Competitive Advantage Through Value Chain And Vertical...

We are living in a world, where technology keeps changing on day-to-day basis. In this ever-changing world of technology, the question is how are some companies doing better than the others and what are they doing to maintain competitive advantage? Rise of technology has given birth to competition by giving companies new ways to perform at higher levels and this has also led to the ways companies are producing their products and services. Technology has affected several sections of an organization by having an impact on business communications, company’s HR practices, and organizational changes. Therefore, in order to gain and maintain competitive advantage, a company must do one of the two; either produce goods/services at a lower cost or produce innovative products in a way that leads to differentiation and a premium price. Section 1: Competitive Advantage through Value-Chain and Vertical Integration Companies are using value chain approach to better understand which key areas will give them the greatest edge over its competitors. They are focusing on each division, distribution centers, pricing, product innovation, selling techniques, and value-chain formations. Value chain is an important notion that highlights the role of information technology in the operations of a company. â€Å"A Value-Chain is the whole series of activities that create and build value at every step. The total value delivered by the company is the sum total of the value built up all throughout theShow MoreRelatedThe Supply Chain Of Zara Essay1140 Words   |  5 Pages It always keeps in mind to improve their production quality. Supply chain management is the intercorrection of organizations managements that relate to each other through linkages between processes that produce value to customer. 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Other types of Strategy: 1.Focus Strategy 2.Competitive or Value disciple strategy 3.Blue Ocean Strategy Focus Strategy: It uses either cost or differentiation strategy.This type of strategies is applies by the small companies especially for those want to avoid competition with big companies, Competitive or value disciple Strategy: This type of strategies is used to create customer value by providing competitive advantage. They are product leadership, customer intimacy and operational

Mobile Phone Life Cycle Free Essays

Samsung Electronics is a semiconductor mobile phone and mobile phone component manufacturer. It exists in the most dynamic end of the consumer product industry. It cannot succeed without continuous incremental improvement and without constantly updating its product portfolio. We will write a custom essay sample on Mobile Phone Life Cycle or any similar topic only for you Order Now The product life cycle for its premium product the Samsung galaxy S3 is estimated to be only 9 months. This occurs because customers withhold purchasing a product for which they know is going to be updated and replaced imminently. Samsung is a conglomerate in multiple markets, with the main profit centres being mobile telecommunications and information technology manufacturing. Samsung has posted record profits in its most recent financial quarter. Samsung is a dynamic but reactionary company; it emulates innovations by other manufacturers such as Apple but it operates in a marketplace where such things are common. It manufactures components for most other manufacturers of mobiles tablets and PCs. Samsung has an adversarial relationship with Apple who is Samsung’s both Samsung’s main competitor in mobile telephony and one of its biggest customer’s. Samsung has an advantage over Apple at present in that it has the infrastructure and dynamic capability to manufacture the components required. This leaves its main rival Apple requiring Samsung’s co-operation. Samsung is seeking to increase the price which it charges Apple. Strategically this is a wise option as switching costs for Apple essentially having to retool its entire operating network and refresh its product’s. Samsung is a company that prefers to grow organically. It has been suggested that the firm engage in a purchase of Blackberry maker Research in Motion. This would be characterised as a defensive acquisition. It would be merely adding to its portfolio of assets and gaining ownership of a mobile operating system. Currently it licences the Android from Google. Samsung has a strong diverse product portfolio and is capable of competing in numerous markets from the low end smartphones to the Premium Galaxy range; Samsung has a product for every possible price point. Samsung partners with other providers and builds phones and other devices for them such as the Google Chrome book. In an industry where there are numerous rivals and whereby Product Life Cycles are becoming progressively shorter. Samsung has an advantage in that as a semiconductor manufacturer it can respond to changes in the market dynamic quicker. A disadvantage for