Professional Documents
Culture Documents
- INFORMATION TECHNOLOGY
FACULTY OF BUSINESS ADMINISTRATION
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E - COMMERCE
Student’s name:
Phan Nguyễn Quỳnh Như – 20DH121568
Võ Thị Ánh Tuyết – 20DH121590
HCMC, December/2020
Contents
I. Introduction.........................................................................................................1
II. Finding................................................................................................................. 1
2.1. Apple.................................................................................................................. 1
2.1.1. General introduction about Apple............................................................1
2.1.2. Apple's strategic goal - to be a brand of perfection..................................2
2.1.3. The results of those strategies....................................................................5
2.2. Google................................................................................................................5
2.2.1. General introduction about Google...........................................................5
2.2.2. Google's Strategy........................................................................................5
2.2.3. The results of those strategies of Google...................................................9
2.3. Microsoft..........................................................................................................10
2.3.1. General introduction about Microsoft....................................................10
2.3.2. Microsoft's Competitive Strategy............................................................10
2.3.3. The results of those strategies of Microsoft............................................14
III. Conclusion.........................................................................................................14
References.................................................................................................................. 16
I. Introduction
Over the past 20 years, the three tech giants mentioned in this analysis have inspired so
many things in our lives, from joy to making friends, getting rich, and discovering new
things, more than anyone in human history.
Furthermore, Apple, Microsoft, and Google have also created hundreds of thousands of
high-paying jobs. Their products and services are embedded in the daily lives of billions of
people on this earth.
They put a supercomputer in everyone's pocket, spread the internet to the developing world,
and mapped every cave and alley on the globe, even the deepest places in the ocean.
These three tech giants have contributed an unprecedented value of US$3.4 trillion. Through
their shares, millions of families have settled down and established businesses. In short, they
have made this world better.
All of that is true, and the praises do not stop on thousands of pages, repeated at conferences,
press conferences, universities and even at government hearings. government.
So what is the reason why they are praised so much? Let's witness the battle for the mobile
Internet together – an Industrial Economics analysis of the competitive strategies of Apple,
Google, and Microsoft.
II. Finding:
2.1. Apple:
2.1.1. General introduction about Apple:
Company: Apple Inc.
Established: 1976
Service: App Store, Apple Music, Apple Pay, iCloud, iTunes Store
Website: https://www.apple.com/
Apple always finds inspiration from others. The "luxury products" industry helped shape
Apple's modern luxury strategy. They decided to pursue the strategy of creating scarcity in
order to achieve today's huge achievements and unimaginable profits that are almost
impossible for technology companies to produce new hardware. which imitates. According
to 2016 statistics, Apple holds a 14.5% share of the smartphone market but already accounts
for 79% of the profits of this segment globally.
To become a true luxury product, a computer needs to be shrunk, learned more, more
beautiful, and most importantly, convenient to carry around for its owner, to show that it is a
sign of success in the eyes of the community and themselves.
In the end, Apple has done a good job of removing the word "computer" from customers'
subconscious when referring to this company in the past. In the future, customers only talk
about "tech toys" or a "technology accessories" from a music players to a phone. Customers
can carry Apple products everywhere, even wearing them as jewelry. Apple has begun to
enter the world of luxury.
Proving the strategy to turn Apple products into luxury products, the Apple Watch launch in
2015 is seen as a product that helps close Apple's loop. Apple has launched an advertising
strategy on 17 pages of newspapers for the Apple Watch smart watch, surprisingly, they do
not advertise in any newspapers about famous technology such as Computer World, E&T
Magazine, ... or magazines. Time. They chose Vogue magazine - a magazine specializing in
luxury fashion.
Creating super-scarcity is key to Apple's success. They sell millions of iPods, iPhones,
iWatchs, and Apple Watchs, but create a mentality that only 1% of people in the world can
afford and that's what Apple wants.
