Abstract

This is a comparative strategic analysis on two of the leading giants in the mobile smart phone industry, namely: Apple versus Samsung. The comparative strategic analysis was conducted through these tools: (i) Resource-Based View (RBV), (ii) Porter’s Generic Strategic framework (i.e., strategic positioning), (iii) Blue Ocean Strategy, (iv) McKinsey 7s framework, and (v) Value Chain Analysis. It is found that Samsung indeed does share some similarities with Apple, and these are as follow: (i) both pursued differentiation strategy – of focusing on high end up market segment, (ii) both focus on product quality (while also never neglect the need to cut costs); (iii) both are customer-oriented; (iv) both trying to innovate to outperform competitors; (v) both enjoy advantage of economies of scale; and (vi) both focus on human capital development extensively.

Nevertheless, there are also stark differences between the two companies, of which these differences include differences from these dimensions: organisation structure, organisation culture, leadership style, incremental versus radical innovation, as well as the areas being focus on in trying to win over the competition (example: branding versus economies of scope).

Overall, it is found that there is no an easy ways to success, as all elements (marketing insights, quality management, branding, leadership, human capital development, effective strategy and so on) are important for firm performance. There are simply many reasons that had contributed to Apple’ success, and so does Samsung.

Apart from that, it can be seen that companies can pursue different strategy, and yet being successful. There are many differences between Apple and Samsung – and yet it is witnessed that both the company enjoy different strengths and able to capture large market size within the mobile phone sector.

Besides, it is also noted that different frameworks offer different perspective (albeit some of the issues discussed or investigated under these different frameworks do overlap). These different frameworks enable researcher to understand the complex picture in totality, and to understand the issues neglected or not being captured by certain strategic framework (but being addressed by other strategic framework).

Chapter 1: Introduction

1.1 The Mobile Phone Industry

The mobile phone industry is an intensely competitive industry (Jung & Oliver, 2010), albeit it can be sometimes highly profitable for the industry leader that had achieved certain competitive edge or the competitive advantage against other competitors (Lee, 2012a). Some of the industry players in this particular industry, include: Apple, Samsung, HTC, Nokia, Microsoft Corp, Research In Motion, Sony (Yun-Hee & Lee, 2012; Jung & Oliver, 2010), and also not to mention newcomers that are aggressive and gaining ground in the industry such as Xiaomi and Huawei (Ren, 2014; Schechner, 2014; Shaer, 2013; Wakabayashi, 2014).

1.2 Rationales for Research

There are many reasons to why such as study is important. First of all, a review of the literature found that there are actually not study being conducted to compare the strategic management process and outcomes of Apple versus Samsung. This is somewhat surprising given that both Apple and Samsung are two giants in the consumer electronics, or more specifically, the smart phone industry, of which the products offered by these companies have been affecting the lifestyles of people around the world. Furthermore, a study into the competition and strategic management of these two companies will be interesting, as it can be seen how these two companies had struggled to gain more market share, and had on and off able to win over the competition, although such successes achieved by both of these companies are not long lasting. In other words, a comparative study on Apple versus Samsung would be valuable in providing insights to the field of strategic analysis, as the case study would likely to able to provide interesting real life examples on how a company win over the competition, and vice versa. Other than that, there is also very little study that employ a series of strategic management frameworks, theories and models in analysing real life cases. It is therefore this study will leverage on many different strategic frameworks, theories and models for the strategic analysis purposes [i.e., (i) Resource-Based View (RBV), (ii) Porter’s Generic Strategic framework (i.e., strategic positioning), (iii) Blue Ocean Strategy, (iv) McKinsey 7s framework, and (v) Value Chain Analysis]. Through this approach, it is possible to better understand about the strengths or limitations of each of these strategic management frameworks, theories and models; in explaining the performance, success or competitive advantage of a firm. Considering these, a study on comparative strategic analysis on Apple versus Samsung is indeed necessary and valuable, as to close the gap within the literature, but also to provide greater understanding on how the various strategic analysis frameworks, theories and models can be used to explain or guide better firm performance and competitive advantage.

1.3 Research Aim

Following the discussion presented above, the research aim of this dissertation is therefore to conduct a comparative strategic analysis on two of the leading giants in the mobile smart phone industry, namely: Apple versus Samsung. The comparative strategic analysis will be conducted through these tools: (i) Resource-Based View (RBV), (ii) Porter’s Generic Strategic framework (i.e., strategic positioning), (iii) Blue Ocean Strategy, (iv) McKinsey 7s framework, and (v) Value Chain Analysis. Then, as the two companies operate in several business segments, this study will focus only in the mobile phone sector, as to zoom down the area of research for better depth in discussions. Such a comparative study will provide greater insights to the usefulness of strategic framework, aside from covering the gap within the literature on competition between Apple versus Samsung. To complete this research aim however, several research questions must be solved or addressed; and these relevant research questions will be outlined in the next section.

1.4 Research Questions

To achieve the research aim, the first research questions to be addressed is about how Apple actually performs, under the strategic analysis via these frameworks: (i) Resource-Based View (RBV), (ii) Porter’s Generic Strategic framework (i.e., strategic positioning), (iii) Blue Ocean Strategy, (iv) McKinsey 7s framework, and (v) Value Chain Analysis. Then, in a similar way, the second research question is about how Samsung actually performs, under the strategic analysis via these frameworks: (i) Resource-Based View (RBV), (ii) Porter’s Generic Strategic framework (i.e., strategic positioning), (iii) Blue Ocean Strategy, (iv) McKinsey 7s framework, and (v) Value Chain Analysis. Then, the third research question is about how Apple had performed strategically, as compared to Samsung; based on the strategic analysis via these frameworks: how Apple actually performs, under the strategic analysis via these frameworks: (i) Resource-Based View (RBV), (ii) Porter’s Generic Strategic framework (i.e., strategic positioning), (iii) Blue Ocean Strategy, (iv) McKinsey 7s framework, and (v) Value Chain Analysis. Finally, the fourth research question will be about what are the concluding remarks or implications for this study?

1.4 Formulating Research Objectives

In order to answer and address these research questions, three corresponding research objectives can be formulated. These research objectives are summarised and presented in Table 1 below.

Table 1: Research Objectives

Research Objective	Descriptions
1	To examine about strategic management processes and outcomes of Apple, via these strategic analysis frameworks: (i) Resource-Based View (RBV), (ii) Porter’s Generic Strategic framework (i.e., strategic positioning), (iii) Blue Ocean Strategy, (iv) McKinsey 7s framework, and (v) Value Chain Analysis.
2	To examine about strategic management processes and outcomes of Samsung, via these strategic analysis frameworks: (i) Resource-Based View (RBV), (ii) Porter’s Generic Strategic framework (i.e., strategic positioning), (iii) Blue Ocean Strategy, (iv) McKinsey 7s framework, and (v) Value Chain Analysis.
3	To compare about the strategic management processes and outcomes of Apple versus Samsung, through the insights gained from these strategic analysis frameworks: (i) Resource-Based View (RBV), (ii) Porter’s Generic Strategic framework (i.e., strategic positioning), (iii) Blue Ocean Strategy, (iv) McKinsey 7s framework, and (v) Value Chain Analysis.
4	To conclude the implications from results obtained due to comparative strategic analysis on Apple versus Samsung.

Chapter 2: Literature Review

2.1 Introduction

There are many strategic analysis frameworks, theories or models available in the literature and each of these have their respective advantages or limitations. In order to conduct a comprehensive strategic analysis on the case study on Apple versus Samsung, a review of these relevant strategic analysis frameworks, theories or models will be performed, so as to inform about the research process, research design and discussion process in the later part of this research project. For that, some of the more famous strategic analysis frameworks, theories or models selected, to be included and employed in this research project include the following: (i) Resource-Based View (RBV), (ii) Porter’s Generic Strategic framework (i.e., strategic positioning), (iii) Blue Ocean Strategy, (iv) McKinsey 7s framework, and (v) Value Chain Analysis. The discussions on these strategic analysis frameworks, theories or models are presented accordingly in these subsequent paragraphs.

2.2 Resource-Based View (RBV)

2.2.1 The Theory

Under the RBV paradigm, it is believed that a firm can achieve competitive advantage through building core competencies that are superior to the other competitors (Boxall, 1996; DeSarbo, Di Benedetto & Song, 2007), and that to achieve competitive advantage is the ultimate outcomes desired by any company (Fahy, 2000).