Samsung is that is does not have the same prestige as Apple and therefore cannot charge such premiums for its products. Samsung has to offer more at a lower price point than Apple does for its competing products. Samsung’s flagship Galaxy Range has 2 rivals for Apples iPhone the Galaxy S3 and the Galaxy NOTE 2. These combined even though they are of similar quality and differentiated towards different market segments than the iPhone 5 sales are still less than Apple. Could Samsung drop the Samsung nomenclature and market its high end models as Galaxy? This could enhance the appeal of the high end premium line. In the technology business Samsung is a rare beast in that it rarely makes acquisitions. Very few technology acquisitions are deliberately earnings generative. Facebook buying Instagram and Microsoft buying Skype are considered to be primarily defensive plays to enhance and protect certain advantages each of these companies had. Samsung could purchase a rival chip maker, though logistically and practically there would be little point in doing so. Another concept potentially to consider would be merging with Google to create an all in one hardware and software company. While logistically this would be the ultimate defensive move by both sides, it would be very difficult integrating the different business cultures it would probably mean that Samsung would have to move its headquarters to the U. S. A. A merger to companies that are on friendly terms as it is would certainly produce synergies in financing, but as they both maintain large cash piles that are increasing every quarter it doesn’t seem that the risk would be worth it. Another option for Samsung would be Nokia this would give Samsung 30 per cent of all the patents for 4G networks which would give the firm a significant royalty stream from every 4G enabled phone worldwide over the next 8 to 10 years which is the expected length that 4G will remain as the most modern network. Samsung will however be paying for a brand name and significantly weak company . It would also have to fend off rumoured interest from Microsoft. It would be a costly acquisition at 30 billion dollars given the Market Capitalisation of Nokia today and the required premium with which would be required to be successful. Samsung could use its partnership with Renault Nissan in the automotive industry to create a suite of products automatically synchronised with the car. This would be similar enough the Tesla Model S. While this is a left-field suggestion it is leveraging assets that Samsung already has and utilising it in order to serve its main Profitable arm. This allows the firm to gain a competitive advantage over its main rival Apple. The struggling Nippon-French automobile manufacturing partnership might also be receptive to an outright takeover by Samsung. Samsung has heretofore been a trend follower, albeit a very adept and nimble one. It hasn’t necessarily been the most innovative company, however with product life cycles getting consistently smaller and the competition which Samsung faces at all ends of the market from the low end to very top is also getting more innovative. Samsung is one of only a small number of companies that could redefine the market. It already produces Smart TVs in large quantities. It could start selling phones laptops and tablets TVs in large bulk quantities by already pre synchronising them for customers. Its steps like this that will put it ahead of its main rival Apple which is rumoured to be introducing a television that is expected to permanently alter viewing experience. In order to successfully manage this transition Samsung would have to be ahead in the U. S. A first and foremost. Gaining access to material is what blocked Apples entry into this new market. Aggressively Samsung could purchase a cable company or Netflix and control this content for itself, gaining such an imperative competitive advantage. Samsung if it wanted to be aggressive could stop supplying Apple severely hampering its main rival’s operations while aggressively increasing market share elsewhere by undercutting Apple. Another strategy would be to introduce a phone that would have enhanced abilities i. e. a class above its premium Galaxy range and equivalent iPhone 5 and Google Nexus 5. This would entrap Apple in a Pincer movement that would allow Samsung to be effectively the supplier of the latest accessory mobile phone, which at present is the iPhone 5 rather than the equivalent S3 and Note 2. The other strategy is to remain second the mobile phone market and a distant competitor to Apple in the Tablet market, this is the most conservative option and requires the least capital outlay, however it risks being overtaken in the same way Nokia was. In the technology market an aggressive approach would be beneficial, but as the relationship between Google and Samsung is seen as quite good the optimal strategy would be to jointly design products that would create a short term monopoly , such things exist in a world