To execute this strategy of creating scarcity, Apple needs the following key characteristics:
divine founder; crafty craftsmanship; offer high price; global coverage; and vertical
alignment.
Divine Founder:
Nothing is more successful in developing a brand in the self-expression trend than continual
personification of the brand by a specific individual, who is the brand's creator Steve Job.
Indeed, when it comes to Apple, Steve Jobs is frequently mentioned. The CEO may come
and go, but the founder is always the ultimate ruler.
Exquisite craftsmanship:
Success in the luxury goods sector comes down to attention to detail and professionals, most
of which are highly skilled and skillful. That's how Apple makes their products where the
message repeats and becomes their idea. According to Apple's design director - Jony Ive,
"The product appears to be light, simple, coherent and familiar without a more reasonable
alternative."
Consumers associate high costs with great quality and individuality. Apple cannot sell a
laptop or phone for tens or hundreds of times the price of a comparable market item.
However, they continue to sell at a greater price than the market average. As a result,
Apple's choice to transition from a commodity technology brand to a luxury brand was one
of the wisest and most sensible.
Global coverage:
Mass-market retailers like Carrefour and Walmart often hire ethnographers to inform them
in their local markets. But luxury brands, including Apple, have their definition of their
market. The consistency of Apple's brand symbol is reflected in the design of the brand's
Showroom.
492 similar stores are placed in popular shopping malls in 20 countries, attracting over a
million Apple fans every day. Meanwhile, in Florida, Walt Disney Resort's The Magic
Kingdom entertainment park. Apple also controls the worldwide supply chain. Machine
components are sourced from all over the world, including research laboratories in Japan,
rare stone quarries in China, and American chips. Apple also has production operations in
China, which are then sent to Apple stores (both online and offline). As a result, Apple
became one of the most lucrative firms in global history.
Vertical link:
As previously said, Apple's "global coverage" nature is a key aspect in their approach.
Traditional retailers, according to experts in this industry, are nearly extinct. The Internet is
the future, as if Steve Jobs didn't realize that. Contrary to popular belief, the store
transformed the technology sector and elevated Apple to the status of a premium brand. The
iPhone led Apple's stock on the stock exchange, but it was the store that drove tremendous
revenues for the Apple brand. The failure of brick-and-mortar retailers in the past has been
blamed for the growth of e-commerce. However, there is some evidence to support this.
However, in the retail industry, internet sales range from 10% to 12%. Apple has done that
extremely effectively, consistently investing in shops and brands. In summary, Apple
utilized an advertising strategy based on genuine consumer experiences.
According to Aswath Damodaran's research, most IT companies must accept short life
cycles. The bad news is that technology firms are vulnerable to younger, smarter competitors
who will swiftly overtake them. What about the good news? The good news is that these
internet businesses can create a product, expand, and engage customers faster than other
sectors. The fact that Apple's new introduction events are always extremely well attended is
concrete confirmation of this problem. Furthermore, the brand has a client retention
percentage of up to 92%.
Apple not only extended its lifetime by changing a computer brand into a luxury fashion
brand, but it also transformed one of the greatest planning firms into one of the best.
2.2. Google:
2.2.1. General introduction about Google:
Company: Google LLC
Established: 1998
Industry: The business area that Google pursues, which is contextual search advertising,
Internet applications, cloud computing and many more services...
Key products: Google Earth, Google Map, Google Book, Google Desktop, Google Image,
Blogger, Google Voice, YouTube, Google Analytics and more were not designed by
Google. In which, it can be said that the most successful deals can be mentioned Android,
Chrome and Double Click.
Internet apps: Google search can pick up pretty funny results, but steadily increasing number
of Internet applications designed to provide users with full access to utility software continue
to benefit Google users. Apps like Gmail, Google Voice, Google Docs, Google Wave,
Google Analytics.
