Environmental Scan Essay Samples
Competitive strategies refer to the methods that companies choose in order to achieve a competitive advantage in the market. In most cases, there are three types of competitive strategies that a company can implement. The strategies are differentiation, leadership, and a focused strategy. They are the strategies that allow a company to perform better than its competitors. In this case, focus is going to be on Samsung and Apple. They have competitive strategies that allow one beat the other and vice versa. Most of the strategies these companies use affect sustainability of the long-term organizational performance (Hitt ,Ireland & Hoskisson, 2014).
One of the competitive strategies that Samsung employed is the differentiation strategy. In this policy, the company had been faced with the challenge that the Dynamic Random Access Memory (DRAM) industry might fall into a commodity trap and be subject to cutthroat price competition and price fluctuations. It as a result developed several classifications of broad product differentiation. The classifications are legacy, frontier, and specialty. Frontier classification refers to cutting-edge products with the highest margins; legacy is the current products manufactured by technology that develops frontier products, and specialty is where products are used to target niche markets (Hitt ,Ireland & Hoskisson, 2014).
The above differentiation strategy is not sustainable for long-term organizational performance because of enormous costs that are associated with it. Also, it might not work properly because of its failure to develop a consistent theme and reputation. Additionally, it makes it possible for Samsung to cannibalize its products (Hitt ,Ireland & Hoskisson, 2014).
For the case of Apple, it tends to employ the focus strategy. It focuses on one product more than its other products. This approach has made Apple often stand out due to its focus on the iPhone product. This is due to the consistent mass production of the iPhone series where currently, iPhone 6 is its current product. The mass production allows production per unit to be cheaper hence increasing profits and resulting in even more money (Sadeghi, 2012).
The Apple’s product-focused strategy might not work correctly for it because of various reasons. It is because it requires more specialized equipment that is expensive. Also, it requires higher capital investment and results to lower product flexibility (Sadeghi, 2012).
Samsung could use the Apple's competitive strategies for positive gain. This is because; Samsung could use product-focused strategy to achieve a higher market in the US. It is because the American market is dominated by Apple’s products and, therefore, will embrace a change. Samsung can also use the differentiation strategy to gain new markets in other places such as Asia, Latin America, and Africa. It can use reduced prices to favor the markets due to their challenging economic status (Sadeghi, 2012).
In conclusion, the competitive strategies that both companies are using might not work properly for long-term organizational performance. It is due to the reasons that have been given above. Also, Samsung can use some of Apple’s strategies to gain a competitive advantage against Apple. Some of the strategies it can use have also been explained.
Hitt,M., Ireland, D., Hoskisson, R. (2014). Strategic Management: Concepts and Cases: Competitiveness and Globalization. Boston: Cengage Learning.
Sadeghi, S. (2012). Defensive Strategy – Apple’s Overlooked Key to Success. Berlin-Kreuzberg: epubli.
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