A patent grants property rights to an inventor of a process, design, or invention for a set time in exchange for a comprehensive disclosure of the invention. I am talking to you on a phone right now that Apple just copied, Brian Wallace, Samsungs former vice president for strategic marketing, told me years later. Introduction. And make heads turn like Samsung and Apple do, then sign up for an unlimited design subscription and take your marketing designs to the next level. The costly legal lawsuit between Samsung and Apple went on for several years. Vergara (2012) asserts that the company has also used product differentiation to maintain a competitive advantage in the Smartphone market. Kimp Tip: Scrolling through the social media pages of Samsung Mobile you will see that the brand uses illustrations quite often. Samsung is a diverse business with chips, displays, and other technology. that we need, and in a very effective manner.. An intense growth strategy focuses on key areas such as market penetration, development, alternative channels, and devising new products for new customers (Slack, Brandn-Jones & Johnson 2016). Samsung employs the red ocean strategy, which involves observing the existing competitors, identifying their weaknesses, and building on the faults (Chandrakala & Devaru 2013). Samsung had built a carrier-driven model, jumping through hoops to ensure that Sprint and AT&T received their own customized Galaxy phones to sell, using Samsungs marketing money. Marketing Strategy: Apple vs. Samsung At the origins of the conflict The legal battle between the two giants of the mobile market has been the starting point for a quarrel that has only. But Apple retains its clutter-free minimalistic design. Have you ever seen two Apple ads and thought that they do not look similar? If you use an assignment from StudyCorgi website, it should be referenced accordingly. The figures have changed over the years with Apple at 18% and Samsung at 23.4% in the first quarter of 2022. This is possible when you clearly define your brands personality and values and take measured steps toward conveying them to your customers. (2023, February 21). Most companies that employ vertical integration always start with manufacturing the product before finishing with producing the internal components. Apple would not even consider doing a folding smartphone unless they believed they could sell them in the 10's of millions. As he told biographer Walter Isaacson, he wanted to launch thermonuclear war on Android, the operating system used in Samsung phones. Apple recognises the key role played by technology in maintaining a competitive edge in the Smartphone market. Apple does a better job of switching Samsung customers at 19% vs. Samsung only converting 7% of its users from Apple. This phone is amazing, says the Samsung guy, showing off his smartphone before getting into a taxi, bidding farewell to the crowd of Apple zombies. In April 2011, Apple filed multiple lawsuits, spanning dozens of countries, against Samsung for patent infringement. According to Yektan, Nayebzadeh, and Rabbani (2014), the company is usually willing to invest colossal amounts of money in marketing a new product. Indeed, Samsung is a worldwide industrial and consumer products company whose mobile division has become one of its greatest success stories and cash cows. Apple has continued to firmly hold on to its branding and marketing designs over the years. No longer was the smartphone war a battle between Apple and a tangle of obscure Android me-too phones. But then when you cannot find a strong visual connection between them all, it is hard to make an impact. In the course of their meeting, he pulled out the NAND flash memory, as it was called, and put it on the table. On a chart of competitors in their space, with style for the vertical and innovation for the horizontal axis, they placed Apple and Sony in the upper-right quadrant, marking them as both stylish and innovative. According to Gustin (2012), Apple is currently engaged in developing the existing products as opposed to creating new ones. 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. Need help aligning your branding and marketing designs with your brands personality? I would love to see Apple become more aggressive on their AirPods Pro pricing and Samsung's lower pricing on their earbuds could put pressure on Apple to perhaps bring the price of their earbuds down a bit this fall. There was always at least one Apple fan in the room who scolded the Android fans, and vice versa, with Android users pointing out how much more flexible and customizable their operating system was. Here was the response to the question when they thought the bag contained the new, unreleased iPhone: Id give you my brand new BMW. It is not enough to create a strong brand identity. All rights reserved The following is an overview of the two companies. Shai Agassi is an Israeli entrepreneur and founder of Better Place, a battery charging service for electric cars. Soon after Apple introduced the Apple Watch and AirPods, Samsung doubled down on innovating around these devices too, and many now consider them an equal competitor to Apple on all of these above-mentioned products. For this reason, the real damage is not on the production line, but rather in the mountain of legal costs incurred by Samsung and Apple around the world. The good news of this