print out 2

8/7/2019 print out 2

1/50

INTRODUCTION

Samsung was established in 1938 whose brands can now be found worldwide, representing

everything from home appliances to highly sophisticated digital products. Samsung aims to attract

and nurture the best talents, and to foster a corporate culture in which it can thrive.

The CEO of Samsung is Jong-Yong Yun. Samsung is a Korean electronics company. Ever since it

was founded in 1938, Samsung has continually refined its mission statement to respond both to

change in itself and in the world: "Economic contribution to the nation, "Priority to human

resources, "Pursuit of rationalism". Each slogan represents significant moments in Samsungs

history, reflecting different stages of the company's growth from a domestic industrial leader into a

global consumer electronics powerhouse.

In the 1990's, Samsung once again acknowledged the need to transform its mission statement to

keep pace with growing global operations, rapid changes in the world economy, and escalating

competition from well-established rivals.

MANAGEMENT PHILOSOPHY

"We will devote our human resources and technology to create superior products and services,

thereby contributing to a better global society."

This management philosophy represents Samsungs strong determination to contribute directly to

the prosperity of people all over the world - a single human society.

SAMSUNGAS PUT FORWARD BY THE CEO:

Key to our efforts is our own people, whose talent and creativity are dedicated to doing their best

at all times. Technology also plays an important role in making it possible to achieve higher

standards of living. And superior products and services are what we are all about.

We believe that the success of our contributions to society and to the mutual prosperity of people

across national boundaries truly depends on how we manage our company. Thus, we challenge the

world to create the future with our customers. Our determination is growth - a perpetual challenge -

but always working within the context of cooperation and inclusion of our customers.

SAMSUNG LOGO (WORDMARK)Samsungs corporate logo was redefined to project Samsungs firm determination to become a

world leader in 1993.

The Samsung name is now written in English, expanding its global presence throughout the world.

The name is superimposed over a dynamic, new logo design, giving an overall image of dynamic

enterprise that is on the move. The elliptical logo shape symbolizes the world moving through


2/50

space, conveying a distinctive image of innovation and change. The first letter, "S", and the last

letter, "G," partially break out of the oval to connect the interior with the exterior, showing

Samsungs desire to be one with the world and to serve society as a whole.

Samsung is using two logos its blue coloring suggests both stability and reliability, while projecting

a warm felling. Samsung Electronics, being reborn as the company is responsible for the worldsmost innovative digital convergence in 21st century, has adopted a new corporate brand slogan.

SAMSUNG IN PAKISTAN

Samsung operating in Pakistan referred to as Local Samsung started in April 2000. It has its hub

quarter in Dubai and including Pakistan is operating in seventeen countries. Samsung in Pakistan is

operating through local partners in Pakistan. They are:

Digital World Pakistan:

Deals in audio-visual.

Document World Pakistan:

Trades in Information Technology.

Venture and Mobile Zone:

Operates in mobile phones.

National Electric Company:

Does business in white goods i.e. home appliances like washing machines,

refrigerators, microwaves, and vacuum cleaners.

DIGITAL WORLD (LOCAL SAMSUNG):

Market Slogan of Digital World is Everyones invited. Its Marketing Office is in Karachi and

Sales Offices are in five major cities Lahore, Karachi, Rawalpindi, Faisalabad and Multan.

SPECIFIED FOCUSED PRODUCT (TELEVISION):

Samsung has a wide range of television for its customers in four different varieties of

television, i.e. Taunts Plasma, Taunts Projection, Plano Flat and Conventional and notebook

Coordinates everyone's efforts (particularly important as more companies try to integrate all of

their marketing activities.


3/50

LITRATURE REVIEW

A.SWOT AnalysisAnalysis of Strengths, Weaknesses, Opportunities and Threats for an organization

iscalled SWOT ANALYSIS.

B.PEST Analysis

C.Porters model

D.Functionalanalysis

E.Financial Ratio Analysis

o FinancialAnalysis

Financial ratios are calculated from one or more pieces of information from acompany's financial statements. For example, the "gross margin" is the gross profit from

operations divided by the total sales or revenues of a company, expressed in percentageterms. In isolation, a financial ratio is a useless piece of information. In context, however, a

financial ratio can give a financial analyst an excellent picture of a company's situation and

the trends that are developing.

There are different types of Financial Ratios, such as

1. Liquidity Ratios:

Which give a picture of a company's short term financial situation or solvency. It

contains

1. Current Ratio2. Quick Ratio

2. Activity Ratio:

Which use turnover measures to show how efficient a company is in its operations

and use of assets. It contain

1. Average Collection Period2. Inventory


4/50


5/50

OrganizationalAnalysis of Samsung

SWOT ANALYSISAnalysis of Strengths, Weaknesses, Opportunities and Threats for an organization

is ca lled SWOT ANALYSIS. The SWOT framework is a tool for auditing an organization and its

environment. SWOT is the first stage of planning and helps decision makers to focus on key issues.

