Name – Prateeksha Singh

Roll No - M20203810

Answer 1)

Apple Revenue- From 2006 until 2021, Apple's annual/quarterly revenue and growth rate are
shown. The amount of money a firm receives from its consumers in exchange for the sale of
goods or services is known as revenue. On an income statement, revenue is the top line item
from which all expenditures and expenses are removed to arrive at net income.

 Apple revenue for the quarter ending June 30, 2021 was $81.434B, a 36.44%
increase year-over-year.
 Apple revenue for the twelve months ending June 30, 2021 was $347.155B, a 26.77%
increase year-over-year.
 Apple annual revenue for 2020 was $274.515B, a 5.51% increase from 2019.
 Apple annual revenue for 2019 was $260.174B, a 2.04% decline from 2018.
 Apple annual revenue for 2018 was $265.595B, a 15.86% increase from 2017.
Solid sales of Apple's iPhone products have historically powered the company's exceptional growth
in revenue, profits, and share price.

As sales of its iPhone and other technology hardware gadgets have stalled, the business has stepped
up its efforts to become one of the world's major digital service providers.

For fiscal year 2019, the company's iPhone business generated approximately 54.7 percent of total
revenue; the company's Services segment generated approximately 17.7 percent of revenue; Mac
sales generated 9.8 percent of total revenue; Wearables, Home, and Accessories generated 9.4
percent of total revenue; and the iPad generated 8.1 percent of total revenue.

Brand Value:

Forbes recently released its yearly report on one of the most valuable brands in the world. Apple,
the front-runner, led the list of branding behemoths for the ninth year in a row, amassing an eye-
watering brand worth of $241.2 billion, up 17 percent from last year.

Apple has always positioned itself as a unique company that "Thinks Different." Unlike any other
software company, the nuts and bolts of their business model, the actual functions of their goods,
are not what drives sales.

Answer 2)

Inbound Logistics:

This group receives and organises the raw materials used to make the company's products. Inbound
logistics also ensures that the product is of high quality. They are in charge of producing a high
volume of work in a short amount of time. Apple sources raw components from China, America,
Europe, and a variety of Asian countries, and then assembles the product in China.
Apple’s Operations Roadmap

Operations:

Apple runs its operation by segmenting its market into five sectors.

1. America: This area, which includes both North and South America, accounts for the majority
of the company's sales. When compared to 2019, the sale of this segment climbed by over
7% in 2020.
2. Europe: India, the Middle East, Europe, and Africa are all represented. The sales are dynamic
here. For example, in 2019, sales decreased, but in 2020, they increased again.
3. Greater China: This category includes Taiwan, Hong Kong, and China. This is not a promising
market for Apple. Sales in this area have been declining for the past two years. The sole
reason for this is because the category is crowded with local competitors offering a low price
range.
4. Japan: In terms of sales, this industry is quite consistent. In 2019 and 2020, the sale was the
same.
5. Rest of Asia Pacific: This is rapidly emerging as a new sales opportunity. This segment's sales
are expected to increase by 10% by 2020.

Outbound Logistics:

This involves the process of shipping a finished product to Apple's California warehouse and
subsequently distributing it. Apple's technology products have a relatively short product life cycle of
roughly a year. As a result, their inventory costs are higher. Apple's shipping expenses in China and
the Asian area were cut in half because to effective market penetration. As a result, they have a
positive brand image and appeal among customers.

Marketing and Sales:

Marketing and sales are highly responsible for the enormous revenue of Apple. The company’s sale
comes from 7 distinguished sectors. These are:

1. Apple Retail Stores

2. Apple Online Stores
3. Wholesalers
4. Direct Sales Force
5. Third-Cellular Network Carries
6. Retailers
7. Value-added Resellers

Through direct distribution, Apple earns 34% of its sales while by indirect distribution they earn the
rest 66%.

Service:

Apple maintains a high level of consistency throughout its service. Apple's young, enthusiastic, and
technologically expertly trained sales assistants demonstrate their products to consumers during the
pre-purchase stage. Customers can upgrade to newer models of Apple devices for a fee after making
their first purchase. There is even a 14-day return policy for things purchased. The only stipulation is
that the product be purchased from the Apple store, either online or in person.

