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RESEARCH METHODOLOGY
PROJECT REPORT
Akash gulati (09) Abhishek kumar (05)Abhishek Mehrotra (06)Bhabani Prasad dehuri (14)
4/13/2012
INTRODUCTION
SAMSUNG MOBILES
Although its line of sparkling smartphones seems fresh and new, Samsung Mobile has been around since 1983. Samsung Mobile's parent company, Samsung Electronics, was founded in 1969. Once known for its televisions and other home appliances, Samsung recently eclipsed heavyweights Sony Ericsson and Motorola as one of the biggest cell phone manufacturers in the world. A Rough Beginning 1. Samsung Mobile's first ever offering was a car phone it introduced in 1986. Because of poor reception and sales, manufacturing was halted. From this point until the early 1990s, Samsung Mobile would introduce mobile phone models, but sales were low because demand was low. The designs of these early attempts were bulky, and reception was poor. With Motorola holding a sizable advantage over the rest of a fledgling mobile phone field, Samsung nearly dropped its Mobile division. Turning Point 2. In 1993, Samsung Mobile released the SH-700 series, which boasted a smaller and sleeker design and better sound quality. With a better product and a more aggressive marketing campaign, Samsung would reclaim more than half the mobile phone market share in Korea from Motorola. The Global Market 3. Samsung cell phones found its way into American hands for the first time in 1996, when they partnered with Sprint on a line of sleek and compact phones. A few short years later, South America and Japan were enjoying the high-end design of Samsung Mobile phones. Samsung Mobile Today
4. In early 2009, Samsung Mobile's global market share stood at more than 17 percent, second only to Nokia. In the 3rd quarter of 2008, for the first time in its history, Samsung Mobile shipped more than 50 million handsets in a quarter--despite a global recession. Samsung Facts 5. Lee Byung-chull founded Samsung Group in 1938, naming the startup company a Korean word which translates to "three stars" in English. Samsung Mobile enjoys agreements with major cell phone service providers such as T-Mobile, AT&T, Sprint and Verizon Wireless. In early 2009, Samsung Mobile and T-Mobile introduced the Memoir, a cell phone with a "Best in Class" 8-Megapixel camera.
WHY
The study wishes to find out the Reason for falling market share of Nokia as compared to Samsung .
COMPANY NOKIA SAMSUNG 3Q08 UNITS 117461 71671.8 3Q08 MARKET SHARE 28.20% 17.20% 3Q09 UNITS 113466.2 60627.7 3Q09 MARKET SHARE 36.7 19.60%
Nokias market share has dropped to 25 percent, pretty on par with its market share in 1997. Between Q1 2010 and Q1 2011, Nokias share fell 5.5 percentage points. While Nokias share was plummeting, worldwide mobile devices sales jumped 19 percent year-over-year.
WHAT
An analytical study to find out the downfall in the sales volume of Nokia as compared to Samsung Nokia sold 117.5 million units, compared to 113 million the year before, giving it a market share of 28.2 percent, a decline of nearly eight percent over the same quarter last year. Through this research Nokia wants to find out the reason for its falling market share by considering following Variables.
OBJECTIVES
The research will find out the possible reasons for the downfall of its market share as compared to Samsung.This research may also help Nokia to realize its areas of concentration and make segment for ultimately solving the problem. By this research Nokia may also be able to find the possible solution for the falling market share and take necessary actions. By conducting this research Nokia may also be able to increase and sustain it leadership in Mobile Segment.