2.2.2. Google's Strategy:
2.2.2.1. Strategies to build consumer trust:
If Apple is considered the most innovative company in the world. Microsoft is the world
market leader in software engineering. But the trust we place in Google is second to none.
The market for information search is now worth approximately $500 billion. Google is a
modern-day deity since it knows practically everything that mankind needs to know. We
have placed much too much trust in a machine. According to statistics, one out of every six
inquiries on Google is brand new. Google also builds confidence among its consumers by
making it obvious which results are organic and which are sponsored. This boosts the
confidence of their search engines. As a result, Google answers have an unrivaled level of
legitimacy. Furthermore, Google has made it explicit in both directions: organic search will
return impartial, non-commercial results, but paid commercial material may promote in the
returned results.
This conviction not only helps Google increase its market share, but also, more crucially, its
corporate client base. If an advertiser wants a lot of traffic, they may specify the amount they
wish to pay for each click on the ad using the Google AdWords auction. If traffic declines,
the price will reduce proportionately, marketers only pay more than the price given by
others. Because of the dynamic auction method, the price paid by the winner varies between
auctions. The procedure is completely automated, which contributes to public trust in
Google. Customers who trust Google are using a well-founded algorithm rather than
greedily trying to get the most out of it. Google has once again attained fair and unbiased
customer setups.
Google has always kept the homepage only for information purposes, along with the well-
known non-commercial animated logo known as Google Doodles. No amount of money can
purchase their website. Google recognized and fulfilled the requirement for the most
trustworthy firm in the Internet age.
Each Google product always ensures to meet 3 criteria: Features, aesthetics and simplicity.
Many brands choose solutions with high aesthetics and rich features with the aim of serving
all customer segments. The high aesthetic seems to attract users to stop searching for
information to admire. As for the diverse features, users have to wonder before deciding to
use them. These seemingly favorable things are turned out to be disadvantages because it
makes the Web site much more complicated and difficult to use. But for Google, there is a
completely different and wise move. All of the above criteria are used sufficiently. Just
enough aesthetics, just enough necessary features, that is simplicity is the triple test criteria
that Google sets. Google helps users save time, focus on their search and generate high
results.
Google's tools for serving consumers' search services are extended by them compared to
other conventional search engine protocols. Specialized search domains will reduce the
user's search to the most specific sources. These tools are: specializing in searching images,
maps, new movie scenes and articles, searching for keywords in Blogs, content of books,
products or services that can be paid for immediately. online, websites specializing in
scholarships,...
Along with the strong growth of Google is a potential threat to other technology companies.
It seems every day we hear the news about Google's mergers or acquisitions, mergers that
play a big part in Google's strategy to conquer the technology market around the world. This
strategy has helped Google improve its product line, develop a better office suite, potentially
compete with Microsoft Office, and enjoy great success in online advertising. If Apple tried
to achieve immortality by transforming into a luxury company, Google also fulfilled its
ambition in the opposite direction: it became a tool for the entire public – a form of public
service. Their dominance in the technology market is so great that it is always guarded by
the threat of market disruption in the US and around the world.
The giant in that search market is implementing one of the most ambitious strategies in the
history of their business: to rearrange all the information and data of the world. Especially to
record and control all the rich information that exists on the web environment. With such a
single goal, Google has achieved it. Google starts with things that are available online –
things they cannot own – but can become the sifter of that information. Then Google went
into every nook and cranny with Google Maps, accessing astronomical information with
Google Sky and geography with Google Ocean and Google Earth. They entered the treasure
trove of human knowledge by assembling out-of-print books with the Google Library
Project, and moreover they infiltrated world news with Google New.
With the power to contain all of humanity's facts and understandings, Google has gathered
all of the world's information happening right on an open platform. Google's monopoly on
information is now over, and the barriers to entry for new rivals are too enormous for
Google to control for a long time. What Microsoft's Bing search engine can do at that level
is nothing more or less. For a search engine with no reputation, such as Microsoft's Bing, it
may be able to compete with Google. Bing used to have a 13% market share in this area.
