SWOT Analysis of Samsung Electronics Co. & Apple Inc.

Company background Name Industries served Apple Inc. Computer hardware, Computer software, Consumers electronics, Digital distribution Geographic areas served Headquarters Current CEO Revenue Profit Employees Main competitors Worldwide U.S. Tim Cook $ 156.508 billion (2012) $ 41.733 billion (2012) 72.800 (2012) Samsung Electronics Co., Ltd., Amazon.com, Inc., International Business Machines Corporation, Cisco Systems, Inc., Google Inc., Microsoft Corporation, Dell Inc., LG Electronics, Lenovo Group Limited, Hewlett-Packard Company, Sony Corporation and many others.

Apple Inc. is an American multinational corporation, which designs, manufactures and sells personal computers, consumer electronics and software, and provides related services. The business has experienced a tremendous growth from 2001 when it has introduced its iPod mp3 player. Apple Inc. is considered to be the most successful electronics company in the world.

Apple SWOT Analysis 2013

Strengths 1. Customer loyalty combined with expanding closed ecosystem. 2. Apple is a leading innovator in mobile device technology. 3. Strong financial performance ($ 10.000.000.000 cash, gross profit margin 43.9% and no debt). 4. Brand reputation. 5. Retail stores. 6. Strong marketing and advertising teams. Opportunities 1. High demand of iPad mini and iPhone 5 2. iTV launch 3. Emergence of the new provider of application processors 4. Growth of tablet and smartphone markets 5. Obtaining patents through acquisitions 6. Damages from patent infringements 7. Strong growth of mobile advertising market 8. Increasing demand for cloud based services Threats 1) Rapid technological change 2) 2013 tax increases 3) Rising pay levels for Foxconn workers 4) Breached IP rights 5) Price pressure from Samsung over key components 6) Strong dollar 7) Android OS growth 8) Competitors move in online music market Weaknesses 1. High price. 2. Incompatibility with different OS. 3. Decreasing market share. 4. Patent infringements. 5. Further changes in management. 6. Defects of new products. 7. Long-term gross margin decline.

Company background Name Industries served Samsung Electronics Co., Ltd. Consumers electronics, Telecoms Equipment, Semiconductors, Home Appliances Geographic areas served Headquarters Current CEO Revenue Profit Employees Main competitors Worldwide South Korea Kwon Oh Hyun 201.103 trillion (2012) 23.845 trillion (2012) 221.726 (2012) Apple Inc., Nokia OYJ, Intel Corporation, LG Display & LG Electronics, Sony Corporation, Texas Instruments Inc., Lenovo Group Limited, Hewlett-Packard Company, Sanyo Electric Co., Ltd., Toshiba Corporation and others.

Samsung Electronics Co., Ltd. is the largest worlds technology company in terms of revenues. It is the largest mobile phone maker and television manufacturer and second largest semiconductor chip producer.

Samsung SWOT Analysis 2013

Strengths 1. Hardware integration with many open source OS and software 2. Excellence in engineering and producing hardware parts and consumer electronics 3. Innovation and design 4. Focus on environment 5. Low production costs 6. Largest share in mobile phones and second place in smartphones sales 7. Ability to market the brand Opportunities 1. Growing Indias smartphone market 2. Growing mobile advertising industry 3. Growing demand for quality application processors 4. Growth of tablets market 5. Obtaining patents through acquisitions Weaknesses 1. Patent infringement 2. Too low profit margin 3. Main competitors are also largest buyers 4. Lack its own OS and software 5. Focus on too many products

Threats 1. Saturated smartphone markets in developed countries 2. Rapid technological change 3. Declining margins on hardware production 4. Breached patents 5. Apples iTV launch 6. Price wars

Comparison Samsung is focused on producing devices which can be integrated with most of the software and OS. This gives Samsung products an edge over Apples, its arch rival, devices, especially as Android and other OS are gaining market share when iOS and OS X are losing it. Apples financial performance is one of the best among many companies. Company currently (end of 2012) holds about $10,000,000,000 in cash, which can be used for acquisitions, buying back company shares and other matters. It also has higher gross profit margin than its main competitors, which is equal to 43.9%. Company has no debt and is not directly affected by interest rates or credit markets. Samsung Electronics is the largest technology business in the

world in terms of revenues but it has a low gross profit and net profit margins. Although its smartphones business is quite profitable, Samsungs profit margin is low due to its semiconductors sales and aggressive price cuts. Samsung Electronics have achieved large market share in many products they sell, especially in mobile phones, smartphones, semiconductors and television sets. Large market share has its advantage, bargaining power, that Samsung can use to further reduce costs and demand for better contract conditions. On the other side, the less market share Apple has, the less it can influence its potential customers and persuade them to jump into using Apples closed ecosystem products. Samsung has set up its production facilities in low cost countries. This allows producing goods with low production cost and benefit Samsung as it can offer lower price and earn higher margins, providing a competitive advantage. Apples products cost much more. Some critics argue that the price is not justified. When theres such a fierce competition, Apple products price becomes a weakness because consumers can easily opt for similar quality but lower price products. Apple has been chosen as the most innovative business in the world for the 3rd time in 2012. Companys core competency of producing innovative products is the strength the company builds upon and is able to bring the most innovative products to the market. Samsung Electronics serves 4 different industries with many different products in them. Samsung is at disadvantage over its competitor because it loses a focus when competing in too many industries and too many products. Both companies have something in common: patent infringements. Apple is often accused of infringing other companies patents and has even lost some trials. This damages Apple brand and its financial situation. Samsung is infringing Apples and some other firms patents, thus, damaging its reputation and having to pay a huge amount of money in damages. iPad mini sales will increase Apples market share in the tablet market and, will strengthen firms competitive advantage while smartphones market in the developed economies is saturated and the sales will not be growing at a high rate for Samsung.

Apples iTV is the next big lunch from Apple and will support their TV sales and the products ecosystem, which may hurt Samsungs TV sales. Samsung has already asked Apple to pay higher price for its application processors. Due to intense competition and no viable substitutes, Apple may be asked to pay even more.

Sources: 1. http://www.apple.com/about/ 2. http://en.wikipedia.org/wiki/Apple_Inc. 3. http://www.samsung.com/us/aboutsamsung/ 4. http://en.wikipedia.org/wiki/Samsung_Electronics 5. The Times of India (2012). Apple once again crowned worlds most innovative company. Available at: http://timesofindia.indiatimes.com/tech/enterprise-

it/strategy/Apple-once-again-crowned-worlds-most-innovativecompany/articleshow/17217321.cms 6. CNN Money (2012). Whats eating Apple? The analysts weigh in. Available at: http://tech.fortune.cnn.com/2012/11/14/apple-shares-fallen-wall-street-analysts/ 7. The Financial Times (2012). A little less Samsung in Apple sourcing. Available at: http://blogs.ft.com/beyond-brics/2012/09/10/a-little-less-samsung-in-apple-

sourcing/#axzz2CE2J8WzA 8. The Financial Times (2012). Samsung: playing tough with Apple. Available at: http://blogs.ft.com/beyond-brics/2012/11/13/samsung-playing-tough-withapple/#axzz2CE2J8WzA 9. Interbrand (2012). Best Global Brands 2012. Available at:

http://www.interbrand.com/en/best-global-brands/2012/Best-Global-Brands2012.aspx

10. Guardian (2012). Galaxy sends Samsung profits sky high. Available at: http://www.guardian.co.uk/technology/2012/oct/26/samsung-galaxy-profitsharesAsdf