A SUMMER TRAINING PROJECT REPORT

ON

SAMSUNG

SUBMITTED IN THE PARTIAL FULFILLMENT FOR THE AWARD OF

DEGREE OF BACHELOR OF BUSINESS ADMINISTRATION 2016-2019

UNDER THE GUIDANCE OF: MR. SHAKTI SHARMA

SUBMITTED BY: NAVEEN NANGLIA

PRN NO: 1628100597

BHARATI VIDYAPEETH DEEMED UNIVERSITY SCHOOL OF

DISTANCE EDUCATION

Academic Study Center-BVIMR, New Delhi

1
 DECLARATION
I Naveen Nanglia student of fourth semester of Bachelor of business administration
in the academic year 2016-2019 at Bharati Vidyapeeth Institute of Management
and Research hereby declare that I have completed project industrial exposure Title
“SAMSUNG” as a part of the course requirements of Bachelor of Business
Administration.

I further declare that the information presented in the project is true and original to the
best of my knowledge.

Naveen Nanglia

2
 ACKNOWLEDGEMENT

I wish I express my sincere gratitude to Mr. Shakti Sharma, for providing me an

opportunity to do my project work on “SAMSUNG”.

I sincerely thank Mr. Shakti Sharma for their guidance and encouragement in carrying
out this project work. I also wish to express my gratitude to the officials and other
staff members of Samsung Company who rendered their help during the period of my
project work.

I also thank the director of Bharati Vidyapeeth Institute of Management and

Research for providing me the opportunity to embark on this project.

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 PREFACE
Practical Knowledge is an important suffix of theoretical knowledge. One cannot rely
solely on theoretical knowledge. Classroom lectures clarify the fundamental aspects
of management, but they must be correlated with the practical training situations. It is
that ideology that practical knowledge should be made mandatory for the curriculum
and has a significant role to play in the fields of business management.

I have put in my sincere efforts to make this INDUSTRIAL EXPOSURE project a

real success. My project is on “SAMSUNG”, its impact on the market as the largest
automobile player and on the economy. This study would help to understand the
position and the growth of the company and analyse the people survey about the
quality and services of the company.

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 CONTENTS

Chapter 1: Introduction to Company

1. Nature of Business
2. Type & ownership Pattern
3. Organizational Structure
4. Production Lay out
5. Organisational Policies

Chapter 2: Industrial Analysis

1. Industry Overview – (Growth rate of Industry, Contribution to GDP)

2. Current Issues (From Newspaper, Journals –For Company and Industry)
3. Key Competitors
4. Environmental Scanning –Political environment, Economic environment, Socio-Cultural
Environment, technological environment, environmental issues (Green environment) and
Legal environment.
5. Porters five forces model of competition –Michael Porter

Chapter 3: Marketing Strategies

1. Products of Company
2. 4 Ps (Product: Price, Place & Promotion)
3. STP (Segmentation, Targeting and Positioning)
4. Distribution Channels
5. Promotion Strategies

Chapter 4: Financial Analysis

1. Sources of Finance
2. Ratio Analysis –Any 5
3. Net Profit/ Balance sheet (from annual report) -Analyse

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Chapter 5: Key Learning’s from the Company and
Recommendations

1. Performance Analysis of the Company

2. Reasons for the expansion/contraction/diversification of Company
3. Comment on Organizational Leadership
4. Market share/growth rate of Company
5. SWOT Analysis of the Company

Chapter 6: Findings

Chapter 7: Conclusions and Suggestions

Bibliography

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 Chapter-1
Introduction to Company

KEY FACTS

 Data founded: 1938

 Chairman (Since 1987): Kum-Hee Lee
 Founder: Byung-Chull Lee (1910-1987)
 Headquarters: Seoul, South Korea
 Global Operations: 285 Offices and facilities in 67 Countries
 Main Business Sectors: Electronics, Finance, and Trade and Services
 Number of Employees: 173,000 worldwide
 Number of listed companies within the group: 14
 Listed Companies:

 Samsung Electronics Co. Ltd.

 Samsung SDI Co. Ltd.
 Samsung Electro-Mechanics Co. Ltd.
 Samsung Techwin Co. Ltd.
 Samsung Heavy Industries Co. Ltd.
 Samsung Fine Chemicals Co. Ltd.
 Samsung Fire & Marine Insurance Co. Ltd.
 Samsung Securities Co. Ltd.
 Samsung Engineering Co. Ltd.
 Cheil Industries Inc.
 The Shilla Hotels and Resorts Co. Ltd.
 Cheil Communication Inc.
 SI Corporation

Samsung Group, based in Seoul, is South Korea’s largest business group. The
multinational conglomerate contains numerous subsidiaries and affiliated businesses,
most of them under the Samsung brand.

7
Here are key dates in the company’s history:

1938: Samsung is founded by Lee Byung-chull as a trading company.

1953: After the Korean War, Lee forms profitable Cheil Sugar, which is followed by
textile, banking and insurance enterprises.

1961: Despite a political coup, charges against Lee of illegal profiteering and a 1966
family scandal of smuggling, the company grows by diversifying into paper products,
department stores and publishing.

1969: Lee, with the help of Sanyo, establishes Samsung Electronics. It produces
inexpensive TVs, microwave ovens and other consumer products for Western
companies such as Sears and General Electric.

1970s: Under a government policy of rapid industrialization, Samsung launches a

number of enterprises in ship building, petrochemicals and aircraft engines.

1980s: The company is exporting electronics under its own name.

1983: Samsung begins production of personal computers.

1987: Lee’s son, Lee Kun-hee, assumes control of Samsung.

1988: Samsung Semiconductor and Telecommunications merges with Samsung

Electronics. Its core business focus is home appliances, telecommunications and
semiconductors.

1990: Samsung becomes a world leader in chip production.

1994: Samsung Motors is formed.

1996: Lee Kun-hee is involved in a corruption scandal and gets a suspended sentence
for bribery.

1998: Samsung completes the development of flat-screen televisions and begins the
first mass production of digital TVs. Samsung Motors delivers its first cars.

2005: Samsung develops the first speech-recognition phone.

8
2007: Samsung Group is accused of political bribery and influence-peddling
throughout the South Korean government, judicial branch and the media.

2012: Samsung Electronics becomes world’s largest mobile phone-maker by unit

sales, overtaking Nokia, the market leader. U.S. jurors rule Samsung must pay Apple
(AAPL) $1.05 billion in damages for violating six Apple patents on smartphone
technology.

1. Nature of Business

Samsung Electronics is the world’s largest consumer electronics company. Producing

everything from phones, TVs, cameras and laptops to microwaves and freezers, it is a
top three brand in pretty much every category in which it is active. 2010 sales were in
excess of $135 billion with net profits of over $14 billion. Samsung Electronics is
now twice the size of Sony, the company which 20 years ago was the undisputed
leader in the sector.

The company is part of the larger $200 billion revenue Samsung Group that accounts
for a fifth of Korea’s exports. Samsung has become the flagship of the South Korean
economy and the source of much of the innovation that is taking place across the
consumer electronics sector. Given that it was a low-cost me-too manufacturer of
imitations of Sharp’s microwaves in the 1970s this is a huge achievement. Pivotal to
Samsung Electronics’ success over the past decade or so has been the way it has
embraced design as the source of competition. Growing from 2 to 900, the Samsung
Electronics design team now consistently takes most awards at the prestigious annual
design events as the company’s products are time and time again seen as leading the
category in performance, quality, and value.

While design has become an important part of the success, Samsung Electronics is a
vertically integrated hardware company: it makes the product and pretty much every
component that goes in it. And this means that Samsung Electronics is first and
foremost a technology company. Samsung Electronics’ component business is the
leading producer of many of the best technologies: whether it is memory, integrated

9
circuits, storage, or LCD panels Samsung Electronics makes great products. And it
doesn’t just make them for use in Samsung products – most of its competitors’
products also source their components from Samsung Electronics. Whether you buy a
Samsung or another brand, chances are you are still buying Samsung Electronics’
technology and this brings efficiencies of scale and cost to Samsung over their
competition.

