Conflicts between Apple and Samsung over design patent problems began two years ago just a few months after Samsung started to release its Galaxy smartphone even though they have had good relation that Samsung had provided many components for the iPhone and iPad. Finally, in August 24th 2012 a California ordered Samsung to pay Apple $1.05 billion because they judged that Samsung infringed intellectual property of Appleʼs iPhone and iPad technology and design. they are, however, still continuing the battle in many countries now. As seen in this case, business would be highly likely to be strongly influenced by eternal environment.
Therefore a manager and marketer should always know the environment surrounds their company from a variety of aspects in order to seize a business chance for sure and avoid risk factors as much as possible. It is said that ʻPEST analysisʼ should be one of the effective way to know exterior environment (Abe, 2012). In following paragraph, this essay first shall demonstrate the definition of ʻPEST analysisʼ. Secondly, this essay will outline the conflict briefly, and then examine the potential cause using the Pest analysis. Thirdly, this essay will clarify the marketing strategies of Apple and Samsung, and then inspect the differences of the two marketing methods to be sure why the dispute was caused.
As commonly known, ʻPESTʼ stands for ʻpoliticalʼ, ʻeconomicʼ, socio-culturalʼ and ʻtechnologicalʼ, which are influential external factors on conducting a new project or market research. Political factors includes Laws, global issues, legislation and regulations which might affect the company which you are operating either immediately or in the future. Economic factor includes taxes, interest rates, inflation, the stock markets and consumer confidence all need to be taken into consideration. Social-cultural includes the changes in lifestyle and buying trends, population growth rate, age distribution, ethics and publicity factors. Technological factor includes innovations, access to technology, licencing and patents, manufacturing, research funding and global communications. Jury found that six patents of Apple were infringed by Samsung at issue in the case.
The patents which have been infringed by Samsung range from utility patents to design patents(Letzing and Clark, 2012). They judged that all Appleʼs patents are valid and also Apple have not offended any of the five patents insisted by Samsung. The five patents that Samsung have presented range from Standards-essential patents to feature patents(Letzing and Clark, 2012). The verdict will not have impact on their latest products. However, it might have strong influence on Apple, Samsung and even other companies that make smartphones and tablets. It would be harder for entrants to enter smartphone and tablet markets. They will have to reconsider carefully how smartphones and tablets are designed in order to avoid matters like that case.
That means that Apple would be able to keep its position in the market and profit margin high. If the conflict between Apple and Samsung is seen from the aspect of the PEST analysis, political and technological factors in particular would be the main elements of the disagreement. According to Limacher(2011), there are broadlydivided into three questions that a firm should think throughout the marketing process. The first question is ʻWhat does the market look like from internal and external perspective?ʼ. The second one is ʻwhom do we want to go after and how?ʼ. The last one is ʻWhat do we sell, where do we sell it, how do we sell it, and how do we gain and retain customers?ʼ. If the two companies, especially Samsung had taken account of these questions with political and technological factors of the PEST analysis, they might have been able to avoid it or minimized the loss at least.
One of the reasons why the battle between Apple and Samsung arose might be attributed to the complexity of patent litigation. According to Letzing and Clark(2012), the U.S. Patent and Trademark Office have already granted numerous patents and thus patent litigation is one of the hardest litigation to judge in court. Therefore many have doubted whether or not jury can assess such complicated suit. Moreover, a federal judge who recently abandon an outstanding lawsuit between Apple and Motorola, said ʻthe patent system was in chaosʼ (Letzing and Clark, 2012). It is argued that the trial, that Apple sued Samsung in April 2011, has been especially complicated because of the rare combination of different types of intellectual property claims dealt with in the court. The patents included cover software features, hardware design, highspeed communication features and even a claim to the entire design and feel of a device.
Overall, if either Apple or Samsung encompasses all legislation for intellectual property, leveraging the PEST analysis, the too many patents granted by the U.S. Patent and Trademark Office would lead the companies to an action that results in failure for reasons beyond their control like the case. An article(2009) illustrates that Apple place a strong emphasis on creating customer loyalty, using effective marketing strategies which is well thought-out. First, Apple created a store just for Apple products, where current and new customers are encouraged to enjoy the apple products as much as they can. Second, Apple make Almost all Appleʼs products linked with each other. For example, if you bought an iPod, you can download music through iTunes. Third, Apple establishes a coherent image of Mac users that they are smooth and confident. Fourth, Apple is ready to provide alternative products which are lower price than Apple computer such as iPod or iPhone.
Fifth, Apple tries to control media by leaking rumors about new inventions in order to keep its customers enthusiastic about new Apple products now and in the future but there is a objection raised as well. It is that the control of information from media might mislead people in public (2010). Sixth, Apple sells its products to education institutions. Seventh, Apple always cares consumersʼ needs by means of both meticulous research and distinct design. Eighth, basically, Appleʼs consumers have less opportunities to interact with the company for Apple products. For example, Apple constantly produces a good product but let AT&T handle the service in terms of iPhone. Ninth, Apple regards consistency as important. Therefore, all Apple products have the similarity of basic design. Tenth, Apple supplies customers with various ways to enjoy its products such as in their living rooms, pockets and offices, regardless of the consistency. Finally, Apple focused on keeping its attractiveness, which ranges from packaging to aesthetic design to user-interface experience.