S = strengthsW = weaknesses

O = opportunitiesT = threats.

Strengths and weaknesses in the SWOT matrix are internal factors.


6/50

Opportunities and threats in the SWOT matrix are external factors

SWOT can be used in conjunction with other tools for strategic planning, such as the Porter's Five-

Force analysis

In order to calculate SWOT analysis we have to calculate Internal Factor Evaluation (IFE) and

External Factor Evaluation (EFE).

1. Internal Factor Evaluation (IFE)2. External Factor Evaluation (EFE)

The IFE Matrix together with the EFE matrix is a strategy-formulation tool that can be utilized to

evaluate how a company is performing in regards to identified internal strengths and weaknesses of a

company. The IFE matrix method conceptually relates to the Balanced Scorecard method in some

aspects.

INTERNAL FACTOREVELUATION:

It is a strategic management tool for auditing or evaluating major strengths and weaknesses in

functional areas of a business. IFE matrix also provides a basis for identifying and evaluating

relationships among those areas. The Internal Factor Evaluation matrix or short IFE matrix is used

in strategy formulation.

STRENGTHS

SAMSUNG has the following strengths and is in more competitive position in these areas than itscompetitors. Following are the main strong points of SAMSUNG

y High brand reputation

y High R&D Capability

y Extended guarantee Service

y High loyalty

y Unique health theme

y Large market Share

y

Latest technologyy Unique quality of the picture tube

y Wide range of product line (models) product variety

y Strong financial position

y Pioneer in the Electronics world.


7/50

y Advance Features

y Superior sound quality

y Free repair and parts for one year

WEAKNESSESSAMSUNG has some weaknesses in operating the business. If SAMSUNG get control on these

weaknesses then it can become a market leader in the home appliance.

y Expensive

y sales network still undeveloped

y Lacking market Control

y market tactic Is normal

Internal Factor Environment Matrix

No Strength Weight companyresponse

score

1 High brand reputation 11 4 .44

2 High R&D Capability 10 3 .3

3 Extended guaranteeService

9 2 .18

4 High loyalty 8 4 .325 Unique health theme 4 2 .08

6 Large market Share 8 3 .24

Weakness

1 Expensive 15 4 .6

2 sales network still

undeveloped

13 2 .26

3 Lacking market Control 12 1 .12

4 market tactic Is normal 10 3 .3

Total 100 2.84


8/50

1-Very Good2-Good

3-Poor4-Very poor

The result shows that company is good in its strengths and weakness because 3 is for good

and SAMSUNG has the score of 2.84 so it is in good ife position.

EXTERNAL FACTOREVELUATION

This method is a strategic-management tool often used for assessment of current business

conditions. The EFE matrix is a good tool to visualize and prioritize the opportunities and

threats that a business is facing.

OPPORTUNITIES

SAMSUNG has opportunities for expansion the business. If Samsung work to get the they can

perform well..

y It can capture potential market

y launch new model

y Improve packaging

y Invest in R&D

y capture large market share

y Improve existing design

THREAT

SAMSUNG Company exist in very competitive market. It has many threats for the presentsituations. Company should make its policies and strategies according to these threats. So

following are the main threats

y Number of competitor increasing

y lack of distribution


9/50

y No political affiliation

y Import duties on the product

y political instability

External Factor Environment MatrixNo Opportunities Weight Company response Score

1 launch new

model15 3 .45

2 Improvepackaging

12 2 .24

3 Invest in R&D 10 4 .4

4 capture largemarket share

8 3 .24

5 Improve existingdesign

5 2 .1

Threats

1 Number ofcompetitor increasing

14 3 .42

2 lack ofdistribution

11 3 .33

3 No political affiliation 10 1 .10

4 Import duties

on the product

9 2 .18

5 y politicalinstability

6 4 .24

Total 100 2.7


10/50

1

EI MATRIX

External factorEnvironment

Internal Factor

SWOT ANALYSIS OF SAMSUNG

We observe from the above shown matrix that SWOT analysis of SAMSUNG is quite good. This

Matrix shows all the four factors in detail, Strengths, Weaknesses, Opportunities, and Threats of

SAMSUNG. The SWOT analysis shows the companys current position, so this matrix shows that

SAMSUNG is good in its position

S w

O T


11/50

1

PEST ANALYSIS

Pest analysis is a very important tool in marketing. Through Pest Analysis company comesto know about its threats and opportunities as well as its social obligations that society

expects from it. Moreover it will come to know the importance of technology in the

industry while comparing with the competitors on the technology basis. It can benchmark

itself to improve technology and its product line as well.

