Dynamic Capabilities Of Apple And Samsung: A CSR Perspective

CSR Initiatives and Their Importance

This report helps in understanding the importance of CSR initiatives for an organization and how does it help an organization in boosting its brand image among consumers and the positive impact of CSR on the communities in which companies operate. CSR is explained as the practices and policies adopted by organizations that focus on making a positive impact upon society and work towards overcoming concerns associated with social and environmental issues (Khan et al., 2012). It also helps organizations in maximizing their profits and also contributed to boosting the productivity of the organization. This report is based upon organization Apple and Samsung which is considered as one of the top brands in electronic devices. Samsung is a South Korean company that is one of the largest producers of electronic devices and Apple is an American multinational technology company that excels in computer software and online services. This report focuses on understanding the dynamic capabilities of these two companies in the context of competitiveness and the impact of globalization upon the market and technology. It also reflects upon the strategies of CSR which can help both these organization in gaining success and how does CSR help the organization in gaining long-term profits and how strategic partnering with government and society can help the organization in expanding their consumer base (Costa & Menichini, 2013).

Dynamic capabilities of an organization are explained as the potential of an organization to adapt to changing business environment in terms of internal and external competencies (Khoobiyan et al., 2019). Such capabilities are considered important to gain a competitive advantage over competitors. Apple focuses on innovating its products and its ability to create differentiation products help them in building such dynamic capabilities and adapting to changing business environment. The dynamic capability of Samsung is gaining access to innovative technology and satisfying the demand of the market by launching effective products and services (Haizar et al., 2020).

Porter five forces can be used to understand about relative competitiveness between these two organizations which is mentioned below:

Industry Rivalry

Both Apple and Samsung have fiercer rivalry between them to gain market share and reach out to a higher number of consumers but there are domestic players which are effectively operating in the market and both these organizations have to ensure that they should effectively compete with domestic companies (The Economist, 2017). Both these organizations are engaged in rivalry to gain a comparative edge over each other and their resource abundance is helping them in functioning in the market.

Power of Buyers

Both in the case of Samsung and Apple power of buyers is high as consumers can easily switch to other brands which makes both organizations vulnerable to increasing competition. Both Apple and Samsung focuses on providing products and services which can satisfy the needs of consumers and ensure that they should be affordable and durable. Samsung has the upper hand in this as they focus on targeting a different segment of the consumer which helps them in boosting its revenues (Forbes, 2022).

Dynamic Capabilities of Apple and Samsung

Power of Suppliers

The power of suppliers in the case of both organizations is low as these two organizations have access to many suppliers which helps in switching easily. Apple and Samsung focus on delivering quality products and ensuring that raw materials which are utilized should be effective. Apple which has higher consumer retention rates focused on delivering a quality user experience to consumers (Forbes, 2018).

Threat of Substitutes

In the case of Apple, this force is weak as there are fewer options for consumers in such segments that can provide premium products with effective design and integration. In the case of Samsung, various companies offer alternate products which affects its productivity. It does help Apple in gaining a comparative edge over Samsung.

The threat of New Entrants

Various companies are operating in a similar segment as Samsung but in the case of Apple, it is very difficult for new entrants to enter the new market as it requires major financial investment and it is also difficult for new entrants to operate in different markets like Samsung (Washington Post, 2018). In the case of Samsung, it operates in more markets than Apple which does have a positive impact on its revenues.

PESTLE analysis can be used to understand its dynamic capabilities and understanding about responses of these two organizations to the globalization of markets and technology (Nandonde, 2019).

Political Factors

Both Apple and Samsung depend upon low manufacturing costs in China because they help in making the production of products more effective and efficient (Forbes, 2017). Political disruption of the USA with China has resulted in affecting the manufacturing of Apple as Chinese imports have been restricted within the United States which is affecting the Apple business. Samsung could utilize this as an opportunity to expand its business into new markets.

Economic Factors

Increased labor costs in China could affect both Apple and Samsung costs which could lead to increasing the prices of their products which can affect its consumer base (Tech2, 2019).