It is crucial to aware that resources is not purely something physical or financial, but the term ‘resource’ is being interpreted more as anything that can enable a firm to achieve competitive edge through building of core competencies (Boxall, 1996; Ray, Barney & Muhanna, 2004). In such line of logic, those essential resources can include: effective human resources management (Boxall, 1996; Lo, 2012), relevant knowledge, relevant skills (DeSarbo, Di Benedetto & Song, 2007), organisational culture, technology, patents, talents, system, management practices or even the unique offerings delivered by a firm to the marketplace (Kelliher & Reinl, 2009; Lo, 2012).

Under the RBV, it is acknowledged that not all sorts of resources will be able to contribute to competitive edge of a company. Those resources that can contribute to competitive advantage are those that have these criteria: value, rareness, non-substitutability, barriers to duplication, competitive superiority and appropriability (Fahy, 2000; Ray, Barney & Muhanna, 2004; Serra & Ferreira, 2010). Then, under the RBV, a business manager should work towards identifying, developing and deploying key resources to maximise returns (Fahy, 2000; Kelliher & Reinl, 2009).

2.2.2 Usefulness and Limitations

There are many reasons to which RBV is frequently employed in literature and strategic management. This is because such a paradigm can be useful in explaining performance or profitability of a company (DeSarbo, Di Benedetto & Song, 2007). Indeed, the RBV would provide guides to managers on what sorts of resources that a firm shall concentrate on building (i.e., focus on valuable, rare, costly to imitate, and non-substitutable resources), in order to gain competitive edge over the competitors (Barney, 2001; Ray, Barney & Muhanna, 2004). Other than that, there are also empirical evidences that RBV is a valid strategic framework to explain competitive advantage of a firm (Saffu, Samuel, Elijah-Mensah & Ahumatah, 2008).

Nevertheless, there are some limitations pertaining to RBV that worth highlighting herein. First of all, it is undeniable the RBV is actually a deterministic approach to strategic management, as it is assumed that effective strategy is possible through specially formulated or design and executed strategies (that is focusing on building core competencies). Such a view may not be true, as there are times whereby effectiveness of a strategy is more ‘evolutionary’ in nature (Boxall, 1996). Then, there are some ambiguity pertaining to the RBV theory. For instance, the theory never able to generate a list of critical resources every firm must possess in order to gain sustained strategic advantages (Barney, 2001). Aside from that, it would be also crucial that RBV is not a quick fix to strategic problems, as to develop the relevant resources can be time consuming (Lo, 2012). Anyway, it is valid to assert that to rely solely upon the RBV will not be sufficient or comprehensive, as there are many other strategic frameworks or theories that can complement the RBV approach to strategic analysis or strategic management. The next one to be discussed herein is about Porter Generic Strategic.

2.3 Porter Generic Strategic Framework

2.3 The Theory

The Generic Strategic Framework, as proposed by Michael Porter, asserts that three types of generic strategies are at the disposal of a firm to attain competitive advantage, namely: cost leadership, focus, and differentiation (Monahan & Rahman, 2011; Dess & Davis, 1984). Today, this strategic framework is believed to be one of the most widely accepted typology of strategic options for businesses (Bordean, Borza, Nistor & Mitra, 2010; ; Akan, Allen, Helms & Spralls, 2007), and had received more research attention than any other concepts (Kim, Nam & Stimpert, 2004).

As cited in Allen, Helms, Takeda & White (2007), this theory asserts that a company should choose only a single strategy on which to concentrate, i.e., either: differentiation, cost leadership, or focus strategy. Otherwise, a firm might end up being “stuck in the middle” – with mediocre performance. For that, to pursue a cost leadership strategy is one that demand a business manager to do the following: adopt a low cost leadership mindset, focus on efficiencies, drop off any activities that a firm does not have any cost advantage, leverage on mass production, mass distribution, economies of scale, technology, product design, lower input cost, capacity utilization of resources, and nearer access to raw materials. Then, a differentiation strategy will demand a firm to concentrate on providing a unique product or service, setting their offerings as being differentiated from competitors (so to enable the firm to charge higher price than the competitors). Finally, the focus strategy is one that targets a specific, often narrow, segment of the market, best if the focus is on a narrow competitive scope within an industry that large firms may have overlooked.

2.3.2 Usefulness and Limitations

The Porter Generic Strategic framework does have some advantages or strengths. First of all, the framework is subjected to rigorous academic research and review, and that it is has high accessibility to managers (Stonehouse & Snowdon, 2007). Often, scholars also argue that this model is popular, well defined, feasible, simple and it can complement other strategic framework (Ormanidhi & Stringa, 2008). Then, there are evidences that Porter Generic Strategic framework is useful in explaining performance and profitability of firms (Bordean, Borza & Glaser-Segura, 2011). Other than that, the Porter Generic framework is also useful to develop other more complicated framework (Parnell, 2006).

However, some of the assumptions under the Generic Strategic framework are often being critiques, or even found to be untrue. For example, the Generic Strategic framework demands a firm to stick to a particular strategy, for competitive advantage. Then, it is assumed that a firm should select either one of the three strategies, for business success. Such notion is found not to be true, as in Leitner & Güldenberg (2010) – because evidences suggest that firms that pursued a hybrid strategy can too be as successful as those that stick with a single strategy over the long run (and can be even more profitable to those firms that stock only to the differentiation strategy over the long run). Similar findings also yielded by Kim, Nam & Stimpert (2004) and Parker & Helms (1992). Aside from that, the framework also may not be feasible to be used by distressed firms (Pretorius, 2008). Yet, the model also ignores the acts of competitors in the strategic analysis, but that can be very important and shall never be ignored (Collins & Winrow, 2010). In a similar manner, the model also ignore about the importance of innovation in shaping the performance of a firm, of which that obviously is a serious limitation of this model, given that to innovate is increasingly critical for affecting firm competitive advantage in the future (Furrer, Sudharshan, Howard & Alexandre, 2008). Nevertheless, other strategic framework can be used to complete this model. In the next part, the theories related to Blue Ocean Strategy will be discussed and reviewed.

2.4 Blue Ocean Strategy

2.4.1 The Theory

One of the recent strategic framework that had received greater attention from scholars is about the Blue Ocean Strategy, of which the main concept is to leverage on the concept of value innovation, to create a ‘huge leap’ in value offering (that satisfies new customer desires and needs), to win over the competition via creating an uncontested market space that allow a firm to set the rules of a particular field or ‘new’ industry (Kim & Mauborgne, 2005; Kim, In, Baik, Kazman & Han, 2008).

Contrary to the concept of Porter Generic Strategy, the Blue Ocean Strategy advocates the pursuit of both low cost and differentiation strategy simultaneously - as the cornerstone of the Blue Ocean Strategy is to enable a firm to lower is costs structure, while also increasing its value proposition to the consumers (Figure 1).

Figure 1: The Value Innovation Concept under Blue Ocean Strategy

The idea of Blue Ocean Strategy is valid as it is also consistent with the concept of first mover advantage, in which the first innovator that creates an industry is likely to gain greater advantage in terms of costs, branding and experiences, as compared to the late comers (Dehkordi, Rezvani & Behravan, 2012).

Then, under the conception of Blue Ocean Strategy, to benchmark against the competitors is not necessary, as a business manager is supposed to create new uncontested marketplace, by leaving the status quo, or the so-called red ocean of bloody competition (Leavy, 2005), so that competition becomes irrelevant (Grienitz & Schmidt, 2012).

2.4.2 Usefulness and Limitations

There are various aspects on which Blue Ocean Strategy framework can be useful and valuable. First of all, the conception and the usefulness of Blue Ocean Strategy are receiving acknowledgement and agreement from more and more scholars recently, such as: Gochhait & Tripathy (2014), Yang (2012) and Dehkordi, Rezvani & Behravan (2012). Indeed, the Blue Ocean Strategy framework is derived after studies on 150 blue-ocean creations in over 30 industries spanning more than 100 years from 1880 to 2000 (Kim & Mauborgne, 2005), making it a reliable model to be leveraged upon.