Pest analysis of Samsung is given as follows :

1.POLITICAL/LEGAL ENVIRONMENT:

Pakistan has been facing political instability. One government come into power, makes plans and

policies and tries carrying them out accordingly. Another government rejects these plans and goals

of the previous government and sets them on its own from a zero point again.

So the political instability causes lack in the foreign investment due to higher risk.

As the smuggling is increasing this not only affects the companys objectives but also

affects the industrys profitability as well. Government is not taking severe measures to

discourage smuggling, which is threatening the company.

Company does not have any sound platform to protest against smuggling and unfair

means. Additionally there are certain rules and regulations of the state which company has

to oblige by to remain in the business.

2.ECONOMIC ENVIRONMENT:

As for as economic conditions are concerned, the economy of Pakistan has been suffering

for the last 30 years.

As compared to the 90s when Pakistan sustained a double-digit inflation, the current inflation rate

of 3.7%, has attributed greatly to the declining trend in the prices. With lower inflation and

relatively stable economy, foreign investment is starting again in this industry. So the competition

also helps in lowering the prices.

3.SOCIAL ENVIRONMENT:

As Pakistan is a developing country, it lacks the recreational facilities for its masses. So

most of the people use TV for their entertainment. So there is potential market for

Samsung.


12/50

1

Most of the people belong to middle and lower middle class, so the life style of these

people are similar and they share common preferences and interest.

So 14" TV is the best product that has established the Samsung brand name of the Sony

and secondly the 14" is more appropriate for major population in Pakistan because it

fulfils their requirement along with economic constraints. As the economic circumstancesof these households suit to this product particularly (i.e. 14" TV only), so it is appropriate

for Samsung to concentrate on this product, keeping in mind the economic conditions of

the target market.

As Samsung has strong brand image, so the reference group can be a source of boosting up its sales.

So all the social factors like age, income, life style etc. favors Samsung 14" TV.

4.TECHNOLOGICAL ENVIRONMENT:Samsung has latest technology, due to which it has attracted the most consumers (i.e. market share

25%).

Samsung has conventionalquality due to which more natural colors are displayed. Tantus

results in more prominent colors. Plano screening has reduced the eye fatigue. PAL,

SECAM, NTSC, modes have made it possible for Samsung TV to operate in any

geographical area of the world.

All these latest technologies have made Samsung unique in the world of electronics. So

there are no such technological factors, which can destroy Samsung marketability and

brand image. Reason behind this is the research and development of Samsung. Samsung

has been investing a lot of money in the research and development to come up with

products that satisfy customers needs and wants.


13/50

1

PORTERMODEL


14/50

1

Porters five forces:

The industry-based view of strategy is underpinned by the five forces framework, firstadvocated by Michael Porter. This model consists of five forces, which are

(1) The intensity of rivalry among competitors.

(2) The threat of potential entry.(3) The bargaining power of suppliers.

(4) The bargaining power of buyers.(5) The threat of substitutes.

A key proposition is that firm performance critically depends on the

degree of competitiveness these five forces have within an industry. The stronger and

more competitive the five forces are, the less likely that firms in an industry are ableto earn above-average returns, and vice versa (Mike W.Peng,2006)

y The intensity of rivalryamongcompetitors.

There are at least six sets of conditions that will cause intense rivalry. They are

1) A big number of competitors2) Similar size of competitors

3) Infrequently purchases4) A high increasing margin of new unit capacity

5) Slow industry growth

y Threat of New Entry:

The incumbents primary weapons are entry barriers. There are at least 5 attributes associated with

high entry barriers.1) The scale-based low cost advantages.

2) The non-scale-based low cost advantages.3) Product differentiations

4) Excess capacity5) Government policy banning or discouraging entries.

y Bargaining Power of Suppliers:

There are four conditions that lead to strong bargaining power for suppliers.1) Only few firms dominate the supply industry.

2) Suppliers provide unique, differentiated products with few or no substitutes.3) The focal firm is not an important customer for suppliers

4) Suppliers can enter the focal industry by forward integration.


15/50

1

y Bargaining Power of Buyers:

There are four conditions that can give strong bargaining power to the buyers1) A small number of buyers leads to strong bargaining power2) The products do not clearly produce cost savings or add value for buyers

3) The products are standard, undifferentiated commodities4) The buyers have economic difficulties

5) The buyers can enter the focal industry through backward integration

y Threat of Substitutes:

Two areas of substitutes are particularly threatening.

1) The substitutes have superior quality and function when compared to existing products.

2) The switching costs are low

Rivalryamong Competitors:

The direct competitor of SAMSUNG is LG in electronic market . The SAMSUNG market share is much greater as

compare to LG in the mobile phone industry .The LG is market leader in the TV and SAMSUNG is still on second

number in branded tvs.The SAMSUNG is the leader and number one in latest tvs model. In window room air conditioner

LG market share in greater than SAMSUNG.

