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

2

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

3

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.”

5

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

6

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)

7

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.

8

2. ORGANIZATION

Apple Inc.

1.1 Organizational Structure

1.2 Geographical footprints –

Headquarters

1 Infinite Loop

Cupertino, CA 95014

United States.

9

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

10

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.

11

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

12

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

13

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

14

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

16

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

17

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

20

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.

21

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.

22

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

23

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.

24

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

26

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

27

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

30

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.

31

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:

32

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

33

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.

35

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

36

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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