rivalry is that consumers are the big winners as each company pushes the other to greater innovation. In August 2011, for instance, a court in Germany issued an EU-wide injunction on the Samsung Galaxy Tab 10.1 device for violation of an Apple interface patent. There is a pretty diverse demographics that the brand caters to. A resident of South Korea for five years and a Fulbright scholar, he studied at the School of Oriental and African Studies in London and the George Washington University. Pendleton was abandoning the marketing worlds older, more vanilla strategy of going through print and TV news outlets, opting for the Web first, appealing to millennials. What do we stand for? Then he went around the room and asked everyone to fill in their idea. It is fair to say there is no love lost between Apple, Inc. (NASDAQ: AAPL) and Samsung Electronics Co. Ltd. (NASDAQ: SSNLF). Barnes, D 2008, Operations management: An international perspective, Cengage Learning, Boston, MA. There are many competing brands of smart phones and Samsung has reported a decline of profits in 2014. There have been several lawsuits between the multinationals since then. 15, no. We are going to patent it all, Jobs once said. Step two was to ensure that the economics of the coming marketing war on Apple made sense. Want to create a strong visual identity for your brand? 359-378. This would be a historic shift in focus, likely signaling a departure from self-funded R&D and into outsourced innovation, not unlike Apple. Before turning its sights to Apple, Samsung competed with, and in many cases bested, Japanese technology companies in the 1980s and 1990s. Kimp.io 2022. #SamsungUnpackedLearn more: https://t.co/4gGDCqmFzp pic.twitter.com/HzHTdVUslw. Additionally, Samsung has a reputation for producing high-quality products at competitive prices, which has helped it to win market share from Apple in some areas. It talks about Apple going towards a greener approach. In Samsung's home country (South Korea), the company dominated the smartphone market with a 65.98% claimcompared to Apple's 23.15% market share. This case is slightly contrasted from rival companies who are seen as cautious when investing in new technologies. Product differentiation can be measurablelike price or calorie countor subjective. Everyone else had fallen by the wayside. And this is a packaging box from recent times. From roasting Apple to challenging the common smartphone norms, the brand has its own style of creating content that people talk about. We dont have a campaign here, guys, Pendleton said. Opinions expressed by Forbes Contributors are their own. February 21, 2023. https://studycorgi.com/apple-vs-samsung-companies-operational-strategies/. Nevertheless, Samsung is currently investing more resources in research to create its unique technologies. No longer was the smartphone war a battle between Apple and a tangle of obscure Android me-too phones. StudyCorgi. This strategy is unlike Apple, which outsources its Smartphone components. Or the aggressive, political election-style marketing campaigns that are reminiscent of the Ford versus Chevy attack ads. All of Apple's products include programs that work very well with each other, but not with any of its competitors' products, which makes it easy for customers to keep buying Apple and difficult to switch to someone else. The main competitive strategy of Apple Inc is developing new and innovative products that blend technology and art. When Samsung joined the market, its main strategy involved maximising on the weaknesses of rival companies to gain an edge. Samsung has its own set of benefits in marketing and thats why it has quickly risen to be a brand that rules the smartphone segment. . . The first bag, people on the street would be told, contained the next unreleased iPhone. One of the great technology rivalries that have emerged over the last 6- 10 years has been the one between Apple and Samsung for the hearts and minds of the smartphone, smartwatch, and earbud consumers. . Currently, Samsung has a market capitalisation of about $154 billion, barely a quarter of Apple's. But if you believe that a company should be measured by how much it sells then it's Apple that is following Samsung as the second-largest electronics multinational in the . Conclusion Both strategies are effective in their own right. 28-31. Kang, H, Chang, S & Song, J 2013, Competition for platform leadership: The Smartphone war between Samsung Electronics and Apple, Korea Business Review, vol. Samsung can effectively apply this strategy because it develops most of the components it uses on its Smartphones. During a frantic all-nighter, someone in the room suggested that they turn the commercial into a single scene, rather than two separate, awkward, forced moments of chatter between disparate characters. On a conference call with 72andSunny, he laid out Samsungs goal, as handed down by Dale Sohn. Samsung was right.. This strategy is aimed at ensuring the company comes up with unique products so that it may not be seen as a copycat. Enter ambush marketing. They wanted to take down each competitor, from HTC to Motorola to BlackBerry to Apple, one by one over the next five years. Again, the use case for these is still weak and demand is minimal at best. Slack, N, Brandon-Jones, A & Johnston, R 2016, Operations management, Pearson Education, Upper Saddle River, NJ. From the game plan of these brands to the ads they create, everything has something to tell marketers and other brands aspiring to make a difference in a competitive world. The new commercial was completed the next afternoon. Get Kimp, When Samsung and Apple Collide Head-to-head Ambush Marketing at Its Best. Differentiation is another way that Apple implements its strategy. He approached the whiteboard and wrote: Samsung = ?, Who are we? he asked. 