1
THE SADHU VASWANI INSTITUTE OF MANAGEMENT STUDIES (SVIMS), PUNE
REPORT ON ENTERPRISE ANALYSIS: DESK RESEARCH COURSE (COURSE CODE 115)
OF FIRMS
M/s. Apple Inc.
And
M/s. Samsung Electronics Ltd.
SUBMITTED IN
PARTIAL FULFILLMENT OF THE REQUIREMENTS OF THE MBA DEGREE PROGRAMME OF THE UNIVERSITY OF PUNE
OCTOBER, 2013
SUBMITTED BY
Komal Singh
ROLL NO. 13216
(BATCH - 2013-14)
SADHU VASWANI INSTITUTE OF MANAGEMENT STUDIES
KOREGAON ROAD, PUNE 411006
DATE: 15th October 2013
This is to certify that Miss KOMAL SINGH, Roll No. 13216, is a bona fide student of
this Institute, currently pursuing her Semester-I of the MBA Programme. She has successfully
completed the report on Enterprise Analysis Desk Research course (Course Code 115 ) as a generic
elective and submitted the same for further evaluation.
(Dr. Prof. Mahesh Halale) (Dr. Prof. B.H. Nanwani)
Subject Facilitator Director
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APPLE INC.
Table of Content
TOPICS Page No.
Company 1 - Apple Inc.
1. Enterprise history & background 1
2. Organization 5
3.Markets 8
4. Financial 11
5.Governance 15
6. Summary 17
7. Learning’s 18
8. Bibliography 19
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Samsung Electronics Ltd.
Table of Content
Company 2- Samsung Electronics Ltd.
Topics Page No.
1. Enterprise history & Background 20
2. Organization 25
3. Markets 28
4. Financial 32
5. Governance 36
6. Summary 39
7. Learning’s 40
8. Bibliography
4
1. Enterprise history and background
Apple Inc.
1.1 History and background
Apple Inc.'s world corporate headquarters are located in the middle of Silicon Valley, California.
Apple was established on April 1, 1976, by Steve Jobs, Steve Wozniak and Ronald Wayne.
Apple was incorporated January 3, 1977, without Wayne, who sold his share of the company back
to Jobs and Wozniak. On December 12, 1980, Apple went public at $22 per share. Steve Jobs
announced that Apple would begin producing Intel-based Mac computers in 2006.
After Jobs , the Chief operating officer ,Tim Cook assumed Jobs day-to-day operations at Apple,
although Jobs was assumed to be "involved in major strategic decisions for the company."
1.2 Vision:
To become the worldwide leader in computer and mp3 player sales.
1.3 Mission:
“Apple is committed to bringing the best personal computing, and mobile usage experience
to students, educators, creative professionals and consumers around the world through its
innovative hardware, software and internet offerings.”
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1.4 Key Executives
Timothy Donald Cook "Tim" Chief Executive Officer
D Bruce Sewell Senior VP/Secy/Gen Cnsl
Daniel Riccio "Dan" Senior VP:Hardware
Engineering
Jonathan Ive "Jony" Senior VP:Industrial Design
Philip W Schiller "Phil" Senior VP: Product Marketing
Peter Oppenheimer Senior VP/CFO
Craig Federighi Senior VP/Head:IOS & OS X
Eduardo H Cue "Eddy" Senior VP:Internet Software
&Svcs
Jeffrey E Williams "Jeff" Senior VP:Operations
Holder Shares % Out Value* Reported
Vanguard Group, Inc. (The) 44,504,335 4.90 17,647,303,957 Jun 30, 2013
State Street Corporation 37,297,366 4.11 14,789,524,539 Jun 30, 2013
FMR, LLC 31,023,222 3.41 12,301,638,219 Jun 30, 2013
BlackRock Institutional Trust Company,
N.A.
25,378,225 2.79 10,063,227,559 Jun 30, 2013
Northern Trust Corporation 13,976,334 1.54 5,542,035,721 Jun 30, 2013
Invesco Ltd. 12,349,486 1.36 4,896,941,683 Jun 30, 2013
Bank of New York Mellon Corporation 12,372,947 1.36 4,906,244,673 Jun 30, 2013
Goldman Sachs Group, Inc. 10,518,358 1.16 4,170,844,497 Jun 30, 2013
JP Morgan Chase & Company 9,914,780 1.09 3,931,507,713 Jun 30, 2013
BlackRock Fund Advisors 9,014,941 0.99 3,574,694,554 Jun 30, 2013
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1.5 Major Acquisitions :
Below mentioned are some latest acquisitions of Apple Inc.
Chomp
Redmatica
AuthenTec
Particle
HopStop.com
Semiconductor
Matcha
Embark
1.6 Corporate Social Responsibility
Apple requires its suppliers to adhere to the Supplier Code of Conduct . It insists on providing
safe working conditions, treat employees fairly, and use environmentally responsible
manufacturing processes. Drive compliance to the Code through an aggressive monitoring
program that includes factory audits, corrective action plans, and verification measures.
As a result of compliance monitoring and the subsequent corrective actions, working conditions
have improved at many facilities across the Apple supply chain.
1.7 CSR Activities (Not applicable)
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1.8 Mergers and Acquisitions
Anobit
Redmatica
AuthenTec
Particle
WiFiSlam
Locationary
HopStop.com
Semiconductor
Matcha
Embark
AlgoTrim
Conclusion
Over the past 30 years Apple has amplified from computer design to developing consumer
electronics. The company was started by Steve Jobs, Steve Wozniak, and Ronald Wayne in the
1970’s. Apples main business initiative is customer relationship management. When working with
or purchasing from Apple you are promised top notch customer service and assistance.
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2. ORGANIZATION
Apple Inc.
1.1 Organizational Structure
1.2 Geographical footprints –
Headquarters
1 Infinite Loop
Cupertino, CA 95014
United States.
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Corporate Office (INDIA)
19 Floor, Concorde Tower C,
UB City No 24 Vittal Mallya Road
Bangalore 560-001
Service and Sales Locations
In 2001, Apple announced the opening of a line of Apple Retail stores, to be located throughout the major
U.S computer buying markets and later on in Tokyo and other countries.
Africa
Middle East
Europe
Latin America
United States
Canada
Puerto Rico
Asia Pacific
Manufacturing Units –
UK
China
Japan
Canada
Italy
Switzerland
France
Germany
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Spain
Hong kong
Netherlands
Sweden
1.3 CERTIFICATIONS –
Apple products have ENERGY STAR specifications
The first Apple manufacturing site (Sacramento, California)
Is ISO: 14001 Certified
Apple has a number of ISO certifications relating to various processes and Departments around the
world.
Conclusion
Apple has been a major player in the market and is spread around various locations in the world.
Its headquarter is in United States and also has a corporate office in India.Apple has established
itself as a leader in the consumer electronics and media sales industries. In an effort to court a
broader market, Apple opened several "mini" stores in 2004 in attempt to capture markets where
demand does not necessarily dictate a full scale store.
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3. MARKETS
Apple Inc.
3.1 Major Customers and Customer Segments
Apple has emerged to be a strong competitor as of Samsung smart phones which is coming up to
beat the prices of Apple Smartphones. Apple has been focusing on the Middle/Upper class of
customers for its products. Unlike Samsung, Apple products are mainly for the classes. It has
identified targets in the young generations who are ready to pay for high end technological
products. They include music enthusiasts and fans ages 12-35 and professionals in media and
design.
Apple CEO has addressed while launching its latest iPhone 5S that it aims at providing a cheaper
iPhone for the developing markets and a more powerful one for high-end buyers.
3.2 Product Lines of Apple:
Mac,iPad, iPod, iPhone, Apple TV, Software, Online services.
3.3 Few Brands and Products:
Operating System iOS
iCloud
iTunes
iPhone 2G, 3G, 4, 5
iPod shuffle, Nano, Touch, Classic
MacBook Pro, MacBook Air, Mac mini
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3.4 Market Share in the Total Industry
The pie chart below depicts the market share of all the products of Apple.