Other than that, the framework is also highly relevant especially for the small business, or entrepreneurs, that do not choose to compete head on with other competitors (Wengel, Ferreira-Villegas, Pérez-Hernández & Suárez-Cruz, 2010). Aside from that, the Blue Ocean Strategy is relevant nowadays as it explicitly focus on innovation to outperform the industry players – so to create more value to the consumers while also to lower the cost simultaneously (Mirrahimi, 2013).

Besides, the conceptual framework of Blue Ocean Strategy is also apparently being supported empirically, as based on a study by Wubben, Düsseldorf & Batterink (2012), it is found that the Blue Ocean Strategy-framework enables one to identify ex ante an untapped market space, aside from providing some important insights in future key success factors to set oneself apart from competitors and change the rules of the game in the very competitive industry landscape. Other similar findings are also obtained by: Cirjevskis, Homenko & Lacinova (2011) as well as Parvinen, Aspara, Hietanen & Kajalo (2011).

There are however some limitations of this theory. For example, while the theory had discussed about how to create Blue Ocean; it is relatively silent on how to remain a leader in the Blue Ocean. This is crucial as the Blue Ocean would likely and eventually turn into Red Ocean, in which the industry leader may lost out competitors to the new comers or challengers (Hollensen, 2013). Aside from that, while the concept is theoretically sound, the execution of the Blue Ocean Strategy can be very challenging (Leavy, 2005). Nevertheless, in the next part, another famous and practical strategic framework, namely: McKinsey 7s framework will be discussed and presented.

2.5 McKinsey 7s Framework

2.5.1 The Theory

Another academically common and yet practically widely employed strategic framework is about the McKinsey 7s framework, that views an organisation or a firm as a whole or holistic entity that consisted of the following dimensions: structure, strategy, systems, styles, skill, staff, and shared values (Naipinit, Kojchavivong, Kowittayakorn & Sakolnakorn, 2014). Specifically, there are seven S to be attended by manager in strategic management, and these seven S can be categorised either as the hard S (a.k.a., the Cold Triangle) or the soft S (a.k.a., the Warm Square). The hard S includes: strategy, structure and systems; while the soft S include: skills, style and shared values (Maccoby, 1993).

Under the paradigm of McKinsey 7S, a business manager shall align all of these seven S (in a mutually supportive and internally consistent manner) – to support the attainment of organisational mission (Maccoby, 1993). In other words, it is necessary to pay attentions to all of these seven aspects of strategic management, as there is no use inventing a great new strategy if the organisation does not have the skills or staff to implement it (Ndoda & Chaneta, 2014). For strategic effectiveness, it is crucial to pin point areas of improvement and to manage the ‘fitness’ of the different dimensions.

2.5.2 Usefulness and Limitations

The popularity of the McKinsey 7S framework is not without reason. This is because the framework has wide applications. For example, the framework can be used conveniently for organisational analysis (Singh, 2013), and that will provide insights for managers on areas that require further improvement (Hanafizadeh & Ravasan, 2011). In a way, hat framework can lead to formulation of actionable or action-oriented strategy for a firm (Al Badi, 2013). Aside from that, the framework can be used to analyse business or entrepreneur performance and competitiveness (Naipinit, Kojchavivong, Kowittayakorn & Sakolnakorn, 2014), and that enable the analysis of the competitors. Then, the framework can be useful to identify the critical success factors for an organisation as well (Ndoda & Chaneta, 2014). The framework is also realistic, as it is comprehensive and considers multiple dimensions in strategic management of a firm (Junarsin, 2012; Cacioppe & Edwards, 2005).

However, there are some limitations pertaining to this framework. For example, such a strategic framework ignores issues such as organisational life-cycle, or “cycle of growth” concepts in explaining organisational behaviour (Cacioppe & Edwards, 2005). Yet, this framework is also relatively silent on which element is more important to organisational success, and how these different elements should be managed in responsive to differing industry landscape or business environment (Narula & Arora, 2010). For that, it is obvious that this strategic framework should be accompanied by other strategic framework as well, for the analysis or strategic management process to become more comprehensive and holistic.

2.6 Value Chain Analysis

2.6.1 The Theory

As the business environment is becoming more competitive, supply chain management is not no longer sufficient, as businesses nowadays should also recognise about the importance of ‘demand’ aside from ‘supply’. In other words, the management of the supply chain is not sufficient, but it is crucial also to better understand the end-consumer’s value; and then to readjust or tailor the entire supply chain to meet such value required by the end consumers. The concept of managing, and transforming the products and processes (product features and supply chain setup) to deliver those requirements is known as the value chain management (Zokaei & Simons, 2006).

For effective value chain management, value chain analysis is yet another useful strategic framework, which is also developed by Michel Porter (Popescu & Dascalu, 2011), that can be used to diagnose the value chain management process in an organisation (or even across an entire supply chain) for the achievement of sustained competitive advantage (Alnawaiseh, Al-Rawashdi & Alnawaiseh, 2014; Soosay, Fearne & Dent, 2012). To explain, value chain can be defined as “a series of interrelated set of value creation activities”. For that, and as shown in Figure 2, there are two types of value chain activities, of which are: (a) basic activities including forward logistics (raw material handling and storage), operation and reverse logistics (storage and distribution), marketing and sales, service; as well as (b) secondary activities that include infrastructure, human resource management, technology development and procurement (Liu, 2014; Bao, Lee & Chen, 2012).

Figure 2: Value Chain Analysis

Under the value chain concept, the decomposition of various business processes enable managers to better analyse the costs and relative potential (value added) of each activities, thereby providing more guidance to managers on how to lower cost and doing better as to gain competitive advantage (Liu, 2014; Fleisher & Bensoussan, 2003). In a way, the value chain also provides guidance to managers on which are the critical success factors (product cost, product quality, delivery time, innovation) (Alnawaiseh, Al-Rawashdi & Alnawaiseh, 2014). Through focusing more on those value adding activities, to eliminate activities that waste resources, as well as to align business processes to meet customer perceived value, it is possible to become a lean organisation, for better profitability and performance (Singh, Singh, Singh, Singh & Regmi, 2013).

2.6.2 Usefulness and Limitations

There are many advantages offered by the strategic framework of value chain analysis. First of all, the value chain analysis is very useful, and that include relevant for: cost analysis and reduction (through eliminating non-vale adding activities), differentiation, product development (Crain & Abraham, 2008; Sharma & Christie, 2010), identify value add potential, estimate the financial contribution from each activities, assist in the measurement of competitiveness (Van Hoang, 2015; Letson, Dzanja, Kakota & Hara, 2013), to identify strategic and operational misalignments within chains, to prevent misallocation of resources, and also to identify areas for improvements for economic sustainability (Fearne, Marian, & Dent, 2012; Soosay, Fearne & Dent, 2012; Popescu & Dascalu, 2011). Aside from that, the value chain analysis is also relevant and practical as it consider both the company’s internal and external environment (Alnawaiseh, Al-Rawashdi & Alnawaiseh, 2014; Crain & Abraham, 2008). It is also increasingly important because as the business environment is becoming more challenging and turbulent, business efficiencies (i.e., cost down) and effectiveness (i.e., meeting customers’ perceived value) are becoming more critical for success of a firm, and that can be achieved by value chain analysis (Motadel & Kordestani, 2013). Other than that, the value chain analysis can also be combined with other strategic analysis framework, such as quality management, for even more comprehensive and practical analysis and strategic implementation process (Popescu & Dascalu, 2011).

Nevertheless, there are some limitations pertaining to value chain analysis that worth discussing. For that, Fearne, Marian, & Dent (2012) argued that value chain analysis ignore about the social and environmental aspects of sustainability in pursuit of sustainable competitive advantage. In other words, there is inadequate attention to social and environment consequences of firm behaviour. Aside from that, there is also lack of focus on stakeholder management. All of these weaknesses indicate that the value chain analysis shall be complement or supported by other strategic analysis tools as well.

2.7 Summary of Chapter 2

Overall, this chapter had outlined the various academic tools and techniques to be used within this research. With that, the comparative analysis on Apple can be conducted.

