Successful Innovation and Performance in Two Different Organizational Cultures: Focusing on Samsung Electronics and Apple in the Mobile Phone Industry
By Hyojung Lee
(Supervisor: Dr. Prof. John Cullen)
A Thesis Submitted in Partial Fulfillment of the Requirements for the Degree of
Master of Business Administration
at
University of Amsterdam
Plantage Muidergracht 12, 1018TV Amsterdam October 2014
Abstract
Competition in the mobile phone industry is over-heated. However, only two main players seem to enjoy most of the growth in the market, which are Samsung Electronics and Apple. Both of the firms are delivering successful performance globally in the industry. Interestingly, these two companies are originated from completely two different organizational cultures. This research will devote to find out i) what factors – different types of assets (ordinary and extra ordinary assets) have made these two firms so successful within ii) two different organizational cultures (quasi-bureaucratic vs. quasi-entrepreneurial). We will examine the organizational culture of these two firms and its relation to the firm performance. Furthermore, intrinsic relations of different types of assets combination will be investigated. In the conclusion, this research will close with some suggestions for future researches such as how the defined assets can be redeployed and used for other organizational set up in order to attain competitiveness.
I. Introduction
Competition in the mobile phone industry is over-heated. According to Forbes, “the two largest smart phone companies, Apple and Samsung, filed over 40 patent lawsuits against each other. Now the two companies have signed a pact that ends all patent lawsuits outside of the U.S. The lawsuits will end in countries including Britain, France, Spain, Germany, Italy, South Korea, Japan, Australia and the Netherlands. (Chowdhry, 2014)” On the one hand, it seems quite troublesome for these two leading companies facing to the severe battle; On the other hand, they enjoy most of the growth in the market. Samsung overtook Nokia to become the world’s largest mobile phone producer in the first quarter in 2012 (Williamson, 2012), and Apple also achieved its highest ever market share by selling nearly doubled handsets to worldwide than last year (Apple Inc., 2013).
Undoubtedly both firms are delivering very successful performance globally in the mobile phone industry. Interestingly however, these two companies are originated from entirely two different organizational backgrounds and management hierarchy. One company is embedded in highly bureaucratic and conservative organization (South Korea), which we expect their organization culture and control mechanism are centralized. The other one is in the opposite (the U.S.) that we expect more decentralized organization structure. Subsequently, I want to explore the factors which have made these two firms so successful though they have two opposite organizational background.
Thus far, many previous studies in the area of strategic management have focused on firms’ performances and competitive advantages. In this research, I attempt to define how these two different organizational designs can originate and foster the successful firm performance. In addition, intrinsic relations of different types of asset combinations will be tested. Furthermore, I will explore whether there is any ideal organizational design to promote the performance.
The prominent research questions stem from as follows; i) comparing to other players in the mobile phone industry, what different types of assets (ordinary or extra ordinary assets) have made these two firms so successful within ii) such different organizational culture (hierarchical versus flexible); how these two different organizational cultures can originate and foster the firm performance successfully. In order to deliver a solid research, further sub questions can be developed as follows; i) are there any intrinsic relations in terms of different types of asset combination to make them successful? Or are there any specific assets’
combinations or core competences to achieve and foster the firm performance? ii) are there any specific elements to form an optimal organization in order to incubate, initiate and foster the firm performance over time?
In the following chapter, theoretical background will cover various researches in terms of competitive advantages. Especially, emphasis will be placed on examining the intrinsic roles of assets to achieve competiveness in the market. In addition, some prominent researches will be discussed in terms of organizational studies. After the substantial review on the literatures, a theoretical framework will be introduced with relevant hypotheses.
These hypotheses will be tested applying the case studies of Samsung Electronics and Apple. Various data sets will be collected that will be cross-checked. Final chapter of this research will be concluded with findings and some suggestions for the future researches such as how the defined assets can be redeployed and used for other organizational set up in order to attain competitiveness.
II. Literature Review and Theoretical Framework
2.1. Literature Review on Competitiveness of Firms
Various researches have been published on investigating firm’s competitiveness. Many scholars tried to explain how firms can differentiate themselves in order to achieve better performance than others. One of the dominating approaches in the 1980s is positioning school. Michael Porter (1980) is one of the main researchers of this field represented by his book Competitive Strategy. Porter (1980) presents five-forces model (threat of entry, threat of substitutes, bargaining power of suppliers, bargaining power of buyers, and competitive rivalry) and three generic strategies (cost leadership, differentiation, and focus) and explains that firms can perform better than others by favorably positioning themselves in attractive industries where the firm is protected by barriers to competition from the forces. The positioning school, and the work of Porter in particular, have contributed to the development of the strategic management field, however they have been challenged by many researchers as the positioning school does not explicate enough the fitness or provide a precise strategic behavior in relation to the environment.
Alternatively, resource-based school emerges with different view from the positioning school. Main focus of the resource-based view is to understand the firms’ performance difference in terms of their own resources, competences, and capabilities. This school is developed by many scholars such as Barney (1991), Peteraf (1993), and Prahalad and Hamel (1990). According to Barney (1991), a firm will attain competitive advantage by making “supra-normal” profits when it has valuable, rare, inimitable and non-substitutable resources. In the similar context Prahalad and Hamel (1990) add their view that “core competencies lead to the development of core products which further can be used to build many products for end users.” The resource-based scholars express that resources are the ultimate sources of the competitive advantage of the firms, therefore the firms should have strategy with a clear vision for its future and at the same time develop unique and valuable resource combinations to realize the vision (Stoelhorst, 2008). The resource-based school supplements internal perspectives of competitive advantage on the external focus of the positioning school.
Wijnberg (2004), however, challenges the resource-based view that there is a limitation to provide an answer to question such as “what does ‘valuable’ resources mean, apart from scarce, inimitable, and non-substitutable?” The advocates of resource-based view do not provide the clear definition of valuable resources (Wijnberg, 2004). Consequently, the
resource-based view needs to be improved to provide an intrinsic definition of resources and the relationship between resources and value. In this sense, Mol and Wijnberg (2004) try to introduce more detailed definition of “value”. They studied how valuable resources can assist firms to create, appropriate, capture, and protect the “value” from the value chain. According to them, if the firm acquires specific assets with less than their original worth that can bring them benefit by influencing relevant final customers who decide the value, the firms are able to generate competitiveness, consequently “value” is created and captured. Furthermore, they argue that the firm needs to protect the created value otherwise competitors will ruin the value by imitating (Mol and Wijnberg, 2004). In this light, Mol and Wijnberg (2004) introduce three different kinds of assets: “ordinary assets”, “ex-ante extra ordinary assets”, and “ex-post extra ordinary assets”. “Ordinary assets” are related to product characteristics. “Ex-ante extra ordinary assets” are related to the assets that persuade relevant selectors effectively in order to enter into the market. “Ex-post extra ordinary assets” are to protect the value from being imitated by other competitors.
