Comparisons between Apple and Samsung Business Model

 

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Assignment Details:-

• Topic :: MBA Capstone- Apple
• Document Type :: Essay (any type)
• Subject :: Business
• Deadline :*: As Per Required
• Number of Words :: 3000
• Citation/Referencing Style :: APA

 

Executive Summary:

 

Apple Company and Samsung Company are two close competitors in selling Smart phones around the world. They both are industry leaders and controls majority of the global market share together. While Apple Company has been the innovator in developing Smart phones and bringing them to the new world, Samsung Company has been the commercial scale manufacturer and seller of Smart phones at way lower prices than that of Apple Company. Both the companies strive hard to add new features in their Smart phones to tempt customers and maintain superiority in their market over competitors.

This research will target on comparisons of Apple Company with Samsung Company on the basis of financials, personnel and key leader organizational structure. Attempts will be made to add factual information supported by relevant literature.

 

Introduction:

Apple Company is an American technology company that was founded on 1^stApril, 1976 by Steve Jobs, Steve Wozniak and Ronald Wayne. The company manufactures electronic products and offer virtual services including cloud computing, artificial intelligence etc. Apple Company became popular after year 1999 onwards when it’s developed the first ever Smart phone that revolutionized the communication world (Apple.com, 2021).

Samsung Company is a South Korean multinational Company that was founded on 1^stMarch 1938 by Lee Byung-Chul. The company manufactures several electronic, automotive, apparel, medical equipment, and others. Samsung gained popularity throughout the world from its electronic devices and reached the top position in the global market with the development of Smart phones (Samsung.com, 2021).

Both Apple Company and Samsung Company are listed on NASDAQ which is an American stock exchange. Apple Company is listed as AAPL while Samsung Company is listed as SSNLF.

 

Comparisons between Apple and Samsung Business Model:

 

a. Financials:

The financials of Apple Company and Samsung Company can be compared on the basis of their stock price in the NASDAQ, price/sales value, price/book value, price/earnings value, dividend yield, market cap and investment style. The following table clearly shows the comparative analysis of the financials of Samsung Company with the Apple Company.

The above table reveals the followings:

1.) The stock price of Samsung Company is 2210 USD which is way higher than the stock price of Apple Company which is 137.09 USD. The last day change in the value of the business of Samsung Company is 0%, while the last day change in the value of the business of Apple Company is negative 3.50% which is a fall of 4.97 USD (Maley, 2019).

2.) The price to sales value of Samsung Company is 1.19 USD while its 8.09 USD for Apple Company which is way above than the former.

3.) The price to book value of Samsung Company is 1.55 USD while its 34.75 USD for Apple Company which is again much higher in comparison.

4.) The price to earning value of Samsung Company is 7.84 USD, while it is 36.95 USD for Apple Company. This reflects the higher price to earnings ratio of business for Apple Company as compared to Samsung Company.

5.) The dividend yield of Samsung Company is 2.21% which is higher than Apple Company at 0.59%. This shows that Samsung Company takes better care of interest of the shareholders by sharing higher dividends with them.

6.) The market cap of Samsung Company is 502.57 USD Billions which is lower than Apple Company at 2.28 USD Trillions.  This shows that the market capital of Apple Company is higher than that of Samsung Company (Mamun & Hasan, 2017).

7.) The year on year (YOY) growth rate for Apple Company has been declining at steady pace, while the year-on-year growth rate for Samsung Company has improved from 3% in year 2015 to 19% in year 2018, then moved down to 2% in year 2018 and moved back to 5% in year 2020. Therefore,revenue growth prospects of Samsung Company are higher than Apple Company based on year on year revenue growth analysis.

8.) The estimated earnings growth for Apple Company is expected to decline in financial year 2020 to 17% and in 2021 to 13%. On the other hand, the estimated earnings growth for Samsung is expected to rise from 39% in financial year 2020 to 40% in year 2021. This way a P/E for Apple Company is expected to reach 21 while for Samsung it is expected to reach 13.

 

b. Personnel:

The personnel at Apple Company and Samsung Company include the founders of the company and present-day key people which can be discussed as follows:

1.) The founders of Apple Company include Steve Jobs, Steve Wozniak and Ronald Wayne, while the founder of Samsung Company is Lee Byung-Chul. This way the former company was founded by three people while the latter was founded with the efforts of one person only.

2.) The key people in the Apple Company as of today includes, Arthur D. Levinson as Chairman, Tim Cook as Chief Executive Officer and Jeff Williams as Chief Operational Officer. On the other hand, the key person in the Samsung Company as of today is Lee Jae-Yong who is the Chairman of the company. This way the Apple Company works under the expertise and decision-making policy of strategist from different positions in the business process including Chairman, Chief Executive Officer and Chief Operational Officer, while, Samsung works under direct control of the Chairman Lee Jae-Yong (Samsung.com, 2021).