MOBILE PHONE BRANDS
3.5 Advertising Agencies
Apple debuted a new series of ads produced by TBWA\Media Arts Lab
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3.6 Advertising Slogans:
Apple has a very long list of slogans that have been used in advertising and marketing material
from the '70s to the present. Listed below are few of them-
“Byte into an Apple" (Late 1970s)
"The Power to Be Your Best" (1990)
"Think different" (1997–2002)
"Designed by Apple in California" (2013)
"It takes minutes of practice to make Macintosh do this"
"Introducing Macintosh"
"Performance and design.Taken right to the edge" (Used to promote the new iMac in 2012)
"The world's highest resolution notebook" (Used to promote the MacBook Pro family with Retina
Display- 2013)
"All the power you want. All day long" (used to promote the new MacBook Air with improved
battery life-2013)
"Your Top 40,000" (Used to market the iPod classic 2009)
"The world's thinnest smartphone" Ad for iPhone 4
"Forward thinking" (2013) Used to promote the iPhone 5s
Conclusion
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Apple phones have a strong market share in terms of loyal customers. It has come up with high
end technological products that have gained momentum like the iPhone and MacBook. The
customers have emerged to be as tech savvy and the ones who are ready to pay a little more for the
techonological advancements in the products.
4. Financial
Apple Inc.
4.1 Revenues
Header 2008 2009 2010 2011 2012
Sales 37,491 42,905 65,225 1,08,249 1,56,508
Total Assets 47,501 47,501 75,183 1,16,371 1,76,064
Assets turnover 94.7 90.3 86.8 93 88.9
(In million $ )
4.2 Profitability
Header 2008 2009 2010 2011 2012
Gross Profit 13197 17222 25,684 43,818 68,662
Operating Income 8327 11740 18,385 33,790 55,241
Operating Margin 22.21% 27.36% 28.19% 31.22% 35.3%
Net Profit 6119 8235 14,013 25,922 41,733
Profit margin 16.3% 19.2% 21.5% 23.9% 26.7%
Return on Investment 12.8% 17.3% 18.6% 22.2% 23.7%
(In million $)
4.3 Segmented Revenues
Net sales in the Asia-Pacific segment increased $10.7 billion or 47% during 2012 compared to
2011. The growth in net sales during 2012 was mainly due to increased demand for iPhone from
the launch of iPhone 4S, strong demand for the new iPad and iPad 2, and higher Mac sales.
Growth in the Asia Pacific segment was affected by the timing of iPhone and iPad product
launches. iPhone 5 was launched in a limited number of countries in the Asia Pacific segment
during the fourth quarter of 2012 and was not launched in China during 2012, and the new iPad 15
that was introduced by the Company in March 2012 was not launched in China until the fourth
quarter of 2012. The Asia-Pacific segment represented approximately 21% of the Company’s total
net sales in both 2012 and 2011.
Net sales in the Asia Pacific segment increased $14.3 billion or 174% during 2011 compared to
2010. The Company experienced particularly strong year-over-year net sales growth in its Asia
Pacific segment during 2011, especially in Greater China, which includes Hong Kong and Taiwan.
Korea and Australia also experienced strong year-over-year revenue growth. Higher net sales in
the Asia Pacific segment were due mainly to the increase in iPhone sales primarily attributable to
the strong demand for iPhone 4 and carrier expansion, strong sales of iPad, and increased Mac
sales. The Asia Pacific segment represented 21% and 13% of the Company’s total net sales in
2011 and 2010, respectively.
Segmented
revenues - 2008 2009 2010 2011 2012
Operating Segments:
America 16,552 18,981 24,498 3 8,315 57,512
europe 9,233 11,810 18,692 2 7,778 3 6,323
Greater China 1 2,690 2 2,533
Japan 1,728 2,279 3,981 5,437 1 0,571
Rest of Asia Pacific 2,686 3,179 8,256 9 ,902 1 0,741
Retail 7,292 6,656 9,798 1 4,127 1 8,828
In million $
4.4 Market Capitalization
Market Capitalization is a measure of the estimated value of the common equity securities of the
company or their equivalent. On September 2012, Apple reached a record share price of more than
$705 and closed at above 700. With 936,596,000 outstanding shares (as of June 30, 2012), it had a
market capitalization of about $660 billion.
Market cap $ 446,108,366,880
P/E Ratio 12.26
Earnings Per Share (EPS) $ 40.04
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4.5 Auditors of the company
Ernst & Young LLP has been Apple Inc.’s independent auditors since 2009. Previously they used
KPMG.
4.6 Listing Status and script codes
Apple Inc. is listed on the NASDAQ Stock Exchange. It went public with an initial public offer at
US$22.00 per share.
The Script Code is: AAPL
ISIN number: US0378331005
Below is a table showing the Stock information about Apple Inc.
Date of stock
priceShare Price
52 Week
High52 Week Low PE Ratio
26-09-2013 485.01 682.17 385.1 12.11
The chart above depicts the market share of Apple on the NASDAQ stock exchange for the period
of 1 year 2012-2013.
4.7 Global Listing
Not Applicable
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Conclusion
In its fiscal year ending in September 2011, Apple Inc. reported a total of $108 billion in annual
revenues – a significant increase from its 2010 revenues of $65 billion – and nearly $82 billion in
cash reserves. On March 19, 2012, Apple announced plans for a $2.65-per-share dividend
beginning in fourth quarter of 2012, per approval by their board of directors. This shows that even
after losing market share Apple has been able to procure substantial financial growth.
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5. GOVERNANCE
Apple Inc.
5.1 Philosophy:
According to Apple, four main principles contribute to integrity: honesty, respect, confidentiality,
and compliance. To more thoroughly detail these principles, Apple has drafted a code of business
conduct that applies to all its operations, including those overseas. It has also made available on its
website more specific policies regarding corporate governance, director conflict of interest, and
guidelines on reporting questionable conduct. Additionally, Apple provides employees with a
Business Conduct Helpline that they can use to report misconduct to Apple’s Audit and Finance
Committee. Many of Apple’s product components are manufactured in countries with low labour
costs. The potential for misconduct is high due to differing labour standards and less direct
oversight. As a result, Apple makes each of its suppliers sign its “Supplier Code of Conduct” and
performs factory audits to ensure compliance. Apple may refuse to do additional business with
suppliers who refuse to comply with Apple’s standards. To emphasize its commitment toward
responsible supplier conduct, Apple releases an annual Apple Supplier Responsibility Report that
explains its supplier expectations as well as its audit conclusions and corrective actions the
company will take against factories where violations have occurred.
5.2 Actions Taken by SEBI:
Not Applicable
5.3 Involvement in scams
As apple inc. has been very vigilant and is in link with their customers, the chances for any scams
relating to the company or the product are very low.
The official website has a redressal service, where one can post any SMS or mails that they have
received and check for its legitimacy.
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5.4 Insider trading issues
Not Applicable
5.5 Standard and poor’s Corporate Governance Score
On April 23, 2013--Standard & Poor's Ratings Services has assigned its 'AA+' corporate credit
rating to Cupertino, Calif.-based Apple Inc. The outlook is stable. It is anticipated that they would
also assign this rating to unsecured senior debt that may be issued as part of the shareholder return
program, subject to review of the documentation.
The rating on Apple reflects the company's 'minimal' financial risk profile and 'strong' business
risk profile, incorporating market-leading products, a globally diverse customer base and strong
profitability.
5.6 Awards:
Human Interface Design Excellence (HIDE) Awards itself was conducted by Apple Inc. for
Innovative products since the year 1997.
Awards won by Apple include
IPod accessory earn Invention of the Year Awardin the year 2008.
Best vendor retailer in the year 2010.
Marketers at ANA give top honour to Apple Inc. in year 2007.
Apple scoops D&AD gold award for a fourth year in year 2002.
Extra Mile Award in Oct 2009.
The 50 All Stars in March 2013.
Effie Award for advertising in 2007
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ConclusionApple practices code of conduct in the organization by contributing to the integrity, honesty,
respect, confidentiality and compliance. Apple makes each of its supplier’s sign it’s “supplier code
of conduct” and performs factory audits to ensure compliance. The scams related are very low.
There are many awards won by Apple Inc., however Apple has had a legal feud with Samsung.
But still Apple’s corporate governance score is stable.
Summary
Apple Inc has emerged as a key market player with the launch of its revolutionary products like
iphone and iPad. More than 25% of the revenues come from completely new business lines
launched in the last 5 years. Their top business lines (those representing over 10% of sales) are #1
or #2 sales leaders in the categories.
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Learnings
There are plenty of examples of businesses out there that have very little innovation in terms of
what they do, but they take a product or service that has worked well elsewhere and merely copy it
without adding significant differences or improvements. Often they will do this and offer it at a
significantly reduced cost and very commonly with low quality. On the contrary, Apple has come
up with high end technological products. The new products have regularly reached iconic status
and are hotly anticipated by media. People aspire to own the products and relate to them as
extensions of themselves. The growth in net sales during 2012 was mainly due to increased
demand for iPhone from the launch of iPhone 4S, strong demand for the new iPad and iPad 2, and
higher Mac sales.
