The main objective of any firm is not just making profits but the highest possible profits. Companies are willing to go out of their way to ensure that they reap the most out of their business activities even if this may mean teaming up with their fiercest rivals in business. Apple and Samsung offer a perfect example of a partnership between huge competitors for the sake of maximizing profits. The two firms constitute the two worlds’ largest technological companies.
The firms have employed the B2B marketing strategy. With this kind of strategy, the two firms are able to draw from each other’s strengths in different ways and as a result ensure the highest possible degree of efficiency. While Samsung prides itself in great hardware, Apple is associated with software and product packages that respond to the specific needs of the consumer. This paper intends to explore the business to business marketing between Samsung and Apple while analyzing the factors behind the strong symbiotic relationship they have.
Business to Business Marketing
Business markets are formed by corporations, institutions and government agencies. These markets acquire the product and services available in both local and international markets for use, incorporation, resale and consumption. These types of businesses cover the largest proportion of the market for companies’ products and services. As such, companies normally interact with other companies in order to get the supplies of products and services they are not able to produce themselves.
The interaction develops due to the fact that no one company can be totally self sufficient. This is the case with Samsung and Apple Inc. The two companies purchase industrial products to facilitate the production process of products like Samsung’s flat screen TVs and Apple’s computers. Even though the two corporations are electronic giants, they are not self sufficient. They cannot produce everything and as such outsource for other products and services to complete their production process. They depend on each other more than they depend on other companies in the market creating a mutual dependence between them that is inevitable.
Samsung: Apple’s Biggest Supplier
Apple does not manufacture the component parts of its products by itself. The device accessories are supplied by various companies. They are then mounted together by a single company that is located in China. Sometimes Apple supplies its clients with the gadgets directly from China as opposed to passing the products through the U.S where its headquarters is located Due the nature of manufacturing and assembling of Apple devices, the devices can be described as, “Apple’s is not Apple.” Apple devices are essentially the designs.
The hardware parts are supplied by different manufacturers. Among the suppliers, Samsung stands out as the most significant contributor of the parts. It supplies some of the most important components of the devices. The processors found in Apple Inc’s devices, for instance, are manufactured by Samsung. They are responsible for the functioning of Apple’s devices. Samsung contributes about 26% of Iphone’s components cost. This places Samsung as Apple’s closest friend because of the significant contribution it makes to its products.
The reason for the market competition between the two firms is that Samsung also manufactures its own tablets, phones and computers. As such the two companies have the same line of products for the final buyer. Despite, the rivalry Apple cannot contemplate finding another supplier due to the fact that Samsung produces the best quality of hardware in the world. Finding another supplier would compromise the quality of its products and work against its business strategy.
Samsung is Apple’s biggest supplier of components. Samsung’s business model is to be a supplier of component parts. Apple concentrates more on strengthening its elegancy in design, software, quality services and the creation of easy-to-use combinations of hardware leaving the manufacturing and assembling of its products to other companies.
This has assured Samsung a steady flow of cash. Going by the current statistics, its biggest customer is Apple, contributing to great percentage of its revenue. Samsung uses the revenue to push forward its development agenda. For instance, Samsung announced the opening up of a new factory that will be operational from 2017. This ambitious plan requires a steady flow of income in order to implement and achieve the objective. Samsung aims at maintaining its position as the leading manufacturer of technological components in the world. Samsung needs Apple because of its purchasing capability.
Apple and Samsungs Symbiotic Relationship
It is worth noting that Samsung and Apple have in the past engaged in a number of legal battles over infringement on patents. Nevertheless, Apple and Samsung continue to aid each other in the delivery of products and services. This makes one wonder why it is so difficult for the two to divorce each other. It is because the two aid one another in product manufacture and service delivery. Their rivalry is because they are often trying to outsmart one another when fighting for the market share. The rivalry occurs only when the consumer of their final products is concerned. Behind the eye of the public, the two are like married couples each with something to give to the other.
Apple relies heavily on Samsung to supply the component parts of it devices. This is particularly important for Apple as it enables it concentrate on the design process. Apple’s strategy is to combine elegance with quality. The company is able to come up with elegant designs and powerful software that are compatible with each of the designs. Samsung stands as the biggest beneficiary of Apple’s initiative of outsourcing for the manufacture its products’ component parts. This has enabled Apple to produce the best brands of phones and computers. Samsung remains part of its future plans with regard to the production of more sophisticated products.
In a similar manner, Samsung depends on Apple to push forward its strategy of being the world’s leading producer of the best technological devices. A few years ago, Apple moved to court to sue Samsung over patent infringement with regard to its galaxy S handset smart phone and Galaxy Tab tablet. Although Apple was unsuccessful in stopping Samsung from manufacturing more devices, the court granted them an injunction against selling the product in Europe and Australia. These proceedings show that though Samsung has an advantage of hardware, it is incapable of designs and products. Apparently, Samsung depends largely on Apple Inc’s ability to design and market its brand successfully.
Samsung also relies on Apple as its major component’s customer. As stated earlier, Samsung’s strategy is to maintain its position as the number one component producer. In order to achieve this goal, it needs a consistent customer like Apple. Apple is known to have one of the best inventory turnovers. In fact, the company had the best sale ever of mobile devices last year. This shows the company’s ability to achieve high sales that increase its demands for component parts. The benefits accrued from the sales are directly shared by Samsung. Samsung earns revenue that enables it to expand.
Both apple and Samsung need each other to survive. Although they seem to be at war with each other, the two can barely survive separately. Apple looks for the best manufacturer of components that is Samsung. On the other hand, Samsung looks for a reliable customer who will provide them with a constant source of cash flow. The two companies engage in a business to business relationship that ensures perpetuity.
Clearly, both Apple and Samsung continue to enjoy great success due to the symbiotic relationship existing between them. Business to business markets are generally products of the interaction between companies, government agencies, corporations and other business entities. There is a lot that other companies can learn from the relationship between the two companies.
Even though, Samsung and Apple are arch rivals, they have learned to swallow their pride and work to together for the greater good, which maximum profits and growth prospects for both firms. It is important that other companies strongly consider the strategy adopted by Samsung and Apple if they hope to enjoy immense success in their operations.