The researches of Mol and Wijnberg (2004) bring deeper understanding and more concrete explanation about meaning of the “value”, and this approach supplements the previous researches on firm’s performance difference, such as positioning or resource-based view. Byun (2005), however, argues that the asset classification from Mol and Wijnberg (2004) does not provide a clear picture how these assets can be applied in practice. The research does not provide practical examples to the practitioners. He argues that the meaning of “ordinary assets” and “extra ordinary assets” in the literature of Mol and Wijnberg (2004) is still ambiguous and suggests that more intricate relations of assets need to be examined in the dynamics of competitive business environment.
Consequently, relevant conceptual framework has been introduced using the combination of different types of assets which explains how firms create, capture, and protect the value applying those assets. This approach provides somewhat clear direction for practitioners how they can set up a strategic plan employing an effective assets’ combination framework especially in growth phase of industry life cycle (Byun, 2005). The research concludes that optimal combination of ordinary assets, ex-ante extra ordinary assets, and ex-post extra ordinary assets are critical factors for successful performance in the growth phase of industry life cycle, which is considered a good contribution in the field of strategic management studies.
In addition to the relevant strategic management studies, I also pay attention to the increasing importance of organizational studies, which argue that organizational culture is a critical factor for innovation as well as organizational performance. For instance, according to Cameron (2008), in practice we often notice that it is difficult to name a highly successful company in its industry without having identifiable and distinctive organizational culture. Every firm has its own characteristics in terms of organizational culture, which may lead to different performance. Following chapter will contribute to provide further insight in terms of organizational culture and performance.
2.2. Literature Review on Organizational Culture
Numerous empirical studies have demonstrated that organizational culture is a critical factor for innovation of the organization. Various researchers argue that organizational culture provide a firm source of sustained competitive advantage. For instance, Deal and Kennedy (1982) explain that successful firm has a unique organizational culture that differentiates the firm from the others. In other words, organizational culture can play an important role to enhance organizational performance by motivating employees, gathering people around their shared purposes, and influencing employee behaviors (Çiçek and Özer, 2011). Glynn et al. (2013) elaborates further that organizations could have distinct cultures, or sets of shared values, beliefs, and norms that guide the attitudes and actions of organizational members. Consequently, there are various meanings attributed to the concept of organizational culture, which are defined in many different ways in the literatures. Each organizational scholar presents different view, since the concept of the organizational culture was emerged before having conventional or common concept of culture itself (Ju, 2004).
The numerous numbers of definitions of organizational culture from different scholars (Kroeber and Kluckhohn, 1952) can be categorized into two main disciplinary foundations, which are “sociological” and “anthropological” (Cameron, 2008). The former foundation considers that “organizations have culture”, and lateral foundation views that “organizations are cultures”. Within the each discipline, two different approaches have been developed to define and understand organizational culture, which are “functional” and “semiotic” approach (Cameron, 2008). The “functional” approach sees that the organizational culture emerges from collective behavior, therefore the organizational culture is an attribute possessed by the organization. The “semiotic” approach considers that organizational culture resides in individual interpretations and cognitions, and the organizational culture describes that
organization is (Cameron, 2008). The former perspective assumes that managers can identify, measure and change their organizational cultures and the culture is potential predictor of the organizational performance, whereas the latter assumes that there exists nothing but culture in the organization (Cameron, 2008).
Large number of organizational scholars agree with the concept that considers culture as “social glue”, which is binding an organization together, therefore they adopt the functional perspective in sociological foundation (Cameron & Ettington, 1988; O’Reilly & Chatman, 1996; and Schein, 1996). According to them, organizational culture is dominant ideas that people have in mind. Organizational culture, as the deeply rooted values and beliefs that are shared by personnel in an organization (Sun, 2008), affects the way organizational members feel and behave (Cameron, 2008).
In this context, Pettigrew (1979) uses the term “organizational culture” first time in his academic literature. According to him, organizational culture can be defined as a set of values, norms, beliefs, meanings, and behaviors. Ouchi (1981) adds his view by arguing that organizational culture consists of a set of symbols, ceremonies, and myths that communicate the underlying values and beliefs of that organization to its employees. Deal and Kennedy (1982) explains organizational culture as “the way things get done around here.” These scholars consider the culture as a set of psychological predispositions (Sun, 2008). Schein (1985) also provides similar approach to understand the concept of organizational culture, which he defines it as “a pattern of shared basic assumptions that a group learns as it solves its problems of external adaptation and internal integration, that has, worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think and feel in relation to those problems.” In other words, he sees the organizational culture as a set of beliefs, values and assumptions shared by members of an organization. It is comparable to the definition introduced by Barney’s study (1986), explaining that organizational culture is a set of shared values, beliefs, assumptions and symbols that direct the way in which a firm runs its business.
Taking the view of organizational culture from the functional perspectives in sociological foundation, in the following chapter, I will further explore the different types of organizational culture more in a form of framework. This framework will be a cornerstone to formulate hypotheses, which need to be tested with case studies.
2.3. Organizational Culture and Performance
Cameron and Quinn (1999) conducted a research on organizational effectiveness and success, in which they introduced a “competing values framework” classifying the organizational cultures in four dimensions. As depicted in Figure 1, the competing values framework model has four quadrants divided by a horizontal and vertical axis: “clan”, “adhocracy”, “market”, and “hierarchy” culture. The horizontal axis presents the extent to which an organization stresses internal or external view, and the vertical axis presents the extent to which an organization focuses on control or flexibility (Cameron and Quinn, 1999).