Samsung Electronics have made a major success of product design, but this has not
been done in isolation of great technology. As with Audi, it has been the increasingly
close and symbiotic relationship between the engineering and the aesthetic design that
has made the brands stand out more from the crowd.

Going forward, a big challenge for Samsung Electronics will be to utilise its
competences in design, technology and integrated processes to continue pushing the
technological boundaries, competing on quality with its Asian peers, and producing
the products that the vast majority of the world’s consumers clearly want to buy.

2. Type & ownership Pattern

 MUTUAL FUND OWNERSHIP

Mutual Fund Name Shares Held %Outstanding

(% Change)

VA College America Euro Pacific 2,038,471(4.87) 1.49

Growth

Vanguard Total Intl Stock Idx 1,259,486(1.42) 0.92

Fund

VA College America Cap World 1,176,233(7.95) 0.86

Gr and Inc.

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Dodge & Cox International 1,173,643(-8.59) 0.79

Stock Fund

Samsung KODEX 200 ETF 761,598(13.29) 0.56

IShares MSCI Emerging 743,060(0.00) 0.57

Markets (AU)

IShares Core MSCI Emerging 735,928(0.00) 0.53

Markets

VA College America Growth 713,600(2.87) 0.52

Fund of America

DFA Emerging Markets Core 475,015(0.00) 0.35

Equity Fund

Vanguard Developed Markets 461,554(-0.13) 0.34

Index Fund

VA College America Invmt Co 461,554(-0.13) 0.34

of America

VA College America New 428,488(0.00) 0.31

Perspective

IShares MSCI South Korea 422,119(0.00) 0.32

Capped (AU)

Oppenheimer Developing 367,582(52.39) 0.27

Markets Fund

MiraeAsset TIGER 200 ETF 349,739(37.13) 0.26

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  INSTUTATIONAL OWNERSHIP

Institution Name Shares Held % Outstanding

(% Change)

Capital Research and 6,243,815(+4.35%) 4.58

Management Company

BlackRock Fund Advisors 2,199,735(+0.06%) 1.66

Vanguard Group Inc 2,063,137(+0.67%) 1.50

Dodge & Cox 1,288,271(-8.32%) 0.86

Samsung Asset Management 1,130,232(+11.00%) 0.83

Co Ltd

Mirae Asset Global Investments 665,759(+21.05%) 0.49

Co Ltd

T. Rowe Price Associates, Inc. 641,307(+4.39%) 0.47

BlackRock Advisors (UK) Limited 627,718(-0.21%) 0.48

Dimensional Fund Advisors LP 606,426(+0.72%) 0.45

Artisan Partners Limited 571,332(-1.86%) 0.42

Partnership

Templeton Global Advisors 453,055(-9.94%) 0.33

Limited

OFI Global Asset 425,121(+54.68%) 0.31

Management, Inc.

Korea Investment 328,467(+1.35%) 0.24

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Management Co., Ltd

Franklin Mutual Advisers, LL 316,723(+0.05%) 0.23

Fidelity Management &

Research Company 304,679(+2.75%) 0.22

3. Organizational Structure

Samsung was named by Lee Byung-chul, founder of Samsung Electronics when he

established the Samsung Trading Company on March, 1938. Sam in Samsung is
defined as strong, abundant and big; while "Sung" means high and bright.
Interestingly, Samsung's origin was not involving electronics. Initially, Chairman Lee
set up a trade export company in Korea that sold fish, vegetables, and fruit to China.
Start from 1958, Samsung began to expand into other industries such as media,
financial, ship building and chemicals and Samsung Electronics was established under
subsidiary of Samsung Group in 1969. The company then expanded to semiconductor
business and became the first chip-making facilities in the country during that time.
Samsung Electronics focused on four areas which are digital media, semiconductor,

13
telecommunication network and LCD digital appliances. In 1993, the "lightest"
mobile phone of its era was developed. Finally, it surpassed Sony to become world's

twentieth-largest and most popular brand. Samsung was the world's largest
manufacturer of OLEDs with 40% market share worlds wide and 90% share of global
AMOLED market. More than 600 American patents and 2800 international patent are
owned by Samsung Electronics in 2006 that makes it as the largest owner of
AMOLED technology patents. The company also became the second-largest mobile-
phone maker beating Motorola in 2007 for the first time. In 2009, it became world's
largest technology company overtaking Hewlett-Packard measure by sales. In 2010, it
produces 30 nm-class DRAMs and 20 nm-class NAND flashes which were the first
time in the world. At 2011, it is the world's largest mobile phone maker and second-
largest semiconductor chip maker. Samsung Electronics became the largest
smartphone vendor due to sales of Galaxy SII and Galaxy Note devices.

4. Production Lay out

When Samsung released its first Galaxy phone back in 2009, it was clear that the
company would become a contender in the revitalized smartphone market. When it
released the first Galaxy Note smartphone two years later in 2011, it was clear that
Samsung wasn’t afraid to take chances. And when Samsung released the Galaxy S4 in
2013, it was clear that the company’s displays would be the best in the industry for
years to come.

But something else was clear during all that time. Despite Samsung’s willingness to
take countless pages out of Apple’s playbook, the company’s hardware designs were
still sorely lacking. The look of Samsung’s phones was boring. The thin plastic backs
felt cheap and flimsy. Long story short, Samsung smartphones looked and felt like
cheap iPhone knockoffs.

Now, in 2017, the new Galaxy S8 and Galaxy S8+ mark a changing of the guard. The
torch has been passed. The student has become the teacher. Call it whatever you want,
but the bottom line is this: Samsung has out-designed Apple with its new flagship
smartphones. They look and feel like the future, and Apple’s three-year-old iPhone
design is stuck in the past.

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Samsung’s transition began in 2015 when the company released the Galaxy S6. It was
the first flagship phone from the South Korean electronics giant that looked and felt
like a flagship phone. The smooth glass front and back were joined by a sturdy
aluminum mid-frame, and there were only a few small pieces of plastic on the phone’s
exterior — the small strips that separated each section of the aluminum frame, and the
home button.

It was official: Samsung was a premium smartphone maker.

The company’s flagship Galaxy S and Galaxy Note handsets have always featured
cutting-edge specs. They have always offered terrific performance that was on par
with the best Android phones in the business. And they have always had stunning
displays with vivid colors and great contrast. Now, starting with the Galaxy S6, they
also featured designs to match. But still, few people would argue that the company’s
phones looked as sleek or felt as premium as Apple’s iPhones.

Until now, that is.

In terms of hardware design, the Galaxy S8 and Galaxy S8+ are the complete
package. They’re industry leaders in terms of specs, as Samsung’s flagship phones
always have been. They also feature Super AMOLED screens that are unrivaled.
Again, this has been the norm for Samsung for years. But the biggest story in terms of
Samsung’s growth as a smartphone maker is the design.

Samsung has always been a follower, ever since it released its first smartphone nearly
a decade ago. But now, Samsung is a leader.

In fact, diehard Apple fans have been unable to find anything to complain about, so
some of them have resorted to insignificant nonsense like the alignment of the USB-C

15
port and speaker openings on the bottom of the phone. While it’s true that Apple’s
alignment on the bottom of the iPhone 6/6s/7 is perfect, I’m not sure there’s a sane
end user on the planet who would actually care about something like this.

But it’s indicative of the difference between Samsung and Apple when it comes to
attention to detail! Perhaps. Or perhaps Samsung decided it was more important to
squeeze in the phone’s internal components as tightly as possible so that it could
create a design with a remarkable screen-to-body ratio of 83%. Trust me, Galaxy S8
and Galaxy S8+ users are going to appreciate the narrow bezels around the Infinity
Display far more than any iPhone user appreciates his or her perfectly aligned ports.
Also of note, Samsung managed to make its new flagship phones IP68 water-resistant
without removing the 3.5mm headphone jack, misaligned though it may be.

Speaking of screen-to-body ratios, welcome to the next smartphone battleground.

