EBUS301 E-BUSINESS MODELS AND STRATEGY SAMPLE

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EBUS301 E-BUSINESS MODELS AND STRATEGY SAMPLE

Comparison between Samsung and APPLE

Question 

EBUS301 E-BUSINESS MODELS AND STRATEGY

Introduction

Samsung is one of the most leading Multi-national South Korean Companies, which was founded in the year 1938. The company was meant to be a trading organization, but, later, it has some holding companies along with numerous subsidiaries that are united under the brand name of Samsung. The products that are produced by the company are highly appreciated by customers across the world. It is the largest South-Korean Conglomerate that has earned substantial respect and applause for its great products (Roma & Ragaglia, 2016).

The company started in the year 1938 as a small trading type of firm, which was located somewhere near Su-dong near Daegu city. The organization was founded by Lee Byung-Chui, and initially, he has only forty members to operate the entire company as well as deal with the significant business production and distribution of groceries within the locality of the city.

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After a few years passed, the company started to grow in mid-1947, and Lee put up a new office in Seoul. There, he started with a sugar refinery firm which also succeeded within a concise period and receives huge compliments from the citizens. From the future perspective, Lee always wants to lead the world as he was an ambitious person. In the year 1954, Lee successfully developed a woollen mill in Korea, which was located in the suburbs of the city. He didn’t stop after the grand success in Korea; rather he continued to explore the business across the globe with new ideas and innovation.

The Apple Company was started in the year 1976 as a computer-based firm. However, in the last decades, the organization has expanded its business into an intricate company, which is more specialized and much more than just computers. In 2001, the group broke records with the iPods, eventually becoming the most dominant market leader across the globe in music players. The company joined the phone industry in the year 2007, and with the success of the iPhone, now it is the top leading organization in the Universe (Spieth, Schnackenberg & Ricart, 2014). Apple is considered one of the most reputed consumer goods companies as it evaluates the value and understands its products based on public requirements. The organization has set a unique reputation in the consumer electronics industry as it can produce the most innovative phones, music players and much more.

Comparison

Samsung has a better position regarding growth as well as more significant upside potential. The company was initially started as a trading organization, but that later moved towards software. In the year 2016, Samsung announced it would be working with Microsoft to develop IoT devices which will be based on windows. The companies will integrate to develop the software and services on Microsoft’s OS. Their journey from a grocery firm to the Software industries of Lee was tough though, but now the company is ruling the country (Sin & Yazdanifard, 2013).

On the other side, Apple was designed and marketed by Steve Jobs where the self-identity is its capital letter ‘I’ which stands for innovation. In the year 1976, the company released its first personal computer, and later the company began to produce mobile phones redefined with new innovative ideas and features that are entirely different from the others. It has successfully placed itself in the top position as per the market strategy and developed an extremely useful as well as efficient supply chain. The system of the company has been divided into two types-Mac Line of computers, iPod music players, smartphones and IPad tablets computers (Contributor, 2017).

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E-business strategies

E-business model of Samsung and Apple

The widely recognized Company of the South Korean continent, Samsung, has the most extensive seller of Smartphones, and is actually, much larger than the lineup of smart devices. The numerous industrial subsidiaries of Samsung have a wide range of dealers across the globe, and it is the single contributor to South-Korean’s GDP. The business offerings of Samsung influence the life decisions of laymen mainly in South Korea (Digitalbusinessmodelguru.com, 2017). The company deals with many fields that include buying medicines, securing life insurance, studying in various Universities, getting quality healthcare, staying in the home as well as even on vacations, the presence of Samsung can be felt by each one of us across the country. The subsidiaries of the company include Samsung engineering, Samsung Electronics, Samsung Heavy Industries and much more.  The logistics approaches of the e-business model Samsung have lesser typical constraints than the traditional business. The e-business is not limited to any venue in the case of Samsung; they have located anywhere and still retain the capacity of serving the same customer. The capacities of the products produced by Samsung are “infinite” as they are not limited to the space of brick-or-mortar stores. The e-business model of Samsung mainly depends on the shipping methods of the receiving as well as delivering items, whereas the traditional method conducts some types of instant exchange. They have to manage the warehouse to manage their customers.

The E-business model of Apple is useful thinking regarding the innovation and trendsetter of the market. The company has always been the leading seller of the manufacturer of electronics as well as a computer with a constant focus on complete software and hardware integration. In the year 1996, the company focused exclusively on the Macintosh line. The journey evolved beyond the personal computer into the products like iPhone, iPods, and iPad (Economywatch.com, 2017). The company continues to manufacture the hardware often with the contract manufacturers like Foxconn by keeping a focus on software integration as well as on the complete user experience. Apple has changed its approach by expanding its methods to the markets and by adding new business models. The company is one of the leading and longest-running lines of business regarding hardware and software. In the case of e-business strategies of Apple, the exchange offer is good as well as relevant. Customers are not finding any type of issues and find the process as a better way to communicate with dealers.

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Difference

Apple mainly focuses on one market as well as perfecting their smartphones for a certain market, whereas, Samsung always tries to create a smartphone for every type of person. It allows every type of user to buy one, but, Apple selects a small section of customers.