45%

25%

20%

7% 3%

DISTRIBUTION OF BRANDED TELEVISIONS

LG SAM PHL SONY PAN


16/50

1

RISK OF NEW ENTRY BY POTENTAL COMPETITORS

High Investments

With the new inventions threat for new entrants is high in this industry due to the fact that this

industry is a relative to the new devolped products so this is very attractive for foreign companies.

But in order to really make a mark in this industry, you need to have strong investment and funding

to devolep new design and latest technology. For this matter, SAMSUNG is at risk of the influx of

foreign investments in this sector.

China Products

China brands are a big threat for local and original brands. The price of china brands is low as

compared to local and foreign brands. Foreign brands have captured the market of split AC and

television. LG and Samsung are the market leader in television sector but china tvs sales increase

day by day. foreign and Local brands cant compete China brands in this sector of low price.

THE BARGAINING POWER OF THE BUYERSCompanys buyers are the people who ultimately purchase and consume its products. If there are so

many brands and products available in the market at different prices, the bargaining power of the

buyers will be high because they have many alternatives, they can demand to lower the prices. On

the other hand if there are few brands or companies in the market, then the buyers will be in a weakposition to bargain. As a result, the company can raise its prices and earn greater profits. If we see

the Pakistani industry the bargaining power of the buyers is very high because a variety of products

are available in the market at different prices. So the buyers can choose the product according to his

requirements.

Samsung target the middle class market segment And manufactures few products for upper class in

Pakistan.

THE BARGAINING POWER OF THE SUPPLIERS:


17/50

1

When Suppliers are few in the market they look like a threat. In that case, the suppliers are able to

force up the price of inputs. The after effects of that can result in the reduction in the quality of

inputs. If the suppliers of Samsung are weak then company will force the suppliers to reduce the

prices of input and demand for higher quality. If the suppliers are selling the products that have very

few substitutes and are differentiated from others, then the suppliers are always in good bargaining

position.

SUBSTITUTE PRODUCTS

Samsung products are unique in style.There is no real substitute for the products of this Samsung.

Plasma panels and lcd tv have there own attributes. Mobile phones can be substitutes for these

products, but these substitutes are more costly and cant be easily approached.

Opportunities Threats

High Low Low High

Launch new model Up gradation Illiteracy No of Competitors

Improve Packaging Capture potential market No Political affiliation Lack of distribution

Invest in R&D Increase sales promotion Import duties on the

product

Protest against smuggling

Improve existing design Improve repair service Political instability

Capture large market

share


18/50


19/50

1

o Samsung:

On the basis of the information available and ratio comparison, it can be concluded that it

is In increase in 2007 to 2008.and decrease in 2008 to 2009.but Company current ratio is

acceptable and company meets its obligation easily.

o L.G

On the basis of the information available and ratio comparison, it can be concluded that it

is In decrease in 2007 to 2008.and increase in 2008 to 2009.but Company current ratio is

acceptable and company meets its obligation easily.

o COMPARISION

Samsung currentratio is grater than L.G. and company current ratio is acceptable. Company

meets its obligation easily as compare to L.G. the Samsung current ratio is for three years

is average 1.52 and the leading competitor of Samsung electronics is LG which has average1.14.the Samsung current ratio is greater than its competitor .so the higher the current

ratio the higher the ability of the firm to pay its bills .the median ratio for industry is 2.1

1.41

1.52

1.41

1.19

1.04

1.15

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

2009 2008 2007

SAMSUNG

L.G


20/50

2

2. Quick Ratio

Formula Quick ratio = (Current Assets-Inventory)/Current Liabilities.

Purpose Acid Test Ratio or Quick Ratio shows a firms ability to meet currentliabilities with its most liquid assets.

Computation:

Company Year Value Current

Ratio

SAMSUNG 2009 (41901014-7968803)/29795976 1.14

2008 (48968556-9492607)/32207070 1.23

2007 (41901014-7968803)/29795976 1.14

LG(lifes good) 2009 (23812040-6614937)/19973816 0.862008 (22274137-6448628)/20400497 0.78

2007 (17326382-5708260)/15078249 0.86

QUICQ RATIO (2007-2009)


21/50

2

o Samsung:On the basis of the information available and ratio comparison, it can be concluded that it

is Increased in 2007 to 2008.and decrease in 2008 to 2009.but Company quick ratio isacceptable and company meets its obligation easily.

o L.GOn the basis of the information available and ratio comparison, it can be concluded that itis Decrease in 2007 to 2008.and increase in 2008 to 2009.but company quick ratio is less

than acceptable value and company face some problem to meets its obligation easily.

o COMPARISONGraph shows the Samsung company quick ratio is grater than L.G .and Samsung meet its

current liabilities easily. And L.G current ratio is less than acceptable value 1:1.andCompany face some problem to meet its obligation.