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Bibliography
www.bloomberg.com
http://en.wikipedia.org/wiki/History_of_Apple_Inc.
http://www.forbes.com/companies/apple/
http://www.diplointernetgovernance.org/profiles/blogs/apple-vs-samsung-the-battle-fought-
with-patents-who-is-the-real
www.markets.ft.com/market
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1. Enterprise history and background
Samsung Electronics ltd.
1.1 History and background -
Samsung Group is a South Korean multinational conglomerate company headquartered Seoul,
South Korea. It comprises numerous subsidiaries and affiliated businesses, most of them united
under the Samsung brand.
In 1938,Lee Byung-chull of a large landowning family in the Uiryeong county came to the
nearby Daegu city and founded Samsung Sanghoe, a small trading company with forty
employees located in Su-dong.
Samsung diversified into many areas and Lee sought to help establish Samsung as an industry
leader in a wide range of enterprises, moving into businesses such as insurance, securities, and
retail.
In the late 1960s, Samsung Group entered into the electronics industry.
Samsung Electronics Co., Ltd. is a multinational electronics and information technology
company headquartered in Suwon and the flagship company of the Samsung Group.
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After Lee, the founder's death in 1987, Samsung Group was separated into four business
groups – Samsung Group, Shinsegae Group, CJ Group and Hansol Group. Samsung became
the largest producer of memory chips in the world in 1992. In the first quarter of 2012,
Samsung Electronics became the world's largest mobile phone maker by unit sales, overtaking
Nokia.
1.2 Business Group or Family :
Samsung Electronics Co., Ltd. is a multinational electronics and information technology company
headquartered in Suwon and the flagship company of the Samsung Group.
1.3 VisionSamsung is dedicated to developing innovative technologies and efficient processes that create
new markets, enrich people's lives and continue to make Samsung a digital leader.
Samsung Electronics' vision for the new decade is, "Inspire the World, Create the Future."
1.4 Values & PhilosophySamsung is guided by a simple philosophy, strong values and high ethical standards that inform
our work every day. In everything we do, we strive to help people live better lives.
List of a Major Shareholder & Related Parties ( As of December 31, 2012 )
Name Relationship Class of
Stock
Number of Shareholdings
End of Quarter
Number of
Shares
%
Port.
Kun-Hee Lee Major
shareholder
Common
stock
4,985,464 3.38
Kun-Hee Lee Major
shareholder
Preferred
Stock
12,398 0.05
Samsung
Corporation
Affiliate Common
stock
5,976,362 4.06
Samsung Welfare
Foundation
Affiliate Common
stock
89,683 0.06
25
Samsung
Foundation of
Culture
Affiliate Common
stock
37,615 0.03
Ra-Hee Hong Family member Common
stock
1,083,072 0.74
Jae-Yong Lee Family member Common
stock
840,403 0.57
Samsung Life
Insurance
Affiliate Common
stock
11,098,077 7.53
Samsung Life
Insurance
Affiliate Preferred
Stock
21,416 0.09
Samsung Fire &
Marine
Insurance
Affiliate Common
stock
1,856,370 1.26
Cheil Industries Affiliate Common
stock
9,679 0.01
Oh-Hyun Kwon BOD member Common
stock
5,500 0.00
Gee-Sung Choi BOD member Common
stock
6,400 0.00
Ju-Hwa Yoon BOD member Common
stock
6,500 0.00
Total Common
stock
25,995,125 17.65
Preferred
stock
33,814 0.15
Total 26,028,939 15.30
1.5 Subsidiaries and affiliates
As of April 2011 the Samsung Group comprised 59 unlisted companies and 19 listed companies,
all of which had their primary listing on the Korea Exchange stock-exchange.
Principal subsidiary and affiliate companies of Samsung include:
Ace Digitech
Cheil Industries
Cheil Worldwide
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Credu
Imarket Korea
Samsung Card
Samsung C&T Corporation
Samsung Electro-Mechanics
Samsung Electronics
Samsung Engineering
Samsung Fine Chemicals
Samsung Fire & Marine Insurance
Samsung Heavy Industries
Samsung Life Insurance
Samsung Machine Tools
Samsung SDI
Samsung Securities
Samsung Techwin
Shilla Hotels and Resorts
1.6 Key Executives :
Lee Kun Hee - Chairman
Kwon Oh-Hyun - Vice Chairman/Rep Director/CEO
Mr. B D Park - Managing Director, Samsung India Electronics Ltd.
Sohn Young Kwon - President/Chief Strategy Officer
Robert Yi - Senior VP/Head:Investor Relations
Younghee Lee - Exec VP:Global Marketing
Board of Directors :
Oh-Hyun Kwon
Gee-Sung Choi
Ju-Hwa Yoon
Dong-Min Yoon
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In-Ho Lee
Han-Joong Kim
Byeong-Gi Lee
1.7 Corporate Social Responsibility -
•Samsung Hope for Children, an initiative designed to help under-privileged children
through e-learning centres. These e learning centres located in different parts of the
country impart computer literacy to underprivileged youth and ensure placements as well.
•Innovations for development of the community, a partnership between Samsung and
various educational and media agencies to support grassroots innovations. Samsung has
instituted two programs: Samsung Innovation Award with IIT, Delhi and Samsung
Innovation Quotient which recognises India’s best grass root innovators from across the
country.
•Hope for Culture represents Samsung’s tribute to the rich Indian cultural heritage through
Tagore Literature Awards that recognises the best literary contributions in 24 Indian
regional languages. Samsung is partnering with the Sahitya Akademi for the Tagore
Literature Awards. Additionally, Samsung partners with INKO to present the Samsung
Women’s International Film Festival that gives voice and expression to the perspective of
women and celebrates her spirit through the medium of Cinema.
Conclusion
Samsung has been a great competitor in different sectors including the latest competition
in the mobile smart phone industry. Samsung is excited about the future. It seems to look
forward to exploring new territories, including health, medicine, and biotechnology.
Samsung is committed to being a creative leader in new markets and becoming a truly No.
1 business going forward.
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2. ORGANIZATION
Samsung Electronics ltd.
2.1 Organization Structure
2.2 Geographical Footprint -
Headquarters
Samsung Electronics Co., Ltd.
Samsung Main Building
250, Taepyeongno 2-ga, Jung-gu29
Seoul 100-742 Korea
Regional headquarters
North America
Latin America
Europe
Southeast Asia
Southwest Asia
China
Middle East and Africa
Production Network :
Korea
Asia Pacific
Europe
North and South America
Samsung has the Production network in India as well:
- Samsung India Electronics Ltd.
(SIEL), Noida
- Samsung Telecommunications India
Private Ltd. (STI), Haryana
Sales Network :Asia Pacific
Europe
Latin America
Middle East and Africa
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North America
CIS and Baltics - Ukraine, Uzbekistan, Kazakhstan, Russia
2.3 Certifications -
Samsung has certifications regarding Quality Management systems for its various productions.
ISO/TS 16949:2009
Conclusion
Samsung Electronics ltd comes under the Samsung Group. It has diversified into many areas in the
market. The Samsung Digital City- Suwon, South Korea- is a self-contained complex that
welcomes in 40,000 employees each day and boasts office towers, labs, testing facilities.
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3. MARKET
Samsung Electronics Ltd.
3.1 Major Customers and Customer Segments:
Samsung Electronics is focusing on the sales of Mobile Phones related to Smart Phone category as
the state of technology advancement is at a higher pace. The Company has products not only for
the masses but also serve the Classes.
To penetrate the upper-market Samsung had to give up their lower-market position and focus on
innovation and perceiving a higher brand value.Their Coverage Strategy is arguably a
Differentiated Marketing strategy as they have an Extended Product Line with separate offers for
each of its segments.
Samsung electronics has a wide range of products in the Indian market starting from mobile phone
to various home appliances. It deals in B2B and also B2C.
Samsung quotes that to drive and accelerate their growth in Brand preference, they need a
redefined Brand Target on which to focus the future marketing efforts; the target being called as
the : ”Young minded Consumer”.
3.2 Product Lines:
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The company focuses on four areas: digital media, semiconductor, telecommunication network,
and LCD digital appliances. Samsung Print was established in 2009 as a separate entity to focus on
B2B sales and has released a broad range of multifunctional devices and printers and more.