where second best is very often a distant second. Utilising inherent dynamic capabilities it was Apple who was playing catch up to the S3 and Note 2 but the iPhone 5 is outselling both products collectively, this could be because of the inertia derived from being introduced to a particular eco-system, in this way Apple has a first mover advantage in that it has a lot of loyal clients. Samsung primarily operates on Google’s Android operating system which is compatible with other Android users such as HTC and LG. At present Android has 68% of the market but the high margin clients have primarily tended to purchase Apple products. This is an issue that is only further compounded by time. In order to overcome this Samsung would have to be overly aggressive on a pricing strategy for a phone that would be significantly more advanced than its predecessors and its rivals. Samsung Electronics as a whole is a diversified technology company that should continue to grow unless it commit’s the cardinal sin of failing to innovate. It is a buy but it will have to alter its practices if it wants to surpass Apple’s profitability. S. Decker, 2012 Samsung Gets Review of Loss to Apple in U. S. Patent Case http://www. businessweek. com/news/2012-11-19/samsung-gets-review-of-loss-to-apple-in-u-dot-s-dot-patent-case Last Accessed 20/11/12 11. 25 http://www. investopedia. com/terms/d/defensiveacquisition. asp#axzz2ClJTl2OX Last Accessed 20/11/12 11. 30 Sam Grobart, 2012 Samsung’s Four (Easy) Steps to Mobile Dominance http://www. businessweek. com/articles/2012-11-19/samsungs-four-easy-steps-to-mobile-dominance Last Accessed 20/11/12 11. 30 Samsung Annual Report 2011 How to cite Mobile Phone Life Cycle, Essay examples

Formal Informational Report on Dell and HP (Computers and Software)

Question: Discuss about the Formal Informational Report on Dell and HP (Computers and Software). Answer: Different management styles, handling and launch of products and approach to e-commerce Management Style The management style that HP focused was called the HP way." The company abandoned its hire and fire mentality, which was to hire many workers for a large project and then fire them afterward. The company offered their employees with almost perfect job security instead, where the company stayed away from layoffs even during recession 1974. Currently, HP follows the "Management by Wandering around" for informal communication within the enterprise, "Management by Objectives, and Total Quality Control that serves to produce high quality products (Steiber Alange, 2016). Dell started its journey as a startup and therefore follows some management styles. They always analyze their actions which cause the company to succeed and not random fun-filled activities. The company seriously takes family commitment as a way to balance life and work for productive work and encourage spotting opportunities. Other management styles that made so successful are embracing risk like a startup, being strate gic, learning from mistakes and surrounding oneself with the best people (Michael Dells dilemma, 2016). Launch and handling of Products Kou Lee (2015) stated that, over the years HP has produced several products like workstation computers, servers, scanners, and printers. It was successful in a launch in several hardware departments like in printer department, where it was described as the leading printing and imaging systems provider (IPG) from individuals to small and medium enterprises. HP also released some business services in network security. It sells software in different categories such as mobile apps, and analytics and big data. It also provides SaaS or software as a service, software services, and cloud computing solutions. Their managed services also offer full IT-support solutions. Kou, Lee Wei (2015) opined that Dell has products ranging from business class brands where the company offers longer life-cycle, serviceability, and reliability. Its consumer class brands offer performance, value, and expandability. Besides it has peripheral class products and service and support brands. Their technical supp orts for products are provided according to the type of components and support level purchase. Types of support offered are business-day on-site support, collect and return service and business-hours telephone support. It also provides 24x7 online supports for 365 days a year. The company also provides multivendor hardware support, advisory, and protection services among others. Approach to E-Commerce Tandon et al., (2013) stated that, to solve the multitude of problems towards selling its products on an e-commerce platform, HP developed an E-Services framework which has the following stages: matchmaking, negotiation, the formation of the contract, and fulfillment of the contract. In case the company finds the e-commerce to intrusive, that's why they have proposed three standardizations: standards for business-specific types which contracts, services and goods traded, Standards for specifying the