Support Activities in Apple Value Chain Analysis

This part is well organized in four sections:

Infrastructure

Infrastructure includes legislative work, administrative functions, administration, and accountancy. A

well-equipped infrastructure is a key factor in a company's success. During the course of a
company's existence, its infrastructure changes multiple times. Apple's infrastructure has recently
undergone cultural adjustments.

Human Resource Management

Human Resource management is in charge of selecting and overseeing a company's employees'

responsibilities. Human Resource Management is critical since a company's employees are its
lifeblood. Apple pays its employees well, and its employees are more efficient than those at most
other organisations.

Technology Development
Apple’s innovative designs are one among the points of its distinctive brand image. For achieving this
unique property, Apple spends around 10 billion dollars (2016). Mainly, for the technological
advancement within the products, to supply better services to the purchasers and for growing
product range. Apple invests an enormous amount of cash within the Research and development
sector.

Procurement

When a product is finally ready, it becomes an influential factor to seek out out the vendors by
which the products are often sold. Again, establishing a contract with them is additionally important.
Apple maintains an honest relationship with its suppliers. Apple also buys products from its
suppliers. Hence, they maintain a healthy, loyal, and interdependent relationship with their
suppliers.

Answer 3)

Five Forces Analysis of Apple

Competitive Rivalry or Competition with Apple (Strong Force)

Apple faces the strong interaction of competitive rivalry or competition. This component of Porter’s
Five Forces analysis model determines the intensity of the influence that competitors wear one
another. In Apple’s case, this influence is predicated on the subsequent external factors:

 High aggressiveness of firms (strong force)

 Low differentiation of products (strong force)
 Low switching cost (strong force)

Companies like Samsung and LG aggressively compete with Apple. Such aggressiveness, observable
in rapid innovation, aggressive advertising, and imitation, impose a robust force within the industry
environment. Moreover, in terms of product differentiation, available products within the market
are generally similar in fulfilling specific purposes. for instance , many popular apps are available for
Android and iOS devices, and cloud storage services from different companies are available to iOS
users. In Porter’s Five Forces analysis model, this condition creates a robust force by making it easy
for patrons to modify to other sellers or providers. On the opposite hand, the low switching cost
means it's easy for patrons to modify from Apple to other brands, supported price, function,
accessibility, network externalities, and related concerns. the mixture of those external factors
during this a part of the Five Forces analysis results in tough competitive rivalry that's among the
foremost significant considerations in Apple’s strategic management.

Bargaining Power of Apple’s Customers/Buyers (Strong Force)

The bargaining power of buyers is robust in affecting Apple’s business. This component of Porter’s
Five Forces analysis model determines how buyers’ purchase decisions and related preferences and
perceptions impact businesses. In Apple Inc.’s case, buyers’ strong power is predicated on the
subsequent external factors:

 Low switching cost (strong force)

 Small size of individual buyers (weak force)
 High buyer information (strong force)
It is easy for patrons to vary brands, thereby making them powerful in compelling companies like
Apple to make sure customer satisfaction. On the opposite hand, each buyer’s purchase is little
compared to the company’s total revenues. Porter’s Five Forces framework indicates that this
condition makes customers weak at the individual level. However, the supply of detailed
comparative information about competing products’ features empowers buyers to shift from one
provider to a different . This external factor enables buyers to exert a robust force on Apple and
other brands. Thus, this a part of the Five Forces analysis shows that Apple must include the
bargaining power of buyers or customers together of the foremost significant strategic variables
within the business.

Bargaining Power of Apple’s Suppliers (Weak Force)

Apple Inc. experiences the weak interaction of the bargaining power of suppliers. This component of
Porter’s Five Forces analysis model indicates the influence of suppliers in imposing their demands on
the corporate and its competitors. In Apple’s case, suppliers have a weak bargaining power
supported the subsequent external factors:

 Moderate to high number of suppliers (weak force)

 Moderate to high overall supply (weak force)
 High ratio of firm concentration to supplier concentration (weak force)

The global size of its supply chain allows Apple Inc. to access many suppliers round the world. In
Porter’s Five Forces analysis context, the resulting high number of suppliers is an external factor that
presents only a weak to moderate force against the corporate . In relation, the moderate to high
overall supply of inputs, like semiconductors, makes individual suppliers weak in imposing their
demands on firms like Apple. Also, the ratio of firm concentration to supplier concentration further
limits suppliers’ power and influence within the industry. This external factor reflects the presence of
a little number of massive companies like Apple and Samsung, in contrast to a bigger number of
medium-sized and large suppliers. Thus, this a part of the Five Forces analysis shows that the
bargaining power of suppliers may be a minor issue in developing Apple Inc.’s strategies for supply
chain management, value chain effectiveness, innovation, and industry leadership.