22/50

2

3. Average Collection Period

Formula Average Collection Period= Accounts Receivable (365) /Annual credit Sales.

purpose this tells us the average number of days for which receivables are outstanding beforebeing collected.

Computation:

Company Year Value A.C.P

SAMSUNG 2009 (19140558)(365)/138993671 50.26

2008 (13602258)(365)/121294319 40.93

2007 (12114275)(365)/98507817 44.89

LG(lifes good) 2009 (982946)(365)/72952346 4.92

2008 (1171939)(365)/63280391 6.76

2007 (1112961)(365)/53426741 7.60

A.C.P (2007-2009)


23/50

2

EXPLANATION

Samsung

On the basis of the information available and average collection period comparison, it can be

concluded that it is Decrease in 2007 to 2008.and increase in 2008 to 2009.It shows company

convert its receivable into cash in 50.6 days.

L.G

On the basis of the information available and average collection period Comparison,it can be concluded that it is Decrease in 2007 to 2008.and decrease in 2008 to 2009.It shows

company convert its receivable into cash in 4.92 days.

ComparisonThe LG average collecting period is extremely very good as compare to the Samsung.


24/50

2

4. INVENTORY TURNOVER RATIO

Formula

Inventory Turnover Ratio = CGS/Inventory

Purpose;

The ratio tells us how many times inventory is turned over into receivables through

sales during the year

Computation:

Company Year Value I.T.O Ratio

SAMSUNG 2009 98445032/7968803 8.08

2008 89762355/9492607 9.45

2007 98445053/9981064 9.82

LG(lifes good) 2009 55997877/6614937 8.46

2008 47707805/6448628 9.81

2007 41351661/5708260 9.36

INVENTORY TURNOVER RATIO (2007-2009)


25/50

2

Samsung:On the basis of the information available and ratio comparison, it can be concluded that it did not

show a low change of decreasing from 2007-2008, and in 2008-2009 it can conclude that theinventory turnover ratio is decrease thus implies the company was able to maintain the level ofinventory.

L.G

On the basis of the information available and ratio comparison, it can be concluded that it did notshow a significant change of increasing `from 2007-2008, and in 2008-2009 it can conclude that theinventory turnover ratio is decrease thus implies the company was able to maintain the level of

inventory.

ComparisonL.G inventory turn over ratio is more as compare to Samsung.and its sales are more than Samsung.


26/50

2

y Financialleverage ratios

5. Debt Ratio

formula Debt Ratio = Total Debt /Total Assets

Purpose Current Ratio shows a firms ability to meet current liabilities with its currentassets.

Computation:

Company Year Value Debt ratio

SAMSUNG 2009 14286528/118281488 0.12

2008 17063967/105300650 0.16

2007 14283975/93375136 0.15

LG(lifes good) 2009 6196900/44756799 0.16

2008 9692610/42372289 0.23


27/50

2

2007 7137875/34584427 0.12

DEBT RATIO (2007-2009)

SamsungCompany debt ratio is increase in 2007-2008 and decrease in 2008-2009.because the company total

debts are decrease in 2009.company position is good because the acceptable value of debt ratio is1:1 or less than 1.

L.G

Company debt ratio is increase in 2007-2008 and decrease in 2008-2009.becauseThe company total debts are decrease in 2009.Company position is good because the acceptable

value of debt ratio is 1:1 or less than 1.

Comparison:

Samsung debt ratio is low as compare to L.G.and Samsung and L.G has good debt ratio.And debt ratio is less than 1


28/50

2

6.Debt-to-Equity Ratio

Formula Debt-to-Equity Ratio=Total Debt /Total Equity

Purpose The ratio tells us that creditors are providingwhich amount ofFinancing for each 1 currency unit being provided by share holders.

Computation:

Company Year Value D.T.E

SAMSUNG 2009 14286528/66827702 0.21

2008 17063967/58117009 0.29

2007 14283975/51665687 0.28

LG(lifes good) 2009 7220498/17233965 0.42

2008 9692610/14792572 0.66

2007 7137375/12827954 0.56

DEBT TO EQUITY (2007-2009)


29/50

2

EXPLANATION

Samsung:On the basis of the information available and ratio comparison, it can be concluded that it

increased in the year 2007-08 due to decrease in shareholder funds and in 2008 to 2009 ratio is

decrease due to shareholder is increase.

L.GOn the basis of the information available and ratio comparison, it can be concluded that it increasedin the year 2007-08 due to decrease in shareholder funds and in 2008 to 2009 ratio is decrease due

to shareholder is increase.