E-revenue model of Samsung and Apple

The company starts in a very humble manner, and that has influenced several other sectors in the world. The business experiments of the company started in the year 1938 with a grocery store, and with the pace of time, its operation changed within a couple of years due to the huge requirements. In the year 1940, the company starts manufacturing and selling noodles. After a decade, it shifted the business to a sugar manufacturing industry. Just after four years, the growth of the business starts to touch unlimited height due to the set-up of the woollen mill (Jung, 2014). In the year 1956, Samsung starts to strategize the deals and enters into the lucrative Insurance and security business. The revenue model of Samsung e-Business has significantly emphasized technology and usually hires more people from the development fields as well as web design.

The company then finds its strategies in the TV manufacturing business. The company has continued the business segment in the TV manufacturing industries for the next twenty years as it has gained huge revenue from the markets. In the year 1980, the company receives huge opportunities in the telecommunication sector and therefore, switched its business to producing telephone switchboards. After its success in this field, the company entered into the real estate business and built the world’s tallest structures that include the Taipei 101 in Taiwan and Petronas tower Malaysia (Johnson et al., 2012).

Apple raised its capital from the public shareholders, and that was $97 million in the 1980 IPO. Over its 37 years, the company’s creator has always added value, maybe their employees, suppliers and the government agencies who have invested in the critical technology of Apple (Lazonick, Mazzucato & Tulum, 2013). In the year 2016, the company announced an event to repurchase $60 billion shares of its own as well as distributed $40 billion among the dividends by the end of the year. The main benefits are coming from the stock-market speculators and manipulators which include the operators and hedge funds (Macaulay, 2017).

Difference

Apple focuses on at least three phone models every year, whereas, Samsung is very divergent and produce at least two option in every category. Depending on the price range, Samsung has a phone in each section.

Online marketing strategies of Samsung and Apple

Challenging every heavy recession in 1993, the company started the consolidation drive and merged with the complementary units. In that particular year, it became the largest manufacturer of memory chips and focused on the crystal display as well as on the flat television screen over the web. The future growth strategies and business models of Samsung are to become the largest dealer of mobile phones and to give tough competition to the other competitors in the market (Ross, 2017). The current strategy of the company is to invest in healthcare, biotechnology as well as in clean energy. The marketing strategy team of Samsung takes the responsibility for expanding the service globally, for example, to present the core message that the company wants to continue to the customer and every promotional event to international-wise through online services (Roma & Ragaglia, 2016).

The web presence of Apple was started a bit earlier and has gone through many ups and downs. The company started to build well-designed and clean products like the new iMac to reflect its true identity through web services. By the year 2001, Apple has completely transformed its web presence and appeared to be at the top of the page to clear the clutter. The clean, pretty and white website began to raise the standard of the products. In 2007, Apple again broke the record and released the iPhone which got huge appreciation worldwide (Spieth, Schnackenberg & Ricart, 2014).

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Difference

Samsung has always been regarded as the innovator in the consumer industry of electronics over the web, whereas, Apple has been protective of its copyright as well as intellectual property.

Social media strategy of Samsung and Apple

Samsung is in the midst of a terrific battle with the leading smartphone company, Apple. The only way to get an edge over all its nemesis across the Pacific Ocean is by developing insights from its consumers through online services like social media activities. The company has used the analytical platform from the Crimson Hexagon to gain instant insights into its consumers as well as to get detailed reports on the conversations regarding the products along with its rivals (Sin & Yazdanifard, 2013). Samsung has a unique spark regarding innovation and instead of sacrificing the demands of society; they start to create products for the need of the people.

Apple has always been considered the most renowned company in the consumer electronics industry, computer technology as well as cloud-based services. Recently, the company has had something new an aversion towards using social channels for business. The company has constantly proven time and time again that they are the most reliable organization to follow the status quo. They have a completely different appearance on social media purely because of the influential corporation (Samsung.com, 2017).

Difference

Samsung includes social media channels for the launch of the products where the customers can easily find the difference from their rivals. It also ran an event to access the difference sales of dot QLED and OLED television, Whereas, Apple has a major impact on the customers for its smartphones and the promotional events for launching the products only (Sang-Hun, 2017).

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Strengths and weakness of Samsung and Apple

Strength of Samsung and Apple

Samsung is the world’s number one marker of phones with 21.4% of the largest share in the second quarter of 2015. It has the strongest manufacturing as well as marketing capabilities.

Apple has a strong brand image, high-profit margins as well as has effective innovation process.

Weakness of Samsung and Apple

Samsung is not able to match the marketing capabilities in the case of smartphones. Their shares are falling in the market by 2.3% between the years 2014 and 2015. The company is heavily dependent on consumer electronics with limited potential growth. The marketing efforts are not as sophisticated as Apple’s (Utsc.utoronto.ca, 2017).

Apple has a limited distribution network; sales are mainly limited to the high-end marketplace as well as high selling prices.