Namely:
TV/Audio/Video - Television, bluray, DVD players, home theatre
Camera- smart camera, camera, Camcoder
Home Appliances - Refrigerators, AC, ashing machine, Micro ave, smart oven
Mobile devices- Dual sim, CDMA, smart phone, Touch phones, multimedia phone, galaxy Note,
Qwerty phone
PC/ Printers- Tablet, Monitor, optical disc drive, laser printer
Memory Storage-SSD, memory cards
Accessories
3.3 Products and Brands of Samsung Electronics
Listed below are few popular products of Samsung. Some of the products in itself are known to be
as brands like Galaxy.
Galaxy S II, SIII
Galaxy Note
Samsung Galaxy Duos
Samsung Galaxy Gear
Samsung Wave 725
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3.4 Market Share of Samsung Electronic
s
Mobile Phones
34
3.5 Advertising Agencies:
Samsung works with a number of firms for its advertisements which include
PublicisGroupe'sStarcom (media), 72andSunny (creative), RGA
3.6 Advertising Punch Lines or Slogans:
Samsung has been active in the Advertisements for its all new products.
Some of the popular slogans for its products are stated below-
Next is what?
Everyone's Invited
Designed for humans
Life companion
Conclusion
The market for Samsung grew from Rs 31,330 crore in FY'12, dethroning Nokia from the top
position this year. Samsung is on a product launch spree in India, with launches of more than 200
new models across categories slated for 2013. Samsung expects its Galaxy S4 range to contribute
as much as 20% of its smartphone sales volume by the year-end.
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4. FINANCIAL
Samsung Electronics Ltd.
4.1 Revenues
Headers 2008 2009 2010 2011 2012
Sales964,95,08
3
1196,97,66
4
1357,71,64
6
1430,69,25
4
1877,54,28
3
Total Assets837,71,40
0 984,98,366
1179,10,91
8
1349,44,29
4
1690,51,97
5
Assets turnover 1.151 1.215 1.151 1.06 1.11
(In thousands of US $)
4.2 Profitability
Headers 2008 2009 2010 2011 2012
Gross Profit 250,85,095 366,39,571 456,26,046 458,30,791 695,09,553
Operating Income 47,98,618 95,92,817 151,87,054 140,89,757 271,21,033
Operating Margin 4.9% 8.0% 11.1% 9.8% 14.4%
Net Profit 46,85,930 85,70,155 141,77,298 119,08,495 222,62,426
Return on Investment 5.5% 8.70% 12.0% 8.8% 13.1%
(In thousands of US $)
Revenue of Samsung India Electronics is as below:
Year Revenue
2009 10,200
2010 16,000
2011 20,000
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4.3 Segmented Revenues
Segment 2008 2009 2010 2011 2012
Digital Media 421,91,768 488,92,503 1324,43,114 1320,67,414 1113,97,867
Telecommunication
network 345,68,677 420,91,321 815,02,962 1132,63,888 2314,20,085
Semiconductor 223,53,359 268,50,449 728,06,264 713,05,465 669,76,623
LCD 215,17,568 222,79,577 621,62,133 616,48,667 693,59,762
(In Millions of Korean Won)
4.4 Market Capitalization
Market Capitalization is a measure of the estimated value of the common equity securities of the
company or their equivalent.
Shares outstanding 170.13m
P/E (TTM) 7.39
Market cap 220.94tn KRW
EPS (TTM) 184,605 KRW
4.5 Auditors of the company
The auditor of Samsung Electronics Ltd is Samil PricewaterhouseCoopers which is a Korean
network firm of PricewaterhouseCoopers International Limited.
4.6 Listing Status and script codes:
Samsung electronics Ltd is listed on the Korean Stock Exchange
Script code is 005930.KS
London Stock Exchange ; where the code is GDR
37
Stock price: 1,366,000 closed in KRW (As of Sep 26 2013 16:00 BST)
Date of Stock
priceShare Price 52 Week High 52 Week Low PE Ratio
9/26/20131,372,000
KRW
01/3/13 -
1,584,000
07/8/13 -
1,209,00010.8175
The chart depicts the share price of Samsung Electronics for a period
of 1 year 2012-2013
4.7 Share Holding Pattern
As of the end of June, 2013, the number of total shares outstanding of Samsung Electronics is
170,132,764.
Number of shares outstanding & treasury stocks of Samsung Electronics for the recent 5 years
Oustanding Shares Treasury Stock
Year common preferred Total common preferred Total
2008 147,299,337 22,833,427 170,132764 20,263,429 2,979,693 23,243,122
2009 147,299,337 22,833,427 170,132764 19,027,950 2,979,693 22,007,643
2010 147,299,337 22,833,427 170,132764 17,456,260 2,979,693 20,435,953
2011 147,299,337 22,833,427 170,132764 16,912,614 2,979,693 19,892,307
2012 147,299,337 22,833,427 170,132764 16,451,438 2,979,693 19,431,131
38
4.8 Global Listing:
Samsung electronics co. is also listed on the London Stock exchange.
Conclusion
The gross profit of the concern has constantly increased from 250,85,095 KRW in 2008 to
456,26,046 KRW in 2010 and recently 695,09,553 KRW in 2012. The recent share price recorded
was around 1,366,000 in KRW. The market cap 220.94tn KRW.
39
5. GOVERNANCE
Samsung Electronics Ltd.
5.1 Philosophy
The company was founded in 1938 and is headquartered in Suwon, South Korea.At Samsung, they
follow a simple Business philosophy that is to devote their talent and technology to create superior
products and services that contribute to a better global society.Samsung Electronics Co. Ltd.,
together with its subsidiaries, engages in consumer electronics, information technology and mobile
communications, and device solutions businesses worldwide. It has operations in Korea, China,
Latin and North America, Europe, the Asia Pacific, and Africa. Samsung Electronics Co. Ltd. has
a strategic partnership with Lookout.As part of their new vision, they have mapped out a specific
plan of reaching $400 billion in revenue and becoming one of the world’s top five brands by 2020.
To this end, they have also established three strategic approaches in our management: creativity,
partnership and talent.
5.2 Actions Taken by SEBI:
Not Available
5.3 Involvement in scams or Insider Trading:
Not Available
5.4 Insider Trading issues
Not available
5.5 Standard and Poor’s Corporate governance score
S&P's positive outlook on Samsung's credit rating exceeded the outlook on the sovereign credit
rating on South Korea that has been assigned "A" rating with the stable outlook. The credit rater
said this reflected its view that Samsung's operational and geographical diversity and strong
40
liquidity made it highly likely to perform and fulfill its financial obligations even during a
sovereign stress scenario.ESG Rating: C for governance because of two reasons Apple and
Samsung dispute regarding IPR’s.Company’s guide has given 7 score out of 10.
5.6 Awards
1. Samsung was presented with the Golden Peacock Award for the most innovative product for the
year 2011 for the MV800 digital still camera.
2. Samsung awarded as the Consumer Durable Company of the year at the 2011 NDTV Profit
Business Leadership Awards.
3. Mr. JS Shin, President & CEO, Samsung South West Asia was awarded the prestigious "MAN
OF ELECTRONICS AWARD 2011" by Consumer Electronics and Appliance Manufacturers
Association for his exceptional all round contribution to the Indian Electronics and Appliances
Industry.
4. Samsung was awarded as the 'Tablet Company of the Year' by Voice & Data at the V&D 100
Awards.
5. Samsung was awarded the Golden Peacock Awards (GPA) For Corporate Social Responsibility
for its Corporate Citizenship and Community Affairs initiatives that address education, sports,
culture and environment management programs.
6. Samsung won 3 much coveted awards at the NDTV Gadget Guru Awards 2011 that honour
innovation and products that truly make a difference in the world of technology.
• Design of the Year - 3D LED TV UA55C9000
• TV of the Year - 3D LED TV UA46C8000
• Smartphone of the Year - Galaxy S
41
Conclusion
Samsung has a unique feature in its philosophy and that is to inspire the world by developing new
technologies, innovation and new solutions. The scams are almost non- existent except for the
retired chairman’s conviction in tax evasion and embezzlement and the legal feud with Apple. The
company has many awards in its credit and a good corporate governance score.
42
Summary
Samsung Electronics Co., Ltd. is mainly engaged in the production of consumer electronic
products. It operates in two divisions: DMC division, which is divided into consumer electronics
(CE) and information technology & mobile communications (IM) businesses, as well as DS
division, which is divided into semiconductor and liquid crystal display (LCD) businesses.
43
Learning’s
The market share of Samsung has been constantly been increasing in the recent years. The
breakthrough of its touch and smart phones has made it the most popular brands in India. It has
beaten Nokia in terms of its sales. It has emerged as a strong competitor of Apple Inc. relating to
mainly the smart phone market. To penetrate the upper-market Samsung had to give up their
lower-market position and focus on innovation and perceiving a higher brand value. Their
Coverage Strategy is arguably a Differentiated Marketing strategy as they have an Extended
Product Line with separate offers for each of its segments. The Segmented revenue for
telecommunication in the year 2008 was 345,68,677 and has gone up to 2314,20,085 in the year
2012 (data in millions of Korean Won).