First, it was specs. Then, after Apple introduced the Retina Display, it was pixels.
Now, beginning in 2017, it’s bezels. Every top smartphone vendor in the world is hard
at work shrinking the bezels on their flagship phones so that the screen takes up as
much of the phone’s face as possible. Is doing away with bezels on smartphones
really that important? In a word, yes.

Apart from being crucial to upcoming advances in augmented reality, barely-there

bezels like the ones surrounding the Galaxy S8 display allow for a much more
immersive user experience. Distractions fade away and content becomes the sole
focus. Why do you think Apple has never included a logo or anything else that might
be distracting on the faces of its iPhones? It’s because when someone is using his or
her phone, the content on the screen is all matters.

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The 83% screen-to-body ratio on the Galaxy S8 and Galaxy S8+ is the best in the
business among top-tier global smartphone makers right now. By comparison, the
three-year-old iPhone 7 and iPhone 7 Plus design has a screen-to-body ratio of 66%.
As I wrote in an earlier opinion piece, using the iPhone after having used the Galaxy
S8 feels like going back to a tube TV after having upgraded to a flat-screen

On the flip side, Samsung had to remove its physical home button from the Galaxy S8
and S8+ in order to achieve such an impressive screen-to-body ratio, and the company
tried its best to copy Apple with its new virtual home button. It failed.

The virtual home button on Samsung’s new phones is pressure sensitive, similar to
Apple’s 3D Touch home button on the iPhone 7 and iPhone 7 Plus. Apple’s solution
utilizes advanced pressure sensors coupled with a Taptic Engine to make pressing the
virtual home button on an iPhone feel and sound like pressing a real button. On the
Galaxy S8, pressing the home button feels like pressing a plain old touchscreen, and
presses are accompanied by the same weak vibration feedback you’d find on any
other phone.

It might seem like an insignificant detail, but it’s not. As we move further toward
phones that don’t have any buttons at all, advanced haptic feedback systems can make
flat glass feel like a button. Apple has a huge head start in this area, and it will be
quite some time before other companies catch up.

Like the LG G6, Samsung’s new Galaxy S8 and Galaxy S8+ both feature screens with
a tall 18:9 aspect ratio. As a result, it’s difficult to compare their sizes to other
smartphones. For example, the 5.8-inch display on the smaller Galaxy S8 is
technically bigger than the screen on Apple’s iPhone 7 Plus phablet, but Apple’s
screen is wider than the one on the S8. Long story short, diagonal measurements no
longer tell the whole story.

What matters is that both new Galaxy S8 models have nice big displays that are
simply unrivaled right now. They both feature Quad HD+ (2960 x 1440) resolution,
so the 5.8-inch screen on the Galaxy S8 has a pixel density of 570 ppi while the
Galaxy S8+ has a 6.2-inch screen with 529 ppi. On paper, it’s a fairly big discrepancy.
In reality, it’s difficult to notice a difference in most scenarios. What matters is

17
regardless of which model you end up with, you’ll hold in your hand the finest
smartphone display that has ever existed.

As was the case with the ill-fated Galaxy Note 7, the sides of the Galaxy S8 and S8+
are curved on both the front and the back. The phones are each about the same width
as comparable smartphone models from other vendors, but the curved sides help them
sit more comfortably in the hand because they feel narrower. They also feel much
thinner than they are thanks to the curves, though widths of 8mm for the Galaxy S8
and 8.1mm for the Galaxy S8+ aren’t very thick even without the curves on either
side.

Inside, the US versions of the Galaxy S8 and Galaxy S8+ are both powered by
Qualcomm’s new 10nm octa-core Snapdragon 835 chipset, which marries a 2.3GHz
quad for heavy lifting with a 1.7GHz quad for everything else. When they are released

on Friday, April 21st, they’ll be the first widely available smartphones in the world to
feature 10nm chips, which should offer advantages both in terms of power and
efficiency. You’ll also find 4GB of LPDDR4 RAM in Samsung’s new flagships, along
with 64GB of UFS 2.1 flash storage and micro SDXC support.

5. Organizational Policies

SAMSUNG HRM POLICIES

 The role of the HR function is to enable is to achieve its objectives by talking

initiatives and providing guidance and support on all matters relating to its
employee.

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  Samsung develop a lot of courses for Samsung staff to learn, and give them
opportunities to learn example the design center staff can go abroad or have
chance to work with famous talent.
 Samsung believes that employees will stay with the firm only as long as they
fell that there contribution is valued, and they are able to do meaningful work
in a stimulating and challenging environment.

ENVIRONMENTAL POLICIES

Sustainable environmental management and execution are one of the primary values
at Samsung engineering co., Ltd. (SECL) and SECL is committed to be a word class
and preferred provider of Engineering, Procurement and Construction services. In
order to be recognized as a Global leader SECL will continue to add value to by
designing and implementing eco-friendly solutions for our Clients, thus ensuring they
also achieve their corporate goals. It our intent to effectively manage and improve our
environmental performance and minimize the impacts of our business on the
environment and the communities in which work.

To achieve are goal being recognize as the leading and preferred Global EPC
Company, SECL and our subcontractors shall follow the principles listed bellow:

 Driving continual environmental by ensuring effective management of our

environmental impact and implementing Environmental Management Systems
in compliance with ISO 14001:2004 and subsequent revisions.
 Complying with all environmentally sound designs and execution plans.
 Preventing pollution and minimizing or mitigating any adverse impacts of
SECL’s business activities on the environment.
 Involve all personal top to bottom in impact recognition, impact elimination
and sustainable use of resource both locally and internationally.

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 Chapter-2

Industrial Analysis

1. Industry Overview – (Growth rate of Industry, Contribution to GDP)

Samsung Electronics is the world’s largest consumer electronics company. Producing

everything from phones, TVs, cameras and laptops to microwaves and freezers, it is a top
three brand in pretty much every category in which it is active. 2010 sales were in excess
of $135 billion with net profits of over $14 billion. Samsung Electronics is now twice the
size of Sony, the company which 20 years ago was the undisputed leader in the sector.

The company is part of the larger $200 billion revenue Samsung Group that accounts for
a fifth of Korea’s exports. Samsung has become the flagship of the South Korean
economy and the source of much of the innovation that is taking place across the
consumer electronics sector. Given that it was a low-cost me-too manufacturer of
imitations of Sharp’s microwaves in the 1970s this is a huge achievement. Pivotal to
Samsung Electronics’ success over the past decade or so has been the way it has
embraced design as the source of competition. Growing from 2 to 900, the Samsung
Electronics design team now consistently takes most awards at the prestigious annual
design events as the company’s products are time and time again seen as leading the
category in performance, quality, and value.

While design has become an important part of the success, Samsung Electronics is a
vertically integrated hardware company: it makes the product and pretty much every
component that goes in it. And this means that Samsung Electronics is first and foremost
a technology company. Samsung Electronics’ component business is the leading producer
of many of the best technologies: whether it is memory, integrated circuits, storage, or
LCD panels Samsung Electronics makes great products. And it doesn’t just make them
for use in Samsung products – most of its competitors’ products also source their
components from Samsung Electronics. Whether you buy a Samsung or another brand,

20
chances are you are still buying Samsung Electronics’ technology and this brings
efficiencies of scale and cost to Samsung over their competition.

Samsung Electronics have made a major success of product design, but this has not been
done in isolation of great technology. As with Audi, it has been the increasingly close and
symbiotic relationship between the engineering and the aesthetic design that has made the
brands stand out more from the crowd.

Going forward, a big challenge for Samsung Electronics will be to utilise its competences
in design, technology and integrated processes to continue pushing the technological
boundaries, competing on quality with its Asian peers, and producing the products that
the vast majority of the world’s consumers clearly want to buy.

2. Current Issues (From Newspaper, Journals –For Company and

Industry)

21
A South Korea court has approved the arrest of Lee Jae-yong, the heir to the Samsung
fortune and the company’s de facto leader. It’s another piece of bad news for a company
that was already struggling to recover from last fall’s catastrophic meltdowns of batteries
in its Galaxy Note 7 phones.

Samsung faces huge challenges maintaining its perch at the top of the global smartphone
industry, including competition from cheap Chinese handset manufacturers and Google’s
new Pixel smartphone. Its leadership appears to be struggling to meet them.