Social Factors

Apple and Samsung could focus on utilizing the markets of Africa as a way of boosting their profits as people over there are still not familiar with their products and services.

Technological Factors

Samsung is considered as one of the innovative companies which help in gaining the comparative edge and also help in adapting to sustainable business advantage and Apple needs to come up with unique services as which can help them in effectively operating within the limited market.

Legal Factors

Both companies introduced their payment services in which Apple and Samsung have to ensure that they should adhere to the rules and regulations of the government. Such services could be useful for these companies to adapt to changing market scenarios.

Environmental Factors

Pollution from both organization manufacturing facilities can be a major concern for Apple and Samsung. Both organizations need to adapt to environment-friendly practices which can help them in setting an example in the market.

Corporate social responsibility is a business approach in which companies contribute to economic, social, and environmental activities. Through these efforts, companies are contributing towards society and taking responsibility for affecting the environment. In recent years the concept of corporate social responsibility gains its importance. According to the report of Forbes magazine, 42% of the population in the globe make their perception about the company by considering their CSR activities. The report also reflects that the company’s reputation in public is mainly based on its CSR activities. CSR activities also help the companies by giving media coverage. These activities also help companies in better engagement with the customers and investors. Global companies are investing more in CSR activities because of the no-harm principle. CSR activities help in creating a positive image among the customers and also help in strengthening the customer base that will ultimately increase the sale of products and profit of the company (Collier, 2018).

Porter Five Forces Analysis

Apple is in the list of top smartphones companies in the world. They have more than 1 million employees. They served in more than 25 countries in the world. They produce a wide range of products for their customers. Their activities and operations affect society. Through their CSR activities, they try to create a balance of their impact on society. Apple supports the local communities in the United States of America by investing in environmental-friendly technologies for example in Oregon, Apple made a partnership with Bluestone Natural Farms to transform compost material to produce organic food on the farm. Apple also investing in renewable energy resources to promote sustainable development for example in the Philippines and Thailand, Apple launched 100-kilowatt rooftop solar project and a 260-kilowatt battery to supply clean energy in educational institutes (Dudovskiy, 2021).

Apple also becomes the first global company in the world to achieve net-zero carbon emission throughout their corporate emissions. In 2020, Apple announced a plan to achieve net-zero carbon emission by 2030 in operations as well. Apple’s environmental sustainability technologies improve the durability of their products and also help in reducing the cost of the products. In recent years, Apple also made a partnership with the world wildlife fund to preserve 36,000 acres of forest in North Carolina and Maine. In this project, forest conservation practice will be promoted and it will also reduce the carbon emission impact (Statista, 2020). Apple also making efforts to reduce toxic materials, they include those materials which are less toxic such as PVC, mercury in their manufacturing process. They also rated as A+ in chemical safety standards because of their safer and stricter regulations regarding the use of chemical substances.

Apple through its CSR initiative also promotes equality and justice. In 2021, Apple invested $100 million in Racial Equity and Justice Initiative. In this program, efforts were made to reduce racism which is faced by the different communities during education and employment. In this program educational support is also given to the universities and institutions. Apple also promotes gender equality and rights of the minorities. The company adopted the rule of equal pay for equal work. Apple also has the strongest supplier code of conduct in the electronic industry (Apple , 2021).  

In a recent year during the Covid-19 pandemic apple also contributed financially in covid relief funds to help in mitigating the adverse impact of the pandemic as a part of their CSR initiative. They also introduce a wide range of protective measures in their work, which includes screenings, cleaning procedures, and promoting social distance norms. They also helped communities by distributing masks and sanitizers to employees and communities. They also launched a mobile application to help in providing information about the covid cases and quarantining, testing procedures (Apple, 2020).