Threat of Substitutes or Substitution (Weak Force)

The competitive threat of substitution is weak in affecting Apple Inc.’s computing technology,
consumer electronics, and online services business. This component of Porter’s Five Forces
framework determines the strength of substitute products in attracting customers. In Apple’s case,
substitutes exert a weak interaction supported the subsequent external factors:

 Moderate to high availability of substitutes (moderate force)

 Low performance of substitutes (weak force)
 Low buyer propensity to substitute (weak force)

Some substitutes to Apple products are readily available within the market. for instance , rather than
using iPhones, people can use digital cameras to require pictures, and landline telephones to form
calls. In Porter’s Five Forces analysis model, this external factor exerts a moderate force within the
industry environment. However, these substitutes have low performance because they need limited
features. many purchasers would rather use Apple products supported convenience and advanced
functions. This condition makes substitution a weak interaction in impacting the company’s business.
Also, buyers have a coffee propensity to substitute. as an example , customers would rather use
smartphones than undergo the effort of shopping for and maintaining a camera , a telephone , and
other devices. This a part of the Five Forces analysis shows that Apple doesn't got to prioritize the
threat of substitution, specifically in management decisions in business processes like marketing,
market positioning, and merchandise design and development.

Threat of New Entrants or New Entry (Moderate Force)

Apple Inc. experiences the moderate force of the threat of latest entrants. This component of
Porter’s Five Forces analysis model indicates the effect and possibility of latest competitors entering
the market. In Apple’s case, new entrants exert a moderate force supported the subsequent external
factors:

 High capital requirements (weak force)

 High cost of brand development (weak force)
 Capacity of potential new entrants (strong force)

Establishing a business to compete against firms like Apple Inc. requires high capitalization. Also, it's
extremely costly to develop a robust brand to compete against large companies like Apple. These
external factors make new entrants weak. However, there are large firms with the financial capacity
to enter the market. for instance, Google has already done so through products like Nexus
smartphones. Samsung also won’t to be a replacement entrant. These examples show that there are
large companies that have the potential to directly compete against Apple Inc. Thus, the general
threat of latest entry is moderate. This a part of the Five Forces analysis shows that Apple must
maintain its competitive advantage through innovation and marketing to stay strong against new
entrants’ moderate competitive force.

Considering the five forces, Apple must focus its attention on competitive rivalry and therefore the
bargaining power of buyers. This external analysis supports the company’s current position of
continuous innovation. Through rapid and continuous innovation, Apple effectively addresses the
five forces in its external environment, although much of the company’s effort is to strengthen its
position against competitors and to stay attracting customers to Apple products. An applicable
recommendation is to accentuate research and development for innovation to develop novel
products which will complement the iPhone, the iPad, and other existing products.

Answer 4)

Apple’s Generic Strategy

Apple Inc.’s generic strategy is broad differentiation. This generic strategy focuses on key features
that differentiate the corporate and its information technology products from competitors. Through
the broad differentiation generic strategy, Apple stands call at the market. for instance , elegant
design and user-friendliness of products, combined with high-end branding, effectively differentiate
the technology business. This generic strategy means Apple always aims to line itself aside from
competitors not by price but by competitive advantages supported product design that draws
customers. Such design includes seamless connectivity among devices and cutting-edge aesthetics.
albeit this generic strategy makes Apple different, the corporate still broadly reaches various
segments of the market. The firm’s products are designed for everybody , thereby supporting a
broad market reach. for instance , Apple targets individuals and business organizations through the
MacBook line . during this way, the generic strategy of broad differentiation supports the corporate
in maintaining its competitive advantage, leadership, and position as a high-end and high-value
technology business.