format of contracts, proposals, and advertisements, which are used during business-to-business (B2B) transactions. And, standards that specify the protocols which the traders use to engage with each other during different stages of B2B lifecycle. Dell set up its website www.dell.com as an e-commerce website and found huge success through online sales. The approach behind the move to e-commerce platform was to leverage the benefit of face-to-face contact between the seller and the buyer. I t ensures that the staff is responsible for providing quality customer service and support, and on delivering the product when the users order products from the website (Mohapatra, 2013). Other strategies the company adopted are selling directly to the consumers, customization of product, and tracking the products. Future challenges of HP and Dell HP broke up from its internal PC division and split itself into two companies forming Hewlett-Packard Enterprise and HP Inc. The former will focus on selling consulting services and data center hardware, whereas, the latter will focus on selling printers and PCs. It means server farms, inventory tracking, accounting, payroll, and email were all divided into two, leaving all the thousands of employees in the dark. Eighteen software programs that needed transition had to be taken extra care, because if they broke HP would be unable to ship inventory, take orders or pay workers (MacArthur Barton, 2013). Dell faces a challenge from its Dell-EMC Merger. With the merger, there will be a lot of overlapping products which will confuse the customers until the company comes out with a single brand. EMC charges much higher price than Dell for the same product, and its the reason when the merger will complete, and the revenue per sale will decline (deal, 2016). It is more troublesome since EMCs sales force depends on earned revenue, and lower revenue equals to lower commissions. Decisions and its implications of HP and Dell HP decided to split up into two organizations Hewlett-Packard Enterprise and HP Inc. The company took the decision after taking many factors into account such as Lenovo taking over the market, slow demand in the PC market, problems in the companys senior management, company's own $10.2 billion Autonomy acquisition that lowered the companys value among many. It led to a migration of at least 18 software programs, which if broken would result in non-payment of workers, broken payroll inventory, and non-shipping of inventory items. Many workers were also left in the dark because of the acquisition (Forbes Welcome, 2016). Silver Lake Partners, a private equity firm brought Dell from public shareholders, but the buyout was underpriced at 22%, and this can lead to compensation to investors in tens of millions, those who opposed the deal for the computer maker (How Michael Dell, Silver Lake Underpaid Shareholders But Did No Wrong, 2016). Competitive Edge of Dell and HP Voigt, Buliga Michl (2017) explained that Dells competitive edge comes from its build-to-order and direct selling approach preventing middleman in between. JIT or just-in-time strategy allowed them to function with lowest inventory level. It gave Dell a significant cost advantage in component costs as they deprecate. Dell also offered personalization options which are customer centric. The workforce of the company also had access automated real-time volume expectations and demand trends of various components. Dell has its manufacturing plants built in places, which has high productive workforces and low labor costs, giving them a location-specific advantage. One strategy of HP is the key to sustainability to gain a competitive advantage. Another strategy is to renovate their BPS or Business Process Service by introducing new technologies to optimize existing systems, improve system integration, mitigating implementation risks and delivering results quickly (Pavie et al., 2013). New technologies introduced are Mobile technology, cloud technology, analytics to provide insights, and advanced BPS accelerators and automation. Strategic Moves of Dell and HP HPs main competitor is Dell. Dell has been consistent in funding innovation for the last six years, but for HP they had been trying to sustain in the PC market, and its demise started when it was split into two companies. Currently, in compared to HP Dell has a strong channel partner program (Forbes Welcome, 2016). In the same period, HP had a mixed channel partner track record. HP's reluctance in x86 server market and PC market led to the disappearance of few partners as they felt burned when the sales team members of HP Enterprise took direct deals. Now, Dell has a definite upper hand against HP in the channel (Cooke, 2013). Company success stories In the Global 2000 list, HP was positioned 80, and number 31 as Forbes nominated in the Worlds Valuable Brands category. At present, it is one of the champions in the global technology provider's area (HP History: HP's Garage: Story: Partner in Greatness | HP Official