Lee Jae-yong represents the third generation of his family to lead Samsung. Samsung’s
success in the smartphone business was driven by his father, Lee Kun-hee, who took over
the company from his father in 1987. Lee Kun-hee shook up the company in 1993 with a
new management philosophy that helped Samsung become an iconic global brand. Today,
Samsung is a market leader in the smartphone business, and financial results released this
week show that the company enjoyed strong profits in 2016 despite the battery fiasco.

Unfortunately, the elder Lee had a heart attack in 2014, and since then, the company has
had something of a leadership vacuum. Lee has been grooming his son to take over his
leadership of the company, and having the son face bribery charges isn’t going to help.
The situation is made even worse by Samsung’s unusual corporate structure, which prizes
intense internal competition and needs a strong referee to keep that competition from
becoming dysfunctional.

Samsung says two separate battery issues were to blame for all of its
Galaxy Note 7 problems

22
Samsung has an answer for what went wrong with the Galaxy Note 7, but it may not be a
very satisfying one.

After months of investigating, Samsung is pinning all the blame on two separate battery
flaws, insisting nothing was wrong with the phone itself.

For those who have been living under a rock — and not taken any flights in the last four
months — a significant number of Samsung Galaxy Note 7 phones overheated and
caught fire, prompting two recalls and the eventual discontinuation of Samsung’s highest-
end phone.

“It was a very painful period, but in a couple of months we learned a lot,” Samsung
mobile head DJ Koh told Recode in an interview at Samsung’s Mountain View, Calif.,
offices.
Samsung said its investigation, which involved 700 dedicated staff testing 200,000
phones and 30,000 additional batteries, was also validated by similar findings by the
three outside firms it brought in to investigate (UL, Exponent and Germany’s TUV
Rhineland).

In response to its findings, Samsung is adding several steps to its testing processes for the
lithium-ion batteries it uses and forming a battery advisory board.

23
“I wish [that] this serves as an opportunity to improve safety of lithium-ion not only for
Samsung but for the entire industry,” Koh said, adding that Samsung takes responsibility
for all components of the phone, including batteries made by other Samsung subsidiaries
and those bought from outside companies.

For those who want to get a bit nerdy, here’s what Samsung says was wrong with each
battery. For the first battery, Samsung says a design flaw in the upper right corner of the
battery made the electrodes prone to bend and, in some cases, led to a breakdown in the
separation between positive and negative tabs, causing a short circuit.

With the second battery, which came from a separate supplier, Samsung believes there
was nothing wrong with the design itself, but says a manufacturing issue led to a welding
defect that prompted that battery to also short circuit and ignite.

Samsung said that its design for the Note 7, while demanding on its battery suppliers, was
not unreasonable or the reason why the batteries failed. The issues with battery B,
Samsung said, were tied to the fact that the supplier tried to quickly increase its
production after battery A was pulled off the market.

“We believe if not for that manufacturing issue on the ramp [of battery B], the Note 7
would still be on the market,” Samsung Electronics America head Tim Baxter
told Recode.

The key question now is whether consumers will find Samsung’s answers — and
proposed changes — convincing enough to restore their trust.

Samsung promised to continue both its Galaxy and Galaxy Note product families and
said it will continue to innovate even as it ensures a higher priority for product safety.

The company is expected to introduce the Galaxy S8 in the coming weeks and, if it
follows past practice, the next Galaxy Note would come in the fall. The company said all
forthcoming phones will go through the new eight-step battery testing procedures.

3. Key Competitors
24
LG G6

The biggest announcement to come out of Mobile World Congress is probably the LG
G6, the latest flagship smartphone from the Korean company. The G6 is perhaps most
easily recognizable by its new 18:9 screen with rounded corners, which takes up a lot less
real estate on the face of the device thanks to its much smaller bezels. The phone is also
the first phone besides the Google Pixel to ship with the Google Assistant baked in.

LG G6 packs a Qualcomm Snapdragon 821 processor, 4GB of RAM, 32GB of storage

with a microSD card expansion slot, a 32-bit Quad DAC, a rear fingerprint sensor (which
also acts as its power button), and Android Nougat.

BlackBerry KeyOne

BlackBerry is kind of back (again), this time in the form of a new device made by its new
parent company, TCL (which also houses the Alcatel brand, for those who aren’t
familiar). The BlackBerry KeyOne is a familiar phone for those who’ve had experience
with BlackBerry in the past, but this one is yet another Android-based take with security
and other software features.

25
As you can see above, the KeyOne — previously known as “Mercury” — includes a
hardware keyboard below its 4.5-inch display. It also has a Qualcomm Snapdragon 625,
the same IMX378 12MP sensor from the Google Pixel, an 8MP front facing
sensor, 32GB of storage, 3GB of RAM, and more, all retailing for $549 in the US.

Motorola Moto G5 and G5 Plus

Lenovo-owned Motorola used Mobile World Congress this year to show off its latest
budget offerings, namely the Moto G5 and G5 Plus. The Moto G line — largely due to its
polished and performant stock software — has long been a favorite among those who use
iOS devices primarily, and that probably isn’t changing much with these latest handsets.

As is usually the case, the Moto G5 Plus — which is the only device between the two
that’s coming to the US — packs some pretty great specs for the price point. It has a 5.2-
inch display, a 3,000 mAh battery, 64 GB of storage, and a 2.0 GHz Snapdragon 625. The
12 MP rear camera on the Moto G5 Plus in particular is a great value.

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Huawei P10 and P10 Plus & Huawei

Huawei took the stage in Barcelona to show off its new flagship Huawei P10, but as we
noted in our hands-on with the phone, it doesn’t seem to pack a feature set nor value that
will appeal to the average US consumer. Besides a new palette of “on trend” colors, the
P10 is a lot of the same from the Chinese company, featuring some great specs and a
dual-camera set up that probably won’t disappoint.

4. Environmental Scanning –Political environment, Economic

environment, Socio-Cultural Environment, technological environment,
environmental issues (Green environment) and Legal environment.

Samsung has been considered as one of the best global industry. In the whole world, the
products of Samsung have been used and are admired by the people from every domain
and background. From mobile phones to the electronic devices Samsung has been serving
the Industry and the society in good terms. Samsung basically deals with white goods.
The company has been owned by a South Korean family. Samsung has been a company
which is highly dynamic in nature. In order to maintain the market, Samsung should
always consider the certain facts and analysis. Samsung has covered so many countries in
the world, therefore it is important to analyze certain external as well as internal factors.

27
Political environment

The political factors are most of the time not very much influential in the way of the
progress of the companies like Samsung. The company is away from the political
scenario of the state in which the country is operating. However, in recent times there are
certain things like the peace of the state and the political instability which laid direct
impact on the company. A country with political instability becomes a war prone area and
the sale of the white good items became low. It could be analyzed from the example that
the recent conflicts in Korea have greatly affected the company as a whole.

Economic environment

This is one the very important dimension for the company like Samsung. The more the
states will develop the higher are the chances of the company to expand and open its new
units in the newly developed zones. The good GDP of the country means that the people
has more income and will be more prone to buying the latest items produced by the
company. In this way, the overall profit of the company will be increased and the
company will always be in a position to expand globally. Moreover, the overall economic
crisis the world has been facing in recent times has also a direct impact on the company
like Samsung. The global uncertainty has made the company to change its strategies
every now and then.

Social environment

These impacts are purely based on the local beliefs and culture of the people in which the
company is operating. This is a very dynamic domain and for the success, the company
must show flexibility in its policies pertaining to the local culture. Samsung is basically a
purely Korean company but it has changed its preferences and the related policies as per
the local social factors in which the company is being operated.

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Technological environment

Samsung has been famous in the world for its innovation. Samsung has its mission to
always follow the contemporary trends in the technological sphere. There are many rivals
of Samsung now. It is incumbent for the company to go one step ahead of the technology.
The products Samsung is producing are mostly technological related so it is one of an
essential factors which the company needs to keep in view while chalking out the policies
and assessing the forthcoming launching of devices and the features of the devices.
Samsung has been the technology driven company and focusing on the latest trends of
technology should have been the fundamental maxim the company like Samsung should
follow.