44
Bibliography
http://in.reuters.com/finance/stocks/companyProfile?symbol=005930.KS
www.bloomberg.com
www.markets.ft.com/market
http://www.hoovers.com/company-information/cs/revenue-
financial.Samsung_Electronics_Co_Ltd.a166cb2c88a2e408.html
http://www.csr.com/investor-centre/proposed-transaction-with-samsung-electronics-co-ltd
http://en.wikipedia.org/wiki/Samsung_Electronics
http://www.diplointernetgovernance.org/profiles/blogs/apple-vs-samsung-the-battle-fought-
with-patents-who-is-the-real
2. Enterprise history and background
Apple Inc.
2.1 History and background
45
Apple Inc.'s world corporate headquarters are located in the middle of Silicon Valley, California.
Apple was established on April 1, 1976, by Steve Jobs, Steve Wozniak and Ronald Wayne.
Apple was incorporated January 3, 1977, without Wayne, who sold his share of the company back
to Jobs and Wozniak. On December 12, 1980, Apple went public at $22 per share. Steve Jobs
announced that Apple would begin producing Intel-based Mac computers in 2006.
After Jobs , the Chief operating officer ,Tim Cook assumed Jobs day-to-day operations at Apple,
although Jobs was assumed to be "involved in major strategic decisions for the company."
2.2 Vision:
To become the worldwide leader in computer and mp3 player sales.
2.3 Mission:
“Apple is committed to bringing the best personal computing, and mobile usage experience
to students, educators, creative professionals and consumers around the world through its
innovative hardware, software and internet offerings.”
2.4 Key Executives
Timothy Donald Cook "Tim" Chief Executive Officer
D Bruce Sewell Senior VP/Secy/Gen Cnsl
Daniel Riccio "Dan" Senior VP:Hardware
Engineering
Jonathan Ive "Jony" Senior VP:Industrial Design
Philip W Schiller "Phil" Senior VP: Product Marketing
Peter Oppenheimer Senior VP/CFO
46
Craig Federighi Senior VP/Head:IOS & OS X
Eduardo H Cue "Eddy" Senior VP:Internet Software
&Svcs
Jeffrey E Williams "Jeff" Senior VP:Operations
Holder Shares % Out Value* Reported
Vanguard Group, Inc. (The) 44,504,335 4.90 17,647,303,957 Jun 30, 2013
State Street Corporation 37,297,366 4.11 14,789,524,539 Jun 30, 2013
FMR, LLC 31,023,222 3.41 12,301,638,219 Jun 30, 2013
BlackRock Institutional Trust Company,
N.A.
25,378,225 2.79 10,063,227,559 Jun 30, 2013
Northern Trust Corporation 13,976,334 1.54 5,542,035,721 Jun 30, 2013
Invesco Ltd. 12,349,486 1.36 4,896,941,683 Jun 30, 2013
Bank of New York Mellon Corporation 12,372,947 1.36 4,906,244,673 Jun 30, 2013
Goldman Sachs Group, Inc. 10,518,358 1.16 4,170,844,497 Jun 30, 2013
JP Morgan Chase & Company 9,914,780 1.09 3,931,507,713 Jun 30, 2013
BlackRock Fund Advisors 9,014,941 0.99 3,574,694,554 Jun 30, 2013
2.5 Major Acquisitions :
Below mentioned are some latest acquisitions of Apple Inc.
Chomp
Redmatica
AuthenTec
Particle
47
HopStop.com
Semiconductor
Matcha
Embark
2.6 Corporate Social Responsibility
Apple requires its suppliers to adhere to the Supplier Code of Conduct . It insists on providing
safe working conditions, treat employees fairly, and use environmentally responsible
manufacturing processes. Drive compliance to the Code through an aggressive monitoring
program that includes factory audits, corrective action plans, and verification measures.
a result of compliance monitoring and the subsequent corrective actions, working conditions have
improved at many facilities across the Apple supply chain.
2.7 CSR Activities (Not applicable)
2.8 Mergers and Acquisitions
Anobit
Redmatica
AuthenTec
Particle
WiFiSlam
Locationary
HopStop.com
Semiconductor
Matcha
Embark
AlgoTrim
48
Conclusion
Over the past 30 years Apple has amplified from computer design to developing consumer
electronics. The company was started by Steve Jobs, Steve Wozniak, and Ronald Wayne in the
1970’s. Apples main business initiative is customer relationship management. When working with
or purchasing from Apple you are promised top notch customer service and assistance.
2. ORGANIZATION
Apple Inc.
1.3 Organizational Structure
49
1.4 Geographical footprints –
Headquarters
1 Infinite Loop
Cupertino, CA 95014
United States.
Corporate Office (INDIA)
19 Floor, Concorde Tower C,
UB City No 24 Vittal Mallya Road
50
Bangalore 560-001
Service and Sales Locations
In 2001, Apple announced the opening of a line of Apple Retail stores, to be located throughout the major
U.S computer buying markets and later on in Tokyo and other countries.
Africa
Middle East
Europe
Latin America
United States
Canada
Puerto Rico
Asia Pacific
Manufacturing Units –
UK
China
Japan
Canada
Italy
Switzerland
France
Germany
Spain
Hong kong
Netherlands
51
Sweden
1.3 CERTIFICATIONS –
Apple products have ENERGY STAR specifications
The first Apple manufacturing site (Sacramento, California)
Is ISO: 14001 Certified
Apple has a number of ISO certifications relating to various processes and Departments around the
world.
Conclusion
Apple has been a major player in the market and is spread around various locations in the world.
Its headquarter is in United States and also has a corporate office in India.Apple has established
itself as a leader in the consumer electronics and media sales industries. In an effort to court a
broader market, Apple opened several "mini" stores in 2004 in attempt to capture markets where
demand does not necessarily dictate a full scale store.
3. MARKETS
52
Apple Inc.
3.7 Major Customers and Customer Segments
Apple has emerged to be a strong competitor as of Samsungsmart phones which is coming up to
beat the prices of Apple Smartphones. Apple has been focusing on the Middle/Upper class of
customers for its products. Unlike Samsung, Apple products are mainly for the classes. It has
identified targets in the young generations who are ready to pay for high end technological
products. They include music enthusiasts and fans ages 12-35 andprofessionals in media and
design.
Apple CEO has addressed while launching its latest iPhone 5S that it aims at providing a cheaper
iPhone for thedeveloping markets and a more powerful one for high-end buyers.
3.8 Product Lines of Apple:
Mac,iPad, iPod, iPhone, Apple TV, Software, Online services.
3.9 Few Brands and Products:
Operating System iOS
iCloud
iTunes
iPhone 2G, 3G, 4, 5
iPod shuffle, Nano, Touch, Classic
MacBook Pro, MacBook Air, Mac mini
3.10 Market Share in the Total Industry53
The pie chart below depicts the market share of all the products of Apple.
MOBILE PHONE BRANDS
3.11 Advertising Agencies
Apple debuted a new series of ads produced by TBWA\Media Arts Lab
3.12 Advertising Slogans:
Apple has a very long list of slogans that have been used in advertising and marketing material
from the '70s to the present. Listed below are few of them-
“Byte into an Apple" (Late 1970s)
"The Power to Be Your Best" (1990)54
"Think different" (1997–2002)
"Designed by Apple in California" (2013)
"It takes minutes of practice to make Macintosh do this"
"Introducing Macintosh"
"Performance and design.Taken right to the edge" (Used to promote the new iMac in 2012)
"The world's highest resolution notebook" (Used to promote the MacBook Pro family with Retina
Display- 2013)
"All the power you want. All day long" (used to promote the new MacBook Air with improved
battery life-2013)
"Your Top 40,000" (Used to market the iPod classic 2009)
"The world's thinnest smartphone" Ad for iPhone 4
"Forward thinking" (2013) Used to promote the iPhone 5s
Conclusion
Apple phones have a strong market share in terms of loyal customers. It has come up with high
end technological products that have gained momentum like the iPhone and MacBook. The
customers have emerged to be as tech savvy and the ones who are ready to pay a little more for the
techonological advancements in the products.
4. Financial55
Apple Inc.