Comparison

`We can see that L.G has a higher proportion of debt in total long term funds available as

Compared to Samsung.


30/50

3

y Profitability ratios

7. Gross Profit Margin %

Formula Gross Profit Margin % =Gross Profit / Sales

Purpose the gross profit marginis the the measure of firms profitability ofsales

after takingamount ofgoodssold.

Computation:Company Year Value G.P.M

SAMSUNG 2009 40048639/138993671 0.29

2008 31531964/121294319 0.26

2007 27626905/98507817 0.28

LG(lifes good) 2009 16954469/72952346 0.23

2008 15573306/63280391 0.24

2007 12075080/53426741 0.22


31/50

3

GROSS PROFIT MARGIN (2007-2009)

EXPLANATION

Samsung

On the basis of the information available and ratio comparison, it can be concluded that it was

decreasing consistently as the profit was decreasing and the sales was increasing. In 2007 to 2008company gross profit is decreased and in 2008 to 2009 is increased.

L.G

On the basis of the information available and ratio comparison, it can be concluded that it wasdecreasing consistently as the profit was decreasing and the sales was increasing. In 2007 to 2008

company gross profit is decreased and in 2008 to 2009 is increased.

Comparison

L.G gross profit margin is high as compare to Samsung.

0.153

0.1

0.15

0.17

0.07

0.16

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

0.18

2009 2008 2007

SAMSUNG

LG


32/50

3

8. Net Profit Margin

Formula Net Profit Margin = Net Income/SalesPurpose The Net profit margin is the measure of firms profitability of

sales after taking amount of all expenses and income taxes. It tells us aFirms net income per dollar of sales

Computation

Company Year Value N.P.M

SAMSUNG 2009 10229921/138993671 0.07

2008 5890214/121294319 0.05

2007

7922981/985078

17

0.08

LG(lifes good) 2009 2790814/72952346 0.03

2008 1138872/63280391 0.01

2007 2068698/53426741 0.03

NET PROFIT MARGIN (2007-2009)


33/50

3

EXPLANATION

SamsungCompany net profit margin is decrees in 2007-2008 and in 2008-2009 is increase. Company sales

are increase and company profit is increase in 2009.

L.G

Company net profit margin is decrees in 2007-2008 and in 2008-2009 is increase. Company salesare increase and company profit is increase in 2009.

Compression

Samsung profit is more as compare to L.G. and its sales and profit is high as compare to L.G

0

0.01

0.02

0.03

0.04

0.05

0.06

0.07

0.08

0.09

2009 2008 2007

SAMSUNG

LG


34/50

3

9. Return onAssets (ROA)

Formula Return onAssets (ROA) = N.P.A.T /TotalAssets

Purpose Thisshows the rate of returnininvestments

Computation:

Company Year Value R.O.A

SAMSUNG 2009 12565050/118281488 0.11

2008 6577775/105300650 0.05

2007 9632873/93375136 0.10

LG(lifes good) 2009 3442130/44756799 0.07

2008 1619027/42372289 0.03

2007 2378901/34584427 0.07


35/50

3

RETURN ON ASETS (2007-2009)

EXPLANATION

SamsungThere is a decrease in the return on asset in 2007-2008 as compared to in2008-2009. Thecompany net profits have increase in 2009 as compared to in 2008 and company return on assets is

increase in 2009.

L.G

There is a decrease in the return on asset in 2007-2008 as compared to in2008-2009. Thecompany total net profits have increase in 2009 as compared to in 2008 and company return on

equity is increase in 2009.

ComparisonSamsun return on equity is more as compare to L.G. because its net profit is more as compare to

L.G


36/50

3

10.Return onEquity (ROE)

Formula Return on Equity (ROE) = Net Income / Stockholders' EquityPurpose Measure of overall firm performance is return on equity.

Computation:

Company Year Value R.O.E

SAMSUNG 2009 10229921/66827702 0.153

2008 5890214/58117009 0.10

2007 7922981/51665687 0.15

LG(lifes good) 2009 2790814/17233965 0.17

2008 1138872/14792572 0.07

2007 2068698/12827951 0.16

RETURN ON EQUITY


37/50

3

EXPLANATION

Samsung

There is a decrease in the return on equity in 2008 as compared to in 2009 return on equity

is increase. The company average total equity has increased from 2009 and has resulted in increase

because company net income is increase as compare to 2008.

L.G

There is a decrease in the return on equity in 2008 as compared to in 2009 return on equityis increase. The company average total equity has increased from 2009 and has resulted in increase

because company net income is increase as compare to 2008.

Comparison

L.G return on equity is more as compare to Samsung.