 Apple also invests in research development activities as part of CSR performance. The products of the company work on energy efficiency principles. Through innovation and technologies, Apple makes his products more efficient which consume less energy. They also follow energy star guidelines while making their products. Energy star guidelines also help in promoting environment-friendly technologies. Apple is the only company in the entire world that is awarded for using a clean energy index of 100% as per the report of Greenpeace international (Greenpeace, 2017). In 2019, Apple also focuses on water conservation. They used recycled water and temporary freshwater in their operation. They managed to save more than 30.5 billion gallons of water in 2019 alone (Dudovskiy, 2021).

PESTEL Analysis

Despite all these efforts, Apple is facing some critical issues regarding labour and human rights allegations. In recent reports, Apple facing allegations of being slow in cutting ties with suppliers of China which is known for breaching the company’s CSR policies. They also face allegations for lobbying the US government to alter legislation that limits the good made with the use of forced labour. In 2020, an Australian institute also made an allegation on apple for using unfair labour norms and practices (Dean, 2022).    

Although companies facing some serious allegations in many countries for many reasons on contrary, they contribute towards society with the help of CSR incentives. Through all these sustainable and environment-friendly technologies apple is moving towards the concept of Greener Apple. All these steps of the company show positive impacts and improve social and environmental conditions. This initiative is helping apple to gain customers worldwide and also helps in creating a positive image which ultimately helps in profit-making.        

Samsung is also the leading manufacturer of smartphones. They have also known their corporate social responsibilities. They have a different council to perform the task of corporate social responsibilities which is known as the Sustainability Management Council. This council has 14 other related departments to deal with the different aspects of CSR. Samsung also has a global code of conduct in respect to their CSR activities which is based on some principles. These principles include strict compliance of laws, maintenance of organizational behaviour, respecting different stakeholders and employees, concerns towards the environment, and being responsible towards their work.

Samsung started an institute that encourages young adults for vocational training to build skills and knowledge which can be helpful for them in the future to become self-reliant. They trained more than 40,000 individuals in their institute till 2017. Samsung also started smart schools to improve the education standards. These schools are mainly focused on those students which are socially and economically backward. They also started a program named Samsung Solve for tomorrow in which students are engaged with the non-Government organization to identification and resolution of social issues (Chang, et al., 2019).

Samsung also appointed more than 300 supplier inspections to prevent the use of child labour in the organization (Samsung , 2020). They also work towards the safety and health of their employees as a part of CSR activity. During the Covid-19 pandemic, they help in vaccination drives, promoting awareness about the impacts of the pandemic. Samsung also working in the promotion of gender equality. The recent employment rate in Samsung suggested that they are giving equal chances to women to get employment in the organization.

Samsung also working towards waste management and recycling of electronic products. From 2009 to 2015, Samsung collected more than 2.26 million tons of electronic waste and used recycling methods to manufacture new products. In 2015, Samsung also collected more than 34,322 tons of plastic waste used to waste in making new products. These approaches help Samsung to become environmentally friendly and also help them in achieving their CSR goals around the globe (Dudovskiy, 2017).  

Corporate Social Responsibility

Samsung also uses environmentally friendly technologies which can help in reducing greenhouse gases. Samsung reduce its use of greenhouse gases by more than 70% in recent years. They also started environmental education courses to create awareness among the individuals under the green communication initiative.

Samsung also played an important role during the sudden outbroke of Covid-19. They established many dedicated teams to deal with the situation. They support many local communities by providing medical reliefs, vaccines, and other essential items of basic needs.         

Despite all these efforts, Samsung facing some serious allegations regarding the safety equipment breach. The same concern was highlighted in the annual report of Samsung. A Chinese supplier also shows in their report that how Samsung uses working infringements practices. They also show that there is a lack of safety standards in the organization. They also force individuals to do more work than the fixed hours. There are many other reports which highlight that the workplace is not safe because of the reason that there is the concern of water and air pollution (Samsung Newsroom , 2019).    

Samsung considerably works for the communities by promoting corporate social responsibility. Samsung has a positive image in the market. The company must need to focus on the negative aspects as well because they can impact the reputation of the company. They need to resolve these aspects as soon as possible. Samsung needs to ensure workplace safety for the employees. All these efforts of Samsung will promote the company in the global market and also help in improving the brand valve. These efforts will also help the company in strengthening its customer base across the globe.  

