Currently Apple is being short-term strategy , it can makes trade price of Apple stock a little bit higher. As long as Apple keep maintaining its staggering profitability. . Henry Blodget(Blodget, 2013) says Apple is clinging to super-high profit margins and the same risky “premium’ strategy that almost bankrupted it in the PC market of the 1990S, He also mentioned even if Apple does not get completely marginalized, this strategy will likely hurt the company and its shareholders and customers over the long haul. Back to 2007, when iphone released by Apple, Apple had own mobile phone market. Due to manufacturing prowess advantage, meanwhile enabled to produce and sell it lower price than other competitors. The great combination between good product and low unit cost leads outstanding result- giving Apple company about 30% profit margin and allowing it to a mass a staggering $150billion in cash.
Samsung had tough time and struggling in the smartphone market but after few years Samsung become Apple’s biggest competitor by a very wild margin. There are some core strategy that leads the Samsung to be a great company.
Fast follow the competitors’ advantages and strengths: Samsung is learning from competitors and they are doing the best in the learning than any other competitors. They are clearly understand what competitors are doing and what kind of new product they bring into market, observing what seems to be gaining traction. Afterwards very rapidly build up new product with their own version of that innovation. After they learned from competitor they not simply imitating the competitors product’s design they insert their own technology. For example, Samsung Galaxy smartphone was learned from Apple’s iPhone but the ...
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...Apple ordered DRAM chips from different supplier to hold back the Samsung. Apple was attempting to weaken the Samsung’s dependency but it was failed. All kinds of phenomena shows that Samsung is the only company can supply current components of Apple’s products. It reported that Apple will remain the supplier and demander relationship in foreseeable future. According to one of Porter’s five forces- supplier power, fewer supplier choices you have, stronger power supplier has. It means as only supplier of Apple, Samsung can easily make them more competitive and decrease Apple’s profit, also fully capable to pressure Apple. For example, raising price of supplies, lowering supplies quality, reducing supplies availability. Once Samsung execute any action listed upon, Apple’s operation will instable, on the contrary Samsung will even more competitive than current position.
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