38/50

3

4Ps of Marketing Mix

A "Marketing Mix" is the set of controllable, tactical marketing tools that workTogether to achieve company's objectives, they are: product, price, promotion and place. Although

some marketers have added other P's, such as personnel, packaging and physical evidence, thefundamentals of marketing typically identifies the four P's of the marketing mix as referring to:

Product: A tangible object or an intangible service that is mass produced or manufactured on a

large scale with a specific volume of units. Intangible products are often service based like thetourism industry & the hotel industry.

Typical examples of a mass produced tangible object are the motor car and the disposable razor. A

less obvious but ubiquitous mass produced service is a computer operating system.The SAMSUNGproducts are cell phones, plasma panels,lcd tvs,aircooling items, mass storage devices, anddifferent type of home appliance. Samsung Product Line comprises of:

A. Mobile Phones

B. Audio-Visual

C. IT Items


39/50

3

D. Home Appliances

E. Semiconductors

F. Compressors

G. CCTVs

A. MOBILE PHONES:

y GSM

y CDMA

y TDMA

y CORDLESS PHONE

B. AUDIO-VISUAL

y TV

y DVD Player

y Camcorder

y VCR

y Digital Set Top Box

y Digital Audio Player

y Home audio

y Portable Audio

y Note PC

y LCD TV

y Monitor and Industrial

y Small and Mediums

C. IT ITEMS:

y Notebook PCs

y Hard Disk Drive

y CD/DVD-Rom

y CD/DVD-Writer

y Monitor

y Printer


40/50

4

y Multi Function Products

y Fax

D. HOMEAPPLIANCES

y Refrigerator

y Air Conditioner

y Microwave Oven

y Washing Machine

y Vacuum Cleaner

E. SEMI CONDUCTORS

y DRAM

y Flash and Smart Media

y SRAM

y URAM

y MCP

y Graphics Memory

y Mask ROM

y System LSI

y ASIC

F. COMPRESSORS

y Recipro Compressor

y Rotatory Compressor

G. CCTVS

y Cameras

y Smart Dome Systems

y Monitors

y Network Security

y Controllers

y VCRs

y DVRs


41/50

4

Price The price is the amount a customer pays for the product. It is determined by a number of

factors including market share, competition, material costs, product identity and the customer's

perceived value of the product. The business may increase or decrease the price of product if other

stores have the same product. Price fixation is an important aspect of marketing. Pricing decisions

of a company are affected by both internal as well as external factors.

Internal Factors:

Internal factors, affecting the price of a product, are many. Cost of the product sets the floor. Anycompany would like to charge a price which covers the cost of the product and a fair rate of return.

Cost of the product means total cost i.e., fixed plus variable costs. Fixed costs do not change withthe change in volume of production up to a certain level. Variable costs change proportionately. In

the period of recession, companies continue to supply at a rate which covers variable costs and asmuch of costs as possible. The Companys marketing objective is yet another important variable for

price fixation. If it is survival, the company would stay in the market as long as it covers variablecosts fully and fixed costs partly. In case it is market leadership, a low price will be fixed initially

The internal factors that affecting the Samsung is that was his high variable cost .the Samsungresearch variable cost is very high it create special research centre in Korea

External Factors:

Besides internal factors, external factors also influence the pricing decision of a company. These

factors are called environmental factors. Nature of demand, competitors costs, price offers andgovernment policy are very important factors to be considered while fixing prices.

The relationship between price and demand should be analysed properly. No company can ignorethe costs, prices and offers of substitute items from competitors. Economic factors, like rate of

interest, state of industry (boom or recession), inflation, etc. affect the price-fixing decision. In caseof certain products, e.g. products which fulfill basic needs, government may impose price control.

Thus, it would also affect price of the product.

In Pakistan the middle class people are in majority so they want those items that Has not so costlyand the items filled there desires like costly products. Samsung Focus on this nature .for example

his mobile as unique .its competitors cost is very high and quality is slightly high like nokia. Orsome competitors have low price but quality is low.

Place Place represents the location where a product can be purchased. It is often referred to asthe distribution channel. It can include any physical store as well as virtual stores on the Internet.

Place is another important element of marketing mix. Once the goods are manufactured, packaged,priced and promoted, they must be made available to the consumers. Activities related to placing

the products are covered under this element of marketing-mix. It consists of decisions relating tochannels of distribution and physical distribution. Channels of distribution refer to the individuals

and organizations which facilitate moving the goods from manufactures to consumers. It isimportant that regular and smooth flow of goods is maintained so that products are not spoiled and

supplies are not delayed. To ensure this, various facilitating services need to be arranged liketransportation, warehousing, inventory control, and order processing. These are known as


42/50

4

components of physical distribution Samsung focus the place .it place its items in all big stores.Samsung introduces a new place program its open its sales centre in all the big customer care

centers of the distribution countries .for example in Mobile Zone service centre Samsung open itssales center.