Chapter 3: Research Methodology

3.1 Secondary Data in Research

Generally speaking, there are two main research approaches: primary research versus secondary research. To explain, primary research is about the conduct of research through the collection of primary data (such as through the use of questionnaire and interview method to elicit first hand data from the research participants). Such research method has the benefit of obtaining first-hand information (Mcisaac, Goeree & Brophy, 2007), and can be highly useful when the data (or input) required within a research is not available in the form of secondary data (or in the case when the secondary data available may be outdated or believed to be inaccurate). However, the conduct of primary research tends to be time consuming and require greater commitment of financial resources. Therefore, such research tends to be more focus on (or zoom into) a particular topic or areas (Czinkota & Ronkainen, 1995; Ahmed, Kazim & Arif, 2012).

Yet, the secondary research is about the conduct of research through the use of data collected or documented by other researcher or related individuals (such as from other scholars or from the data published by the management in a company). The use of secondary has a main advantage of time savings, as rather than spending time on collecting primary data, the researcher can refer to many different sources of secondary data (especially in the case of qualitative data) to conduct the particular research (Czinkota & Ronkainen, 1994). Besides, such research approach is also necessary when the amount of data required is something not feasible to be collected by a particular researcher (or researchers). That is also not to mention that in case a researcher would need to study about issues in the past or issues related to development of certain trends, to rely on secondary data is unavoidable (Castleberry, 2001; Cowton, 1998).

The discussion above shows that either primary or secondary research has their respective pros and cons. Therefore, considering the nature of the two research approach, this study will be structured as a pure desk-based research that explores the strategic initiatives of Apple and Samsung, so to better compare the strategies employed by both the companies. Under the desk-based research approach, only secondary data will be used (Powell, 1991). The secondary data will be obtained from reliable sources, such as: annual reports of the subject companies (as the main source of data to be analysed), insights from academic journals on the subject companies, relevant news (or press release) on the subject companies, as well as official documents or news published by the respective companies involved in this study (i.e., Apple and Samsung). Through such method, the required qualitative data can be obtained – which will then be feed into the various strategic management framework employed in this dissertation.

The key reason of using desk-based research (in this research project) is that this is a low cost research method (Duff, 2002), and is relevant for this research project as the researcher has very limited funding to complete this study. Other than that, the use of huge range of secondary data can actually inform the research from multiple perspectives, which will be valuable in trying to understand a situation comprehensively (Powell, 1991). In other words, the use of secondary data by itself is actually already sufficient in informing the analysis and research, and the research can be conducted even without the collection of primary data (because secondary data on Apple and Samsung can be obtained easily from various sources – especially from the annual reports of the respective companies). Given that, and considering that the financial resources at the disposal of the researcher are limited, it is determined that the use of secondary research is appropriate in the context of completing this research.

3.2 Qualitative versus Quantitative Research Method

From another perspective two of the most common applied research methods are: quantitative research method and qualitative research method. These two research methods have their respective strengths and limitations as well. For that, quantitative research method is useful in conducting empirical research that is meant to generalise research findings, or in investigating into validity of theory or assertion through the use of statistical method. However, such research approach tends to be lacking in terms of ability to provide explanation to the observed statistical relationships or findings. Contrary to that, the qualitative research method is useful to provide the reasoning behind observations or theory, but would not be capable of generating empirical evidences to support or reject certain theories or notions. The drawback of such method is that it tend to be constrained to a particular case study – rather than to be used to generalise a situation (Saunders, Lewis & Thornhill, 1997; Varey, 2006).

Considering the nature of this research as well as the strengths and limitations of both qualitative and quantitative research method, it is determined that this will be a qualitative study – whereby the issues related to strategic analysis on Apple and Samsung will be explored. The use of qualitative research method is suitable because this is also an exploratory study rather than an empirical study (Irvine & Gaffikin, 2006; Varey, 2006), which aimed to obtained relevant insights on the strategic efforts and outcomes of Apple versus Samsung, and also to apply the various academic strategic tools and techniques to the comparative analysis of Apple versus Samsung. In other words, the numerical method or the quantitative research method is not relevant to this study – as such method would be more suitable for statistical investigation – particular in trying to generalise the situations, to verify conceptual framework, or in the conduct of financial analysis (Saunders, Lewis & Thornhill, 1997). However, the comparative study on Apple versus Samsung is more of a case study – which should only be carried out via a qualitative analysis (Varey, 2006).

3.3 Limitation of the Research Approach

Different research methods have their respective pros and cons (Suman, Sharan & Sachan, 2012). It is understood that the particular research method or approach employed here (i.e., qualitative research method based only on secondary sources of data) does come with certain limitation. First of all, this is a case study on Apple and Samsung, relying on historical data and secondary sources of data. For that, the findings may not be indicative of the future situations (Carbone & Makridakis, 1986), such as in predictive of the future competitiveness of Apple versus Samsung. Then, although only reliable secondary data is used, there might still be chances that some of the information might not be accurate. As the results, the robustness and accuracy of the end results from this research might be affected when data input is not accurate (Saunders, Lewis & Thornhill, 1997).

3.4 Research Ethics

Research ethics are crucial issue to be attended to by a researcher – particularly in the context of how a research may affect the other people or relevant stakeholders (Saunders, Lewis & Thornhill, 1997). Fortunately, the research conducted herein face very minimal research ethics related issues, as this is purely a desk-based research that performs the research via analysis on secondary sources of data only, without any primary data collection process. Furthermore, it is ascertain that the research conducted herein will not cause harms or disturbance to any parties. It can therefore be concluded that this study had complied with all of the relevant research ethics principles.

Chapter 4: Critical Discussion

4.1 Porter Five Forces Analysis

In order to better understand about the business environment, the framework of Porter Five Forces analysis will be applied to specifically understand about the mobile phone segment. This is crucial as to set the contextual background (i.e., to comprehend about the external environment), of which both Apple and Samsung are operating and competing in. For that, a review of the competitive forces, that are significant or materials in affecting the strategic positioning or firm performance of Apple and Samsung, will be outlined and discussed, as follow. The five dimensions of Porter Five Forces are presented accordingly in the following paragraphs.

4.1.1 Rivalries among Existing Industry Players

Prior to discussion on the rivalries within the smart phone industry, a review of the current market share of Apple and Samsung will be provided. In Figure 3, the trends (i.e., changes) of market shares of the respective competitor in the industry (from 2004 to 2012) are shown. It can be seen that both Apple and Samsung are struggle for greater market shares. Yet, in Figure 4, it shows the most recent market shares enjoyed by the industry players. It can be seen here that Samsung lead ahead of Apple in terms of market shares. Nevertheless, both Apple and Samsung had occupies nearly half of the entire market shares – indicating that both these firms are having strong positioning within the industry.

Figure 3

Source: IDC WW Mobile Phone Tracker

Figure 4

Source: Strategy Analytic

Overall, the mobile smart phone industry is a highly competitive industry, albeit it can be a lucrative market for the industry leader that able to capture most of the market share (Jung, 2006; Apple Inc., 2014). Several industry players dominated the industry, and among these, aside from Apple and Samsung (in the past as well as in present), include the following: Nokia, Motorola, Sony, Sharp, Microsoft, HTC, Research in Motion, Google, Hewlett-Packard, Huawei, Micromax, Karbonn, Maxx, and recently Xiaomi (Jung, 2006; Ammisetti, 2012; Jung & Oliver, 2010; Breen, 2013). The industry is so competitive; as can be witnessed from the sudden fall of the industry giant and monopoly (which before the downfall enjoy significant economies of scale advantage), namely Nokia in the recent years, when the company became complacent and fail to innovate to stay competitive in the mobile phone industry (Ammisetti, 2012).

Nevertheless, since the introduction of smartphone by Apple, the mobile phone has been a growing industry, as more and more consumers are engaging in mobile internet use, whereby in the year 2010, it is estimated that one out of five people in the world is having a smartphone (Minhyung, 2010). As such, the growth of the industry is actually a factor favourable to the smart phone companies such as Apple and Samsung. As the market is growing, competition between Apple and Samsung would not likely to seriously intensify, as the industry players can choose to expand without having heads on competition with each other.

Nevertheless, it is also crucial to aware that the mobile smart phone industry is actually a cyclical industry, whereby recession can seriously hurt the profitability of the industry players (Ramstad, 2007b; Ramstad, 2009). As such, it can be expected that the competition between industry players will likely intensify in times of recession or economic slowdown.

