An Analysis of Amazon, Apple, and Samsung’s Strategies
Instructions:
Pull the financial statements of 3 companies (Amazon, Apple and Samsung) in the industry that you are interested in entering. Try to find companies that are pursuing different strategies. Explain what you learned about their revenue model, cost model, product mix, distribution channels, partners, target customers and value proposition.
Solution
An Analysis of Amazon, Apple, and Samsung’s Strategies
Different companies employ different strategies to become successful and to fight against competitors. For instance, some companies focus on techniques that would result in revenue maximisation, cost reduction, product mix, ways of approaching customers, means of distribution, and value propositions. Therefore, the paper presents the different mechanisms that Amazon, Apple, and Samsung companies employ to remain successful.
In regards to the revenue model, Amazon being an e-commerce enterprise earns transaction fees from online paying service enterprises that customers use when paying for their online purchases. Besides, the company makes sales income from direct sales that customers make. Furthermore, Amazon earns revenue from the service of listing products to be sold to other clients. Apple and Samsung, on the other hand, earn their revenues from the sales of electronic gadgets that they sell to consumers.
In regards to the cost model, Amazon incurs shipping and delivering costs, storage costs and gift wrap costs (Vuong, 2014). Apple and Samsung incur relatively similar costs of manufacturing, labour, distribution, research and development, as well advertising and promotion.
In consideration to the product mix, the three companies utilise the strategy of product differentiation. Amazon offers a wide variety of products which includes online retail services and retail goods. Besides, the company offers Amazon Prime that is a membership product that encompasses shipping services for the online purchases. Apple’s products include the iPhone, Mac, iTunes, tablets, personal computers, and soft wares such as the IOS. Samsung’s products include personal computers, Galaxy smartphone, and household electronics.
In regards to distribution strategy point of view, Amazon operates various distribution centres located around the world. Apple also has various distribution infrastructures globally with primary distribution centres based in China and United States. Samsung also many distribution centres across the world that allows its products to reach consumers easily.
In regards to the partnership, Amazon recruits service providers as a strategy for ensuring that it remains competitive with the rapid changing technology. Apple has formed partnerships with various companies such as Deloitte, IBM, Cisco, and SAP. The partnership helps to ensure that Apple remains competitive, for instance, Cisco helps Apple to produce products that have enhanced application and voice experience. Samsung also has adopted the partnership strategy by developing the Samsung Alliance Program that enables the business to enhance its innovations.
Considering the target customers, Amazon targets people who have an interest in internet shopping. Apple and Samsung, on the other hand, are competitors and target the same audience. Both Apple and Samsung target consumers who use electronic gadgets such as mobile phones and personal computers.
In the perspective of value proposition, Amazon strives to offer best prices, customer service, and interoperability to its clients. Apple has various value propositions for its different products. In its Mac product, for example, Apple stresses on the lightweight, convenient and highly technologized advantage that the product offers to users. The value proposition of Samsung, on the other hand, is to provide high-quality products at reasonable prices.
Summarily, Amazon, Apple, and
Samsung employ different tactics for ensuring their success and survival. The companies, however, show similarities in the use of partnership strategy since all of
them liaise with other organisations in
attempts to gain competitive advantages. Besides, each company has its distinct value proposition that serves as a
means of attracting customers.
References
Vuong, M. (2014). Amazon’s net shipping costs top $5B for first time, fueling push to build out its own delivery network. GeekWire. Retrieved 5 May 2017, from https://www.geekwire.com/2016/amazons-net-shipping-costs-top-5b-for-first-time- fueling-push-to-build-out-its-own-delivery-network/