<Figure 1> Competing Values Framework
(Source: Cameron and Quinn, 1999)
“Clan” organizational culture is located at the upper left quadrant, which is defined as internal maintenance and flexibility. The clan culture emphasizes the benefit of human resource development with high cohesion and morale. At the same time, it values teamwork, participation and consensus. In other words, this organizational culture is family-like and focuses on mentoring and “doing things together” (Quinn, 1988). “Adhocracy” culture is in the upper right quadrant with stressing external positioning with a high degree of flexibility. This segment of organizational culture is defined as dynamic and entrepreneurial, which focuses on creativity and innovation as important factors (Quinn, 1988). This culture focuses on “doing things first”. “Market” culture in the lower right quadrant has focus on external maintenance with stability and control. It is result-oriented and stresses competition, achievement, and “getting the job done” (Quinn, 1988). “Hierarchy” culture in the lower left quadrant of the model, contrasting with the “adhocracy” culture, focuses on internal maintenance with stability and control. This culture is structured and controlled, and concerns
Clan Adhocracy Culture Culture Internal External Focus Focus Hierarchy Market Culture Culture Flexibility Control
stability and efficiency in the long term; “doing things right” (Quinn, 1988). Cameron and Quinn (1999) associate the upper two, “clan” and “adhocracy”, with flexibility and adaptability and the lower two cultures, “hierarchy” and “market”, with a focus on stability. A “hierarchy” culture, based on control, will mainly lead to incremental change, while a focus on “adhocracy” will more typically lead to rapid change (Cameron and Quinn, 1999). Cameron and Quinn (1999) conclude that culture profile of certain organization can be characterized according to the competing value framework, and they develop “organizational culture assessment instrument” in order to identify organizational culture profile (Cameron, 2008).
More recently Richard L. Daft (2007) publishes that corporate strategy and structural design needs to be strengthened by its culture and that the organization should be valuable within its environment. He measures and defines organizational design and behaviour, which can improve organizational effectiveness and efficiency. In the similar context to the competing value frame work of Cameron and Quinn (1999), Daft (2007) distinguishes the organizational culture in a way of that the organizational strategy interacts with its environmental needs presenting a typology of culture, which has four categories that an organization can belong to: “adaptability”, “mission”, “bureaucratic”, and “clan” culture as we can see from Figure 2. “Adaptability” culture strategically concentrates on the external environment through flexibility and change. Organization with this type of culture quickly reacts to external environment and requires changes in order to meet customers’ demand. It values innovation, creativity, and risk taking (Daft, 2007). This culture can be understood in similar track with the “adhocracy” culture presented by Cameron and Quinn (1999). “Mission” culture is characterized by focusing on organization’s clear vision to achieve the purpose and specific goals. This type of organization concerns with servicing customers in external environment, however do not rapidly change. The “mission” culture is comparable to the “market” culture in competing value framework of Cameron and Quinn (Daft, 2007). “Bureaucratic” culture focuses internally with stable environment. Organization with this type of culture values high level of consistency, conformity, and collaboration among members, and their personal involvement is low (Daft, 2007). According to Daft (2007), this kind of organizations may fail to meet the demands of external environment. We also can see that this culture shows similar characteristics to “hierarchy” culture with the theory of Cameron and Quinn (1999). “Clan” culture emphasizes on members’ participation and involvement and quickly changes according to the external environment. The organization, which follows this culture, considers
the needs of the members lead to its high performance (Daft, 2007).
<Figure 2> Typology of Organizational Culture of Richard Daft
(Source: Daft, 2007)
Hellriegel and Slocum (2009) also characterize organizational culture with four quadrants: “clan”, “entrepreneurial”, “market”, and “bureaucratic” culture. As shown in Figure 3, the four quadrants are divided by horizontal and vertical axis. The horizontal axis reflects where an organization’s attention is focused on, which is ranging from internal to external functioning, and the vertical axis reflects where the organization’s control is oriented to, ranging from stable to flexible. In “clan” culture, long and thorough socialization process is a source of unity of the organization. Members of the organization recognize their common fate and share sense of identification in the organization (Hellriegel and Slocum, 2009). “Entrepreneurial” culture highly values risk-taking and creativity and it not only reacts quickly to dynamic environment but also creates change. This culture is seen in many of hi-tech companies. Individual initiative, flexibility, and freedom are encouraged and this culture is leaded to effectiveness by providing new and unique products and fast growth (Hellriegel and Slocum, 2009). “Market” culture is characterized by achieving (financial or market based) goals. Relationship between individual and organization is contractual and each party does not recognize the right of the other to demand more than was previously specified (Hellriegel and Slocum, 2009). “Bureaucratic” culture shows hierarchical and formal coordination with rules and standard operating process. Within this type of culture, organizational members consider standardized goods and customer service as important factors and their goals are predictability (Hellriegel and Slocum, 2009).
Flexibility Stability Adaptability Mission Culture Culture Clan Bureaucratic Culture Culture Needs of Environment Strategic Focus External Internal
<Figure 3> Frame of Culture Type of Hellriegel and Slocum
(Source: Hellriegel and Slocum, 2009)
2.4. Theoretical Framework and Hypotheses
Thus far we have explored a number of relevant researches which provide a comprehensive definition of organizational culture and types in relation to the dynamics of environment change how it affects firm performance. The underlying value of the organizational culture influences the behavior of the organizational members and leads them toward organizational goals and performance (Schein, 1985). Some scholars also demonstrate that organizational culture can supply a source of sustained competitive advantage for firms, since it is a firm-level resource, which is valuable, rare and difficult to imitate (Barney, 1986). More recently, Daft (2007) demonstrates that organizational culture can positively influence organizational performance by guiding and motivating employees and shaping their behaviors toward specific goals. He also argues that firm can constantly adapt and rapidly react to dynamic business environment through its organizational culture, which eventually strengthens organizational performance (Daft, 2007). Organizational culture gives members a sense of identity, increases their commitment, reinforces organizational values, and serves as a control mechanism for shaping organizational behavior (Nelson and Quick, 2011).
Regarding the relationship between culture and organizational performance, hierarchical organizational culture has been criticized since it may decrease creativity and demotivate members of the organization (Lee, 2014). Many scholars insist that creative culture lead successful corporate performance, while bureaucratic culture has low relationship with the performance (Lu, 1999; Hung, 2003; and Lee, 2003). According to them, employees who are encouraged to be creative and independent will have higher job satisfaction, productivity and
Flexible Clan Entrepreneurial Culture Culture Bureaucratic Market Culture Culture Stable Internal External Forms of Attention Formal Con trol Orientation
morale, consequently the organization will have higher performance (Tsai et al. 2012). Specifically, Hung (2003) tests correlation of leadership, organizational learning, culture and performance of five small and medium companies, and concludes that creative culture, which allows organizational members’ mistakes and focus on self-discipline and independence, effects positively on the organizational performance. Furthermore, Lee (2003) also argues that flexible and open-minded organizational culture lead to more successful performance of human resources.