Environmental issues

With the rise of globalization, people have become more and more ethical and ethics
oriented. The consumers always expect from their favourite brand to be socially
responsible. They always want from their brand to play a vital role in the betterment of
the society as a whole. The working conditions of the company must also be good enough
to attract the best of the individuals to be the part of the Samsung family. The external, as
well as internal factors are the major ingredients in the success of the company. They
clearly define the agenda the company should follow to avoid the failure.

Legal environment

For the global company like Samsung which has many rivals like Apple. Samsung has to
be very much vigilant about the legal issues like copy and other pirated issues. Apple has
many times blamed Samsung for copying their design and features. In this perspective,
Samsung has to face many penalties. Apart from this many times, Samsung has been
accused of not paying much to its employees as compared to its rivals. The individual
working in Samsung often leave and join the rival companies, which maximizes the risks
of leakage of innovative ideas. Samsung should chalk out some legal bindings in this
perspective. Moreover, Samsung should always abide by the legal issues of the domain in

29
order to increase the customers and to maintain a positive image in the market which will
always help in gaining the trust of the customers.

5. Porters five forces model of competition – Michael Porter

Threat of new entrants is not a major hindrance to the success of Samsung Group. This is
based on the fact that major multinational corporations operating in the industry including
HTC, Apple and Samsung largely benefit from economies of scale. This is to a significant
level in gaining cost advantage. Such an advantage is not available to new market
entrants.

What’s more, entering and operating in consumer electronics and mobile industry needs
massive capital investment. This fact represents a major barrier for new entrants.
Additionally, access to various distribution channels including distribution centers,
wholesales warehouses and consumer technology sales outlets in the high street can
prove to be a major barrier for new entrants. This in the end reduces the threat of new
entrants to the market.

Bargaining power of buyers-high

The bargaining power of buyers is high based on porter 5 forces analysis of Samsung.
Samsung clients can easily settle for products from other companies including Motorola,
HTC, LG, Blackberry, Nokia and Apple Inc. They can do so at no extra cost and it
significantly increases their bargaining power.

Bargaining power of suppliers-medium

The bargaining power of suppliers working with the corporation depends on the type of
supplier. Suppliers that deal with general parts and components in many cases do not
yield a lot of bargaining power. This is because of the significance of the company’s
order volume and its ability to negotiate for better prices.

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However, one supplier, particularly Google, exercises an immense bargaining power as
Android platform supplier because of lack of alternative platforms that Samsung can
explore.

It is also good to note that Samsung Electronics duly recognizes the significance of
creating strategic cooperation with suppliers. About 72.7 percent of its total economic
value was shared amongst suppliers in 2014. In addition, Samsung maintains all-
encompassing communication method with its suppliers within the scope of different
initiatives including Supplier Dialogue Fair, Hot Line, Shared Growth Day and informal
meetings with suppliers.

Threat of substitutes

The threat of substitutes is high because of the number of clients who are using laptops,
tablets and other gadgets to watch different programs. However, Samsung Group is aware
of this and has diversified its products to include any gadgets that allow clients to access
the internet, watch TV programs and play games much more sophisticated applications. It
has produced interactive TV models that offer seamless integrations with external devices
and web applications.

Rivalry

Samsung Multinational Corporation faces fierce competition from well-known and well
established brands including Motorola, LG, Nokia, Panasonic and Sony among others.
Even though Samsung is a global brand and boasts of an ethical behaviour that has
enabled it to increase its revenue yearly, it still has to ensure it stays on top of the game
by carefully analysing its environment based on porter’s five forces model. It is for this
reason that the company keeps launching high quality and tech savvy products that attract
more global clients.

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Additionally, Samsung has a great ambition to become a global leader in the world of
electronics. This is complemented by their investment in Research and development as
well as marketing functions.

Summary of porter 5 forces analysis of Samsung

This porter 5 forces analysis of Samsung presents how external business environment can
impact the marketing strategy of Samsung. The company therefore needs to ensure that
its current practices are in line with the realities and demands of the consumer electronics
market across the globe.

Samsung further, needs to be more aware of the necessities and desires of its clients
across the globe to increase its profits and maintain its reputation or build it even further.

The sample academic paper on porter 5 forces analysis of Samsung above is among the
many you will find on our blog. If you need help in writing an essay, a , term papers or a
research paper on any topic get in touch with us today. Kindly visit our homepage here to
learn more about us.

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 Chapter-3

Marketing Strategies

1. Products of Company
 Mobile phones

 TV/Audio/Video

 Camera / Camcorder

 Home Appliances

PC / Peripherals / Printers

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2. 4 Ps (Product: Price, Place & Promotion)

To effectively market a product or service there are four things you need to get right:
Product, Price, Place and Promotion. These four elements are known as the marketing
mix or the 4Ps. The four marketing mix elements should be viewed as one unit and
structured to support each other; Otherwise a firm's marketing strategy will be confusing
and un co-ordinated.

The diagram below shows the four factors which make up the marketing mix; product,
price, place and promotion

Product:

1. Tablets

2. Mobile phones – Smart phones, normal phones,

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 3. Televisions – LEDs, LCDs. Plasma TV, SMART TV, HDTV etc.

4. Cameras and Camcorders

5. Refrigerators

6. Air conditioners

7. Washing machine

8. Microwave ovens

9. IT – Laptops, printers and accessories

The benefit of Samsung in terms of its product is that there is a trust on all
Samsung products because of the way Samsung products have performed in the last few
years. Problems with the Products have been negligible.

And with its Smart phones, Samsung has achieved a status symbol for its customers. At
the same time, Samsung is known for its service and people know that Samsung gives a
very fast service for any of its product. Thus in the marketing mix of Samsung, the
product portfolio is one of the strongest point for Samsung.

Price:
Because of its presence in different product categories, Samsung uses various pricing
strategies. We can divide the pricing strategies and match it with the products that it is
used for.

Skimming price – Samsung’s smart phones are one of the best in the market and are
the market leader in terms of the features and USP’s that they provide. The recent
Samsung Note 3 + Gear is another entrant in the market which is catching people eyes.
Thus Samsung uses Skimming price for these products wherein it tries to get a high
value in the start before competitors catch up. Once the model is old or any competitor
has launched a similar product, Samsung immediately drops the price.

Competitive pricing – For products other than smart phones, Samsung uses Competitive
pricing. Televisions, air conditioners, refrigerators and other products have competition in
the form of Panasonic or LG. Samsung is known to be a great brand but it is not greater
than LG for home appliances.

In fact LG beats Samsung where home appliances are concerned. Similarly in Washing
machines – Whirlpool, and in Cameras – Cannon, are the brands which are to be beaten.
You can view this article on top Samsung competitors in each segment. Thus in various
categories, Samsung keeps competitive pricing so as to beat the competitor. Samsung as
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a brand hardly uses penetrative pricing because it doesn’t enter late in the market. In fact,
it is present in most consumer durable segments in the market.

Place:
Samsung is present through various channels in the market. It works on the channel
marketing concept wherein there are three segments. Sales and Service dealers, Modern
retail and Distributors. The sales and service dealers handle key accounts for Samsung
and are involved in corporatesales. These dealers may also open exclusive Samsung
showrooms.

The Modern retail segment includes large retailers like Croma, Hypercity, Vijay sales,
Vivek’s and any others who are present in the modern electronic retail chain. Samsung
being such a branded product, the retailers are bound to keep Samsung as an alternative
or as the primary product for their customers.

The distribution network is the most interesting in the case of Samsung. In several cities,
Samsung has a single distributor through whom they distribute throughout a territory. For
example – In Mumbai, Samsung has SSK distributors who are distributors for all
Samsung products.

This distributor has a huge investment in Samsung and both, the distributor and the
company, go hand in hand for the sale of Samsung’s products. Thus all material of
Samsung will be sold to a single distributor who in turn will sell it forward to retailers.