4.1 Revenues
Header 2008 2009 2010 2011 2012
Sales 37,491 42,905 65,225 1,08,249 1,56,508
Total Assets 47,501 47,501 75,183 1,16,371 1,76,064
Assets turnover 94.7 90.3 86.8 93 88.9
(In million $ )
4.2 Profitability
Header 2008 2009 2010 2011 2012
Gross Profit 13197 17222 25,684 43,818 68,662
Operating Income 8327 11740 18,385 33,790 55,241
Operating Margin 22.21% 27.36% 28.19% 31.22% 35.3%
Net Profit 6119 8235 14,013 25,922 41,733
Profit margin 16.3% 19.2% 21.5% 23.9% 26.7%
Return on Investment 12.8% 17.3% 18.6% 22.2% 23.7%
(In million $)
4.3 Segmented Revenues
Net sales in the Asia-Pacific segment increased $10.7 billion or 47% during 2012 compared to
2011. The growth in net sales during 2012 was mainly due to increased demand for iPhone from
the launch of iPhone 4S, strong demand for the new iPad and iPad 2, and higher Mac sales.
Growth in the Asia Pacific segment was affected by the timing of iPhone and iPad product
launches. iPhone 5 was launched in a limited number of countries in the Asia Pacific segment
during the fourth quarter of 2012 and was not launched in China during 2012, and the new iPad
that was introduced by the Company in March 2012 was not launched in China until the fourth
quarter of 2012. The Asia-Pacific segment represented approximately 21% of the Company’s total
net sales in both 2012 and 2011.
Net sales in the Asia Pacific segment increased $14.3 billion or 174% during 2011 compared to
2010. The Company experienced particularly strong year-over-year net sales growth in its Asia
Pacific segment during 2011, especially in Greater China, which includes Hong Kong and Taiwan. 56
Korea and Australia also experienced strong year-over-year revenue growth. Higher net sales in
the Asia Pacific segment were due mainly to the increase in iPhone sales primarily attributable to
the strong demand for iPhone 4 and carrier expansion, strong sales of iPad, and increased Mac
sales. The Asia Pacific segment represented 21% and 13% of the Company’s total net sales in
2011 and 2010, respectively.
Segmented
revenues - 2008 2009 2010 2011 2012
Operating Segments:
America 16,552 18,981 24,498 3 8,315 57,512
europe 9,233 11,810 18,692 2 7,778 3 6,323
Greater China 1 2,690 2 2,533
Japan 1,728 2,279 3,981 5,437 1 0,571
Rest of Asia Pacific 2,686 3,179 8,256 9 ,902 1 0,741
Retail 7,292 6,656 9,798 1 4,127 1 8,828
In million $
4.4 Market Capitalization
Market Capitalization is a measure of the estimated value of the common equity securities of the
company or their equivalent. On September 2012, Apple reached a record share price of more than
$705 and closed at above 700. With 936,596,000 outstanding shares (as of June 30, 2012), it had a
market capitalization of about $660 billion.
Market cap $ 446,108,366,880
P/E Ratio 12.26
Earnings Per Share (EPS) $ 40.04
4.5 Auditors of the company
Ernst & Young LLP has been Apple Inc.’s independent auditors since 2009. Previously they used
KPMG.
57
4.6 Listing Status and script codes
Apple Inc. is listed on the NASDAQ Stock Exchange. It went public with an initial public offer at
US$22.00 per share.
The Script Code is: AAPL
ISIN number: US0378331005
Below is a table showing the Stock information about Apple Inc.
Date of stock
priceShare Price
52 Week
High52 Week Low PE Ratio
26-09-2013 485.01 682.17 385.1 12.11
The chart above depicts the market share of Apple on the NASDAQ stock exchange for the period
of 1 year 2012-2013.
4.7 Global Listing
Not Applicable
Conclusion
In its fiscal year ending in September 2011, Apple Inc. reported a total of $108 billion in annual
revenues – a significant increase from its 2010 revenues of $65 billion – and nearly $82 billion in
58
cash reserves. On March 19, 2012, Apple announced plans for a $2.65-per-share dividend
beginning in fourth quarter of 2012, per approval by their board of directors. This shows that even
after losing market share Apple has been able to procure substantial financial growth.
5. GOVERNANCE
Apple Inc.
59
5.1 Philosophy:
According to Apple, four main principles contribute to integrity: honesty, respect, confidentiality,
and compliance. To more thoroughly detail these principles, Apple has drafted a code of business
conduct that applies to all its operations, including those overseas. It has also made available on its
website more specific policies regarding corporate governance, director conflict of interest, and
guidelines on reporting questionable conduct. Additionally, Apple provides employees with a
Business Conduct Helpline that they can use to report misconduct to Apple’s Audit and Finance
Committee. Many of Apple’s product components are manufactured in countries with low labour
costs. The potential for misconduct is high due to differing labour standards and less direct
oversight. As a result, Apple makes each of its suppliers sign its “Supplier Code of Conduct” and
performs factory audits to ensure compliance. Apple may refuse to do additional business with
suppliers who refuse to comply with Apple’s standards. To emphasize its commitment toward
responsible supplier conduct, Apple releases an annual Apple Supplier Responsibility Report that
explains its supplier expectations as well as its audit conclusions and corrective actions the
company will take against factories where violations have occurred.
5.2 Actions Taken by SEBI:
Not Applicable
5.3 Involvement in scams
As apple inc. has been very vigilant and is in link with their customers, the chances for any scams
relating to the company or the product are very low.
The official website has a redressal service, where one can post any SMS or mails that they have
received and check for its legitimacy.
5.4 Insider trading issues
Not Applicable
60
5.5 Standard and poor’s Corporate Governance Score
On April 23, 2013--Standard & Poor's Ratings Services has assigned its 'AA+' corporate credit
rating to Cupertino, Calif.-based Apple Inc. The outlook is stable. It is anticipated that they would
also assign this rating to unsecured senior debt that may be issued as part of the shareholder return
program, subject to review of the documentation.
The rating on Apple reflects the company's 'minimal' financial risk profile and 'strong' business
risk profile, incorporating market-leading products, a globally diverse customer base and strong
profitability.
5.6 Awards:
Human Interface Design Excellence (HIDE) Awards itself was conducted by Apple Inc. for
Innovative products since the year 1997.
Awards won by Apple include
IPod accessory earn Invention of the Year Awardin the year 2008.
Best vendor retailer in the year 2010.
Marketers at ANA give top honour to Apple Inc. in year 2007.
Apple scoops D&AD gold award for a fourth year in year 2002.
Extra Mile Award in Oct 2009.
The 50 All Stars in March 2013.
Effie Award for advertising in 2007
Conclusion
61
Apple practices code of conduct in the organization by contributing to the integrity, honesty,
respect, confidentiality and compliance. Apple makes each of its supplier’s sign it’s “supplier code
of conduct” and performs factory audits to ensure compliance. The scams related are very low.
There are many awards won by Apple Inc., however Apple has had a legal feud with Samsung.
But still Apple’s corporate governance score is stable.
Summary
Apple Inc has emerged as a key market player with the launch of its revolutionary products like
iphone and iPad. More than 25% of the revenues come from completely new business lines
launched in the last 5 years. Their top business lines (those representing over 10% of sales) are #1
or #2 sales leaders in the categories.
62
Learnings
There are plenty of examples of businesses out there that have very little innovation in terms of
what they do, but they take a product or service that has worked well elsewhere and merely copy it
without adding significant differences or improvements. Often they will do this and offer it at a
significantly reduced cost and very commonly with low quality. On the contrary, Apple has come
up with high end technological products. The new products have regularly reached iconic status
and are hotly anticipated by media. People aspire to own the products and relate to them as
extensions of themselves. The growth in net sales during 2012 was mainly due to increased
demand for iPhone from the launch of iPhone 4S, strong demand for the new iPad and iPad 2, and
higher Mac sales.
Bibliography63
www.bloomberg.com
http://en.wikipedia.org/wiki/History_of_Apple_Inc.
http://www.forbes.com/companies/apple/
http://www.diplointernetgovernance.org/profiles/blogs/apple-vs-samsung-the-battle-fought-with-
patents-who-is-the-real
www.markets.ft.com/market
64
2. Enterprise history and background
Samsung Electronics ltd.
2.1 History and background -
Samsung Group is a South Korean multinational conglomerate company headquartered Seoul,
South Korea. It comprises numerous subsidiaries and affiliated businesses, most of them united
under the Samsung brand.
In 1938,Lee Byung-chull of a large landowning family in the Uiryeong county came to the
nearby Daegu city and founded Samsung Sanghoe, a small trading company with forty
employees located in Su-dong.
Samsung diversified into many areas and Lee sought to help establish Samsung as an industry
leader in a wide range of enterprises, moving into businesses such as insurance, securities, and
retail.