Taking into account these prominent researches defining the relationship between the organizational culture and performance, and also asset combination and performance, I establish a theoretical framework which can be tested with selected cases.
2.4.1. Hypothesis 1
Applying the definition of organizational culture with functional perspective in sociological foundation which is largely agreed upon, definition of the organizational culture as mixture of shared values and beliefs among the organizational members will be employees in this research. As discussed in previous chapter, the organizational scholars have categorized companies’ organizational culture and divided it into several types (Cameron and Quinn, 1999; Daft, 2007; and Hellriegel and Slocum, 2009). These scholars use different name of the types to characterize the organizational culture, however closely looking at it we figure out that there is no such big difference in terms of the definition of characteristics. Basically, these all three scholars examine firm’s extent to focus and emphasis between internal and external, and between flexibility and control or stability. Clan culture, characterized by Cameron and Quinn (1999), can be understood in the similar context to clan culture of Daft (2007) and Hellriegel and Slocum (2009). Adhocracy culture of Cameron and Quinn (1999) is in same track to adaptability of Daft (2007) and entrepreneurial culture of Hellriegel and Slocum (2009). We can consider mission culture of Daft (2007) has similar definition to market culture of Cameron and Quinn (1999) and Hellriegel and Slocum (2009). Last but not least, hierarchy culture of Cameron and Quinn (1999) is same to bureaucratic culture of Daft (2007) and Hellriegel and Slocum (2009). In this paper, I will use the terms of Hellriegel and Slocum (2009) in order to characterize organizational culture of selected samples (Samsung Electronics and Apple), as it concerns the latest research.
At the same time, I apply the theoretical backgrounds of flexible and open-minded organizational cultures, which may result in better performance than the organization that
stresses more on control and stability. Acar and Acar (2014) investigate that advanced technology related organizations, defined as “new economy”, tend to show characteristics of “entrepreneurial” culture of Hellriegel and Slocum (2009). In this context, following hypothesis is formulated.
Hypothesis 1: Flexible and open organization culture must have better access to the ordinary assets than a bureaucratic and conservative organizational culture, which foster innovation and in turn support successful performance.
2.4.2. Hypothesis 2
Mol and Wijnberg (2004) conclude that firm can have competitive advantages when they secure necessary assets alongside of value chain. For instance, the firm first needs ordinary assets, which is linked to value creation ensuring the capacity to produce new product characteristics. Ex-ante extra ordinary assets are related to certain assets, which help the firm to efficiently enter into the selection system and keeping rivals from entering into this system. Ex-post extra ordinary assets are specific assets, which protect the firm against competitors to imitate the assets (Mol and Wijnberg, 200). Applying this theoretical background of Mol and Wijnberg, Byun (2005) tries to provide a concrete example of the assets in mobile phone industry, examines firm’s asset constellation in order for the firm to outperform others. He concludes that firm needs to destructively emphasize all different kinds of assets (ordinary, ex-ante extra and ex-post extra ordinary) as a whole in order to gain sustainable competitive advantage especially in the growth phase of the industry life cycle. In other words, firms need to enhance ordinary assets, derived from convergence in technological and non-technological innovations, and emerge ex-ante extra ordinary assets, which result from positive relationship with relevant selectors, and also emerge ex-post extra ordinary assets, which come from intellectual property rights and brand equity (Byun, 2005). Based on abovementioned findings, following hypotheses will be used in this paper.
Hypothesis 2: Combination of ordinary assets, ex-ante extra ordinary assets and ex-post extra ordinary assets is necessary in order for firm to have sustainable competitiveness.
With these theoretical framework and hypotheses, I will try to examine how firms can outperform others even in dynamic and competitive business environment. Mainly, I will focus on mobile phone industry and attempt to test the hypotheses with empirical case studies of Samsung Electronics and Apple, who are leading companies in this industry.
III. Methodology
3.1. Research Method
Case study approach as a qualitative research is a proper method for conducting this research as this methodology will provide a good investigation tool for the formulated propositions that are complex and intertwined in each organization’s conditions. I will test the hypotheses with the two selected samples, which are Samsung Electronics and Apple in real competitive business world, hence this case study can be considered multi case studies. Each result of the case study will be linked to the theoretical framework and hypotheses expressed above and attempt to find out similar and/or contrary results regarding successful performance.
In order to avoid “poor case study”, various sources are collected. The use of multiple sources is the major strength of the case study approach. Concerning with data collection, Jick (1979) lists four advantages of multiple data collecting method. First, researchers can be more confident of their results. Second, deviant or off-quadrant dimensions of a problem may be uncovered, leading to enriched explanation of the research problem. Third, synthesis and integration of theories is facilitated. Finally triangulation may serve as the critical test, by reason of its comprehensiveness, for competing theories. I also use the multiple data collection method (triangulation methods) in this research by using documentations.
To employ secondary data sets, various types of documentations can be used for this research. The type of information may take different forms and needs to be objective data collection methods. For instance, we can consider files, books, news clipping, reports, budgets, etc. In this research, especially, I use different kinds of newspapers, journals, audited annual reports, and various rating reports.
3.2. Samples
Selected samples, Samsung Electronics and Apple, are two global leading companies in the mobile phone industry. Often they are cited as the most innovative companies reporting strong financial outperformance than the other players in the market for years. According to the Business Week, “If Samsung isn’t yet as lustrous a brand as Apple, it is finding success as the anti Apple – Galaxy smartphones outsell iPhones. And Samsung is probably the only the other company that can throw a product introduction and have people line up around a city block, as they did in New York city on March 2013 for the launch of the Galaxy S4. That never used to happen when Samsung unveiled a refrigerator. When it comes to mobile
hardware, today there is only Apple and Samsung, and a desperate crowd of brands that can’t seem to rise above being called the rest. (Grobart, 2013)”
With the introduction of Smartphones, the rules of the game in the mobile phone industry have changed. Those who were not able to catch up with this rapid change lost their position in the market and became less relevant. At the same time, new area of competition is emerged, which is so called new Ecosystem of mobile phone industry: iOS based system for Apple and Android based system for Samsung. As a consequence, handset business of Motorola was sold to Google. Nokia had to watch its long-term period of number one position in the mobile industry erode since they were late with this new trend. The Sony-Ericsson partnership dissolved (Grobart, 2013). Overall, taking into account the fact that both firms maintain leading market shares for years as a representative of two different ecosystems (Android vs. iOS) in the mobile phone industry, the case studies of both Samsung and Apple are deemed relevant.