Promotion:
Samsung uses multiple forms of promotions. Samsung as a company believes in pulling
the customer to themselves through advertising but at the same time uses strong tactics
to push the product to the customer through sales promotions.

Thus on one hand, Samsung uses various marketing vehicles across the year covering
festive season as well as Non festive time. On the other hand, it gives many offers and
discounts to its trade partners to motivate them to sell Samsung above competition. With
such a strategy, Samsung’s brand is on the rise so that both, the pull as well as push
strategy is working simultaneously in Samsung.

The marketing mix of Samsung is a lesson to marketers in several points.

First, Business will grow if you have multiple products at once as all of these products
can become revenue drivers for your company. Second, Pull strategy, though expensive,
is far more beneficial in the long time.

3. STP (Segmentation, Targeting and Positioning)

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Segmentation
 Low Range (Targeting low income groups) – Samsung Galaxy Y Color Plus
S5360, Samsung Galaxy Y Pro Duos, GT-B5512, Samsung Galaxy Y S5360,
Samsung Galaxy Pocket, Samsung Galaxy Fit S5670, Galaxy Pop 1669,
Samsung Galaxy Ace S5830, Samsung Galaxy S DOUS. The price range in
this segment is Rs 6000-12000.
 Middle range (for the middle income group) – Samsung Galaxy Ace Plus
S7500, Samsung Galaxy SL 19003, Samsung Galaxy 2 P3100, Samsung
Galaxy R 19103, Samsung Galaxy S plus 19001, Samsung Galaxy S 19000.
The price range this segment is Rs 14000-22000.
 The high end Galaxies ( Targeted for the high income group) – Samsung
Galaxy Tab 620, Samsung Galaxy S2i9100, Samsung Galaxy Beam, Samsung
Galaxy Tab 730, Samsung Galaxy Note, Samsung Galaxy Tab 210.1,
Samsung Galaxy Tab 680, Samsung Galaxy Tab 750, Samsung Galaxy S3.
The price rang in this segment is Rs 25000-44000.

Targeting
 After segmenting the market based on the different groups and classes, the targets
need to be chosen. Samsung mobiles have the following targets customers:
 Trendy young people.
 Professionals.
 Large businesses.
 The common cellular phone users.
 Organizations such as: services to public safety, the government, and both utility
and manufacturing enterprises.
 Institutional sales for colleges.
 Target is not only number driven but also acquiring and retaining customers.

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Positioning
Positioning is about the customer perception about the brand as being different from the
other brands on specific dimension including product attributes. The strategies adopted
by Samsung to position itself in the mobiles phone market re as follows:
 It focuses more on the real margin which comes from mid-to-high –end segments.
 Samsung Concept Store
 Market making & category creating in small towns.
 Wider Care Network
 Access to Samsung care line
 Pioneering in the 3G segment of mobile phones.
 Branded itself as a synonym for quality.
 Created a Unique Brand image for itself as a high end value driven brand.

4. Distribution Channels

Samsung has two manufacturing units one each in Noida and Chennai. A national
distributor takes care of the logistic associated with distributing the goods across the
country. A Carrying & Forwarding (C&F) Agent is present in each of the main states. The
C&F agent takes care of storing and transporting the goods onwards to dealers and

38
distributers. While warehouses for storing the products are provided by the C&F agent
the goods are still owned by the company. In the big cities like Delhi the goods are
shipped directly from the C&F agent to the dealer. In some case the smaller dealer may
be supplied by some of the larger dealer. For big retailer like e-zone and next the goods
are shipped from the C&F agent warehouse owned by the retail chain. In both the cases
once the goods are transferred to the dealer the ownership is taken over by them. The
transactions are on case basis and no goods are given on credit. In case of large retail
chains the purchasing decisions are taken at a national level and happen directly between
the company ant the head offices of the retailer.
 Franchisees- Samsung Electronics franchised a number of small outlets (Mobile
Stores). All the outlets which are under the franchiser should follow certain set
guidelines of the franchiser’s company. This would include converting a normal
outlet into Samsung Electronics outlet. But the franchiser will help in visual
merchandising and loan for deposits which are refundable.
 Shopping Malls- Many shopping malls have a separate mobile phones section.
Samsung targeted these malls as they are the right place for promotion and sale of
stylish variants of Samsung Galaxy.
 Mobile Phone Outlets- Samsung Galaxy mobiles are also available in the
different mobiles stores present different parts of India. The store keepers are paid
commission for demonstrating the various uses of the Galaxy mobiles to the
customers and vouch for the quality of the products.
 E-business – Samsung Galaxy is also available in E-business sites like Flipkart,
Home Shop18. These sites often offers discounts to encourage the sales of the
Samsung Galaxy mobiles.

5. Promotion Strategies

 Samples-Samsung Mobiles invited prospection custmers to try the production

for free. It took out dummy models of the phones, as well s mobile shops had
trial phone which a customers could feel in his hand.

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 London 2012 Olympic Games Samsung mobiles launched a scheme, where a
new cutomers or an existing customers can connect their mobiles with Optus
mobiles plan and stand a chance to win the passes.

 Samsung 50 $ cash back offers-Samsung Introduced an offer where one can

send postcard and win Samsung galaxy note,even it had some participate
stores where one wa entitled to get a 50 $ cash back on purchase of galaxy
note.

 Assessories– Samsung galaxy tab gave away freebies like bluetooth, leather
case 2GB SD card to its customers.

 The corporation is expected to spend $ 14 billion on advertising in 2013, with

publicity appearing in TV and cinema ads, on billboards, an at sports and arts
events.

 Brand Ambassador: Aamir khan.

 Providing free content on the moblies by collaborating with the copyright

owners of Bollywood movies. For e.g Ghajini, Love Aaj kal.

 Promotional offers like free entry to the know of ‘10 ka dum.’

 Organizing contents like ‘Samsung Moblies Karaoke Festival.’

 Opening the Samsung Fun Club for better customers relationships.

 Free online software updates, tutoria;s and customers services.

 Established many Samsung Mobile Stores to increase the visibility of the

brand.

 Highlights the innovative features of its products through a combination of

innovative advertising and barnding.

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 Chapter-4

Financial Analysis

1. Sources of Finance
Sources of Finance for a Business. It includes the dynamics of assets and liabilities over
time under conditions of different degrees of uncertainty and risk. For any businesses be
it start-ups or established one, there are internal and external sources.

A. Internal sources

1. Personal sources:
These are the most important sources of finance especially for a start-up business. When
someone opens a new business it is more likely he/she needs to invest from his/her own
pocket at first before trying to raise money from other sources .Most of the time family
members contribute capital for the start-up entrepreneurs.

2. Retained Earnings:
It is the net income of a business minus any dividend paid to the shareholders. Usually
small business grows investing back the retained earnings. This is the common way for
small firm to grow.

B. External sources
1. A bank loan:
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A bank loan is a long term financing for a business usually bank will require providing
some security for the loan. Normally bank is used for purchasing the fixed assets and that
asset could be put as security to the bank.

2. A bank overdraft:
A bank overdraft is a kind of bank loan but for the short-term bank may approve a
business as certain amount of loan facility and when the bank balance of the business
goes below zero then it can use the loan in return for paying a high rate of interest.

3. Issuing bond:
A firm ma issue some bonds for financing a capital purchase for long term financing.
Usually business would require paying a coupon payment periodically along with the
principal amount.
4. Share Capital (IPO):
An established business may want to issue IPOs to raise capital for the expansion of
existing business or to pay off the long term dept. instrument.

2. Ratio Analysis –Any 5

Sales Revenue Growth

Samsung slowing growth rate and uneven sales trend Apple’s double digit growth rate.

Profitability Ratios

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Samsung profit margins consistent with sales

Adopting of green management style resulting in efficiency in operations

Apple proving 3 times more efficient than Samsung and the industry norm

Liquidity ratios

Samsung slightly above the industry average and maintain its liquidity at 1.2 in year 2011

Apple well above the industry standard with 1.6 and are lowering towards the average.

