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Structure of the Solution
*** Extensive Company Analysis for Samsung, Apple and Microsoft
Purpose: To identify and examine three firms within one industry. Critically assess the Board of Directors, mission, vision and value statements to evaluate their intended vs realized strategies. Critically assess relevant PESTEL pressures (See Chapter 3 pdf file attached), the profit potential and bargaining power within the industry. Most importantly, make a recommendation with actionable implementation plan about the future positioning of a (single) firm.
Board of Directors, mission, vision and value statements
1. Identify three organizations that are rivals in ONE industry. Specify the industry you are analyzing. Critically evaluate each organization’s corporate governance and vision, values, and mission to infer espoused vs. actual strategy/advantages;
2. Critically assess the industry competitiveness via PESTEL forces and Porter’s five forces: barriers to entry/exit; bargaining power of suppliers; rivalry between the three organizations; bargaining power of consumers; and substitute goods;
3. Explain the profit potential of the industry; Explain how well (or poorly) positioned each company is to create value; and (most importantly!)
4. Choose one organization and recommend ways that one firm can improve its industry positioning to continuously co-create value. Hint: exhibits efficiently must be used to communicate vision, values and missions, prioritized PESTEL pressures, the 5-forces model,
SOWT and others that you may innovatively research and add in for the selected one organization for recommendations. All exhibits are in addition to the 2 pages of full text, singled space. (Please refer to attached sample structure and please thoroughly follow that to
eliminate any discrepancies)
Sample of Solution
The smartphone industry has consumed exponential growth in the last decade due to increased consumer interaction and dependence on personal electronics (Exhibit 2). Since the sector is quite lucrative as per its profit margins and future prospects, numerous electronic giants pursue to penetrate this industry with their distinguished competencies. Moreover, the changing or may be adapting consumer preferences has also posed particular challenges for the prevailing businesses in this industry. Since the customers demand more innovative, quality and less expensive products, it has become quite arduous for the smartphone companies to continuously innovative while also minimizing costs. Hence, such drastically changing trends can vanish any entity from industry in a quite short span of time. For instance, Nokia was considered to be the giant of smartphone industry with the highest share of 50.8% in 2007, but eventually, the lack of innovation and responsiveness to the changing market trends dropped its share to 2.8% by 2013. Although, Nokia didn’t counter any mistake as mentioned by its CEO in his last speech, “we didn’t do anything wrong, but somehow, we lost.” . But, the lack of innovation and responsiveness steered them to the demolition. Currently, the major competitors of this industry are Samsung, Apple, and Microsoft with 21.3%, 14.1%, and 7.2% market share respectively . The companies integrate their corporate strategies with their core competencies to eventually honor the demands of their consumers
Porter’s Five Force Analysis:
Apart from the challenging consumer demands, companies like Apple, Samsung, and Microsoft also have to compete with each other to remain competitive and maintain their market share. Hence, as exhibited in Porter’s Five Force analysis (Exhibit 10), the competitive environment is a potential barrier to entry for the new entrants to the industry. While, with the greater bargaining power of consumers, companies have to stick to the changing demands of their potential buyers. Apart from the buyer, the companies such as Apple, Microsoft and Samsung have to realize strategic alliance with their suppliers for establishing economies of scale and adding more value to their supply chain. Moreover, since there are a significant number of substitute brands available for smartphones, the companies essentially have to keep their consumer base engaged by providing new versions of the smartphones . It is also evident from the Porter Analysis (Exhibit 4), that Apple Inc. managed its exclusive position in the market. Moreover, it can be implied from the DuPont Analysis that Apple Inc. has managed to generate maximum return on the invested capital by efficiently utilizing assets for generating revenues.