As a limitation, more data sets in different industries might need to be collected and tested, if the research aims to deliver further insightful testing result on the hypotheses and bring out further comprehensive outcome of analysis. However, main purpose of this research is providing a grounded theory and new perception for future investigations and researches in strategic management and organizational studies, rather than generalization. In the conclusion I will include a few suggestions for future researches and some area of improvement.
3.3. Measuring Instruments
Selected samples are Samsung Electronics and Apple. Applying the theoretical framework of organizational culture and asset constellation approach discussed in the previous chapters, these two companies will be investigated and compared each other. I will employee the approach of ‘Frame of Culture Type’ of Hellriegel and Slocum (2009) to examine and test the established hypothesis 1. More elaborately, the testing will place an emphasis on defining where those two organizations are allocated under which type of culture and examining how that classification can benefit from their organizational culture in terms of innovative initiatives as well as performance.
Employing the asset combination approach of Mol and Wijnberg (2004), hypothesis 2 will be examined and tested. Applying the conceptual framework of asset combination suggested by Byun (2005), I will investigate the main success factors of those two firms how they perform
better than other rest of firms in the mobile phone industry. More detailed elements of measuring instruments are listed in the following paragraphs.
3.3.1. Organizational Culture and Performance
Instruments to evaluate the organizational culture are various according to their typological approach, theoretical and conceptual provenance attribution, range of exploring the culture (Scott et al. 2003). However, it is difficult to choose one of the approaches since it is varying according to the researchers’ theoretical choice of model and study. Many scholars have defined organizational culture and characterize it with specific aspects (Cameron and Quinn, 1999; Daft, 2007; and Hellriegel and Slocum, 2009). They divide the organizational culture into four types based on internal or external focus and flexibility or control coordination mechanism. Name of each culture type of the scholars are different, however they all show similar aspects of the characteristics. This paper use the terms of Hellriegel and Slocum (2009) in order to characterize organizational culture of Samsung Electronics and Apple, and furthermore I will test the proposed hypothesis with the two cases whether it provides a validity.
Clan culture values high cohesion, morale, teamwork and involvement, which is family-like organization. This culture emphasizes socialization process of human resources. Entrepreneurial culture presents high degree of flexibility by focusing on risk-taking, creativity. This culture is flexible and open-minded and rapidly reacts and adapts to change according to the external business environment. Individual initiative and freedom are encouraged in this entrepreneurial culture. Market culture is result-oriented and focuses on achievement and competition, but this culture not necessarily creates rapid change to the dynamic environment. Relationship between individual and organization is contractual and each party does not recognize the right of the other to demand more than was previously specified (Hellriegel and Slocum, 2009). Bureaucratic culture is structured, controlled, formal, and hierarchical with top-down coordination, high level of conformity and standard operating processes.
3.3.2. Ordinary Assets
By definition, the ordinary assets are related to product characteristics, which can contribute to value creation (Mol and Wijnberg, 2004). In the mobile phone industry, we see two main components of ordinary assets that are technological product characteristics relating to
scientific technological feature and non-technological product characteristics relating to industrial (handset) design. Technological features can be identified in a transformation of digital convergence with various aspects such as mobile phones with a functionality of digital camera, video, emails and other applications. Together with enhanced technological development of internet based smartphones, nowadays various functionality of applications (Apps) become one of the most important elements in the industry.
One of the strong elements to be investigated in the ordinary assets is characteristics of organization. Reviewing the prominent studies in the area of organizational culture, we take a note that types of organizational culture in fact make a difference in fostering the initiatives of innovation, which result in better firm performance. In view of emergence of new ecosystem in the industry, examining the organizational culture becomes more significant how the organizational type and background can promptly react on this evolvement and change. Taking into account the relevance of organizational culture, I decide to separate this element from the other type of assets and investigate independently.
There are a couple of other elements which can be examined and tested in relation to ordinary assets. For instance, annual research and development (R&D) investments, Capex expenditure, complex of internal production lines or effective management and cooperation with suppliers can be considered in the area of technological product characteristics. With regard to non-technological characteristics, particularly industrial design or equivalence which can influence on that matter such as the number of design institutions, professional designers, and international design awards or prizes which they won can be investigated. Re-using the conceptual framework of previous research conducted by Byun (2005), I assume that the relevance of ordinary assets must be intensified in the growth phase of industry life cycle in order to maintain competitive position in the industry.
3.3.3. Ex-ante Extra Ordinary Assets
Ex ante extra ordinary assets are related to entering into the selection system or preventing competitors from entering into the selection system to secure value appropriation. In order to enter the selection system effectively and deter other’s entrance, firms should be able to persuade relevant selectors and make them their loyal customers in the market, which require specific assets, ex-ante extra ordinary assets. One of the main differences between ordinary assets and ex-ante extra ordinary assets is that ordinary assets are purely focus on product characteristics, while ex-ante extra ordinary assets are related to the relations with market or
relevant selectors in the market. Those two assets can be placed in and focused on different stage of competitive environment, which implies that firms must secure first product creativeness and successful launching of products then later stage creative marketing tools must be defined and implemented in order to capture value.
Actually, ex-ante extra ordinary assets are comparable to the definition of ‘complementary assets’ of Teece (1986). According to Teece, after the technological innovation is acquired, the innovations should be tied up with complementary assets such as capability of competitive production, effective marketing strategy, and after sales service to lock in the substantial economic returns from an innovation. In his research, Teece suggests that in order to remain competitive in the market firms must be able to produce their products efficiently by using of “effective cost barriers.” As an example of those complementary assets, lean production, just in time delivery, total quality control, 6 sigma, and supply chain management can be considered.
Besides the cost barrier noted by Teece (1986), in this research, I will examine creative and effective marketing strategies how the selected firms realize value capture. For instance, effective cooperation with network operators can be seen as relevant ex-ante extra ordinary assets. Network operators such as T-mobile or Vodafone are the most significant channels to influence the end users. It is also interesting to examine how new ecosystem (Android and iOS) plays a role in this aspect. Applying the conceptual framework of Byun (2005), in the growth phase of industry life cycle, ex-ante extra ordinary assets must be acquired gradually to capture the value. Together with strengthened ordinary assets, ex-ante extra ordinary assets become relevant in this stage.