BUSINESS, MANAGEMENT

Apple Inc.’s Generic Strategy & Intensive Growth Strategies

Apple Inc.’s generic strategy and intensive growth strategies directly relate to the company’s
strategies in pricing, marketing, and other areas of the business. Michael E. Porter’s model for
generic strategies defines strategic options that the corporate can use to develop its competitive
advantages within the consumer electronics and knowledge technology and services industries.
together of the foremost valuable companies within the world, Apple shows that its generic strategy
may be a major determinant of competitive advantage against other firms like Samsung, Google,
Amazon, Microsoft, Dell, HP, Lenovo, Sony, IBM, BlackBerry, Huawei, LG, and even Walmart with its
content distribution service, Vudu. On the opposite hand, Igor Ansoff’s Matrix of growth strategies
presents ways for the technology business to intensively grow in current or new markets and
industries. during this case, Apple’s intensive growth strategies support the power to take care of a
robust position within the global market. With a high rate of innovation and emphasis on excellence
in product design, the enterprise succeeds even with its relatively high selling prices. This successful
positioning indicates Apple’s effectiveness in using its generic strategy for competitive advantage,
and intensive strategies for business growth.

Apple’s generic strategy aligns with the company’s intensive growth strategies, especially in
maximizing the utilization of the organization’s competitive advantages. especially , the intensive
growth strategy of development is vital to fulfilling this generic strategy and supporting the long-
term growth and success of the company’s technological goods and services. This alignment
between the generic competitive strategy and therefore the intensive growth strategies provide
support for fulfilling Apple Inc.’s corporate mission and vision statements.

Answer 4)

Apple’s Generic Strategy (Porter’s Model) & Objectives

Apple Inc.’s generic strategy is broad differentiation. This generic strategy focuses on key features
that differentiate the corporate and its information technology products from competitors. Through
the broad differentiation generic strategy, Apple stands call at the market. for instance , elegant
design and user-friendliness of products, combined with high-end branding, effectively differentiate
the technology business. This generic strategy means Apple always aims to line itself aside from
competitors not by price but by competitive advantages supported product design that draws
customers. Such design includes seamless connectivity among devices and cutting-edge aesthetics.
albeit this generic strategy makes Apple different, the corporate still broadly reaches various
segments of the market. The firm’s products are designed for everybody , thereby supporting a
broad market reach. for instance , Apple targets individuals and business organizations through the
MacBook line . during this way, the generic strategy of broad differentiation supports the corporate
in maintaining its competitive advantage, leadership, and position as a high-end and high-value
technology business.

The broad differentiation generic strategy has significant implications on Apple’s strategic objectives.
for instance , to use this strategy, the corporate must continue emphasizing innovation through
research and development. Apple must keep developing innovative products in order that the
business maintains its competitive advantage. Competitors eventually catch up with new
technologies and new products, therefore the broad differentiation generic strategy compels the
corporate to continuously innovate to stay itself always before the competition. Thus, continuous
innovation is one among Apple’s strategic objectives supported the broad differentiation generic
competitive strategy. additionally , to take care of business growth, the corporate must continue to
grow its market reach, like within the global consumer electronics market. In its generic strategy for
competitive advantage, Apple doesn't specialise in any specific market segment. Instead, the
corporate competes by selling various goods and services that suit the varied segments of the buyer
electronics and knowledge technology services industries. Thus, another of Apple’s strategic
objectives supported its generic strategy is to penetrate markets to make sure a broad reach. Such
expansion and business growth are achieved through intensive strategies for growth.

Market Positioning of Apple

Lifestyle brand and not a Functional brand

Apple has been ready to build a lifestyle-brand by making Apple mean “Creative” and “Superior-
class” within the sub-conscious minds’ of consumers.

There is a well-liked saying that straightforward is stylish

This is what Apple stood by of these years and defined its positioning around three core tenets:
Simplicity, Creativity, and Humanity.

Apple communicated this positioning through one among its most successful marketing campaigns
till date: Think Different

THINK DIFFERENT

The act of thinking differently represents; smart, innovative, clever, and artistic .

The company has lived up to the claim of ‘thinking differently’ by actually ‘acting differently’ by going
against the norm – always asking the question; “what’s different about this?”

It’s this attitude of thinking different, what made Apple one among the foremost valuable tech
companies of today’s time.