Efficiency ratios

Gearing ratios

Debt ratio

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Interest cover

Samsung had a attractive interest cover of 26 above the industry average 17-18 times.
Apple has no long term debt and paid no finance cost in entire 3 year period ending 2011.

3. Net Profit/ Balance sheet (from annual report) -Analyse

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45
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 Chapter-5:

Key Learning’s from the Company and

Recommendations

1. Performance Analysis of the Company

Samsung Electronics today announced financial results for the third quarter ended
September 30, 2017. Samsung’s revenue for the quarter was KRW 62.05 trillion, an
increase of KRW 14.23 trillion YoY, while operating profit for the quarter posted a
record KRW 14.53 trillion, an increase of KRW 9.33 trillion YoY.

In the third quarter, strong demand for high-performance memory chipsets for servers
and flagship mobile devices was a contributing factor to the company’s overall robust
performance. The Semiconductor Business registered significant earnings growth both
YoY and QoQ, and the System LSI added to the earnings rally through increased sales
of DDIs and image sensors. The display panel segment posted an earnings decline
despite the expanded sales of flexible OLED panels for premium smartphones. The
Mobile Business saw strong shipments thanks to the launch of Galaxy Note 8 and solid
sales of the new Galaxy J series, but its earnings declined QoQ due to the higher sales
proportion of mass-market smartphones.

The Memory Business achieved strong earnings results for the quarter on the back of
high seasonal demand for all memory applications, the trend toward higher density
chips and a continuation of favorable supply and demand conditions and prices. For
NAND, the launch of flagship smartphones and the expansion of cloud infrastructure
drove strong demand. For DRAM, demand for applications used in servers, mobile
devices, PCs and game consoles also remained solid.

For the OLED business, an increase in shipments of flexible displays for customers’
new flagship smartphone launches drove an increase in sales. However, QoQ earnings
declined due to an increase in start-up costs of the new OLED production line and
increased competition within rigid OLED products. For the LCD business, third
quarter earnings declined, as an imbalance in supply and demand led to a decrease in
the ASP of LCD panels. Further, capacity expansion in the LCD industry continues to
impact prices.

The Mobile Business saw smartphone shipments increase on the back of the global
roll-out of the newly launched flagship, Galaxy Note 8, and solid performance of the
new Galaxy J series. However, overall revenue and earnings decreased QoQ due to the
higher sales of mid- to- low tier models.
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Samsung’s TV business saw significant improvements in QoQ earnings driven by
increased sales of premium products including QLED TVs. However, due to the higher
cost of LCD TV panels and weakening demand of the TV market, YoY earnings were
modestly lower.

Looking ahead to the fourth quarter, the company anticipates tight supply and demand
conditions to continue for the Memory Business due to strong demand for servers and
mobile devices. For the Display Panel segment, increased shipments of flexible OLED
products and the release of new rigid OLED panels will improve earnings. However,
the LCD segment will be met by weak seasonality, coupled with expanded panel
supply. For the Mobile Business, the company will try to maintain solid earnings by
increasing flagship sales through the global roll out of the Galaxy Note 8. Meanwhile,
the Digital Appliances Business expects to continue revenue growth by ramping up
sales of new products including washing machines with QuickDriveTM technology
and POWERstick PRO vacuum cleaners. The TV business will focus on increasing
sales of premium products including QLED and ultra-large screen TVs.

Moving on to business prospects for 2018, the company expects earnings to grow
primarily from the component businesses, as conditions in the memory market are
likely to remain favorable and the company expects increased sales of flexible OLED
panels. For the Memory Business, demand for high-density, high-performance NAND
will increase, as the need for larger data capacity in servers and mobile devices grows.

The company expects positive growth in the DRAM market, due to the development of
technologies in big data, artificial intelligence and machine learning, in which faster
processing and analysis of data are critical. The technological advancement of mobile
devices with dual camera, 3D sensors and on-device AI will spur DRAM growth. As
for next year’s outlook for the System LSI and Foundry Businesses, Samsung will
continue to drive favorable earnings growth by increasing the supply of 10-nano
products and image sensors, and will also focus on strengthening the competitiveness
in the sub 7-nano process through investment in the EUV-related infrastructure.

In the display segment, Samsung will continue seeking growth by addressing market
demand for flexible OLED display panels with differentiated technology, as OLED is
set to become a mainstream feature in smartphones. Although global competition in
the LCD panel business is expected to intensify in 2018, Samsung will strive to ensure
its profitability by solidifying partnerships with key customers and enhancing the
lineup of ultra-large size, high resolution, quantum dot and frameless panels.

49
As for the Mobile Business, Samsung will strengthen its leadership in the high-end
market with flagship smartphones and improve profitability through optimizing
product lineups. Moreover, the company will strive to secure business growth
opportunities through new technologies such as 5G and by strengthening the services
and software competencies.

For the consumer electronics business, Samsung will continue to focus on expanding
premium product sales and enhancing its B2B businesses.

2. Reasons for the expansion/contraction/diversification of Company

Samsung is one of the company that gone for Diversification. Samsung adds new or
unrelated products lines to penetrates new markets, such as : Textiles, insurance,
securities, construction, Solar cells, rechargeable batteries for hybrid for hybrid cars, LED
technology ,Smartphone, biopharmaceuticals and medical equipment’s in its line of
Production. He success of the diversification originated from Samsung’s creative
understanding of Core Competence.

 Samsung has been successful in diversification strategy due to a powerful and

well-known brands name, advance technology, extensive distribution network.
 In horizontal diversification, Company creates or acquires production units for
outputs which are alike – either complementary or competitive.
 It is the diversification through establishing structure and systems that are most
suitable to itself.
 The success of the diversification originated from Samsung’s creative
understanding of Core Competence.
 R&D investment will be positively associated with a change in diversification
strategy.
 In 1993, after it has made success in semiconductors Samsung made a great effort
to develop LCD technology.
 LCD has become world’s mainstreams products due to its excellent quality, and
maintained it at the top for eight consecutive years.
 In 2011, Samsung electronics is diversification into bio pharmaceuticals by joint
venture with investment of around $264.4 million.
 During 2013, Samsung has merged its home grown Bad operating system (OS)
with Intel’s open source Tizen.

3. Comment on Organizational Leadership

Kwon Oh-hyun, Samsung Electronics’ CEO, vice chairman, and the head of its hugely
successful components business, has announced his resignation. He will step down from

50
the CEO role, as well as his positions on the board and as CEO of Samsung Display, in
March 2018.

"It is something I had been thinking long and hard about for quite some time. It has not
been an easy decision, but I feel I can no longer put it off," Kwon said in a letter sent to
employees. "As we are confronted with unprecedented crisis inside out, I believe that
time has now come for the company start anew, with a new spirit and young leadership to
better respond to challenges arising from the rapidly changing IT industry."

“NOW THE COMPANY NEEDS A NEW LEADER MORE THAN EVER.”

The unnamed “crisis” in Kwon’s letter no doubt includes the imprisonment of Lee Jae-
yong, the de facto leader of the entire Samsung group, on corruption charges. While Lee
didn’t take a hands-on role in Samsung Electronics’ regular business, Kwon’s resignation
is the first sign that the scandal could have a major impact on the company’s operations
and culture.
Samsung Electronics is performing well, however, having announced earnings guidance
hours ago that predicts a second straight quarter of record profits. The company expects
its operating profit to have nearly tripled year on year, demonstrating strong recovery
after the equivalent period in 2016 saw the Galaxy Note 7 recall disaster. But Kwon says
that the current performance is thanks to decisions made in the past, casting doubt over
the company's ability to predict trends and grow in the future.

"There are no words to describe how proud I am that we built together one of the most
valuable companies in the world. We have come a long way to create a company that
truly changes how people live, work and communicate with each other,” Kwon’s letter
continues. “But now the company needs a new leader more than ever and it is time for me
to move to the next chapter of my life."

Kwon, 64, has been Samsung Electronics CEO since 2012 and was named Samsung
Display CEO in 2016. He joined the company in 1985, rising to lead its semiconductor
business before his appointment as CEO. Samsung hasn't announced a successor,
although Kwon has had two “co-CEOs” — BK Yoon and JK Shin — in the past. Both
stepped back from day-to-day operations in 2015, however, retaining their titles.