In the late 1960s, Samsung Group entered into the electronics industry.
Samsung Electronics Co., Ltd. is a multinational electronics and information technology
company headquartered in Suwon and the flagship company of the Samsung Group.
After Lee, the founder's death in 1987, Samsung Group was separated into four business
groups – Samsung Group, Shinsegae Group, CJ Group and Hansol Group. Samsung became
the largest producer of memory chips in the world in 1992. In the first quarter of 2012,
Samsung Electronics became the world's largest mobile phone maker by unit sales, overtaking
Nokia.
1.2 Business Group or Family :
Samsung Electronics Co., Ltd. is a multinational electronics and information technology company
headquartered in Suwon and the flagship company of the Samsung Group.
65
1.8 VisionSamsung is dedicated to developing innovative technologies and efficient processes that create
new markets, enrich people's lives and continue to make Samsung a digital leader.
Samsung Electronics' vision for the new decade is, "Inspire the World, Create the Future."
1.9 Values & PhilosophySamsung is guided by a simple philosophy, strong values and high ethical standards that inform
our work every day. In everything we do, we strive to help people live better lives.
List of a Major Shareholder & Related Parties ( As of December 31, 2012 )
Name Relationship Class of
Stock
Number of Shareholdings
End of Quarter
Number of
Shares
%
Port.
Kun-Hee Lee Major
shareholder
Common
stock
4,985,464 3.38
Kun-Hee Lee Major
shareholder
Preferred
Stock
12,398 0.05
Samsung
Corporation
Affiliate Common
stock
5,976,362 4.06
Samsung Welfare
Foundation
Affiliate Common
stock
89,683 0.06
Samsung
Foundation of
Culture
Affiliate Common
stock
37,615 0.03
Ra-Hee Hong Family member Common
stock
1,083,072 0.74
Jae-Yong Lee Family member Common
stock
840,403 0.57
Samsung Life
Insurance
Affiliate Common
stock
11,098,077 7.53
Samsung Life
Insurance
Affiliate Preferred
Stock
21,416 0.09
Samsung Fire &
Marine
Insurance
Affiliate Common
stock
1,856,370 1.26
Cheil Industries Affiliate Common 9,679 0.01
66
stock
Oh-Hyun Kwon BOD member Common
stock
5,500 0.00
Gee-Sung Choi BOD member Common
stock
6,400 0.00
Ju-Hwa Yoon BOD member Common
stock
6,500 0.00
Total Common
stock
25,995,125 17.65
Preferred
stock
33,814 0.15
Total 26,028,939 15.30
1.10Subsidiaries and affiliates
As of April 2011 the Samsung Group comprised 59 unlisted companies and 19 listed companies,
all of which had their primary listing on the Korea Exchange stock-exchange.
Principal subsidiary and affiliate companies of Samsung include:
Ace Digitech
Cheil Industries
Cheil Worldwide
Credu
Imarket Korea
Samsung Card
Samsung C&T Corporation
Samsung Electro-Mechanics
Samsung Electronics
Samsung Engineering
Samsung Fine Chemicals
Samsung Fire & Marine Insurance
Samsung Heavy Industries
Samsung Life Insurance
Samsung Machine Tools
Samsung SDI
Samsung Securities
Samsung Techwin
Shilla Hotels and Resorts67
1.11Key Executives :
Lee Kun Hee - Chairman
Kwon Oh-Hyun - Vice Chairman/Rep Director/CEO
Mr. B D Park - Managing Director, Samsung India Electronics Ltd.
Sohn Young Kwon - President/Chief Strategy Officer
Robert Yi - Senior VP/Head:Investor Relations
Younghee Lee - Exec VP:Global Marketing
Board of Directors :
Oh-Hyun Kwon
Gee-Sung Choi
Ju-Hwa Yoon
Dong-Min Yoon
In-Ho Lee
Han-Joong Kim
Byeong-Gi Lee
1.12 Corporate Social Responsibility -
•Samsung Hope for Children, an initiative designed to help under-privileged children
through e-learning centres. These e learning centres located in different parts of the
country impart computer literacy to underprivileged youth and ensure placements as well.
•Innovations for development of the community, a partnership between Samsung and
various educational and media agencies to support grassroots innovations. Samsung has
instituted two programs: Samsung Innovation Award with IIT, Delhi and Samsung
Innovation Quotient which recognises India’s best grass root innovators from across the
country.
•Hope for Culture represents Samsung’s tribute to the rich Indian cultural heritage through 68
Tagore Literature Awards that recognises the best literary contributions in 24 Indian
regional languages. Samsung is partnering with the Sahitya Akademi for the Tagore
Literature Awards. Additionally, Samsung partners with INKO to present the Samsung
Women’s International Film Festival that gives voice and expression to the perspective of
women and celebrates her spirit through the medium of Cinema.
Conclusion
Samsung has been a great competitor in different sectors including the latest competition
in the mobile smart phone industry. Samsung is excited about the future. It seems to look
forward to exploring new territories, including health, medicine, and biotechnology.
Samsung is committed to being a creative leader in new markets and becoming a truly No.
1 business going forward.
69
2. ORGANIZATION
Samsung Electronics ltd.
2.2 Organization Structure
2.2 Geographical Footprint -
Headquarters
Samsung Electronics Co., Ltd.
Samsung Main Building
250, Taepyeongno 2-ga, Jung-gu
Seoul 100-742 Korea
Regional headquarters
70
North America
Latin America
Europe
Southeast Asia
Southwest Asia
China
Middle East and Africa
Production Network :
Korea
Asia Pacific
Europe
North and South America
Samsung has the Production network in India as well:
- Samsung India Electronics Ltd.
(SIEL), Noida
- Samsung Telecommunications India
Private Ltd. (STI), Haryana
Sales Network :Asia Pacific
Europe
Latin America
Middle East and Africa
North America
CIS and Baltics - Ukraine, Uzbekistan, Kazakhstan, Russia
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2.4 Certifications -
Samsung has certifications regarding Quality Management systems for its various productions.
ISO/TS 16949:2009
Conclusion
Samsung Electronics ltd comes under the Samsung Group. It has diversified into many areas in the
market. The Samsung Digital City- Suwon, South Korea- is a self-contained complex that
welcomes in 40,000 employees each day and boasts office towers, labs, testing facilities.
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3. MARKET
Samsung Electronics Ltd.
3.1 Major Customers and Customer Segments:
Samsung Electronics is focusing on the sales of Mobile Phones related to Smart Phone category as
the state of technology advancement is at a higher pace. The Company has products not only for
the masses but also serve the Classes.
To penetrate the upper-market Samsung had to give up their lower-market position and focus on
innovation and perceiving a higher brand value.Their Coverage Strategy is arguably a
Differentiated Marketing strategy as they have an Extended Product Line with separate offers for
each of its segments.
Samsung electronics has a wide range of products in the Indian market starting from mobile phone
to various home appliances. It deals in B2B and also B2C.
Samsung quotes that to drive and accelerate their growth in Brand preference, they need a
redefined Brand Target on which to focus the future marketing efforts; the target being called as
the : ”Young minded Consumer”.
3.2 Product Lines:
The company focuses on four areas: digital media, semiconductor, telecommunication network,
and LCD digital appliances. Samsung Print was established in 2009 as a separate entity to focus on
B2B sales and has released a broad range of multifunctional devices and printers and more.
Namely:
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TV/Audio/Video - Television, bluray, DVD players, home theatre
Camera- smart camera, camera, Camcoder
Home Appliances - Refrigerators, AC, ashing machine, Micro ave, smart oven
Mobile devices- Dual sim, CDMA, smart phone, Touch phones, multimedia phone, galaxy Note,
Qwerty phone
PC/ Printers- Tablet, Monitor, optical disc drive, laser printer
Memory Storage-SSD, memory cards
Accessories
3.3 Products and Brands of Samsung Electronics
Listed below are few popular products of Samsung. Some of the products in itself are known to be
as brands like Galaxy.
Galaxy S II, SIII
Galaxy Note
Samsung Galaxy Duos
Samsung Galaxy Gear
Samsung Wave 725
3.4 Market Share of Samsung Electronics
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Mobile Phones
3.5 Advertising Agencies:
Samsung works with a number of firms for its advertisements which include
PublicisGroupe'sStarcom (media), 72andSunny (creative), RGA
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3.6 Advertising Punch Lines or Slogans:
Samsung has been active in the Advertisements for its all new products.
Some of the popular slogans for its products are stated below-
Next is what?