But all this strategy wouldn’t are possible without Apple’s razor-sharp execution.

PRODUCT DESIGN:

“Simple is different” – Apple has always lived by this motto and haven't attempted to overdo things
in its product design.

From colorful iMac’s to iPods, iPhones, and iPads – Apple has always added elegance to simplicity
and this is often what has been liked by the purchasers and has worked wonders for the brand.
PRICE:

If you're paying a premium price, you expect an unmatched product quality.

And this is often what's expected from Apple as a brand.

“YOU GET WHAT YOU PAY FOR”

Apple enjoys one among the very best price points within the industry, to the envy of it’s
competitors, who all bang on about ‘value for money’.

INTERFACE DESIGN

Right from its birth, Apple has laid special emphasis on its interface design. The brand has made sure
that its interface is straightforward and straightforward for its each and each customer, regardless of
what walk of life he belongs to.

With an aim to enhance the customer experience, off late Apple has started following Human
Interface, that permits them to form application interfaces more intuitive, learnable, and consistent.

Ans 5)

Instead of introducing flashy new products which will change your life today, this year’s WWDC
conference was all about putting the pieces in situ for what comes next.

It’s a Trojan-horse strategy — sneak the seeds for subsequent breed of technology products into the
things that we’re already using.

A new augmented reality platform, computer game development tools, the HomePod speaker, and
enhancements to iOS 11 on the iPad might not feel revolutionary or maybe particularly useful
immediately , but they're the building blocks for the technologies Apple is betting will power our
future.

AUGMENTED REALITY

There weren’t any AR goggle demos or TED-talk-esque prophecies about how a pair of glasses will
soon be the sole computer you would like . Instead, Apple is starting with something already very
familiar: the iPhone and a replacement way for developers to create AR apps for the phone. When
iOS 11 becomes available on tens of many Apple devices this fall, Apple will immediately have the
most important AR platform. Even better, it’ll get on the devices that folks already use — not
futuristic glasses or headsets. Apple will get a serious advantage over its AR competitors with one
simple software update.

That won’t be a game changer directly in fact , and it certainly won’t deliver the type of jaw-dropping
experience being developed by companies like Magic Leap. AR-enabled iPhones will mostly mean
some cool games and entertainment apps initially . Pikachu will look more realistic in “Pokémon Go.”
You’ll be ready to build virtual Lego models on your cocktail table . The rainbow puke in your
Snapchat selfies will look even better.

But AR on the iPhone sets Apple up for the end of the day by building a base of developers already
dedicated to the platform who want to form stuff for the most important number of users they will .
If and when Apple decides to require AR to subsequent level with a pair of smart glasses or
something else, it’ll be during a better position than companies trying to convert developers.

VIRTUAL REALITY

Apple has been hesitant to urge involved computer game , whilst the remainder of the tech industry
appeared to be hyperventilating over its prospects. But now the time feels right for Apple, and it’s
offering a replacement set of tools within the coming macOS Sierra software that it says will let
developers connect VR headsets and make 3D and VR content.

This isn’t about attracting gamers and VR enthusiasts to the Mac. this is often about ensuring Apple’s
most dedicated class of users has the tools it must create the content of the longer term . Apple has
historically been the platform of choice for digital artists, filmmakers, and other professionals, and
adding VR development tools will confirm those users have what they have and don’t abandon
Apple.

HOMEPOD AND AMBIENT COMPUTING

HomePod, the new Amazon Echo competitor, is Apple’s biggest new computer virus of all.

Even though Apple focused on HomePod’s music capabilities and pitched it as a replacement quite
home stereo, it undersold the remainder of the important potential. HomePod is additionally Apple
putting Siri in your range in a replacement way and making a long-term play for the concept of
ambient computing, during which everything you own is connected and powered by an underlying AI
.

HomePod may be a thanks to put Siri everywhere else when you’re not watching your iPhone, typing
on your Mac, taking note of your AirPods, or tracking your workout on your Apple Watch. HomePod
is Apple creeping into the remainder of your life under the guise of a very nice Wi-Fi stereo. Apple
could also be that specialize in music now with HomePod, but it’s also sneaking during a lot of
Amazon Echo-like features like controlling your connected appliances and getting updates from Siri.