3.3.4. Ex-post Extra Ordinary Assets
Last but not least, ex-post extra ordinary assets will be investigated, which is linked to value protection. By definition, ex-post extra ordinary assets are related to preventing competitors from imitation or enable firms to imitate other creative and successful products. Ex-post ordinary assets consist of two components, legal protection mechanisms and non-legal protection mechanisms. Adapting the conceptual framework proposed by Byun (2005), in the growth phase of the industry life cycle, ex-ante extra ordinary assets become relevant as the competition becomes more intensified in a way of imitating dominant products.
In order to protect the created value, following legal protection mechanism can be considered such as patents, trademark, or copyrights. However, we see some limitations in a form of legal protection. Normally, legal procedure in the court takes long time and legal decision can differ per legal jurisdiction. In addition, it is seen as very costly process and often difficult to adapt the intellectual property rights especially when the competitors imitate and introduce using slightly different format of technology. Hence, I see non-legal format can be more effective to control the imitation and value protection. Corporate identity and corporate brand value is useful non-legal protection mechanism. These two elements are not easy to imitate in a short term, which enables firms to protect the value created and captured from innovative designs and products from imitators. When the firms have strong brand value in the market, this also enables firms to introduce new products easier and even this can enable them to imitate successfully the dominant products effectively. However, in practice, it would be very rare case for leading reputable company copying or imitating other competitors’ relevant products. Rather, I expect that the reputable firm may enter into the market with similar products which are very much comparable to the existing dominate one. In practice, it is a hot area as we see a number of patent lawsuit cases between Samsung and Apple. Remarkably over 40 lawsuits are not only concerning domestic cases but also including cases filed globally.
IV. Case Study and Analysis
4.1. Organizational Culture and Performance
“Conglomerates have been out of favor in most of the industrialized world for decades. What separates Samsung from other extinct examples if focus and opportunism taken to the extreme. Samsung is like a militaristic organization, says Sea Jin Chang, a professor at the National University of Singapore and the author of Sony vs. Samsung. The CEO decides which direction to move in, and there is no discussion. They carry out the order (Grobart, 2013).” It sounds extreme but the paragraph in fact explains well the organizational culture of Samsung. There is another observer who describes the organizational culture of the company. According to Mark Newman, an analyst at Sanford C. Bernstein who worked at Samsung from 2004 to 2010 in its business strategy department, “you have to fall in line. If you don’t the peer pressure’s unbearable. If you do not follow a specific directive, you can’t stay at the firm. (Grobart, 2013)”
Though Samsung has expanded its international design centers globally (London, San Francisco, Tokyo, Shanghai, LA, and Milano) and made efforts to nurture flexibility within the organization, the corporate management style and business culture still remains rather inflexible. We need to take into account cultural background of the country where the corporate is domiciled. South Korea is probably most extensively influenced by Confucian values than any other Asian business culture. Confucian values in Korean culture do control all the aspects of working life from management systems to interpersonal relations; principal of social order, ritual, ordering of life, conforming to the norms of jen (the limits and authenticity of li) and show respect to elderly people. Hence, for Korean people in general, the direction determined by CEO is the order what they need to fulfill and carry out in the context of their cultural background. The organizational culture can be seen as conservatism or bureaucratic but for them it is considered standard social norm to follow, even if they employee today around 370,000 people in more than 80 different countries. Serious risk of this culture is that if the CEO takes a wrong decision, there are limited safe guards for such organization to prevent the wrong destination of the company. The CEO is the owner who takes unlimited responsibility.
As such we can conclude that this organization is falling into between “market” and “bureaucratic” culture according to the Frame of Culture Type of Hellriegel and Slocum (2009). The organization has bureaucratic elements such as structured, controlled, formal and
hierarchical with top down coordination. In the meantime, we recognize that the organization contains the characteristics of resulted oriented and focuses on achievement and competition. Whereas Apple has different culture and cultural background: the domiciled country of Apple is U.S. where they secure the greatest level of individualism in the world. Working environment at Apple is known as casual but with a strong commitment to deadlines. According to the analysts, often it is noted that work culture at Apple as flexible but hard work. Employees at Apple must show their own capability and deliver the output in a challenging and creative environment. Apple introduced a working culture which is not too hierarchical and a more results-driven approach, which worked best for them. Employees at Apple benefit from various career opportunities, generous compensation, and various benefits.
It seems that Apple clearly has a flexible organizational culture which fits in “entrepreneurial” culture that highly values risk-taking and creative culture fostering innovation. However, there are some other aspects of Apple noted by other analysts. “While some appreciated Apple's culture saying that it valued creative people, others felt that it was dysfunctional from a management standpoint and was largely influenced by its former CEO, Steve Jobs, who had a very quirky style. Experts felt that Apple's obsession with maintaining secrecy could hurt the company and its brand in the new milieu. They felt that the biggest challenge for Apple was to move out from under the shadow of Jobs. The performance of the company in his absence was a key concern for all stakeholders, they said. The case concludes by discussing whether a change in the company's culture is required to remain competitiveness in the long run (“Apple Inc.’s Corporate”, 2009).”
Taking into account overall aspects of the companies, we can conclude that Apple is more falling into the category of between “market” and “entrepreneurial” culture, according to the Frame of Culture Type of Hellriegel and Slocum (2009). In order to adequately judge whether two selected firms are successful in the competition, a set of success criteria is suggested for instance, market share, annual turnover, net profit, and customer satisfaction.
By definition, Apple is obviously closer to an ‘open and innovative’ organizational culture than Samsung, consequently which should result in higher financial performance referring to various researches.
<Table 1> Comparison of financial performance
(Source: Apple and Samsung Electronics. 2009-2013 Annual Reports, in million USD)
Table 1 shows the development of total revenue and net profit of the two firms from 2009 to 2013. Over the years, these two companies report a spectacular up-rising financial performance. While Samsung is able to achieve high turnover at all time, Apple reports much higher profit margin of around 21%, which is remarkable. Looking at the mobile phone business division separately as depicted in below Figure 4, we note that Samsung outperforms Apple over the period.