Other than that, competition may become unhealthy as industry players may engage in lawsuits against each other, such as one that is happening between Apple and Samsung (Vascellaro, 2012; Letzing, 2012). That somewhat suggest that competition between industry players is rather intense and may not only constraints between competition of product design, product features or marketing tactics.

Then, within the mobile smartphone industry, both Apple and Samsung are the two market leaders with respective strengths. For that, Samsung is actually the biggest technology company in the world, by revenue and kinds of product portfolio (Ramstad, 2007a). Specifically for the mobile phone industry, Samsung is competing with iPhone offered by Apple through its Samsung Galaxy and Samsung Note series of smartphone (Shaer, 2013). While Samsung is regarded as a challenger to Apple, the performance of Samsung is not something to look down at. For instance, in 2012, Samsung surpass Apple as the biggest mobile smartphone provider by volume (Philp, 2013; Ramstad, 2012).

For Apple, its performance is something that needs no further explanation. It has been regarded as one of the most remarkable and respected high flying companies among the investment fraternity, and had ranked number one in the Top 200 survey of investment club holdings for 2011 (Breen, 2013). Many market observers also perceive that it is the most valuable corporation in the world (Gobble, 2012), and also as the world’s most innovative company (Kenney, 2007). Indeed, for the case of mobile smartphone industry, Apple is credited for re-inventing the entire mobile phone industry, at a time when Samsung was still struggling with its traditional cell phones offerings. Indeed, for many market observers, Apple is still perceived as the industry leader within the smart phone industry; while Samsung is emerging more as the new aggressive challenger.

In the case of competition between Samsung and Apple, it is somehow often argued that it is actually the competition between the Android versus iOS (Philp, 2013; Eunjeong, 2012) – whereby the Android system is one headed or leaded by Samsung, while iOS is the software platform led by Apple.

4.1.2 Bargaining Power of Buyers

Overall, as there are many industry players (such as: Nokia, Motorola, Sony, Sharp, Microsoft, HTC, Research in Motion, Google, Hewlett-Packard, Huawei, Micromax, Karbonn, Maxx, and recently Xiaomi) around the world, the buyers have many choices. Therefore, the consumers actually have many choices to choose from (Apple Inc., 2014), and that they actually have high bargaining power. Nevertheless, many consumers seemed to be loyal to certain types of brand, such as Apple. For that, Apple actually enjoys certain high degree of bargaining power against the consumers (as compared to competitors such as Samsung, which lack a base of loyal customers).

4.1.3 Bargaining Power of Suppliers

Many of the industry players within the mobile smartphone sector are huge in size – and therefore they actually enjoy high degree of bargaining power against the suppliers (which are mostly smaller in size). For both Apple and Samsung especially, there are large conglomerate that definitely possess high bargaining power against the suppliers – which allow them to even manage the suppliers accordingly. Therefore, high degree of bargaining power of suppliers is actually not a threat for both Samsung and Apple.

4.1.4 Threats of New Entrants

Generally, and due to the already very competitive business environment, threats of new entrants are low, given that it would not be easy to survive in such an industry. Furthermore, entrants to the industry will face high capital requirements, impenetrable distribution channels and strong brand preferences (Nair & Leng, 2012), and these barriers to entry would serve effectively to hinder new entrants. Nevertheless, despite all of the obstacles, new entrants (from China) are still emerging, such as Huawei and recently Xiaomi (Moscaritolo, 2014). In a way, the threats of new entrants are more serious that theories may justify. Furthermore, as it is observed that innovation frequently shape and re-shape the industry landscape; it would be reasonable to expect that new entrants are likely. Indeed, Apple itself was actually the new entrant that beat over the industry leader, i.e., Nokia in just a few years ago (Kenney, 2007). Considering that, it would be proper to argue that the threats of new entrants (from the perspective of Samsung and Apple) are moderately high.

4.1.5 Threats of Substitutes Products

As discussed earlier, technology has been changing the landscape of the mobile phone industry, and it is expected that such trend will continue so into the future (Baijia, 2004; Kenney, 2007; Ammisetti, 2012) – and that therefore the threats of new substitutes products are actually very high. Indeed, this can be observed by how Apple and Samsung even need to innovate continuously – to that extend to cannibalise their respective own products portfolio, to stay relevant and competitive in such a dynamic business environment.

4.1.6 Summary and Discussion

Overall, the insights gained from Porter Five Forces analysis is that the mobile smartphone sector is one that is very competitive, while is also facing moderately high threats from new entrants as well as the treats of substitute products. For both Samsung and Apple however, they are enjoying a more favourable position, as they are large in size and therefore enjoy greater bargaining power against the suppliers. Then, Apple actually enjoyed greater positioning within the industry, as the company has a base of loyal customers (which make the threats due to high bargaining power of buyers less relevant for Apple). Nevertheless, other strategic framework will also be used to better understand the situations. The strategic framework of Resource-Based View (RBV) will be the next tool to be applied.

4.2 Resource-Based View

4.2.1 Strategic Analysis on Apple

Apple indeed is a company that possess many valuable, hardly imitable and rare resources that make the company stand out as one of the significant industry leader. These resources possessed by Apple will be discussed and outlined accordingly below. First of all, some of the core competencies of Apple include:

Ability to shape and re-shape the industry landscape, through value innovation (Alsop, 2003), of which can be witnessed from the ability to create, disrupt, or reinvent at least six different industries, not to mention the mobile phone industry (Gobble, 2012; Reinberg, 2011)
Ability to bring together best possible talents around the world, with the promise to participate in something great (Maccoby, 2012).
Ability to create hype, desires, anticipation and excitement in the market – prior to the product launch (Mickalowski, Mickelson & Keltgen, 2008; Tariq, Ishrat & Khan, 2011; Mickalowski, Mickelson & Keltgen, 2008)
Ability to deliver exceptional products of high quality that are also often very attractive physically (Mickalowski, Mickelson & Keltgen, 2008; Nair & Leng, 2012; Apple Inc., 2014), which is often perceived as the marriage of both art (or, fashion) and technology (Petrie, 2012; Penenberg, 2007)
Ability to integrate both software and hardware design and development process seamlessly, through “deep collaboration” and “concurrent engineering (Maccoby, 2012), and team work (Erickson, Hoddie & Wasko, 2011)
Ability to deliver exceptional positive user experiences (Murugesan, 2011)

Then, the resources available to Apple (which arise from its competencies), are as follow:

Exceptional brand – which enjoy high consumer brand loyalty (i.e., with a base of loyal consumers) (Kenney, 2007), and that often able Apple to cross sell or introducing new products to the marketplace (Tariq, Ishrat & Khan, 2011)
Wide network of distribution channels around the world, and that include more than 245 store outlets in the United States and 112 store outlets in international markets (Breen, 2013)
iPhone series is widely perceived as the best smart phone in the world (Reinberg, 2011; McCray, Gonzalez & Darling, 2011)
Possession of many useful patents – which offer them significant durable competitive advantage against the competitors (Breen, 2013)
Excellent business models that have a focus on design, development and marketing activities , of which are the most value adding part within the value chain (Petrie, 2012)

4.2.2 Strategic Analysis on Samsung

Samsung is too a powerful industry player, of which some of the competencies of the company will also be outlined accordingly below:

Samsung has diverse business portfolios (such as: chip- and display-manufacturing prowess), of which all of that can easily support the performance, manufacturing, production or innovation of the firm (Hesseldahl, 2013; Lee, 2012b).
Samsung has a solid and agile six-sigma-based methodology in managing its supply chain operation (Yang, Choi, Hyung, Suh & Bongsug, 2007). That suggests Samsung has excellent production and manufacturing competencies that enable the firm to deliver high quality product to the marketplace
Aside from that, Samsung is proven to be an effective challenger or ‘follower’ – that able to catch up fast in an industry, such as for the case of overtaking Nokia, Sony, and currently – being an aggressive challenger to Apple

Other than that and due to the competencies of Samsung – the firm enjoy some of these ‘resources’ or ‘advantages’, as follow:

Samsung has a strong organisational culture that is committed to improve the quality of life of the consumers and striving for excellence in everything that we do (Murphy, 2006)
Aside from that, there is a special culture of group-wide management and an agile decision-making process within the company (Chang, 2012)
Samsung enjoy significant economies of scale and economies of scope – as not only the world largest maker of smartphone, but also other products, such as chips, semiconductors, and flat screen TVs (Yun-Hee & Lee, 2012; Fifield, 2006; Samsung, 2013); and that the company is also the biggest technology company, in terms of revenue (Jung & Oliver, 2010; Lee, 2012a)
The company enjoy wide range of technological capabilities, due to its tendency to manufacture and produce most of its products (Jung, 2004)
The company also has wide network around the world, which can be beneficial for its supply chain management and global product distribution purpose (Meeyoung, 2002)
Then, as similar to Apple, Samsung does possess many valuable patents as well (Joo & Lee, 2010)
The company is also one of the firms that possess significant Research and Development capabilities – that can contribute to product innovation process (Park & Gil, 2006).