Everyone's Invited
Designed for humans
Life companion
Conclusion
The market for Samsung grew from Rs 31,330 crore in FY'12, dethroning Nokia from the top
position this year. Samsung is on a product launch spree in India, with launches of more than 200
new models across categories slated for 2013. Samsung expects its Galaxy S4 range to contribute
as much as 20% of its smartphone sales volume by the year-end.
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4. FINANCIAL
Samsung Electronics Ltd.
4.1 Revenues
Headers 2008 2009 2010 2011 2012
Sales964,95,08
3
1196,97,66
4
1357,71,64
6
1430,69,25
4
1877,54,28
3
Total Assets837,71,40
0 984,98,366
1179,10,91
8
1349,44,29
4
1690,51,97
5
Assets turnover 1.151 1.215 1.151 1.06 1.11
(In thousands of US $)
4.2 Profitability
Headers 2008 2009 2010 2011 2012
Gross Profit 250,85,095 366,39,571 456,26,046 458,30,791 695,09,553
Operating Income 47,98,618 95,92,817 151,87,054 140,89,757 271,21,033
Operating Margin 4.9% 8.0% 11.1% 9.8% 14.4%
Net Profit 46,85,930 85,70,155 141,77,298 119,08,495 222,62,426
Return on Investment 5.5% 8.70% 12.0% 8.8% 13.1%
(In thousands of US $)
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Revenue of Samsung India Electronics is as below:
Year Revenue
2009 10,200
2010 16,000
2011 20,000
4.3 Segmented Revenues
Segment 2008 2009 2010 2011 2012
Digital Media 421,91,768 488,92,503 1324,43,114 1320,67,414 1113,97,867
Telecommunication
network 345,68,677 420,91,321 815,02,962 1132,63,888 2314,20,085
Semiconductor 223,53,359 268,50,449 728,06,264 713,05,465 669,76,623
LCD 215,17,568 222,79,577 621,62,133 616,48,667 693,59,762
(In Millions of Korean Won)
4.4 Market Capitalization
Market Capitalization is a measure of the estimated value of the common equity securities of the
company or their equivalent.
Shares outstanding 170.13m
P/E (TTM) 7.39
Market cap 220.94tn KRW
EPS (TTM) 184,605 KRW
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4.5 Auditors of the company
The auditor of Samsung Electronics Ltd is Samil PricewaterhouseCoopers which is a Korean
network firm of PricewaterhouseCoopers International Limited.
4.6 Listing Status and script codes:
Samsung electronics Ltd is listed on the Korean Stock Exchange
Script code is 005930.KS
London Stock Exchange ; where the code is GDR
Stock price: 1,366,000 closed in KRW (As of Sep 26 2013 16:00 BST)
Date of Stock
priceShare Price 52 Week High 52 Week Low PE Ratio
9/26/20131,372,000
KRW
01/3/13 -
1,584,000
07/8/13 -
1,209,00010.8175
The chart depicts the share price of Samsung Electronics for a period
of 1 year 2012-2013
4.7 Share Holding Pattern
As of the end of June, 2013, the number of total shares outstanding of Samsung Electronics is
170,132,764.
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Number of shares outstanding & treasury stocks of Samsung Electronics for the recent 5 years
Oustanding Shares Treasury Stock
Year common preferred total common preferred Total
2008 147,299,337 22,833,427 170,132764 20,263,429 2,979,693 23,243,122
2009 147,299,337 22,833,427 170,132764 19,027,950 2,979,693 22,007,643
2010 147,299,337 22,833,427 170,132764 17,456,260 2,979,693 20,435,953
2011 147,299,337 22,833,427 170,132764 16,912,614 2,979,693 19,892,307
2012 147,299,337 22,833,427 170,132764 16,451,438 2,979,693 19,431,131
4.8 Global Listing:
Samsung electronics co. is also listed on the London Stock exchange.
Conclusion
The gross profit of the concern has constantly increased from 250,85,095 KRW in 2008 to
456,26,046 KRW in 2010 and recently 695,09,553 KRW in 2012. The recent share price recorded
was around 1,366,000 in KRW. The market cap 220.94tn KRW.
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5. GOVERNANCE
Samsung Electronics Ltd.
5.1 Philosophy
The company was founded in 1938 and is headquartered in Suwon, South Korea.At Samsung, they
follow a simple Business philosophy that is to devote their talent and technology to create superior
products and services that contribute to a better global society.Samsung Electronics Co. Ltd.,
together with its subsidiaries, engages in consumer electronics, information technology and mobile
communications, and device solutions businesses worldwide. It has operations in Korea, China,
Latin and North America, Europe, the Asia Pacific, and Africa. Samsung Electronics Co. Ltd. has
a strategic partnership with Lookout.As part of their new vision, they have mapped out a specific
plan of reaching $400 billion in revenue and becoming one of the world’s top five brands by 2020.
To this end, they have also established three strategic approaches in our management: creativity,
partnership and talent.
5.2 Actions Taken by SEBI:
Not Available
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5.3 Involvement in scams or Insider Trading:
Not Available
5.4 Insider Trading issues
Not available
5.5 Standard and Poor’s Corporate governance score
S&P's positive outlook on Samsung's credit rating exceeded the outlook on the sovereign credit
rating on South Korea that has been assigned "A" rating with the stable outlook. The credit rater
said this reflected its view that Samsung's operational and geographical diversity and strong
liquidity made it highly likely to perform and fulfill its financial obligations even during a
sovereign stress scenario.ESG Rating: C for governance because of two reasons Apple and
Samsung dispute regarding IPR’s.Company’s guide has given 7 score out of 10.
5.6 Awards
1. Samsung was presented with the Golden Peacock Award for the most innovative product for the
year 2011 for the MV800 digital still camera.
2. Samsung awarded as the Consumer Durable Company of the year at the 2011 NDTV Profit
Business Leadership Awards.
3. Mr. JS Shin, President & CEO, Samsung South West Asia was awarded the prestigious "MAN
OF ELECTRONICS AWARD 2011" by Consumer Electronics and Appliance Manufacturers
Association for his exceptional all round contribution to the Indian Electronics and Appliances
Industry.
4. Samsung was awarded as the 'Tablet Company of the Year' by Voice & Data at the V&D 100
Awards.
5. Samsung was awarded the Golden Peacock Awards (GPA) For Corporate Social Responsibility
for its Corporate Citizenship and Community Affairs initiatives that address education, sports,
culture and environment management programs.
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6. Samsung won 3 much coveted awards at the NDTV Gadget Guru Awards 2011 that honour
innovation and products that truly make a difference in the world of technology.
• Design of the Year - 3D LED TV UA55C9000
• TV of the Year - 3D LED TV UA46C8000
• Smartphone of the Year - Galaxy S
Conclusion
Samsung has a unique feature in its philosophy and that is to inspire the world by developing new
technologies, innovation and new solutions. The scams are almost non- existent except for the
retired chairman’s conviction in tax evasion and embezzlement and the legal feud with Apple. The
company has many awards in its credit and a good corporate governance score.
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Summary
Samsung Electronics Co., Ltd. is mainly engaged in the production of consumer electronic
products. It operates in two divisions: DMC division, which is divided into consumer electronics
(CE) and information technology & mobile communications (IM) businesses, as well as DS
division, which is divided into semiconductor and liquid crystal display (LCD) businesses.
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Learning’s
The market share of Samsung has been constantly been increasing in the recent years. The
breakthrough of its touch and smart phones has made it the most popular brands in India. It has
beaten Nokia in terms of its sales. It has emerged as a strong competitor of Apple Inc. relating to
mainly the smart phone market. To penetrate the upper-market Samsung had to give up their
lower-market position and focus on innovation and perceiving a higher brand value. Their
Coverage Strategy is arguably a Differentiated Marketing strategy as they have an Extended
Product Line with separate offers for each of its segments. The Segmented revenue for
telecommunication in the year 2008 was 345,68,677 and has gone up to 2314,20,085 in the year
2012 (data in millions of Korean Won).
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Bibliography
http://in.reuters.com/finance/stocks/companyProfile?symbol=005930.KS
www.bloomberg.com
www.markets.ft.com/market
http://www.hoovers.com/company-information/cs/revenue-
financial.Samsung_Electronics_Co_Ltd.a166cb2c88a2e408.html
http://www.csr.com/investor-centre/proposed-transaction-with-samsung-electronics-co-ltd
http://en.wikipedia.org/wiki/Samsung_Electronics
http://www.diplointernetgovernance.org/profiles/blogs/apple-vs-samsung-the-battle-fought-with-
patents-who-is-the-real
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