4. Market share/growth rate of Company

The graph bellow indicates that from 2010 to 2013 Samsung had reported signification
improvement in revenue and net profit. However, in 2014 the company’s revenue was
$195.9 billion. 10% less than the revenue reported in the previous year. The company
operating profit had dropped by 32%, as a result of increase on sales and administrative
costs.

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In its annual report 2014, Samsung recognized that it has been lowering its profit margin
in smartphone business and from the year ahead; time looks right for the mobiles
business to take off again. As a result, the company has been planning to people 1
smartphone sales with competitive new lines, to secure Samsung market leadership by
launching innovative premium smartphones and to provide a range of upgrade mid-price
products of impassive quality. The company anticipated remarkable results from new
Galaxy S6 and Galaxy S6 edge in the premium smartphone market and by launching new
large screen devices equipped with first-of-its-kind technology and already winning
widespread recognition, the S6 and S6 edge are beautifully crafted from mental and glass
and blend purposeful design with powerful features.

Despite Samsung price reduction strategy in high end segment, the sales continued to
drop during the tree quarters of 2015. The sales of the S6 smartphone fell short of
expectations because the company could not meet the demand for its flagship model. At
the same time, rival Apple has been gaining ground. Apple reported a strong quarter
ending june 2015, drive by record sales of smartphone and Mac, record revenue from
services and the launch of Apple Watch.

Market Share

Smartphone vendors market share

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According to the date from statist a portal, Samsung is the leading smartphone vendor in
the world based on figures from the third quarter of 2014. The company held a 23.8
percent share of smartphone shipments in this quarter, in comparison to the 12 percent
held by its closest rival, Apple. Samsung’s peaked at 32.5 percent in 2013, but it has since
diminished somewhat, in part due to the emergence of brands such as Lenovo and
Huawei in low-end segment share. Increasing competition means profits will fall in spite
of steady shipments, and this will be the primary issue that Samsung will have to deal
with in the near future.

Interestingly, Samsung is the largest smartphone maker, with 23.7% market share, 9.1%
ahead of apple. But it remains seconds, behind Apple, in terms of tablet shipments. Also,
APPLE appears to have a better management of their operating expenses, which allows

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for them to post better net incomes, higher sales volumes and better growth potential in
the long run.

The graph above show that Samsung smartphone market share trend as similar its sales
revenue trend a significant drop from 2013 to 2104.

While smartphone market share is shrinking Samsung’s semiconductor division grew

fastest, with 10% year-on year growth, as a result of increasing demand for high-density
DDR4/LPDDR4 memory chips, alone with the shift to high-density strong and broader
adoption of solid-state drives. As it is shown in the graph bellow, memory business
market share seems to be relatively stable and it has been a great source of competitive
advantage.

Samsung has been losing market share in both high and low-end market. In High-end
market it has been difficult due to the increasing saturation and competition from Apple’s
new large-screen iphones. Similarly, low-end market shows intense competition from
local vendors in emerging market, such as China and India, which offer lower prices and
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lower production cost. So, these are the reasons why Samsung market share is shrinking
in both high and low-end segment.

So, despite Samsung market share leadership position in smartphone industry, the
company profit margin shows slightly opposite trends, due to its large operating expense
and pricing strategy. Basically, the company can reach many consumers than competitors,
but it is sells its products at cheap prices while production cost is not reducing, which
result in low margins.

5. SWOT Analysis of the Company

Strengths in the SWOT analysis of Samsung

 Samsung enjoys the widest range of product portfolio which includes Mobile
phone, Tablet, TV/Audio/Video, Camera, camcorder, Home appliance, pc,
peripherals, printer, memory cards and other accessories.

 Samsung holds significant market share in most of the product categories.

 Samsung is NO.2 in terms of market share in mobiles, it captured Nokia’s market

share by superior innovation in smart phones.

 Samsung is the best in terms of design features and technology. It was the first to
introduced dual screen mobiles , 65k TFT/LCD color phone, first phone with
polyphonic ringtones, phones with rotating lens, thinnest and lightest note pad etc.

 Samsung enjoys the first mover advantage in terms of introducing advance

features in LCD, refrigerator, Air conditioner etc. It introduced the world’s smallest
MP3 player and India’s first 17” TFT-LCD-TV monitor.

 Samsung took advantage of the growing economy of Asian market by setting up

manufacturing plant in India there by reducing logistics and supply chain costs.

 Samsung brand value increased by 80% in past three years.

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Weaknesses in the SWOT analysis of Samsung

 Samsung Mobile launched a series of Smart phones recently which led

to cannibalization.

 The demand for LCD panels is expected to decline in the future.

 Still Nokia is considered to be the most preferred product in India in terms of ease
of use, reliability and resale value.

 Chinese products focus on economies of scale and dump into Indian market for
lesser cost. This results in reduction of sales.

 Samsung is a hardware leader but has too much of dependence for software from
other parties.

 Online stores which sell a wide range of products are giving better deals as they
don’t incur cost in distribution channel.

Opportunities in the SWOT analysis of Samsung

 Samsung is planning to make the air-condition product category more strong with
unique technology called ‘Triple protection proposition’.

 Samsung is the India’s official ‘Olympic partner’ for the 2012 London Olympic
and recently launched ‘Olympic Ratna Program’. This will result enhance brand
awareness and increase the sales.

 Samsung Mobile and Home appliance has future plans of launching Customized
products for Indian market. This will improve the market share in rural market.

 The Indian youth population is growing and mobile phone sales is expected to
increase due to lesser call rates

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  Its financial position is strong and there is a scope of entering into
unrelated diversification.

Threats in the SWOT analysis of Samsung

 Samsung has wide variety of product lines; failure of one product line will have
impact on the other and will result in brand dilution.

 The competitors like Nokia are focused only in one segment.

 Since India is a potential market, entry of foreign players is likely high. Foreign
players like Haier have already started gaining market share in India in home
appliances.

 Threats from Chinese products.

 Retail Chains like Big bazaar sell consumer electronics and home appliance in
low cost strategy which are procured in bulks from foreign market.

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 CHAPTER – 6

FINDINGS

 Finding from the survey was that the users of Samsung were basically having
lower income. So this showed that the brand has impact because of its low price
strategy along with new features and idea.
 The findings from the result of survey were that most of them are looking for
good features along with low price.
 Mostly people are attracted towards Samsung mobiles due to good reputation and
low initial investment in color and flip handsets.
 One features that most of the users probably prefer more than anything else is
light weight of these handsets.
 Ergonomics is very helpful to understand the interface in these mobiles and it also
makes customers.
 Near about 30% color mobile users switch over to other mobiles due to their good
performance of standby time and talk time.

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 CHAPTER – 7

CONCLUSIONS AND SUGGESTIONS

Conclusions

 Mobile has become an important part of people’s life and it is no more a luxury.
 The majority of respondents who use mobile are quite young.
 Samsung is gaining ground at a tremendous rate in the domestic as well as global
mobile market.
 Samsung showing good sign of grabbing every possible opportunity at its hand.
 Provide better quality and better services so that the phone users will attract more.
 Processors and performance just don’t matter anymore.

Suggestions

 The manufacturer of the Samsung phone should to make durable Samsung phone
as Nokia and Micromax.
 The company should to advertise of the brand Samsung phone to know the users
easily.
 They should have to provide more Service Center as per the region and provide
better services to the users.
 The Qualities and Designs of the Samsung phone have to improved.
 Company should improve the after sales the after sales service of products as it is
the main factor for the sales of consumer products.

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  Advertisements of the company’s products should focus on quality rather than
price.
 Company should target upper, middle class or premium class customers.
 Company should introduce low cost products to satisfy the needs of low or middle
class.

BIBLIOGRAPHY

 http://www.samsung.com.
 http://www.samsung.com/in/aboutsamsung/corporateprofile/history.html
 http://www.samsung.com/in/consumer/index.html
 www.slideshare.com
 And Special thanks to my teacher Shakti Sharma

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