According to Ming(2010), In order to rival Sony and Panasonic, Samsung needed to change its brand image from a cheap electronics company. When the 1988 Summer Olympic Games in Seoul, Samsung seized on the chance to advertise its products by taking advantage of this international sporting event. Samsung officially sponsored the Olympic Games for wireless technology. In 1997, Samsung joined a member of The Olympic Parter(TOP), and then the organization has fulfill this mission for five consecutive Olympic Games. Consequently, this fact certainly improved the companyʼs image. From at that time, Samsungʼs emphasis was on the affiliation with Bes Buy, a top U.S. retailer of electronic goods. Samsung also made a tactic of collaborating with a luxury brand such as Armani to be regarded as prestige, quality and wealth. The strength of Samsung can be said that the wide range of its products from air conditioners to cell phones to hard drives to vacuum cleaners.
By comparison between these two companies marketing strategies, Apple and Samsung, there is a fundamental difference. The focus of Apple is obviously on both creating and enhancing customer loyalty. On the other hand, Samsung is enthusiastic about activities to generate a great publicity. Compared with Apple, Samsung produces various products worldwide. Hence the external environment of Samsung, where might have many factors of PEST analysis, might be fairly extensive, this would prevent the firm from analyzing one area or company deeply. Moreover, in terms of business ethics which is one of the socio-cultural factors in PEST analysis, Samsung is considered to recently almost behaved at variance with the ethics (Hardy, 2012). The company placed an advertisement for Galaxy S Ⅲ which is the latest product of Samsung in public, that had a catch-phrase,”It doesnʼt take a genius. The Next Big Thing Is Already Here.” The advertisement boasted of the abundance of its functions by listing with those of iPhone 5. The recent Samsung advertisements for new Galaxy S Ⅲ offend Apple and the iPhone. An article (Hardy, 2012) contends that the advertisements are not necessarily vicious businesses. however, ʻif advertisers really did discuss ethical concerns, the ad likely wouldnʼt have run.ʼ Overall, the variety of Samsunʼs products mentioned above and this ethical issue might result in the controversy between Apple and Samsung.
In conclusion, this essay have explored the conflict from the perspective of the marketing strategies of Apple and Samsung, especially using the PEST analysis. It described a brief definition of the PEST analysis. It deepened understanding of the present situation of the dispute in terms of political and technological factors of the PEST analysis. As a result, this essay found that this matter would be an absolute reminder of how smartphones and tablets should be designed, and it assessed the potential cause of the conflict.
It might be the complication of a patent lawsuit. It illustrated the marketing strategies of Apple and Samsung, examined the differences of their strategies, and then suggested the possible reason result in the disagreement regarding socio-cultural factors. Apple basically employs nine effective strategies to inspire a strong customer loyalty. By contrast, Samsungʼs marketing strategies are to seek publicity. However, recent Samsungʼs acts are said that it violates business ethics. In other words, Samsung offends Apple by aggressive advertisements. This could be one of the trigger of this battle.
• Abe, T. (2012 ) All about. Available at:http://allabout.co.jp/gm/gc/398209/ (Accessed: 1 December 2012).
• Letzing, J. and Clark, D. (2012) THE WALL STREET JOURNAL. Available at: http://online.wsj.com/article/
• Limacher, R. (2011) STRATEGYHUB. Available at: http://www.strategyhub.net/ 2011/01/framework-of-week-45-strategic.html (Accessed: 1 December 2012) • INSIDECRM (2009) 11 Effective Strategies Apple Uses to Create Loyal Customers. Available
http://www.insidecrm.com/articles/crm-blog/11-effectivestrategies-apple-uses-to-create-loyal-customers-53510/ December 2012).
• Scoksd2001 (2010) ʻCriticism of Apple Inc.ʼ, Blog.com, 23 November. Available at: http://criticismofappleinc.blog.com/ (Accessed at: 1 December 2012). • Ming.F (2010) Samsung – International Marketing Strategy. Available at: http:// www.slideshare.net/MKTGatHPU/samsung-5672631 (Accessed: 1 December 2012).
• Hardy, A. (2012) Ethics and the Media. Available at: http://addison-hardy-mediaethics.blogspot.co.uk/2012/09/samsung-galaxy-s3-advertising-is-it.html (Accessed: 1 December 2012).
• Lee, K. and Carter, S. (2012) Global Marketing Management 3rd Edition. Oxford: OXFORD UNIVERSITY PRESS.
• Baines, P., Fill, C. and Page, K. (2011) marketing. Oxford: OXFORD UNIVERSITY PRESS.
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Topic: The Conflict Between Apple and Samsung
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