s.l.: Pearson Education Australia. Kotler, K. a.B., 2009.

    "Global Marketing Strategy of Samsung." s.l.: Samsung. Lee, G., 2005.

    "Apple’s iPhone Marketing Strategy ExposedApple’s iPhone Marketing Strategy Exposed." [Online] Available at: hypertext transfer protocol: // [Accessed 14 Jan 2015]. McCormack, F., 2014.

    "Supply Chain Management Strategy, Planning and Operation." 5th Global erectile dysfunction. England: Pearson. Meindl, S. C. a.P., 2013.

    "Why Apple is a Great Marketer." [Online] Available at: hypertext transfer protocol: // [Accessed 19 Jan 2015]. Moorman, C., 2012.

    "Apple’s premium pricing scheme and merchandise distinction." Nair, S., 2014.[Online] Available at: hypertext transfer protocol: // [Accessed 17 Jan 2015]. Perez, H.D., 2013. Supply concatenation schemes: Which one hits the grade? s.l.: Supply Chain Strategy Quarterly. Supply Chain 247, 2015. Is Apple's Supply Chain Really the No.1? A Case Study. [Online] Available at: hypertext transfer protocol: // [Accessed 17 Jan 2015]. University of San Francisco, 2015. Apple's Process Improvement do it a planetary Supply Chain Leader. [Online] Available at: hypertext transfer protocol: // [Accessed 21 Jan 2015]. W.Farris, P., Bendle, N.T., Pfeifer, P.E. ; Reibstein, D.J., 2010.Marketing Prosodies:

    The Definitive Guide to Measuring Marketing Performance. New Jersey: Pearson.

    Get an explanation on any task
    Get unstuck with the help of our AI assistant in seconds