Bing, however, was swiftly crushed by Google's techniques and goals.
Google seems to be seeking to cut the price of services, not to increase costs as experts
expect. While most consumer enterprises take the opposite approach. They spend a lot of
time estimating the greatest profit that can be brought to market and figuring out how to
collect the whole consumer surplus. But Google, like Apple and Microsoft, does not do so -
Google has drained all of the earnings from the business. Google's market valuation now
exceeds that of the top eight media businesses combined.
As of February 2016, Google's market valuation was more than that of all other media
businesses combined.
$532 billion
billion
$532
When it comes to entering new areas, Google is under relatively light pressure to match local
customer requirements while also lowering expenses. Google's strategy focuses mostly on
creating and upgrading its goods and services by building additional R&D centers in a high-
tech country. Google presently operates more than 12 R&D facilities across the Middle East
and Europe, employing over 5000 people. In Asia, in addition to the R&D center established
in China, Google also aims to construct another facility in Singapore.
2.2.3. The results of those strategies of Google:
Google recorded 42% increase in the ad auction category in the third quarter of 2016. But
the cost of each click reduced 11%. This is misinterpreted by analysts as a bad omen. A
decline in market pricing usually indicates a loss of market power, hence no firm will accept
a price cut. What we overlook is that Google's income increased by 23% in 2016, which
helped marketers cut prices by 11%.
Google's 2016 revenue reached nearly $90 billion and maintained a cash flow of $36 billion.
Moreover, Google's stock is up 8%, standing at 353.02 USD while the world stock market is
falling seriously.
Ultimately, Google will continue to dominate the search technology industry for a long time.
The internet isn't yet available everywhere, and Google is expected to expand more,
expanding its main business. Our thirst for knowledge will never be quenched.
2.3. Microsoft:
2.3.1. General introduction about Microsoft:
Company: Microsoft
Established: 1975
Headquarters: Redmond, Washington, USA.
Key products: SQL Server, Exchange Server, Systems Management Server, Windows Small
Business Server, …
Service: Bing, Windows Live Mail, Windows Live Messenger, software, cloud-based, IoT,
E-Commerce business platforms, and consultation services.
2.3.2. Microsoft's Competitive Strategy:
2.3.2.1. Cost leadership strategy:
Microsoft's competitive strategy has included cost leadership. Maintaining market leadership
through efficient value chain management is the key objective of this strategy.
Targeting the middle class, which makes up the greatest portion of the global customer base
in the majority of nations, Microsoft is able to increase its market share. Consumers in this
income bracket frequently view pricing and cost leadership as the greatest tactic for
satisfying their wants.
Microsoft places a great emphasis on the accessibility and affordability of its goods across
the board, which has boosted sales and increased brand recognition while giving them a
significant competitive edge.
Microsoft often gives vouchers and discounts to fulfill sales goals and address competitive
challenges from the closest rival, in addition to charging cheap prices by lowering
manufacturing costs and optimizing delivery performance. These pricing and marketing
initiatives hope to boost brand recognition and boost consumer spending.
Microsoft are not the so-called cost leaders, considering the costs of a lot of their goods.
Although several of its goods, including as Windows and Office Suite, have long been
regarded as essentials, they are not inexpensive. Historically, Windows updates have cost
between $100 and $200, and Office improvements have cost somewhat less.
Because of the high input costs or changing prices for consumers who wish to purchase
Apple machines in order to run software, this is less expensive than their greatest rival,
Apple. Apple computers have historically been more premium than comparable devices
running 32- or computer operating systems. It may, however, be expensive because it is seen
as a luxury good.