That said, it’s pretty clear why Apple would want to bury the AI features of HomePod. Pitching it as a
digital assistant rather than a music player will only open up Apple to more criticism about how it's
falling behind in AI compared with Google and Amazon. Apple’s Siri remains much less capable as a
virtual assistant than the offerings from Amazon and Google, and Apple features a lot more work to
try to to to catch up. But there’s no doubt that AI may be a big area of investment for Apple, and
HomePod will play a crucial role during this strategy as Apple makes progress.

IOS 11 ON IPAD

The biggest news with iOS 11 wasn’t on the iPhone. it had been on the iPad.

Apple has finally started making improvements to the software that help turn the iPad into the
laptop replacement the corporate has been promising for years. There’s a replacement file-storage
system, an app dock almost like the one on Mac, the power to tug and drop content in between
apps, and apps that float in separate windows. The iPad is beginning to feel less sort of a giant
iPhone and more sort of a touch-screen Mac.

There’s still tons of labor to try to to . The iPad Pro’s keyboard isn’t nearly as good because the one
on a traditional laptop, and it’s now up to developers to create compelling apps that cash in of all
the new iOS 11 features and provides people a far better reason to ditch their laptop for an iPad. The
new 10.5-inch iPad may be a small move within the right direction because its larger size allows for a
full-size keyboard, but it’s still not enough.

But Apple is inching closer toward its ultimate goal of making an excellent thin and portable laptop
replacement, and iOS 11 seems like an enormous milestone.

WHAT’S NEXT

A lot of these things might not compute . We’re during a period of relatively flat innovation across
most of the tech industry, where new gizmos improve only incrementally annually . It’s impossible to
inform which wild idea will actually find yourself beginning and which can fizzle. (Two years ago
everyone thought smartwatches were getting to revolutionize the tech industry, after all. Now that’s
barely a part of the conversation.)

In some sense, Apple’s latest batch of WWDC announcements feels underwhelming, as if Apple is
dabbling in various areas instead of making a bold move in anybody direction. But the company’s
vision for the longer term is already being etched into its products. Just look closely; it’s right ahead
of you.

Mergers and Acquisitions by Apple:

1) Shazam – $400 million

Music has always been Apple’s forte. It began with music, and it must be always within the
frontlines. With numerous brilliant music apps out there, Apple did itself a favor by acquiring Shazam
and its song-recognizing capabilities. That’s an enormous acquisition during this world of easy digital
accessing. This wasn’t a simple merger, however, as Apple had to affect thorough investigations
from the ecu Commission. Nonetheless, the merger is completed , and Apple users are all the higher
for it.

2) Beats Electronics – $3 billion

Everyone’s conversant in Apple’s billion-dollar acquisition of Beats. But people are probably still
wondering what could possibly cost $3 billion that Apple wanted so badly? We all knew about the
overpriced headphones, but Apple made their own headphone hardware. It seems that it had been
Beats’ streaming business that made Apple turn its head, consistent with a report from The
Guardian. it had been a crucial deal for Apple, and Dr. Dre sure was smart enough to boost the
stakes for his own work.

Special Purpose Vehicle

In 2014, Apple began performing on "Project Titan," with upwards of 1,000 car experts and
engineers developing an electrical vehicle at a secret location near the company's Cupertino
headquarters.

In December 2020, it had been confirmed that Apple is indeed still working to launch a self-driving
car, and immediately , plans to release a vehicle in three to 6 years. Reuters has said Apple is aiming
for 2024, but Apple analyst Ming-Chi Kuo believes a car won't launch until 2025 to 2027 at the
earliest, and Apple remains overcoming leadership and management issues.

Apple will work with a producing partner to supply the vehicles, and therefore the company is
developing "next level" battery technology to increase range and efficiency. Apple has held
discussions with Hyundai and other automobile manufacturers, and while there have been rumors
that Apple and Hyundai would ink a deal by March 2021 with an aim to start out production in 2024,
it's going to take longer for Apple to seek out a producing partner and no known Hyundai deal has
been established.

