Strategic Management And Strategic Competitiveness Essay
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Executive Summary for Google, Samsung, and Apple
Google was founded in 1996, and was a reinvention of the search engines used to navigate the information super-highway. Today, it has grown to provide a much larger body of services, all designed to improve the internet user’s experience, as a whole, and to improve advertisement and search strategies across in the internet. Today, they have expanded their focus to include the development of technology devices.
Samsung was founded in 1938 as a trading company that handed a variety of exports leaving South Korea, and moving to Beijing China. It did not branch into electronics until 1969, but today it handles high-tech electronics and creature comfort devices like smartphones.
Apple was founded in 1976, and dedicated its early years solely to the development of personal computers, but today they have branched out to handle other forms of personal electronics, and have built their small startup into a multi-billion dollar technology powerhouse.
Today, Google’s greatest strategic advantage is its growing infrastructure. The fact that the company now owns its own internet service provider platform, or “Google Fiber,” as well as producing personal devices, and providing internet advertising, marketing, and search engine capabilities creates an astounding level of control in the market. They literally handle the “internet” product from beginning to end, and as such, create for themselves a less volatile sales environment.
Somewhat similarly, Apple has relied on its ability to build a vertical integration program to gain a competitive advantage. By handling the development of their own chips and micro parts, having an apple-only operating system, and insuring that their products are fully integrated with one another, they can make it extremely difficult for competitors to stay ahead of their technological advances. In short, because they are not sharing their technology they are able to stay ahead of competitors (Nielson 2014).
Samsung has, to date, been the only android-program based company to create a large screen phone, by some called the phablet, and this single technology gave them a serious competitive advantage, however, with the introduction of the IPhone 6, and the rise of less expensive android smartphone brands many analysts believe the company could have a struggling 2015 year (Burrows 2014).
All three firms seem to be intent on expanding their product line to include multiple layers of personal consumer products, like phones, tablets, and laptops. They are relying heavily on the future of integration, or the ability to make these products work together, to increase their own sales.
In terms of structure, each company is also increasing looking to move product design and development in house, creating the most streamlined vertical integration possible. The more that they manufacture and develop in house, the greater the ability to protect new technologies from competitors, and to profit from the development.
The External Environment: Opportunities, Threats, Industry Competition, and Competitor Analysis
Google’s Three Greatest Competitors, according to Hoovers, include Yahoo, MSN, and Facebook, as their largest product, or profit producing area are still their online/search engine and social media based products (2014).
Samsung’s three greatest competitors, according to Hoovers, are Panasonic, Sony, and LG Electronics. This reflects the company’s significant holdings in the home entertainment industry which still include TV, DVD player, and Surround Sound development. These products are increasingly integrated into or made connection compatible with the company’s personal electronic products (2014).
Apple’s three greatest competitors, according to Hoovers, include Hewlett Packard, Google, and BlackBerry. HP poses a significant threat on the personal computer and tablet front, but have no hold in the mobile technology field, making Google the greatest threat by far.
In terms of the Porter 5, all three companies can very little need for bargaining power with suppliers, because of their vertical integration, and apparent near-self-sufficiency. Similarly it would be hard for a new company to come in and threaten the established giants, because of their existing reputation and broad base. However, both should be concerned with bargaining with buyers, or offering the best “deal” to remain competitive, and the risk of substitution should a similar but less expensive technology come available on the market.
The Internal Environment: Resources, Capabilities, and Core Competencies
All three companies have significant tangible resources. Google was ranked #46 on Fortune’s top 500, Samsung was ranked #15 on the FT Global 500, and ranked #5 on the Fortune 500 for S&P. They also have significant intangible resources in terms of their loyal customer following, reputation and intellectual assets.
Samsung needs to come up with something new and innovative that pulls them back ahead of the pack, with the loss of the largest tablet on the market advantage, because of the new larger iPhone 6 and other less expensive smart phone brands, they need to find a significant competitive advantage to leverage in the 2015 year.
Apple needs to put quality above speed. There were some obvious issues with the release of the iPhone 6 that needed a redesign to cure. They need to make sure products are really ready for release before they are released before consumers lose faith.
Google needs to be careful, especially with regard to overhead. Their speeding, in order to build the infrastructure that is their greatest competitive advantage, has been extreme, and continued spending at these levels could cause instability long term.
Burrows, P. (2014, September 2). 6 Reasons Samsung Should Fear the iPhone 6 - Bloomberg. Retrieved from http://www.bloomberg.com/news/2014-09-02/6-reasons-samsung-should-fear-the-iphone-6.html
Hoovers. (2014). Apple Inc Company Profile. Retrieved from www.hoovers.com/company-information/cs/company-profile.APPLE_INC.4c9baa063908dbd8.html
Hoovers. (2014). Samsung Company Profile. Retrieved from www.hoovers.com/company-information/cs/company-profile.Samsung_Electronics_Co_Ltd.a166cb2c88a2e408.html
Hoovers. (2014). Google Company Profile. Retrieved from www.hoovers.com/company-information/cs/company-profile.GOOGLE_INC.fb3f79c4d1791506.html
Nielson, S. (2014, February 6). Why Apple's ecosystem is its biggest competitive advantage - Market Realist. Retrieved from http://marketrealist.com/2014/02/ecosystem/
Worstall, T. (2013, September 9). Why Samsung Beats Apple Or Perhaps Vice Versa - Forbes. Retrieved from http://www.forbes.com/sites/timworstall/2013/09/09/why-samsung-beats-apple-or-perhaps-vice-versa/
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