3.) The number of employees in Apple Company is nearly 147,000 which are lesser than the more than 200,000 employees working for Samsung Company (Apple.com, 2021).

 

You May Also Read:- APPLE Case Study Assignment Essay Help

 

c. Key leader organizational structure:

The organizational structure including the key leaders of Apple Company and Samsung Company can be depicted as follows:

The above charts reveal the followings:

1.) Tim Cook is the CEO of the company who is followed by the Senior Vice Presidents, Vice Presidents, Chief Design Officer and Chief Operating Officer who works directly under him. While the CFO works with the financial department heads. Together the CFO and CEO report to the Chairman of the company who further reports to the board of directors and thereafter shareholders. On the other hand, the Lee Jae-Yong takes all the major decisions of the company. He is reported by the head of different departments around the globe and thereby his own expertise is applied along with the assistance of experts to run the business process (Cortis, Eastman, Baines, & Cunningham, 2015).

2.) Apple Company has Spoke and Wheel hierarchy system followed as the business structure wherein the democratic leadership methods are applied for the decision-making process. This way the different employees of the company are allowed to participate in the decision-making process and give ahead their ideas and views for product development and growth prospects of the business. On the other hand, Samsung Company has product type divisions that are geographically grouped and follows centralized corporate hierarchy system. This means that the participation of the employees of the company is limited to certain low-level decision-making process. However, the major decisions are made by the Chairman who directs the department head to follow strategic decisions.

3.) Apple Company applies homogenous production system and no customer segmentation process wherein one type of standards and product features are applied in the manufacturing process that results in limiting the acceptance of the products and services in various regions around the globe. On the other hand, Samsung Company applies product differentiation techniques and proper customer segmentation so that the products and services can meet the local requirements of the customers (Chaudhuri & Holbrook, 2001).

4.) The manufacturing process of Samsung Company is highly competitive as compared to the Apple Company. The use of cost-effective labor and low cost availability of new age technology has helped the business to offer products and services at lower prices. On the other hand, the high cost of labor and expensive latest technological breakthroughs has resulted in increasing prices of Apple Company products. In addition to that Apple Company targets high class customers for creating brand value higher as compared to the Samsung Company (Bacon, 2020).

 

Conclusion:

In conclusion, Samsung Company is performing well in the business process as compared to Apple Company owing to the range of electronic products and services offered. However, the leaders of Apple Company are highly efficient and the business structure is also well defined and as per the new age ideas of leadership and management wherein equal opportunities are offered to the human resource for participation in the decision making process. But such leadership and management skills and applications are missing in Samsung Company which may prove to halt the future growth prospects of the business as the ideas and innovations follows only one route that is Chairman of the company.

 

References:

Apple.com. (2021). Business. Retrieved 01 16, 2021, from https://www.apple.com/business/

Bacon, D. (2020). Hundreds of Apple Workers on Strike in Washington. Retrieved 01 16, 2021, from https://labornotes.org/2020/05/hundreds-apple-workers-strike-washington

Chaudhuri, A., & Holbrook, M. B. (2001). The Chain of Effects From Brand Trust and Brand Affects to Brand Performance: The Role of Brand Loyalty. Journal of Marketing , 65 (2), 81-93.

Cook, H., Mackenzie, R., & Forde, C. (2016). HRM and performance: The vulnerability of soft HRM practices during recession and retrenchment. Human Resource Management Journal , 26 (4), 557-571.

Cortis, N., Eastman, C., Baines, D., & Cunningham, I. (2015). Is job control under threat in human services? Evidence from frontline practitioners in Australia 2003-2012. Competition & Changes , 19 (3), 210-227.

Francis, B., Hasan, I., Sharma, Z., & Waisman, M. (2019). Motivating high-impact innovation: Evidence from managerial compensation contracts. Financial Market, Institution and Instruments , 28 (3), 291-318.

Gounaris, S., & Stathakopoulos, V. (2004). Antecedents and consequences of brand loyalty: An empirical study. Journal of Brand Management , 11 (4), 283-306.

Kabiraj, S., & Shanmugan , J. (2011). Development of a Conceptual Framework for Brand Loyalty: A Euro-Mediterranean Perspective. Journal of Brand Management , 18 (4/5), 285-299.

Laukkanen, T., Tuominen, S., Reijonen, H., & Hirvonen, S. (2016). Does market orientation pay off without brand orientation? A study of small business entrepreneurs. Journal of Marketing Management , 32 (7-8), 673-694.

Maley, J. F. (2019). Preserving employee capabilities in economic turbulence. Retrieved from DOI: 10.1111/1748-8583.12211

Mamun, A., & Hasan, N. (2017). Factors affecting employee turnover and sound retention strategies in business organizations: A Conceptual View. Problems and Perspectives in Management , 15 (1), 63-71.

Samsung.com. (2021). About us. Retrieved 01 29, 2021, from https://www.samsung.com/us/aboutsamsung/home/

 

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