Promotion Promotion refers to using methods of communication with two objectives : (i)informing the existing and potential consumers about a product, and (2) to persuade consumers to

buy the product. It is an important element of marketing mix. In the absence of communication,consumers may not be aware of the product and its potential to satisfy their needs and desires.

Various tools of communication form part ofpromotion mix

There are four components of promotion-mix i.e., advertising, personal selling, sales promotion and

public relations. Thus, promotion mix is a companys total communication programs which consistof different blends of its components.

Advertising:

Advertising is an impersonal form of communication for which theseller pays in order to promotea physical product or service. It maybe in print form as in newspapers and magazines, or in audioform ason the radio and other similar methods, or in audio-visual forms as on

the Television, cinema screen, etc Samsung use new advertising techniques. For example Samsunguses buses advertisement now days.

Personalselling:

Personal selling is a personal communication with one or more prospective buyers for the purpose

of selling a product or service. These days, personal selling is considered to be the most effective

tool because of various characteristics which are listed below l it involves personal interaction;hence feed back is received immediately

Sales Promotion

Sales promotion means the use of short-term incentives which are designed to encourage immediate

purchase of a product or service by the buyer. It may includes offer of discounts, free gifts, freesample, coupons, demonstration, store display, etc

Publicity:

Publicity takes place when a favorable presentation is made through mass media about a product orservice. People believe more on such news than in advertising. It covers people who do not

entertain personal selling and sales promotion approaches. It is a non-paid form of communicationbut sometimes it is not regarded as a promotional tool within the reach of a company.


43/50

4

BCGMATRIXUsing the Boston Consulting Group(BCG) approach, a company classifies

all its SBUs according to the growth share matrix portfolio planning method that evaluates a

companys strategic business units in terms of their market growth rate and relative market share.

The BCG matrix method is based on the product life cycle theory that can be used to determine

what priorities should be given in the product portfolio of a business unit. To ensure long-term value

creation, a company should have a portfolio of products that contains both high-growth products in

need of cash inputs and low-growth products that generate a lot of cash. It has 2 dimensions: market

share and market growth. The basic idea behind it is that the bigger the market share a product has

or the faster the product's market grows the better it is for the company.SBUs are classified as stars,cash cows, question mark and dogs.

BCGMATRIX FOR SAMSUNG


44/50

4

Stars

Stars are high growth, high market share businesses or products. In Samsung

Company, their Plasma panels is its star position. Those products have large number of

sales and they have high growth and good position.

Cash cowsCash Cows are low growth, high market share businesses or products. In Samsung

Company, their optical storage is its cash cows position. They generate large number of revenue for

company. They are at stable position.


45/50


46/50

4

Growth stage also called market acceptance stage.In this stage sales volume

and profits rises and competitors enter the market. At the end of growth stage,

profit starts to decline. The SAMSUNG dual sim mobile has very high growth rate

y MATURITY:

During Maturity stage, sales continuous to increase at decreasing rate. When sales level off,

profits of both producer and middlemen declines. The primary reason is intense price competition.

The lcd or plasma TV is in maturity stage now a days.

y DECLINE:

. In this stage profit and sales volume of the product both decrease rapidly and

finally its life comes to an end.


47/50

4

Every product has its own life cycle, and each stage in product's life-cycle represents a

different profile of risk and return. In general, a company should maintain a balancedportfolio of

products. Having a balanced product portfolio includes both high-growth products as well as low-

growth products.

A high-growth product is for example a new one that we are trying to get to some market. It

takes some effort and resources to market it, to build distribution channels, and to build sales

infrastructure, but it is a product that is expected to bring the gold in the future.

they are getting, and the price does not change much either. This product has only limited

budget for marketing. There is the milking cow that brings in the constant flow of cash.

CONCLUSION

Samsung a market leader in Electronic has installed latest process

technology to produce high quality products. In order to run and manage such

sophisticated plant, they have employed large number of professionals in all fields

i.e. Engineering, Marketing, Finance/Accounts, General Management &

Administrations. To manage and motivate all these people has highly qualified team

in every Department. As a Electronic market tough competition Samsung also face

tough competition but it meet all the challenges effectively.

RECOMMENDATIONS


48/50

4

y The company should increase its sales centre.

y It should be increase in reliability in products

y It should be decrease average collection period to need it expenses rapidly

y Changing its designy Take part in social activities

REFERANCES

y Interview of Mr. Kaleem Khan (Sales Manager, Samsung Temple road, Abid

Market)

y Interview of Mr. Mohammad Akmal (Incharge, Samsung Cavalry Display

Center).

y Interview of Mr. Mohammad Bilal (Sales Executive, Samsung Cavalry Display

Center).

y www.samsung.com

y www.google.com


49/50

4


50/50

print out 2

Documents

Transcript of print out 2