<Figure 4> Performance of Mobile Phone Division
(Source: Apple and Samsung Electronics. 2011-2014 Annual Reports, in ten billion USD)
Overall, we consider that the case of Samsung rejects the hypothesis 1 in view of that the company outperforms Apple though Samsung has disadvantages in terms of organizational culture, which is not optimal for innovation. This argument is further supported by following data in Figure 5, which shows that Samsung continues to maintain its number one position in the global market share.
Then, the question is what factors make Samsung so successful in the mobile phone industry in spite of that they have less competitive organizational culture comparing to Apple. In the following tests, the success factors will be further investigated.
2009 2010 2011 2012 2013
Samsung Total Revenues 117,125 135,772 143,069 187,754 216,709
Electronics Gross profit 35,510 45,626 45,831 69,510 86,228
Net Income 8,222 14,177 11,908 22,262 28,878
Apple Total Revenues 42,905 65,225 108,249 156,508 170,910
Gross profit 17,222 25,684 43,818 68,662 64,304
<Figure 5> Mobile Phone Vendors Global Market Share Q1 2010 ~ Q1 2014
(Source: “Global Market”, 2014)
4.2. Ordinary Assets
Both firms in general are known as the most ‘creative’ and ‘innovative’ mobile phone producers in the world. Emergence of smartphone business changed the rules of the game completely. Former top players such as Nokia and Motorola are now swept away and instead Samsung and Apple has replaced the position. Referring to various researches, it appears that product leadership is one of the key assets to maintain its competitiveness in the sever competition.
In order to maintain its product leadership, relevant R&D investment and Capex expenditure are unavoidable. Below table shows the comparison of R&D investment over the years. Since 2009, Samsung has invested on average 5.8% of R&D expenses and in amount USD 13 billion in 2013, which is substantial amount.
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Q1 '10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 '12Q1 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Others Hwawei ZTE LG Electronics Apple Nokia Samsung
<Table 2> Comparison of R&D Expenses 2009 – 2013
(Source: Apple and Samsung Electronics. 2009-2013 Annual Reports, in million USD)
Apple has invested on average of 2.6% expenses with USD 4.4 billion investment in fiscal year 2013. Though the R&D expenditures of Apple are much less than Samsung, it is noted that both firms have increased R&D expenses over the years substantially, which deemed a clear indication that both firms focus on product leadership aggressively securing the ordinary assets.
Apart from this meaningful R&D expenditure, there are some other elements of the two firms to investigate which enhances the value creation. According to Benedict Evans, a researcher at Enders Analysis, “Nobody had any idea what the right screen size was, so Samsung made all of them and saw which one worked (Grobart, 2013).” In fact, Samsung introduced various sizes of smartphones ranging from 2.8 inches to 5 inches. Notably, Samsung produces memory chips, digital cameras, Amoled displays, processors, and other components in house which give high degree of flexibility. The company has clear advantages in terms of product differentiation at any time. Together with top down management culture, lead time to implement a certain strategic decision can be shorter than any other competitors in the market. Apple focuses on business model rather than limiting themselves to product differentiation. According to Laugesen and Yuan (2010), the company has realized that the future of the mobile phones will be differentiated by software, not by hardware. Apple controls and coordinates the portions of the value chain where they can add value, leaving the other areas to organizations with specific competences (Laugesen and Yuan, 2010). Undoubtedly, Apple created new ecosystem with App store which is new earning engine. This new engine nurtures successful platform to increase consumer interest in mobile phone service through innovative applications. In the meantime, Apple supports the App developers through providing a software development tool kit, which is different feature from Samsung. “Entrepreneurial”
2009 2010 2011 2012 2013
Samsung Total Revenues 117,125 135,772 143,069 187,754 216,709
Electronic R&D expenses 6,349 7,990 8,653 9,848 13,569
% of total revenues 5.4% 5.9% 6.0% 5.2% 6.3%
Rate of increase from
previous month 26% 8% 14% 38%
Apple Net Sales = Total Revenues 42,905 65,225 108,249 156,508 170,910
R&D expenses 1,333 1,782 2,429 3,381 4,475
% of total revenues 3.1% 3% 2.0% 2.0% 3.0%
Rate of increase from
organizational culture, in fact, is strengthening the ordinary assets to capture higher value in the market.
We conclude that both firms have made sufficient efforts to create value through enhancing ordinary assets. Samsung places a focus on product differentiation leveraging the in house manufacturing capacities, while Apple focuses on new business model enhancing the earning power as well as customer loyalty building high switching costs. We also take a note that those two different approaches are embedded in their organizational background.
4.3. Ex-ante Extra Ordinary Assets
Nowadays, we often see that hundreds of people line up for new release of iPhone, which show strong customer loyalty. Apple earns strong customer loyalty through building up and maintaining new ecosystem, App store. iPhone customers achieve personal amusement using the multitude of entertainment related applications available. In addition, iPhone user experience becomes social status with iPhone being seen as a status of symbol. According to the research of Laugesen and Yuan (2010), Apple customers responded to survey with very strong satisfaction rate of 74%. In addition, 75% of the iPhone buyers are reported to be previous Apple customers. Creative business model of Apple (new ecosystem) in fact generates strong channel for customer loyalty which in turn plays a significant role in capturing value.
Apart from the creative business model, Apple focuses on its dedicated retail channels establishing ‘flagship Apple stores’ in high profile global locations such as Amsterdam, Barcelona, London, Paris, Berlin, Beijing, Shanghai, Tokyo and 30 other locations globally. Unique and fancy designs (glass staircases) of Apple flagship stores deliver a clear message of innovative identity of Apple and attractive meeting points for end customers. As depicted in following Figure 6, the number of Apple stores and visitors has increased substantially, which is considered a successful strategy to meet the demands of customers securing the value appropriation.
<Figure 6> Store Visitors vs. Stores Open
(Source: Etherington, 2013)
“For the Galaxy S4 unveiling in mid-Mar.2013, Samsung rented Radio City Hall on a Thursday night. TV trucks were parked outside and lines of people snaked around the block. The lobby was packed. (Grobart, 2013)” Samsung also has strong customer base from Android operating system users. Samsung sees their weakness in the area of software and operating systems comparing to iOS of Apple. Building up strategic alliance with Google, who is providing an Android operating system, Samsung has gained the largest user group of Android. Eventually, the strategic alliance with Google is considered a critical step for Samsung to step into the smartphone business. “Samsung is making efforts to strengthen its position by opening a software development center in Silicon Valley. (Samsung Electronics, 2014).” Samsung realizes the fact that user acceptance is the key to success and access to new ecosystem is core element of capturing value, which is by definition ex-ante extra ordinary assets.
