Question

Perform a Cost and Benefit Analysis for Samsung. Where would you recommend that the company should focus on cost reduction? Justify your recommendations with economics.

Answer 1

Ans

Samsung introduction

The Samsung is a South Korean multinational company headquarter in Samsung town Seoul it comprises number of affiliated business most of them are United under the Samsung brand and is the largest South Korean company Samsung was founded by Lee ye byung - chul in 1938. As it is trending company

Benifit of samsung

1 Integratedemail, Instant Messaging, and SNS support via Samsung Hub allowing for fast and easy communication between employees.$10,000

2 GoogleTalk, including a Video Calling service--allowing for video conferencing from home or at work; which could also make one-on-one meetings between employees less of a hassle. $5,000

3 Builtin security, and the ability to extend the company’s security policies onto the tablet platform allowing for a customizable, unique, reliable, and personal sense of security for ABC. $20,000C

4 Calendarand contact applications, allowing for an organized and customizable experience for every employee in the company. $3,0000

5 Access to map and other navigational tools means that the company will never have to struggle to find a specific location--say the company has a meeting at a destination they’ve never been to--the employees will be able to use their tablet to find their way without getting lost; thus saving time, and time is money.---------- $5,000

6 Accessto both WiFi and a 3G Connection means that employees will be connected to the internet at ALL times. They are not limited to a WiFi connection, allowing them to receive emails, Instant Messages, Video Calls, and even do web browsing from anywhere. This will inevitably make life much more manageable for ABC Company, especially when it’s employees are on the go $45,000

cost analysis for samsung

The Samsung Galaxy Note 7 has been withdrawn from the market after a number of the devices exploded after its launch in 2016. Our research seeks to answer three questions and proceeds as follows. Did the closed innovation of Samsung trigger the Galaxy Note 7 withdrawal? If so What are the costs and benefits of Samsung’s closed innovation? From among the qualitative inquiry methods, this study used case study research. From this research, we isolated three important implications. The first is the benefit and cost of Samsung Electronics’ closed innovation strategy. The second is the internal impact of the Galaxy Note 7 explosions on Samsung Electronics. The third is that success in open innovation strategies requires a great investment to produce strong effects

A Samsung’s Total Expenses Have Increased From $161 Billion in 2015 to $181 Billion in 2018

B Samsung’s Net Income Margins have increased from about 10% in 2015 to close to 18% in 2018, driven by soaring memory prices. However, we expect margins to decline to about 10% by 2020, as memory prices have seen a correction.

C Samsung’s Cost of Sales has increased from around $109 billion in 2015 to about $120 billion in 2018. We expect the Cost of Sales to rise to about $134 billion by 2020.

C Samsung’s Operating Expenses – which include its Selling, General & Administrative Expenses, and R&D Expenses – have increased from $45 billion in 2015 to about $48 billion in 2018. We expect expenses to rise to about $53 billion over 2020.

D Non-Operating Expenses/(Income) stood at about -$2.1 billion in 2018, driven by higher Finance Income and Lower Finance Expenses.

E Income Tax Expense has increased from $6 billion in 2015 to about $15 billion in 2018, driven by higher profitability. The company’s Effective Tax Rate has ranged from between 25% to 27.5% and we expect it to remain at current levels going forward.

Company must reduce the cost

Looking to reduce costs, Samsung will remove between twenty-five percent and thirty percent of its smartphone portfolio during 2015. The South Korean company is also looking to increase operating profits back above ten percent through the rationalisation of the product line, and the accompanying drop in the bill of materials due to the increased economy of sale of shared parts.