Corporate social responsibilities need to perform by the companies because they help in creating a good social image of the company. Companies by promoting CSR activities also take responsibility for the harm caused by them in manufacturing and operations. Apple and Samsung, both companies performing their CSR responsibilities with great efficiencies. They need to take care of the other aspects as well for example workplace safety and promotion of human rights (Barauskaite & Streimikiene, 2021).

CSR is considered important for every organization to contribute to social development and it also helps the organization in boosting its productivity and profitability. Every organization focuses on performing CSR activities as it helps in resolving social and environmental issues and it also helps the organization in showing their responsibility towards the development of society by aligning such activities with the goals of the organization. Every organization focuses on performing CSR by working for benefit of employees who work for them by developing a culture in the organization that is healthy for its employees and which would help employees in creating an environment where employees can feel safe. Every organization focus on performing CSR activities as it helps in creating an effective brand image among consumer which makes a direct impact upon the business of the organization. Both Apple and Samsung performs various CSR initiatives to show their responsibility towards the environment and focus on resolving issues in society

Conclusion

In the case of long-term profitability, Apple and Samsung have taken certain initiatives which help build their brand image in long-term scenarios. Apple focuses on supporting local communities which are based in USA such as they have partnered with Bluestone Natural Farms to transform compostable materials into organic materials which can be utilized on the farm (Dudovskiy, 2021). They have also launched a 100-kilowatt rooftop solar project at an educational premise in the Philippines for disabled children. Apple has also launched different groups of health clinics by the name AC wellness for employees and their families (CNBC, 2018). Apple also focuses on reducing its power consumption and also introduced one of the energy-efficient desktops by the name Mac mini. Samsung also has its own CSR initiative where they focus on working towards schools and community centers that are not in good condition and changed them into libraries in areas such as India, Iraq, and Bolivia. Since 2009, Samsung has also contributed to the development of children by collaborating with Plan International Korea which is a children development organization and provides sponsorships to children who belong to underdeveloped countries (Samsung, 2020). Its employees are also focused on volunteering in CSR activities as employees and their families work towards the development of local communities and children. Samsung also focuses on addressing the gap in global education and for such, they have taken the initiative of Samsung SMART school for students living in underdeveloped areas. In 2015, approximately 224,753 students attended Samsung SMART School. Samsung also focused on reducing the emission of greenhouse gases and toward such a goal initiative as Planet First, they have managed to reduce the emission by 70% and 250 million tons of greenhouse gas has been reduced since 2008. Such initiatives by both organizations show their responsibility toward society and it would help them in boosting their profits and also help in developing their brand image in the market.

Both Apple and Samsung have taken the initiative to collaborate with government initiatives that can help in the development of society as well as help in developing their brand image. Apple had announced its investment of 430 billion dollars which would contribute to adding 20,000 new jobs across the USA in the next five years (Apple Newsroom, 2021). It also aims towards next-generation silicon development and innovation in 5G across different US states. Apple has contributed to more than 2.7 million jobs across the country and its contribution to the economy has also contributed to creating thousands of jobs for the people. Apple has also planned to invest over $1 billion in building a new campus which would also create 3000 new jobs and provide employment to people who belong to the local community (Fortune, 2019). In the case of Samsung, they also collaborated with United Nations Volunteer Programme which is based upon contributing towards development and peace worldwide. Samsung also launched a new digital initiative for India by the name PoweringDigitalIndia where they would work with the government and focus on empowering digitalization in India.

Conclusion

This report concludes about the importance of CSR activities for an organization and also concludes about impact of such activities on business of Apple and Samsung. Both the companies promote education, skills, and gender equality in their CSR activities. They also focus on the management of electronic waste and adopting sustainable practices in manufacturing and operations. Both the companies are focusing on renewable sources of energy by promoting environmentally friendly practices. Dynamic capabilities of both organizations which help them in competing into business environment is also concluded in this report. 

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