4.2.3 Comparative Strategic Analysis on Apple versus Samsung

From the RBV perspective, it can be noted that competencies and resources available to both Apple and Samsung, are indeed what make them the key industry players within the mobile phone industry. Nevertheless, Apple and Samsung have different competencies, which lead them to become the industry leader in the mobile phone sector. For Apple, the competency is more about radical innovation, to reinvent the industry landscape. However, Samsung is more about value and incremental innovation (with some sign of being a challenger to a new industry). Nevertheless, both are capable of delivering quality product, but Apple seemed to be performing better, as the product offered are often also one that is fashionable. Other than that, it is apparent that Apple is more capable in marketing and branding, while Samsung has the advantage of solid manufacturing and production strengths.

Then, the ‘valuable’ resources available to Apple and Samsung also differ. For Apple, it is more about possessing a respectable brand, as well as patents. For Samsung however, it is more about possessing the depth of experiences on manufacturing and wide range of product portfolio – that can all contribute to the production, research, design and development of smartphones.

4.3 Porter Generic Strategic framework

4.3.1 Strategic Analysis on Apple

Prior to the discussion on Apple’s strategy, a review of the contribution of smart phone to Apple will be conducted. As shown in Figure 5 below, the sales of iPhone (i.e., $101, 991) occupy more than half of the total revenue of Apple (i.e., $182, 759 million). Indeed, sales of iPhone are becoming more important for the performance of Apple, as compared to the situation in FY 2012.

Figure 5

Source: Apple Inc. (2014)

Overall, it can be seen that Apple is pursuing a differentiation strategy, as the product design seriously focus on premium market segment – that focus on excellent user experiences (Apple Inc., 2014; Gobble, 2012; Mickalowski, Mickelson & Keltgen, 2008; Nair & Leng, 2012), through delivering of sexiest piece of personal technology to the marketplace (Coffin, 2007). Indeed, some market observers even perceive that Apple is indeed focusing on the very niche market – of high end market that demand flawless user experiences from using their electronic gadgets (Nair & Leng, 2012). Nevertheless, it is also crucial to mention that Apple indeed also focus on cost cutting as well, in order to increase its profit margin (Lashinsky, Lev & Kimes, 2008). As such, it can be concluded that, under the perspective of Porter Generic Strategy, Apple is actually pursuing a differentiation strategy – while never losing the focus to cut costs.

4.3.2 Strategic Analysis on Samsung

For the case of Samsung (as in Figure 6), the sales of smart phone (i.e., referred to as IM in Figure below, that stand for information technology and mobile division) are also significant source of revenue (i.e., 138,817,219 million Korean won) for the company (as compared to the total net revenue of 228, 692,667 million Korean won).

Figure 6

Source: Samsung (2014)

Yet, in a similar fashion, Samsung is also trying to pursue a differentiation strategy in recent years – with a focus on offering high-end premium smart phones to the marketplace (Yang, Choi, Hyung, Suh & Bongsug, 2007; Jung, 2006; Fifield, 2006), albeit earlier the company is focusing more on the mass market with highly affordable mobile phones (Fukagawa, 2012). In other words, Samsung is too focusing of a differentiation strategy.

4.3.3 Comparative Strategic Analysis on Apple versus Samsung

Comparing the strategy of both Apple and Samsung via the Porter Generic Strategic framework, it can be noted that both Apple and Samsung is actually pursuing a differentiation strategy. Indeed, it seems that the target market segment serviced by Apple and Samsung is of high-end and premium market. However, there are some differences on the differentiation strategy pursuit by Apple versus Samsung. For that, Apple is focusing more on user experiences, while Apple is focusing on the Android users – who want to have the convenience of using smartphone in line with other software applications, such as Microsoft, Google and so on. Therefore, there are still some differences – between the differentiation strategy employed by Apple versus one that employed by Samsung.

4.4 Blue Ocean Strategy

4.4.1 Strategic Analysis on Apple

Perhaps the most suitable strategic framework that can be used to analyse the strategies of Apple is through the Blue Ocean framework. Indeed, the strategies employed by Apple can be summarised as the pursuit of a value innovation strategy (Apple Inc., 2014), which can be witnessed by the rare accomplishment of successfully bringing a new product into an already crowded and competitive market (Mickalowski, Mickelson & Keltgen, 2008), via reinventing or re-shaping the industry landscape (Stern, 2012). For the mobile phone sector specifically, Apple is the first to deliver internet content to the mobile phone (McCray, Gonzalez & Darling, 2011). This is an act of radical innovation, but the innovation by Apple is also user- or consumer-oriented (Gobble, 2012). The value innovation strategy employed by Apple is rare within the industry, and such strategy is a continuous effort within the company, as seen from how the company focus single-mindedly on delivering innovative products of exceptional consumers’ values, even at the costs of cannibalizing its own product lines (Gobble, 2012; Maccoby, 2012). In other words, innovation within Apple is not only radical, but it is also consumer-oriented. It is about the creation of Blue Ocean (i.e., the smart phone sector) within the Red Ocean (i.e., the traditional mobile cell phone sector), that make competitors such as Nokia irrelevant – while effectively enabling Apple to emerge as the new leader that shape the rules of the industry.

4.4.2 Strategic Analysis on Samsung

Samsung is a company trying to make a difference in the society (Samsung, 2014). The innovation pursuit by Samsung, is however more incremental – rather than radical. Indeed, innovation by Samsung is more conservative, as Samsung does not have a track record that creates and re-shape a new industry out of a Red Ocean. Neverthless, it is undeniable that there are indeed some elements of value innovation approach employed by Samsung, as in the fact that innovation process within Samsung is align to meeting consumers’ needs and wants (Jones & Lee, 2006). That is further been clarified by the internal management team in Samsung, whereby the leaders in Samsung officially agreed that Samsung has been a follower in the past, but the company indeed aspire to become an innovator in the future (Baijia, 2004). Some successes of Samsung are indeed observable. For example, the company has been offering new models – with improvements over the years (Jung & Oliver, 2010). Then, the offering of Samsung Galaxy Note is about the attempt of trying to create a Blue Ocean, as that phone is too big to be considered a standard smartphone but also too small to be called a tablet (Byeong, 2013). Last but not least, Samsung is also aggressively pushing for mass production of displays using plastic rather than glass, a move that will make mobile devices unbreakable, lighter and bendable (Lee, 2012b).

4.4.3 Comparative Strategic Analysis on Apple versus Samsung

Overall, it can be noticed that both Apple and Samsung are pursuing the value innovation concept in outperforming the competitors. However, Apple seemed to be able to innovate radically from time to time, while Samsung is more persistent on incremental innovation – albeit both of the also focus on consumer-centric innovation process. Nonetheless, it can be noted that Apple has not been able to perform radical innovation since the pass away of Steve Jobs, the innovation pursued or delivered by Apple is now similar to the one delivered by Samsung, i.e., incremental, rather than radical.

4.5 McKinsey 7S framework

4.5.1 Strategic Analysis on Apple

In order to analyse the strategies applied by Apple via the McKinsey 7S framework, and to make the discussions more readable, the discussions will be presented in Table 1 below.