7, pp.3080-3083. Samsung and Apple are the two worlds largest producers of Smartphones. As you can imagine, Apple watches what competitors do closely and, has never taken Samsung's push for continual innovation for granted. It motivates Apple to innovate as well, although, given Apple's history of creating groundbreaking innovative products on their own, I doubt they need Samsung pushing any Apple innovation buttons. StudyCorgi. But since then Samsung has held their last three Unpacked events exclusively online due to the Covid-19 pandemic. This situation has proved successful since Samsung continues registering more profits relative to other global companies. Similarly, when your design is straightforward and filled with visual representations of the idea, you can be sure that your customers will grasp the message within the first few seconds. Apple's business-level strategy is to utilize differentiation as an innovation mechanism. November 12, 2012. And promote your brand in ways you did not predict. Samsung and Apple are two consumer electronics giants with global reach and loyal customer bases. launch event. Flash memory was a much more lightweight and efficient storage device than the traditional hard disk. Id give you my sister. And the response for the Galaxy? Suddenly Pendleton had their ear. In line with the blue ocean strategy, Apple launched the App store, which helped it to control the Smartphones market. Diversification is also part of Samsungs competitive strategy. Five bucks? Oneguy offered his half-eaten ice cream cone. 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. Apple still outspends Samsung by a high margin in marketing, but the quality and creativity in Samsung's marketing campaigns for their new products have been exceptional. The offers that appear in this table are from partnerships from which Investopedia receives compensation. Samsung's competitive strategies are primarily concerned with maintaining a competitive advantage and increasing brand recognition. Dale reported to mobile chief J.K. Shin. Why, even Samsung employees have been called out for posting their Samsung promotional Tweets from an iPhone. By attacking Apple head-on, Samsungs marketers thought they could establish themselves as the challenger brand, turning the competition with Apple into a Coke-versus-Pepsi war for the smartphone world. A visiting delegation of South Korean executives huddled in a conference room to watch the video of these Times Square interactions. There is no doubt there! Declining profit margins in 2014 and 2015, however, forced some introspective analysis within Samsung's executive team. A good amount of promotion across channels, And you can buy Samsung smartphones from several places both online and offline. If you have to compare the smartphone market share, back in 2009, Apple was at 16.1% and Samsung a mere 3.3%. One thing we admire about Apple and Samsung is that they never shy away from taking a dig at each other. . Investopedia does not include all offers available in the marketplace. Who was right? Five days later, theyd still heard nothing back. Apple has a bit higher retention rate at 42% vs. 38% for Samsung. Previously, this approach has enabled Samsung to avoid investing heavily in research since move may appear to competitors as a rather sleazy tactic. Unlike Apple Inc, Samsung uses the red ocean strategy. We had to even take some of it out because it was just so harsh.. . That includes an estimated $20 billion annual payment to iPhone maker Apple (AAPL) and about $3 billion to Samsung. Apple has also used research and development as a competitive strategy (Gershon 2013). Both companies have undertaken various steps to remain competitive in the market. The company relies on high-end technology and innovation to set its products apart from those of the competitors. . Because Apple was an important Samsung customer, the executives at headquarters were pushing for a cautious approach. Research is also important to stay ahead in a market where innovations are easily copied by competitors. "Apple vs Samsung as Blue & Red Ocean Strategy Examples." When you visit the site, Dotdash Meredith and its partners may store or retrieve information on your browser, mostly in the form of cookies. As observed earlier, Samsungs chief strategy involves capitalising on the weaknesses of 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. It promotes through TVCs. The company aligns its business strategy to both marketing and production. With the holiday shopping season closing in, the only solution was to chop up and redo the film then and there. This situation arises from the fact that Samsung has been capitalising on the existing innovations in the market to devise better products under its name. This paper was written and submitted to our database by a student to assist your with your own studies. Todd, however, had never worked at a tech company before and didnt know the industry. If you