iPhone 6S created by Samsung?
On 9 September 2015 Apple presented the iPhone 6S, where they claim: ‘The only thing that has changed is everything’ (Apple, 2015). On the other hand, Samsung claims that ’The next big thing is (already) here’ with their new smartphones (Samsung, 2015). Since I need to buy a new phone very soon, I am starting to doubt how different these products actually are.
The acknowledgment must be made that these companies do not make these phones by themselves. For example, Apple has over 200 suppliers to create their products (Apple Inc., 2015). Besides that Samsung aims to strengthen its position as worldwide computer chip manufacturer (ANP, 2015), which implies that they supply other firms to make their electronic devices (e.g. iPhones).
According to Kaufman et al. (2010) these business networks emerge because customers are more informed and therefore increasingly demanding products and services tailored to their specific needs. This results in business networks, which are able to break up their value chain into independent modules (Kauffman et al., 2010) and thereby are able to add more value to the final product (Ketchen Jr. et al., 2004). One of the reasons to participate in a business network is that it accomplishes more as a whole than the value it can capture by its individual parts (Kauffman et al., 2010). Another reason, especially in this technology driven industry, is that business networks tend to be more innovative (Möller & Rajala, 2007) (Gnyawali & Park, 2011). Therefore all these firms help to grow their entire business network (Gnyawali & Park, 2011), to motive more external parties to join the network (Gallaugher, 2014) and further improve their competitive advantage with their final product (Ketchen Jr. et al., 2004).
The uniqueness of Apple’s business network is that a direct competitor (e.g. Samsung) is a supplier for their products (e.g. iPhone). Scientific literature names this phenomenon co-opetion, where end-product competitors are contributing in each other’s value chain. As aforementioned a reason to embrace co-opetion is more innovation (Gnyawali & Park, 2011), but this still does not clarify why for example Samsung might cannibalize its own products. An explanation is that co-opetition is only beneficial when businesses are still able to differentiate with their value adding activities (Ketchen Jr. et al., 2004). Therefore if end-product competition is growing, businesses are trying to further protect their differentiating activities (Ritala & Hurmelinna-Laukkanen, 2009). A good example from Apple and Samsung are the patent wars they are having for the past few years. They are blaming each other for copying each other innovations to protect their differentiating activities. However, co-opetition will still be beneficial for both parties, since another observance states that it results in less vertical integration and more diversification (Gnyawali & Park, 2011). For example, this ensures that Samsung can further grow as a chip manufacturer without the interference of Apple. Additionally, the suppliers of companies such as Apple benefit from the demand they generate (Zhang & Frazier, 2011). Therefore the question about co-opetition should be: do we as a business want to capture value from competitors or establish a greater competitive advantage? (Park et al., 2013)
To be honest I really admire the research done about this phenomenon named co-opetition. However I still can’t figure out my personal issue. Therefore I would like to ask you: what phone should I buy? Since I can’t see the difference between the products of Apple and Samsung anymore after this study.
Vincent Laduc (417658vl)
Anderson, A., Park, J. & Jack, S., 2007. Entrepreneurial social capital: Conceptualizing social capital in new high-tech firms. International Small Business Journal, 25, pp.245-72.
Anon., 2014. In Gallaugher, J. Information Systems: A Manager’s Guide to Harnessing Technology. Saylor.
ANP, 2015. Samsung wil verder groeien als toeleverancier. [Online] Available at: http://www.nu.nl/mobiel/4132940/samsung-wil-verder-groeien-als-toeleverancier.html [Accessed 25 September 2015].
Apple Inc., 2015. Supplier Responsibility. [Online] Available at: https://www.apple.com/supplier-responsibility/our-suppliers/ [Accessed 23 September 2015].
Apple, 2015. iPhone. [Online] Available at: http://www.apple.com/iphone/ [Accessed 1 October 2015].
Gnyawali, D.R. & Park, B.-J.(., 2011. Co-opetition between giants: Collaboration with competitors for technological innovation. Research Policy, 40(1), pp.650-63.
Greve, H.R., Baum, J.A.C., Mitsuhashi, H. & Rowley, T., 2009. Built to Last but Falling Apart: Cohesion, Friciton and Withdrawal from Interfirm Alliances.
Hitt, L.M., 1999. IT and firm boundaries: Evidence from panel data. Information, 10(2), pp.134–49.
Kauffman, R.J., Li, T. & van Heck, E., 2010. Business Network-Based Value Creation in Electronic Commerce. International Journal of Electronic Commerce, 15(1), pp.113–43.
Ketchen Jr., D.J., Snow, C.C. & Hoover, V.L., 2004. Research on Competitive Dynamics: Recent Accomplishments and Future Challenges. Journal of Management, 30(6), pp.779-804.
Möller, K. & Rajala, A., 2007. Rise of strategic nets — New modes of value creation. Industrial Marketing Management, 36(7), pp.895-908.
Park, B.-J.R., Srivastava, M.K. & Gnyawali, D.R., 2013. Walking the tight rope of coopetition: Impact of competition and cooperation intensities and balance on firm innovation performance. Industrial Marketing Management , 43, pp.210-21.
Ritala, P. & Hurmelinna-Laukkanen, P., 2009. What’s in it for me? Creating and appropriating value in innovation-related coopetition. Technovation, 29, pp.819-28.
Samsung, 2015. Homepage. [Online] Available at: http://www.samsung.com/us/ [Accessed 1 October 2015].
Zhang, J. & Frazier, G.V., 2011. Strategic alliance via co-opetition: Supply chain partnership with a competitor. Decision Support Systems , 51, pp.853-63.