Table 1: McKinsey 7S Analysis on Apple

Dimensions		Discussions
Hard Elements	Strategy	Some of the key strategies of Apple, are as follow: · User-centred innovation (Gobble, 2012; Murugesan, 2011; Apple Inc., 2014) · Offering quality products with exceptional value (Kenney, 2007) · Combination of fashion, art and technology (Coffin, 2007) · Differentiation, by focusing on premium and high end market (Penenberg, 2007) · Integration of the whole widget - from design to hardware to software to content (Maccoby, 2012) · Focus on core competencies, by outsourcing secondaries activities such as production to third party (Maccoby, 2012)
	Structure	Overall, Apple has a lean and matrix organisational structure (Maccoby, 2012). The strengths of Apple, comes mainly from the extraordinary and inspiring leadership offered by Steve Jobs (Erickson, Hoddie & Wasko, 2011; O’Rourke, 2012).
	Systems	There is a high degree of integration between products, services, content, distribution, communications, and developers in Apple, in forming the organisational system in the company (Dubberly, 2012). As discussed before, part of the success of apple is resulted from its clever business models (Petrie, 2012).
Soft Elements	Shared Values	Obviously, some of the shared values within Apple are: customer oriented, creativity, innovation, delivering something great and striving for perfection (Fernandez, 2012; Penenberg, 2007). Other than that, as disclosed in its official corporate website at http://www.apple.com/, some of the corporate value of the company include: continuous improvement, problem solving and seeing things from customer perspectives. Other than that, Apple has an organisation culture that can be described as follow: a culture of respect and value of people of broad and deep expertise (Dubberly, 2012), innovation, and collaboration (Maccoby, 2012).
	Skills	Some of the skills, or core competencies of Apple (as discussed before), include: · Ability to value innovate (Gobble, 2012) · Capable of delivering well-planned and masterful media build-up (Mickalowski, Mickelson & Keltgen, 2008; Nair & Leng, 2012; Kenney, 2007) · Excellent branding · Ability to combine art with technology (Coffin, 2007) · Knowing about what the consumers want – even when they do not know that they want it (Gobble, 2012; Ho & Wu, 2011) · Delivery of quality products (Kenney, 2007)
	Style	Prior to Tim Cook, Steve Jobs was an inspiring, charismatic and transformational leader. It is indeed often observed that Steve Jobs success came from driving employees to do things that they didn’t know they could do (O’Rourke, 2012). The leadership under Tim Cook is however, currently unclear.
	Staff	Human resources are a huge reason driving the success of Apple. The staff of diverse background, managed under a performance oriented environment (Erickson, Hoddie & Wasko, 2011), whom have strong degree of organisational identification to Apple (Nair & Leng, 2012), able to collaborate together to deliver the next breakthrough in the industry (Maccoby, 2012).

4.5.2 Strategic Analysis on Samsung

In a similar way, the strategic analysis on Samsung, via McKinsey 7S framework will be presented in table, as shown below.

Table 2: McKinsey 7S Analysis on Samsung

Dimensions		Discussions
Hard Elements	Strategy	Some of the key strategies of Samsung, are as follow: · To become an innovator, rather than a follower (Baijia, 2004; Samsung, 2014), such as: offering if ultra-thin displays for consumers (Lee, 2012a). · Focus on growth in emerging country, especially China and India (Baijia, 2004; Ramstad, 2007a) · Focus on developing internal strengths, in terms of manufacturing capabilities (Hesseldahl, 2013) · Focus on product differentiation, as well as cost and technological leadership (Fifield, 2006; Samsung, 2014). · Focus on the premium market of high end product (Ramstad, 2012; Jung, 2006) · Continuous to offer new models (Jung & Oliver, 2010) · To focus on both hardware as well as software, to capture the most value adding activities in the mobile phone sector (Yun & Lee, 2012)
	Structure	Samsung has a relatively authoritative organisational structure, as characterised an owner-management system, with emperor-like power over group-wide management, but still able to enjoy an agile decision-making process (Chang, 2012). Anyway, all of the departmental and functional units within the firm are align concurrently for value creation (Park & Gil, 2006).
	Systems	Samsung has been paying great attention to integrate its various business units via information system – for more efficient supply chain and lean operations (Jung, 2006; Hesseldahl, 2013). Indeed, effective knwoeldge management system was also established to hguide organisational learning process (Sun-Hark, Lee & Gil, 2004). Then, as consistent with the globalisation strategy pursued by Samsung, the company indeed also localise its business system in overseas accordingly (Baijia, 2004).
Soft Elements	Shared Values	As per the official Samsung website at http://www.samsung.com, some of the core corporate values of Samsung include: dedicated to giving the employees a wealth of opportunities to reach their full potential, have an unyielding passion for excellence, have an unfaltering commitment to develop the best products and services on the market, to innovate continuously, and to conduct business ethically by taking care of interests of all stakeholders proactively, and be a socially and environmentally responsible corporate citizen.
	Skills	Some of the core competencies of Samsung include: · Wide array of technological capabilities, within the context of electronics and microelectronics (Jung, 2004; Jung¸2006; Hesseldahl, 2013) · Increasingly competent in innovating new products (Yun & Lee, 2012) · Exceptional organisational learning capabilities (Suh, Sohn & Kwak, 2004; Kim, 2007) · However, Samsung still lacking in terms of branding capabilities (Dong-Hun, 2012), although there are signs that Samsung is in progress to create a respectable global brand equity (Joo & Lee, 2010).
	Style	The leadership within Samsung is more authoritative (in a Korean style) – whereby most of the key executives are Korean (Yun & Lee, 2012). Nevertheless, such style tends to lead to fast decision making process (Chang, 2012).
	Staff	Samsung is a company that emphasise a lot on developing internal human capital (Fu, Yi & Zhai, 2013; Samsung, 2014), and there is effort to steer towards effective organisational learning and knowledge management process within the company (Kim, 2007; Suh, Sohn & Kwak, 2004). However, as discussed earlier, the company trust and delegate most critical task to only Korean staffs (Yun & Lee, 2012).

4.5.3 Comparative Strategic Analysis on Apple versus Samsung

Overall, it can be noted that there are a lot of similarities between Apple and Samsung, and among these include: a focus on high end and differentiation strategy, place great importance of human capital, value innovation, excellent performance and continuous improvement, and have an integrated system (to align all of the functional divisions in the company). However, there are some distinctive differences as well. In Apple, organisational structure is more democratic and participative in nature, while it is more authoritative in Samsung. Then, Apple would be likely a more multi-national firm, while Samsung key management is dominated only by Koreans.

4.6 Value Chain Analysis

4.6.1 Strategic Analysis on Apple

The value chain analysis on Apple is presented in table below, to enhance the ease of reading for the readers.

Table 3: Value Chain Analysis on Apple

Dimensions	Discussions
Firm infrastructure (leadership and policy function)	During the era under leadership by Steve Jobs, Apple enjoy the benefits of strong leadership, of which Jobs was charismatic (O’Rourke, 2012; Harvey, 2001), visionary, persuasive (Mueller, 2002; Murugesan, 2011), aggressive (Nair & Leng, 2012; Fernandez, 2012), and have a knack for zen-like simplicity and flawless user experience (Gobble, 2012). The leadership process under the recent Apple’s new CEO, i.e., Timothy Cook (Breen, 2013), is less convincing.
Human Resources Management	Team work and collaboration across the best people from diverse background is emphasised and encouraged (Maccoby, 2012), and that employees are often driven to do things that they didn’t know they could do (O’Rourke, 2012).
Technology and Product Development	Apple has self-sustaining product development process (Dubberly, 2012). Not only is that, the company often able to focus on both the functional as well as aesthetic dimensions in product design, with remarkable market insights on what the consumers want (Gobble, 2012). It is usually also that Apple are continuously developing three to four products in pipeline (Tariq, Ishrat & Khan, 2011).
Inbound, outbound logistics, operations and production	All of the functional division work closely and collaborate simultaneously, instead of a development process in which a product would be passed sequentially from engineering to design to manufacturing to marketing and distribution (Maccoby, 2012). Design and development processes are aligned to meet customer needs (Murugesan, 2011). Ability to deliver almost flawless products is made possible, through the passion for perfection (Gobble, 2012). Nevertheless, Apple does not focus on manufacturing or production activities, as all these low value adding activities are outsourced to third party suppliers.
Sales, marketing and services provided	Apple possess significant marketing insights and ability to capitalize on anticipation of people (Mickalowski, Mickelson & Keltgen, 2008), of which often able to predict what the consumer want – even when the consumers don’t know about it (Gobble, 2012). As a result, the company has been very successful in creating a tribe of loyal customer base that think, live and act in the ‘Apple’ way (Tariq, Ishrat & Khan, 2011).

