Master of Business Administration

Cover Sheet

Student Information

Full Name Hla Tun Oo Grade / Marks

Email address kohlatunu@gmail.com; hlatunu@outlook.com

Module Information

Module Name Strategic Management (MGT510)

Intake

Lecturer Name Dr. Thin Nwe Oo

Mark 10

Submission Date 12.July.2020

Word Count 1500

Instructions to Students

 Submit your assignment on time.

 Use Times New Roman font, size 12, and double line spacing.
 It should not exceed 1,500 Words, excluding cover page, references section and
appendixes.
 This case study answer must be your own work. You are required to acknowledge
any use of the published and unpublished works of others. Use proper referencing
system by providing in-text citations and reference list.
 Do take note that plagiarism is a serious academic offence.
 Your assignment should be checked with plagiarism-checking application,
available at the school. Submit the results along with your assignment.

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 Apple vs. Samsung (or) Apple Differentiates and Samsung Imperfectly Imitates

In recent history Apple has been a product innovator and dominates the tech industry by creating

new markets through first-mover advantage. This has been done with new concept products such

the iPod, iPhone, and iPad products. Almost none of its high-tech rivals, such as Samsung,

Nokia, BlackBerry, Google, Dell, and now Lenovo, have created whole new mobile product

categories. However, more recently, Samsung has been a successful challenger of Apple’s

products. In fact, it has been so successful that Apple took Samsung to court with a lawsuit for

patent infringement. Apple won the lawsuit with a nearly $1 billion judgment against Samsung.

Samsung with its Android (created by Google) operating system appears to be a quick follower

or imitator of Apple’s differentiation strategy. Although Samsung’s Galaxy S4 smartphone with

a larger screen was a great success, the Galaxy S5 fell flat and allowed Apple iPhone 6 products

to overtake the market share lead from Samsung.

However, Samsung itself has been challenged by low-end imitators of the smartphone

product. One of these competitors is Xiaomi Inc., a privately owned smartphone producer in

Beijing, China. Xiaomi’s smartphone product has been wildly successful and popular in China

because of its “fan base” network and online approach for selling low-end smartphones. A

competitor of Xiaomi is Lenovo which recently purchased the Motorola mobility assets from

Google. Xiaomi has been more successful than Lenovo. Lenovo CEO, Yang Yuanqing, has

suggested, “the online model is disrupting the traditional model … we definitely need to address

this.” Xiaomi’s fan club approach and online distribution channel has resulted in lower overhead

and a pricing edge compared to traditional retail vendors. Although Apple outsold Xiaomi in the

fourth quarter of 2014, Xiaomi was not too far behind. While Apple is seen as a differentiated

“luxury product,” there is enough quality in the Xiaomi product to challenge the market share of

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Apple. However, because the Galaxy S5 product was relatively less well received by consumers,

Xiaomi has surpassed the sales of Samsung. Similarly, Micromax, a low-end smartphone

producer in India, has overtaken Samsung in India by following Xiaomi’s “copycat” strategy. As

such, these low-end producers have provided relatively high-quality products often sold through

nontraditional channels (e.g., Xiaomi’s fan club and online sales channel). They are also rapid

second followers of Apple and have created a dilemma for Samsung.

In response to the very significant success of iPhone 6, as well as the significant success

of low-end phones in large emerging economies, Samsung has recently introduced its Galaxy S6

products. Given the competition, Samsung Galaxy S6 phones have copied many of the features

of the iPhone 6: high grade aluminum back and glass screen (Galaxy S5 had a plastic back) with

smooth curved edges, embedded battery, and better finger print scanning. Samsung also focused

on high quality apps, even reducing some of their own proprietary apps that were perceived to be

of lower quality. They have also tried to improve on the battery life compared to the iPhone 6

and have added wireless charging as an upgrade. The initial showing of these products suggests a

strong upgrade and a fast response to the iPhone 6 success. It remains to be seen whether these

products will allow it to regain its preeminence in the luxury market behind Apple. Samsung

obviously has a lot riding on the success of these new products.

Additionally, it has also has come out with the Samsung Pay system similar to Apple

Pay. However it has upped the ante on Apple Pay by being compatible with the equipment

currently used by most stores. Apple Pay has been slow to be adopted by retailers because they

need to pay switching costs for new equipment to process transactions through Apple Pay. It

remains to be seen whether Samsung will be able to maintain its differentiation relative to

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Apple’s luxury branded products and the challengers on the low end such as Xiaomi, Lenovo,

and Micromax.

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