Is a Damaged Reputation Bad for Sales?
Apple and Samsung are two technological giants in the field of Information technology. Apple is the largest customer of Samsung on B2B market and Samsung is one of the largest Apple’s suppliers. Apple buys microprocessors, flash-memory chips, iPhone and iPad screens, application processor and other components from Samsung. Both companies stand to gain from each other and were good partners with each other a decade ago. Their rivalry started when Samsung introduced smart phones which were considered similar to theirs’ by Apple (LESSIN et al., 2013).
Apple introduced iPhone and iPad smart phones whereas Samsung introduced Galaxy S and Galaxy Nexus phones after few years. Apple said that Samsung had copied the Graphical User Interface design and its Physical design in its Galaxy smart phones like pinch-to-zoom, rubber-band, double-tab, rounded corners, iconic home button and filed patent infringement law suit in 2011. Samsung argued that Apple had infringed their patent rights. These patent wars have damaged their sales and reputation, at the same time benefitting their competitors. Realizing this, they have agreed to wind up their fight now. The good thing is that, it has made the two companies realize the advantages of working together. This was not the only one patent but they have a lot of petitions but this one caught everybody’s attention (Phillips, 2013).
Damaged reputation is bad for sales
The patent wars have damaged the reputation of both Apple and Samsung. It has affected sales as well as eased the entry of competitor’s products. Bad reputation damages the consumer’s trust on the company. Consumer’s who believe that Samsung has copied Apple’s ideas will not go for Samsung products in future. Customers thinking that Apple uses its patent rights to eliminate competition will move towards competitors like Nokia. So the sales of both Apple and Samsung are affected. Damaged reputation makes it difficult for these companies to attract customers. Existing customers might compromise but new customers will look for alternate products (Barbra Dozier’s Blog, 2013).
The strong brand names have helped Apple and Samsung reach out to customers. Patent wars have damaged the brand names also. People also advertise by taking about the product. Bad advertising thus is another negative factor that will affect sales. Loyal customers always recommend these items to their friends and relatives. Now they may advise losing association with these companies. More effective strategies will be needed to retain customers and to attract new ones. Store owners will become reluctant to market these companies’s product due to the bad reputation they have suffered. Though Samsung and Apple have their own retail shops, they use intermediaries like super markets, retailers, wholesalers and distributors as well. Due to this patent war, they are afraid to be caught at crossroads (Barbra Dozier’s Blog, 2013).
Apple‘s products are priced high. Its brand name and quality have attracted customers to it. Samsung’s products are priced low and medium and low-income people are attracted to it. In this war, if Samsung’s products are affected, the medium and low income people will take a negative stand towards Apple due to their inability to buy smart phones. This affects the sellers and they may rally behind Samsung. Apple will take a direct hit making its products unpopular. Hence it may have to repair its rapport with Samsung to increase sales (Barbra Dozier’s Blog, 2013).
Damaged reputation is good for sales
There are instances where damaged reputation can boost sales also. In this patent war, both companies and their products have become popular among people. More people are aware of smart phones and their features. Many low income people now tend to buy Samsung products. This can be seen by the increase in sales of Samsung Galaxy phones in 2012. Apple has won the petition against Samsung in US in 2013. This might be a setback on Samsung but has not affected its sales. Alternatively, Apple’s sales will increase due to this verdict and the publicity they have got out of this war (Reisinger, 2014).
The petition war between Apple and Samsung has damaged their reputation on a small scale. The amount it affects its sales will be seen in the days to come. The two companies have also realized that and have seen that new players are coming into the market. As they are dependent upon each other, they have decided to put an end to this patent war and focus on future business.
Barbra Dozier’s Blog,. (2013). Apple-Samsung patent wars. Retrieved 10 November 2014, from http://barbradozier.wordpress.com/2013/12/17/apple-samsung-patent-wars/
Lessin, J., Luk, L., & Osawa, J. (2013). Apple Finds It Difficult to Divorce Samsung. WSJ. Retrieved 10 November 2014, from http://online.wsj.com/articles/SB10001424127887324682204578513882349940500
Phillips, M. (2013). Apple vs. Samsung: A Patent War with Few Winners – The New Yorker. The New Yorker. Retrieved 10 November 2014, from http://www.newyorker.com/tech/elements/apple-vs-samsung-a-patent-war-with-few-winners
Reisinger, D. (2014). A Look Back at the Great Apple-Samsung Patent War. Eweek.com. Retrieved 10 November 2014, from http://www.eweek.com/mobile/slideshows/a-look-back-at-the-great-apple-samsung-patent-war.html#sthash.P06F3k0R.dpuf
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