have to compare the smartphone market share, back in 2009, Apple was at 16.1% and Samsung a mere 3.3%. Trucks carrying fresh apples started arriving at the Texas headquarters of Samsung. (2023) 'Apple vs Samsung as Blue & Red Ocean Strategy Examples'. Pendletons team convinced Dale Sohn to reverse the figures: to put 70 percent behind Samsungs own efforts and devote 30 percent to the carriers. Its a Galaxy S II. In addition, Samsung has relied on sheer volumes of products in the past where it releases numerous models in the market at the same time. The most innovative brands around the world choose Kimp for their designs. Samsung, on the other hand, still lacked brand power: It was raised only slightly on the style axis, while it was far to the left on the innovation axis. Our experts can deliver a Apple Inc.: Business-Level and Corporate-Level Strategies essay tailored to your instructions Samsung's income was similar to 17% of Southern Korea's $1,082 billion cash dollars cash money cash GDP (Samsung, 2012). I tried the first model of the Galaxy Fold three years ago and wrote that this was more a work-in-progress device. . Well give you a few examples. Samsung started with producing the product and finalised by producing the internal components. I advised against it then as I felt that this first model would underperform based on their needs. Can you instantly tell that they are all from Apple? He is a term member of the Council on Foreign Relations. Now lets look at some of the packaging designs from Samsung. Slack, N & Lewis, M 2008, Operations strategy, FT Prentice Hall, Upper Saddle River, NJ. Once Samsung had the marketing budget to reach out directly to customers, Pendleton could initiate step three: hiring an ad agency. Apple vs Samsung as Blue & Red Ocean Strategy Examples. Pendletons staff sent the commercial to South Korea for approval. Or this unusual campaign below. Samsung?. We love comparing such competitive brands because from such competition arise some of the most valuable marketing lessons. This approach has led Samsung into trouble in the past days, losing the case to Apple where it was accused of stealing the latter companys design. Samsung has achieved vertical integration through manufacturing components such as NAND, Mobile DRAM, and Application Processor among others (Vergara 2012). You dont need to wait in line. Excerpted from Samsung Rising: The Inside Story of the South Korean Giant That Set Out to Beat Apple and Conquer Tech 2020 by Geoffrey Cain. There is a brilliant hierarchy in this design and overall it appears well-balanced. Additionally, Apple focuses on relentlessly attempting to expand its market reach. In the past days, Apple invested colossal sums of money in innovation aimed at creating new products. The most acerbic interactions between Samsung and Apple take place in intellectual property rights court, where Apple has repeatedly reached into its bag of litigation tricks to assail Samsung for patent infringement. His pitch? Samsungs greatest strength was its ability to manufacture superior hardware, faster than any of its competitors, through its vast, strict, top-down management system and its superior supply chain. Compared to Apple Inc, Samsung invests 5.7% of its total revenues in research. This report focusses on these two companies and their marketing mix strategies. The above ad wins because of two reasons: Kimp Tip: The above ad works because the core idea is great. ! Apple is an innovator while Samsung sticks to tried and tested formulas. Not to forget the viral Oscar selfie featuring a Samsung phone, (and celebrities of course!). Big brands that have been head-to-head for the market-leader position are known to adopt this strategy now and then. Samsung and Apple apply different strategies in their management. It currently releases new models without major changes. Pendleton and Wallace quickly got to work. Then another pedestrian hails a taxi on the sidewalk, holding the mystery device. Sean Ross is a strategic adviser at 1031x.com, Investopedia contributor, and the founder and manager of Free Lances Ltd. Thomas J. Brock is a CFA and CPA with more than 20 years of experience in various areas including investing, insurance portfolio management, finance and accounting, personal investment and financial planning advice, and development of educational materials about life insurance and annuities. 3, no. One last observation from the Samsung Unpacked event. Barriers to entry are the costs or other obstacles that prevent new competitors from easily entering an industry or area of business. One thing you will notice in the Samsung Vs Apple comparison is that both these brands have very different approaches when it comes to marketing. In March 2014, someone leaked a Samsung strategy document from 2012 in which the Korean-based tech company blankly stated, "Beating Apple is #1 Priority (everything must be in the context of beating Apple)." A four-breakthrough model to explain successful market domination, International Journal of Innovation Management, vol. . Apple vs Samsung as Blue & Red Ocean Strategy Examples. "Apple vs Samsung as Blue & Red Ocean Strategy Examples." 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. Having that built into the Galaxy Watch 4 is a serious differentiator and could help Samsung grow its wearable business. 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