Answer 6)-

It is fair to mention there's no love lost between Apple, Inc. (NASDAQ: AAPL) and Samsung
Electronics Co. Ltd. (NASDAQ: SSNLF). they're during a worldwide corporate battle that started in
2010 when Samsung, then an Apple supplier, released a really iPhone-like product through its Galaxy
lineup. Steve Jobs, Apple's late CEO, was furious and went on the offensive; Samsung, in turn, dug in
its heels.

It made sense that Samsung would attempt to incorporate elements of the Apple business model,
especially after the American technology giant passed Exxon Mobil Corporation because the world's
most precious company in 2011. Ask either company, however, and you're likely to listen to there's
an excessive amount of emulation happening .

Consider the just about unprecedented legal wars happening between Samsung and Apple, which
span four continents and billions of dollars in awarded damages. Or the aggressive, political election-
style marketing campaigns that are like the Ford versus Chevy attack ads.

From a business model perspective, the 2 companies are constantly converging and modifying,
although stark contrasts remain. Samsung has been a worldwide force longer and has its hands in
additional industries. Apple's rise has been comparatively meteoric and focused.

In March 2014, someone leaked a Samsung strategy document from 2012 during which the Korean-
based tech company blankly stated, "Beating Apple is #1 Priority (everything must be within the
context of beating Apple)." it's a telling example of the animosity between two of the world's largest
smartphone producers, who are clearly modifying their respective business strategies with one
another in mind.

• Samsung and Apple are two consumer electronics giants with global reach and constant customer
bases.

• Samsung's business model has focused on vertically integrating supply chains and ramping up
production volume.

• Apple has made a business strategy of that specialize in design and user experience while
outsourcing elements like manufacturing.

• The two companies have found themselves engaged in legal battles over property and patent
fights.

Samsung: vertical combination and merchandise Volume

Samsung operates like many other Asian producers, like NEC Corporation or Sony Corporation, with
a stress on vertical combination and a flood of products. Samsung is present in dozens of markets,
including flat panels, sensors, LED lights, batteries, gaming systems, cameras, TVs, appliances,
cellphone carriers, tablets, smartphones, and even medical electronics.
Before turning its sights to Apple, Samsung competed with, and in many cases bested, Japanese
technology companies within the 1980s and 1990s. the corporate spends a fortune on research and
development (R&D) and capital expenditures (CapEx). This pays off within the mid- and low-end
markets, but the high-end products keep running into the juggernaut that's Apple.

Samsung relies on vertical combination as a chief competitive advantage. While Apple still imports
billions of dollars' worth of components from its rival per annum , Samsung is beholden to nobody.
it's not a magical formula, Nokia was almost as integrated before being steamrolled by Apple and
Samsung, but Samsung controls some logistical certainty during a way that Apple doesn't .

Declining profit margins in 2014 and 2015, however, forced some introspective analysis within
Samsung's executive team. Chair Lee Kun-hee saw his company's global share of smartphone sales
drop from 35% in 2013 to 24% by early 2015, and his son, Lee Jae-Yong, reportedly wants to reply
through mergers and acquisitions (M&As) and partnerships. this is able to be a historic shift focused ,
likely signaling a departure from self-funded R&D and into outsourced innovation, not unlike Apple.

Apple: Design, Integration, and Outsourcing

From its target marketing, research, and merchandise design, Apple may be a far more focused
company than Samsung. it's also a way more profitable company. Apple succeeds in design and
integration, and no small degree of risk.

All of Apple's products include programs that employment alright with one another , but not with
any of its competitors' products, which makes it easy for patrons to stay buying Apple and difficult to
modify to somebody else . Nearly three-quarters of Apple's revenue comes from the iPhone lineup,
making the firm single product-dependent.

Able to suppress R&D costs by outsourcing hardware component production and assembly, Apple's
CapEx looks radically different from Samsung's. This inflates margins and boosts AAPL stock, and is
one among the chief reasons Apple can grow at astounding clips.

Apple doesn't race to be first; it lets other companies spend time on R&D and early market
development before swooping in and improving everything. Consider the iPod, the primary
breakthrough product during Jobs' second stint as CEO, which came out years after the Sony
Walkman. Not content to only throw out an imitator product, Apple worked diligently with record
labels and created alittle , sleek-looking replacement. There are similar stories with the smartphone
and tablet markets, each considered pillars of Apple innovation but neither of which the corporate
invented