4.6.2 Strategic Analysis on Samsung

The value chain analysis on Samsung is presented in table below, to enhance the ease of reading for the readers.

Table 3: Value Chain Analysis on Samsung

Dimensions	Discussions
Firm infrastructure (leadership and policy function)	As discussed earlier, Samsung has a somewhat authoritative leadership style (in the Korean way). Other than that, Samsung indeed does have some company policies that guide how employees work together, among these include: a strong focus on striving for excellence executing the daily tasks (Murphy, 2006), localisation of business practices in overseas – to suit the tastes of carriers in different regions of the world (Hesseldahl, 2013), and work and learn together via a knowledge management system (Sun-Hark, Lee & Gil, 2004).
Human Resources Management	Development of human capital is treated crucially in Samsung (Fu, Yi & Zhai, 2013; Samsung, 2014). Then, as discussed before, most of the key executives in the company are Koreans (Chang, 2012). Such a situation is slowly being changed, as the company starting to recruit more talents from abroad (Yun-Hee & Lee, 2012).
Technology and Product Development	Samsung used to be a follower in the past (Baijia, 2004), but in recent year, the company is becoming more of an innovator, in terms of product design and development (Jung & Oliver, 2010; Joo & Lee, 2010; Park & Gil, 2006). Nevertheless, there are still opinions that Samsung might still need to foster creativity and innovation, to cope with competition from Apple (Yun-Hee & Lee, 2012). Aside from such changes, it is also noted that Samsung is shifting its attention from hardware to software development (Yun-Hee & Lee, 2012), upon the realisation that the software is the key value adding part in the mobile smart phone sector.
Inbound, outbound logistics, operations and production	Samsung focus on improving the effectiveness and efficiencies of its manufacturing process and supply chain (Ramstad, 2007a), aside from trying to benefits from the economies of scope available to the firm (Joo & Lee, 2010). Overall, the operation management in the company can be characterised as Six Sigma-based quality management processes (Choi, Kim, Byung, Chang & Han, 2012). One key distinctive advantage to Samsung is about its ability to in-source to itself (Hesseldahl, 2013).
Sales, marketing and services provided	Overall, Samsung is a highly customer oriented organisation, that align all value creation activities and business processes to meet customers’ needs and wants (Park & Gil, 2006; Samsung, 2014). Then, globally, Samsung is also fast to adapt to needs of business partners and customers in the foreign countries (Hesseldahl, 2013).

4.6.3 Comparative Strategic Analysis on Apple versus Samsung

Overall, through value chain analysis, it can be seen that there are some differences between Apple and Samsung. For example, Apple had the advantage from having deep marketing insights, superior innovation capability in product development as well as is focusing on the most value adding activities in the mobile phone sector. However, Samsung has the economies of scale and a strong focus on manufacturing capabilities (while Apple outsources that to third party). The company is also catching up with Apple in terms of its innovation capability, but it still lacking in terms of competing effectively with Apple from marketing and branding perspective.

Chapter 5: Conclusion

5.1 Conclusion

To conclude the research, discussion on how the various research objectives had been achieved will be provided. First of all, first research objective is about to examine about strategic management processes and outcomes of Apple, via these strategic analysis frameworks: (i) Resource-Based View (RBV), (ii) Porter’s Generic Strategic framework (i.e., strategic positioning), (iii) Blue Ocean Strategy, (iv) McKinsey 7s framework, and (v) Value Chain Analysis. From the analysis, it is understood that strategies of Apple can be characterised as ‘value innovation’ – by leveraging on its innovative capability, exceptional marketing insights and respectable branding (of focusing on the high-end market). The company never worry to cannibalise its own product lines, as has been very successful for being able to combine both art and technology. Other than that, the company also focus on those most value adding activities in the supply chain, while outsourcing the low margin manufacturing job to third party.

Then the second research objective is about to examine about strategic management processes and outcomes of Samsung, via these strategic analysis frameworks: (i) Resource-Based View (RBV), (ii) Porter’s Generic Strategic framework (i.e., strategic positioning), (iii) Blue Ocean Strategy, (iv) McKinsey 7s framework, and (v) Value Chain Analysis. It can be seen that Samsung (which used to be a follower) is trying to become an innovator, and is also focusing on the premium high end market. The company has the advantages of economies of scope and scale, and do everything from production, manufacturing, logistic and sales.

Then, the third research objective is about to compare about the strategic management processes and outcomes of Apple versus Samsung, through the insights gained from these strategic analysis frameworks: (i) Resource-Based View (RBV), (ii) Porter’s Generic Strategic framework (i.e., strategic positioning), (iii) Blue Ocean Strategy, (iv) McKinsey 7s framework, and (v) Value Chain Analysis. For that, Samsung indeed does share some similarities with Apple, and these are as follow.

Both pursued differentiation strategy – of focusing on high end up market segment
Both focus on product quality (while also never neglect the need to cut costs)
Both are customer-oriented
Both trying to innovate to outperform competitors
Both enjoy advantage of economies of scale
Both focus on human capital development extensively

However, there are also stark differences between the two companies, of which these differences will be outlined below.

Table 5: Differences – Apple versus Samsung

Apple	Samsung
Democratize and participative organisation structure	Authoritative organisation structure
Focus on most value adding activities (especially on product design and development as well as marketing and branding)	In-source everything from within Samsung (as it enjoy significant economies of scale)
Charismatic and inspiring leadership style	Korean style paternalistic leadership style
Diverse talents – in every different fields from around the world	Key executives are mostly Korean
Workforce engaged to participate in delivering something great	Workforce being committed largely to enhance competitiveness and economic prosperity of Korea
A focus on both hardware and software	More emphasis on the hardware part – but is trying to venture into software development as well
Often able to innovate radically	Innovation process s more conservative and incremental

Lastly, the final research objective is to conclude the implications from results obtained due to comparative strategic analysis on Apple versus Samsung. For that, it can be seen that companies can pursue different strategy, and yet being successful. There are many differences between Apple and Samsung – and yet it is witnessed that both the company enjoy different strengths and able to capture large market size within the mobile phone sector.

However, it is also obvious that there is no an easy ways to success, as all elements (marketing insights, quality management, branding, leadership, human capital development, effective strategy and so on) are important for firm performance. There are simply many reasons that had contributed to Apple’ success, and so does Samsung.

It would also be crucial to dispel some myth of academic concept. For example the first mover advantage theory (as well as the Blue Ocean theory) would predict Apple to dominate the mobile phone sector, but that is not true, as Samsung can catch up and even beat Apple (occasionally) in terms of sales or volume sold – in the Blue Ocean created by Apple. Ability to innovate radically may not result in long lasting competitive advantage. Then, to purely focus on the most value adding activities, might not be always beneficial or strategic, as some less value adding activities can also offer new opportunities to a company.

5.2 Limitations

Anyway, there are some limitations worth mentioning. First of all, the discussions presented and the conclusion made above, are all limited to the constraints of the respective strategic frameworks used above. There are many issues that were neglected. Indeed, some useful academic framework is also not being used, and these include: PESTLE, product life cycle concept and so on. Some of the limitations or weakness due to this is that: a lack of focus on how national environment, cultural issues, geographical issues and so on may affect the strategic outcomes and Apple versus Samsung.

Aside from that, the discussions also totally ignore the strategies or actions taken by other competitors, such as Xiaomi and so on. For more comprehensive analysis, the competitive actions taken by Xiaomi shall also be considered (as it can be observed that new emerging competitors such as Xiaomi are affecting the profitability of Apple and Xiaomi significantly).

Last but not least, as primary research is not conducted, the most updated information is not obtained, and that the findings presented herein may not be the latest information.

5.3 Suggestions

More valuable research can be conducted in the future. For example, more studies can be conducted via the use of other strategic frameworks, such as: product life cycle, strategic clock, PESTLE, SWOT, as well as even leadership related concept or tools. Other than that, more studies can also be conducted to include other competitors, such as Xiaomi or Sony into the comparative analysis.

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Comparative strategic analysis in the mobile phone industry: Apple Versus Samsung