SAMSUNG QUATERLY LOSS

ANALYSIS REPORT

MUMBAI
05 SEP 2019

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 A REPORT
ON
SAMSUNG QUATERLY LOSS ANALYSIS

A REPORT SUBMITTED IN PARTIAL FULFILLMENT

OF THE REQUIREMENT OF COURSE SLMS501
BUSINESS COMMUNICATION
MUMBAI
05 SEP 2019

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EXECUTIVE SUMMARY

This report was commissioned to examine why the firm has started to incur losses instead of
gain from previous quarter and to recommend ways of profit.
The research states that in the previous quarter the SAMSUNG had a good hold in the
market amongst the competitors and also they had good sales but in this quarter if the
changes are to be seen the firm still holds the same volume of the market share as the
previous quarter but the whole sector has dropped down from the growth and not only
SAMSUNG but other competitors are also facing losses as the economic condition of the
people lowered. Further it is seen that the company has seen rise of other competitors and
people getting more inclined towards the competitors’ products.

The report states that increase in the services offered by the Samsung to its customers and
also improvement of the existing product plus introduction of new products to meet
customer requirement would be helpful for the firm.

It is recommended:

 SAMSUNG should immediately start increasing its types of services offered;

 The firm should start improving its existing product to meet market challenges;
 Samsung should keep making new products for the market;
 The firm should keep an eye on its rising competitors and their products offered and
be better than what they offer.

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 1. INTRODUCTION

Samsung is the world’s biggest mobile manufacturer in the market right now. Samsung
makes various other products like television, laptops, chips, washing machines and any other
things they are widely surrounded in many products market.

1.1. History
Samsung started out as a small trading company with forty employees located in Su-dong. It
dealt in dried-fish, locally-grown groceries and noodles. The company prospered and Lee
moved its head office to Seoul in 1947. When the Korean War broke out, he was forced to
leave Seoul. He started a sugar refinery in Busan named Cheil Jedang. In 1954, Lee
founded Cheil Mojik and built the plant in Chimsan-dong, Daegu. It was the largest woollen
mill ever in the country.
Samsung diversified into many different areas. Lee sought to establish Samsung as leader in
a wide range of industries. Samsung moved into lines of business such as insurance,
securities and retail.
In the late 1960s, Samsung Group entered the electronics industry. It formed several
electronics-related divisions, such as Samsung Electronics Devices, Samsung Electro-
Mechanics, Samsung Corning and Samsung Semiconductor & Telecommunications, and
made the facility in Suwon. Its first product was a black-and-white television set.

1.1. STRATEGY
Samsung business strategy is marked with a high level of flexibility in a way that the
company is determined in changing its strategy dramatically according to changes in external
business environment.

Samsung produced black and white TV as the first technological product in 1960 and since
then the company emerged as one of the leaders in technology and electronics market
segments in the global scale. Frequent change of direction and new product development
persists as important features of Samsung business strategy to this day.

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Samsung basically relies on 3 main things:
 Effective market readership
 Scanning and utilising opportunities in the market
 New product development

1.2. SALES

Samsung has yet again retained its crown as the top global smartphone vendor for 2018 in
terms of overall global smartphone shipments despite a worldwide dip in total smartphone
sales.

Data from Canalys shows that Samsung managed to ship 293.7 million handsets for a total
21.2% market share in the global device market. That is down from the previous 12-month
figure of 316.6 million units shipped.

Whilst the data isn’t a surprise, the year-on-year decline in smartphone shipments does
indicate that we may have actually already reached ‘peak smartphone’.

earnings were affected by a drop-in demand for memory chips used in data centres and
smartphones. The System LSI and Foundry businesses also saw profits decline due to
weak seasonality.

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 2. ANALYSIS OF THE PROBLEM

Earnings were affected by a drop-in demand for memory chips used

in data centres and smartphones. The System LSI and Foundry
businesses also saw profits decline due to weak seasonality.

Overall earnings at the Display Panel Business decreased slightly

due to growing competition between mobile display makers.

In the IT & Mobile Communications (IM) Division, smartphone

shipments and prices fell in the fourth quarter in a stagnant but
highly competitive market, despite strong seasonal demand.
However, the Networks Business reported gains on the back of 5G
equipment installations and expansion of LTE networks.

Quarterly earnings increased in the Consumer Electronics (CE)

Division, led by strong sales of premium TVs, such as QLED TVs.

Looking ahead, Samsung expects demand in the Memory Business

to remain weak in the first quarter due to seasonality and
macroeconomic uncertainties as well as inventory adjustments by
major customers. For OLED, profitability is likely to decline, weighed
on by slow sales of premium smartphones and rising competition
with LTPS LCD products. As for LCD, earnings are expected to
decline as a result of large-scale capacity expansions in the industry.

Earnings in the IM Division are likely to improve in the first quarter,

helped by the planned launch of the new flagship Galaxy
smartphone and the introduction of commercial 5G telecom
services in Korea. The CE Division will unveil new TV models and
focus on premium home appliances, in order to prioritize
profitability in a slower season.

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 3. CONCLUSION

Looking to the first quarter of 2019, sales of mobile displays are

likely to be affected by unfavourable market conditions like
intensifying competition and sluggish smartphone demand. To
maintain profitability, Samsung will actively respond to demand
from major partners and expand its customer portfolio.

In 2019, Samsung expects demand for flexible OLED panels for

smartphones to rebound from the second half. Against this
backdrop, the Company will make efforts to expand the OLED
market through innovative technologies for new applications and
increase the portion of OLED panels for smartphones through
differentiated features.

As for LCD in 2019, despite uncertainties from capacity expansions

in the industry, the Company expects demand for the premium TV
panels to continue to grow including UHD, 8K and ultra-large TVs. In
response, Samsung will focus on enhancing profitability by
delivering high-margin products.

For the whole of 2019, demand for smartphones is expected to

maintain the same level seen in 2018 while market ASP is projected
to rise due to a trend toward adopting high-end features such as
large screens, higher memory capacity, and multi-cameras. The
environment overall will remain challenging due to the sluggish
growth of the global smartphone market and material cost burden.

Samsung Should aim to lead trends in the market by launching

foldable and 5G devices in efforts to ensure sustainable growth. By
cooperating with business partners, Samsung will secure optimized
content and expand into new markets. User retention will be
increased by strengthening connectivity between devices. As part
of this plan, Samsung will expand Bixby to various devices and
connected services while improving its AI capabilities.
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 4. RECOMMENDATIONS

AS the results come out it is recommended to Samsung, they

should
 Samsung not only manufactures mobiles but many other
products too so they can widen their focus on their
other products to decrease their losses.[ CITATION
SAM \l 16393 ]

 Samsung can focus on OLED panels manufacturing for

mobiles phones for other company who buys from
them.

 Samsung can focus on launching foldable phones and 5g

phones in the market as market is now moving towards
5g network and foldable phones.

 Samsung should also keep a good focus on their visual

devices(television) as it is having a good growth
opportunity and also good demand in the market.

 Samsung can also widen their focus on digital appliances

they can go into various types of digital appliances to
have a wider varie