When it comes to costs, Microsoft lags behind open source offerings. There is no opposition
because these items are almost completely free to do using. Open source applications can be
pricey for some people due to a number factors, including the steep climb and work load
required to download and operate the edition. However, since of their usefulness and rising
appeal, many people are starting to take Versions of the software and open office into
consideration. Microsoft must pay particular attention to this, especially if the market
continues to fall apart and consumers become more interested in low-cost options. These
substitutes, which include inexpensive and unlicensed software, won't benefit Microsoft in
any way.
The review of Microsoft's cost leadership approach showed the various advantages of this
combined strategy, including - quick brand recognition, growing customer population,
boosting purchase, and obtaining higher customer happiness. Concentrate on product
accessible and price to meet sales targets. Although cost leadership is emphasized as the
primary approach in the examination of Microsoft's competitive advantage strategies, the
corporation also utilizes brand image in addition to cost leadership to forge a competitive
advantage the foundation for a long-term competitive advantage in a highly saturated global
customer base.
2.3.2.2. Differentiation strategy:
By focusing on distinctive product characteristics, uniqueness as a supplementary generic
approach enables Microsoft to grow its client base.
Microsoft's strategic goal in employing this tactic is to make a difference by integrating
advanced and responding to buyers' rising medical problems. For instance, Microsoft has
increased the number of products it offers after researching shifting consumer tastes in an
effort to set itself apart from rivals and increase the variety of business prospects available.
Microsoft has developed a strong and devoted client base because to its distinctiveness and
cost leadership.
Microsoft promotes their goods in a way that sets them apart from competing options
through a broad differentiation approach. The corporation utilizes distinctiveness as a tactic
to ease pressure from competing brands because it is an established and seasoned brand.
Microsoft makes significant sums in branding, advertising, and celebrities exclusively to set
itself apart from other businesses.
The company's marketing and advertising strategy highlights a number of distinctive
elements, including long experience, strongest brands, and strong global reach.
Additionally, difference is also based on the brand logo. The unusual brand emblem has
helped consumers form a positive perception of the company. Even though the company has
experienced several changes, its core has stayed constant, which is also a potent
differentiator.
Additionally, the business provides a range of tastes to meet the various palate preferences
of customers. To offer distinctive incremental services that can satisfy clients and boost their
choice for Microsoft over competing brands, it employs innovation as a tactic.
2.3.2.3. Centralized strategy:
Microsoft chooses to focus on both excellent value and cheap cost. By meeting the demands
of a narrow market sector at the lowest cost, a low-cost concentration approach is chosen.
The approach of highlighting the best deal is applied by highlighting the company's flavor,
size, and style that may best meet the wants and desires of the customer.
By concentrating on product qualities, Microsoft realigns its brand image and implements
ongoing adjustments in item design and presentation to match behavioral customer
requirements and optimize value.
2.3.2.4. Intensive strategies:
Any business may employ one of four comprehensive tactics to boost sales and market
share. These tactics are frequently employed by businesses to increase their client and
market profile. These tactics include product creation, market expansion, market presence,
and globalization.
● Market penetration:
● Market development:
The practice of expanding into new markets and geographic areas in order to broaden the
client base, generate more revenue, and boost profitability is known as market development.
Microsoft has also broadened its business outside of Europe and Asia Pacific. Due to the size
of the market, there is a significant turnover rate. This is Microsoft's other main tactic, in
addition to customer acquisition, for expanding its customer base.
● Product development:
Additionally, Microsoft has used this crucial tactic to expand both its customer base and
income. Sales for the brand have increased around the globe, and it is still expanding its
extensive range of products. It produces a wide range of goods in addition to software,
including servers, CRM and other enterprise software, advanced features, PC games, various
peripherals, and more. The money generated by this product category has increased over
time for Microsoft.
● Diversification:
Microsoft has kept up its attempts to broaden in order to boost income sources and expand
its clientele. However, their attempt to acquire Nokia was a failure and didn't add any value
to the company or institution. Nokia has, however, also made a foray into the entertainment
and consumer telecommunications industries. Every one of these development initiatives are
intended to increase income and expand the consumer market.
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