Samsung does not run their own shops globally like Apple Stores, instead Samsung maintains close relationship with network operators traditionally. They used to have close business relationship with more than 70 network operators in the world, which has been enhanced for the time being in a way of supporting the network operators in terms of new products and education package. Overall, both firms make efforts to enhance user acceptance by increasing access to the new ecosystem, which requires ex-ante extra ordinary assets. Though two firms
have somewhat different approaches to acquire ex-ante extra ordinary assets by nature, it is deemed that both firms acquired adequate level of assets to appropriate the value.
4.4. Ex-post Extra Ordinary Assets
Though this legal battle is not settled yet and costs more than a billion dollars, many experts see that those two battling firms are benefiting most from this patent war. After the inception of legal battle, no negative impact on their global market share experienced. According to market share data from Statisca (Figure 5), global market share of both firms have improved further, which support the argument by enhancing the recognition of the state of art technology to the customers. Additionally, these two leading mobile phone producers’ legal battle sends out a strong signal to the other competitors in the market for illegal imitation. In both ways, they are protecting their values.
With regard to non-legal protection mechanism, Apple has developed their corporate identity and brand image, which has created customer loyalty and “pent-up” demand for future iPhone series. iPhone users tend not to want the other smartphones in future (Laugesen and Yuan, 2010). Referring to the brand value of the two firms published by Interbrand, Apple ranked at the most valuable brand in the world for the two consecutive years with a brand value of USD 119 billion in 2014, which has increased by 21% over the past year and is considered a remarkable achievement. We can conclude that Apple has successfully built-up their brand value over the period. According to Forbes, Apple becomes important part of people’s lives, and their brand continues to attract customers’ attention (Badenhausen, 2013).
<Table 3> Brand Value of Samsung and Apple
(Source: www.interbrand.com) Rank Brand Value
(USD mln)
Increase Rate
than Previous Year Rank
Brand Value (USD mln)
Increase Rate than Previous Year
2009 19 17,518 -1% 20 15,433 +12% 2010 19 19,491 +11% 17 21,143 +37% 2011 17 23,430 +20% 8 33,492 +58% 2012 9 32,893 +40% 2 76,568 +129% 2013 8 39,610 +20% 1 93,316 +28% 2014 7 45,462 +15% 1 118,863 +21% Samsung Apple Year
As depicted in Table 3, the brand value of Samsung is ranked lower than Apple marking the 7th rank in 2014. However, Samsung has made efforts to enhance their brand value for years by investing heavily on their brand loyalty (Shaughnessy, 2014). The achievement of Samsung in the global brand identity as well as band value is not negligible. In 2009, the brand value of Samsung was ranked at the 19th with USD 17 billion worth, which has improved significantly to the 7th in 2014 with USD 45 billion worth according to Interbrand. Furthermore, “a brand dependence index indicates that more people are dependent on the Samsung brand than any other in consumer electronics,” so that many customers recognize Samsung brand that “they cannot live without and relate more to themselves. (Shaughnessy, 2014).” As such, this recognizable corporate identity can be perceived as a prominent source to protect their value through enhancing customer loyalty.
Overall, it is concluded that both firms have identified the importance of brand recognition and furthermore they have made strong efforts to improve it over years. The outcome of strong corporate identity of both firms supports the argument.
V. Conclusion and Suggestions for Future Researches
So far, we have examined the organizational culture of the selected firms, Samsung Electronics and Apple, and its relation to the firm performance. Furthermore, intrinsic relations of asset combinations in the dynamics of mobile phone industry are investigated. After the thorough case assessment, it is concluded that proposed hypothesis 1 is rejected due to the outstanding performance of Samsung Electronics in spite of the fact that the company is categorized under ‘quasi bureaucratic’ organizational culture. On the other hand, we could find sufficient backgrounds for verifying the case of Apple, where the innovative business model, new ecosystem, in the mobile industry is supported by the ‘quasi entrepreneurial’ organizational culture.
Hypothesis 1 is rejected: Flexible and open organization culture must have better access to the ordinary assets than a bureaucratic and conservative organisational culture, which foster innovation and in turn support successful performance.
With respect to the intrinsic relations of asset combinations in the dynamics of mobile phone industry, we come to the conclusion that both firms have made effort to acquire sufficient level of assets combination, i.e. enhanced level of ordinary assets and sufficient level of extra ordinary assets. These effective assets combination nurtures the value creation and appropriation in the vertical line of value chain. At the same time it provides a function of protection mechanism to secure the created value in the lateral dimension of the value chain. Hence, we conclude that the proposed hypothesis 2 is tested and verified.
Hypothesis 2 is verified: Combination of ordinary assets, ex-ante extra ordinary assets and ex-post extra ordinary assets is necessary in order for firm to have sustainable competitiveness.
The analysis indicates that it is difficult to define a certain “ideal” type of organizational culture, which leads firms to successful performance. As discussed in the previous chapters, both Samsung Electronics and Apple effectively constellate the ordinary and extra ordinary assets in order to create, capture and protect the value in the mobile phone industry. Considering the unique organizational culture of each firm, a tailor-made strategic choice is required for the assets combination. For example, Samsung focuses on product differentiation using their in-house production capabilities, whereas Apple brings new business model strengthening the earning power and customer loyalty. Under quasi-bureaucratic organizational set-up, Samsung benefits from speedy decision making process, which is top-down. Apple leverages on its quasi-entrepreneurial culture to create higher value through nurturing flexibility and innovation. Hence, success factors resulting in successful firm performance are not dependent on certain organizational culture, rather appropriate assets combination matters, which will fit into their organizational culture.
One of the main limitations of this research lies in that only limited samples are selected and tested, which does not support generalization of this outcome. This limitation further can be examined with larger samples of which firms are resided in a conservative cultural background. Furthermore, it is suggested that the proposed hypothesis can be applied and tested in different industries and different stage of industry dynamics.
Competition in the mobile phone industry becomes intensified. Sluggish performance as per the third quarter of this year (2014) for Samsung might be a strong signal of that. More and more cost efficient new entrants are rushing into the market and this will require strengthened composition of extra ordinary assets going forward. No one can guarantee their glorious position but themselves.
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