Recommendation

Marketing mix of Samsung and Apple

The company has unbelievable heights with the new smartphones that have helped the organization to become an inspiration as well as a symbol of quality and reliability for a wide range of customers. Apart from the products, the company is renowned for its customer service and has the fastest product service across the globe (Sang-Hun, 2017). But, it needs to focus on the operating system as many of the customers find it to be an inferior product. It uses the open-source operating system of Google, which has a limited network as compared to Samsung, so it needs to explore the company’s policy as well as should focus on the authorized sellers for its products.

Marketing mix pricing strategy of Samsung and Apple

Skimming price

Samsung uses the skimming price to increase its upper hand over competitors. The slogan of the new smartphone “Next is now” claims that they are the most amazing smartphone creator in the world. Without any doubt, the company has brilliantly sold the highest number of cell phones around the globe (Samsung.com, 2017).

Apple always analyses the most significant opportunities that the organization can easily exploit. These opportunities need to explore strategic business plans like the distribution of the networks, the creation of new product lines and rising demands for tablets and smartphones (Roma & Ragaglia, 2016).

Competitive pricing of Samsung and Apple 

Samsung is an authentic brand in home appliances and has crossed all the difficulties in creating a fabulous marketing strategy. The company has the leading market scenario on Cameras Canon and Nikon. So, for the organization to withstand this tough competition, therefore it is essential to use competitive pricing (Spieth, Schnackenberg & Ricart, 2014). The company is never considered a latecomer; rather, it has changed society with new hopes and innovation. But, some Chinese competitors are catching up with the company in the markets of smartphones, so it needs to change the shares without depending more on consumer electronics sales.

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Apple always faces aggressive fighting, limitation and rising labour cost in various countries where Apple plants are located, so, it is necessary to be strong fundamentally for maintaining its competitive advantage.

References

Contributor, P. 2017. SWOT analysis of Samsung. [online] PESTLE Analysis. Available at: http://pestleanalysis.com/swot-analysis-of-samsung/ [Accessed 6 Dec. 2017].

Contributor, P. 2017. SWOT analysis of Samsung. [online] PESTLE Analysis. Available at: http://pestleanalysis.com/swot-analysis-of-samsung/ [Accessed 6 Dec. 2017].

Digitalbusinessmodelguru.com. 2017. Analysis of the Apple Business Model. [online] Available at: http://www.digitalbusinessmodelguru.com/2013/02/analysis-of-apple-inc-business-model.html [Accessed 6 Dec. 2017].

Economywatch.com. 2017. E-Business Strategy -e-commerce business strategies | Economy Watch. [online] Available at: http://www.economywatch.com/business/e-business-strategy.html [Accessed 6 Dec. 2017].

Jung, S.C., 2014. The analysis of strategic management of Samsung electronics company through the generic value chain model. International Journal of Software Engineering and Its Applications, 8(12), pp.133-142.

Johnson, K., Li, Y., Phan, H., Singer, J. and Trinh, H., 2012. The Innovative Success that is Apple, Inc.

Lazonick, W., Mazzucato, M. and Tulum, Ö., 2013, December. Apple’s changing business model: What should the world’s richest company do with all those profits? In Accounting Forum (Vol. 37, No. 4, pp. 249-267). Elsevier.

Macaulay, T. 2017. How Samsung uses social media analytics to get an edge over Apple. [online] ComputerworldUK. Available at: https://www.computerworlduk.com/data/how-samsung-uses-social-media-analytics-from-get-edge-over-apple-3665827/ [Accessed 6 Dec. 2017].

Ross, S. (2017). Samsung Vs. Apple: Comparing Business Models (AAPL, SSNLF). [online] Investopedia. Available at: https://www.investopedia.com/articles/markets/110315/samsung-vs-apple-comparing-business-models.asp [Accessed 6 Dec. 2017].

Roma, P. and Ragaglia, D., 2016. Revenue models, in-app purchase, and the app performance: Evidence from Apple’s App Store and Google Play. Electronic Commerce Research and Applications, 17, pp.173-190.

Spieth, P., Schneckenberg, D. and Ricart, J.E., 2014. Business model innovation–state of the art and future challenges for the field. R&D Management, 44(3), pp.237-247.

Sin, K.P. and Yazdanifard, R., 2013. The Comparison between Two Main Leaders of Cell phone Industries (Apple and Samsung) versus Blackberry and Nokia, in terms of Pricing Strategies and Market Demands.

 

Samsung.com. 2017. Samsung Profile. [online] Available at: http://www.samsung.com/common/aboutsamsung/download/performance/Samsung_Profile_2013.pdf [Accessed 6 Dec. 2017].

Sang-Hun, C. 2017. The Samsung strategy: Better, faster, cheaper. [online] Business-standard.com. Available at: http://www.business-standard.com/article/companies/the-samsung-strategy-better-faster-cheaper-112090400001_1.html [Accessed 6 Dec. 2017].

Utsc.utoronto.ca. 2017. Business Strategy Samsung. [online] Available at: http://utsc.utoronto.ca/~cleveland/ECMC42H/documents/Samsung.pdf [Accessed 6 Dec. 2017].

 

 

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