Site, 2016). Michael S. Dell became the Youngest CEO of a Fortune 500 company at the age of 27. Today, Dell Inc. it is one of the internationally acclaimed manufacturing brands (Dell's success in the details, 2016). Brief company background information Michael Dell founded Dell in 1984, with the premise that to understand the needs of the customers and proving solutions accurately and efficiently, the company needed to sell computers directly to the consumers (us, 2016). HP was founded in the year 1939 by Dave Packard and William Redington Hewlett. Currently, it operates as two different companies, the other being HP Inc. It is an American multinational Information Technology organization that delivers software services and hardware to large, medium and small enterprises across different industries (About us | HP India, 2016). Analytical statistics of Dell and HP Currently, Dell enjoys a 15 percent share in the sphere of high-end storage products like high-end storage products, printers, monitors, handheld computers, workstations, network servers, notebook computers, desktop personal computers, and a variety of computer software and peripherals. Michael Dell, the founder of Dell, has a 12 percent share in the company and will remain as the company's chairperson. It has over 111,000 employees worldwide. Half of the company's revenue comes from the PC market, and the other half comes from the server industry (Forbes Welcome, 2016). Hewlett Packard has a revenue share of US$ 138.854 billion according to the revenue posted in 2015. Its workforce consists of 315,000 employees as of quarter two of 2015. It serves its products worldwide and is currently headquartered in Palo Alto, California (US). The primary sources of revenue for HP are through value-added solution providers, resellers, and sales to channel partners (HPI/HPE split. Hewlett-Packard Alumni, 2016). References About us | HP India. (2016).Www8.hp.com. Retrieved 6 September 2016, from https://www8.hp.com/in/en/hp-information/ Cooke, P. (2013). Global production networks and global innovation networks: Stability versus growth.European Planning Studies,21(7), 1081-1094. deal, F. (2016).Four challenges for the Dell-EMC deal.Cnbc.com. Retrieved 6 September 2016, from https://www.cnbc.com/2015/10/12/four-challenges-for-the-dell-emc-deal.html Dell's success in the details. (2016).CNET. Retrieved 6 September 2016, from https://www.cnet.com/news/dells-success-in-the-details/ Forbes Welcome. (2016).Forbes.com. Retrieved 6 September 2016, from https://www.forbes.com/sites/valleyvoices/2015/10/27/making-sense-of-the-dell-emc-vmware-deal/ Forbes Welcome. (2016).Forbes.com. Retrieved 6 September 2016, from https://www.forbes.com/sites/patrickmoorhead/2013/06/21/dells-pc-growth-strategy-in-it-to-win-it/ Forbes Welcome. (2016).Forbes.com. Retrieved 6 September 2016, from https://www.forbes.com/companies/dell/ How Michael Dell, Silver Lake Underpaid Shareholders But Did No Wrong. (2016).Fortune.com. Retrieved 6 September 2016, from https://fortune.com/2016/06/02/michael-dell-shortchanged-shareholders/ HP History: HP's Garage: Story: Partner in Greatness | HP Official Site. (2016).Www8.hp.com. Retrieved 6 September 2016, from https://www8.hp.com/us/en/hp-information/about-hp/history/hp-garage/partner-in-greatness.html HPI/HPE split. Hewlett-Packard Alumni. (2016).Hpalumni.org. Retrieved 6 September 2016, from https://www.hpalumni.org/split Kou, T. C., Lee, B. C. (2015). The influence of supply chain architecture on new product launch and performance in the high-tech industry.Journal of Business Industrial Marketing,30(5), 677-687. Kou, T. C., Lee, B. C., Wei, C. F. (2015). The role of product lean launch in customer relationships and performance in the high-tech manufacturing industry.International Journal of Operations Production Management,35(8), 1207-1223. MacArthur, J. B., Barton, T. L. (2015). A teaching case on strategic and tactical decision-making at Hewlett-Packard Co.Journal of Business Cases and Applications,14, 1. Michael Dells dilemma. (2016).Fortune.com. Retrieved 6 September 2016, from https://fortune.com/2011/06/13/michael-dells-dilemma/ Mohapatra, S. (2013). E-commerce Strategy. InE-Commerce Strategy(pp. 155-171). Springer US. Pavie, X., Hsu, E., Rdle, H. J. T., Tapia, R. O. (2013). How to define and analyze business model innovation in Service. Steiber, A., Alnge, S. (2016). Silicon Valley: A Cradle of Management Innovation. InThe Silicon Valley Model(pp. 37-51). Springer International Publishing. Tandon, R., Chakraborty, A., Srinivasan, G., Shroff, M., Abdullah, A., Shamasundar, B., ... Dhore, P. (2013). Hewlett Packard: Delivering Profitable Growth for HPDirect. com Using Operations Research.Interfaces,43(1), 48-61 us, D. (2016).Our history.Dell. Retrieved 6 September 2016, from https://www.dell.com/learn/us/en/vn/our-history Voigt, K. I., Buliga, O., Michl, K. (2017). Customized and Built to Order: The Case of Dell. InBusiness Model Pioneers(pp. 55-66). Springer International Publishing.