VARIABLES
Independent= COGS DEPRICIATION GROSS INCOM NON OPERATING INCOME EQUITY IN AFFILIATES INCOME TAX EPS EPC NET INCOME EBI & TDA Dependent=Market Share
2008
2009
2010
2011
Sales/Revenue
51.06B
50.71B
40.98B
42.45B
38.66B
Cost of Goods Sold (COGS) incl. D&A COGS excluding D&A Depreciation & Amortization Expense Depreciation
34.34B
34.26B
29.09B
30.98B
27.34B
33.13B
32.64B
27.3B
29.21B
25.78B
1.21B
1.62B
1.78B
1.77B
1.56B
579M
723M
603M
599M
894M
1.18B
1.17B
16.46B
11.9B
11.47B
11.32B
2007
2008
2009
2010
2011
SG&A Expense Research & Development Other SG&A Other Operating Expense Unusual Expense EBIT after Unusual Expense Non Operating Income/Expense
9.57B
10.12B
9.32B
9.24B
4.69B
5.14B
4.97B
4.96B
4.89B
4.97B
4.35B
4.28B
218M
417M
236M
240M
(626M)
1.47B
1.83B
520M
626M
(1.47B)
(1.83B)
(520M)
371M
342M
562M
429M
221M
353M
101M
138M
44M
6M
30M
2007
2008
2009
2010
2011
43M
185M
243M
254M
102M
43M
185M
243M
254M
102M
Interest Capitalized 0 Pretax Income Income Tax Income Tax Current Domestic Income Tax Current Foreign 8.27B 1.52B
0 4.97B 1.08B
0 962M 702M
0 1.79B 443M
(1.18B) 290M
2.21B
1.51B
736M
798M
(433M)
(34M)
(355M)
2007
2008
2009
2010
2011
0 0
0 1M
(23M)
Other After Tax Income 0 (Expense) Consolidated Net Income Minority Interest Expense Net Income Extraordinaries & Discontinued Operations Extra Items & Gain/Loss Sale Of Assets
6.75B
3.89B
260M
1.34B
(1.49B)
(459M)
(99M)
(631M)
(507M)
(324M)
7.21B
3.99B
891M
1.85B
(1.16B)
2007
2008
2009
2010
2011
Cumulative Effect Accounting Chg Discontinued Operations Net Income After Extraordinaries Preferred Dividends Net Income Available to Common EPS (Basic) Basic Shares Outstanding EPS (Diluted)
7.21B
3.99B
891M
1.85B
(1.16B)
7.21B
3.99B
891M
1.85B
(1.16B)
1.85
1.07
0.24
0.50
(0.31)
3.89B
3.74B
3.71B
3.71B
3.71B
1.83
1.05
0.24
0.50
(0.31)
2007
2008
2009
2010
2011
3.93B
3.78B
3.72B
3.71B
3.71B
8.14B
7.54B
4.12B
3.76B
268M
152.35B
144.49B
278.76B
465.79B
78.1B
101.77B
98.79B
195.39B
335.4B
77.37B
100.96B
97.81 B
194.39B
333B
733.12M
808.25M
974.46M
1B
2.4B
681.26M
746.47M
901.85M
905.14M
1.56B
Amortization of 51.86M Intangibles Gross Income 40.12B 2007 SG&A Expense 9.46B
61.78M
72.61M
97.2M
836.61M
2008
2009
2010
2011
3.71B
9.35B
8.37B
12.94B 15.96B
5.75B
10.89B
12.71B
26.3B 45.65B
Unusual Expense
96.26M
514.08M
60.81M
(417.51M)
(238.26M )
EBIT after Unusual Expense Non Operating Income/Expense Non-Operating Interest Income Equity in Affiliates (Pretax) Interest Expense Gross Interest Expense
(96.26M)
(514.08M)
(60.81M)
417.51M
238.26M
841.14M
519.99M
478.25M
104.4M
1.73B
828.01M
1.4B
362.14M
313.89M
701.72M
1.21M
10.44M
2.17M
3.56M
30.98M
1.21M
10.44M
2.17M
3.56M
30.98M
2008
2009
2010
2011
32.23B 3.31B
31.74B 3.18B
25.4B 2.78B
44.96B 5.45B
71.43B 9.12B
Income Tax 3.19B Current Domestic Income Tax Current Foreign Income Tax Deferred Domestic Income Tax Deferred Foreign Income Tax Credits Equity in Affiliates Other After Tax Income (Expense)
3.59B
3.29B
6.99B
11.63B
125.91M
(410.26M)
(506.52M)
(1.54B) (2.5B)
(6.15M)
(3.89M)
(3.96M)
2008
2009
2010
2011
28.92B
28.55B
22.61B
39.51B
62.3B
(21.15M)
(82.82M)
5.51M
(18.76M)
323.25M
28.94B
28.64B
22.61B
39.53B
61.98B
Extraordinaries & Discontinued 0 Operations Extra Items & Gain/Loss Sale Of Assets Cumulative Effect Accountin g Chg Discontinued Operations Net Income After Extraordinaries
28.94B
28.64B
22.61B
39.53B
61.98B
2007 Preferred Dividends Net Income Available to Common EPS (Basic) Basic Shares Outstanding EPS (Diluted) Diluted Shares Outstanding EBITDA 0
2008 0
2009 0
2010 0
2011 0
28.94B
28.64B
22.61B
39.53B
61.98B
33.54
32.80
26.04
46.18
73.32
862.76M
873.02M
868.07M
856M
845.32M
33.54
31.65
25.56
45.61
71.91
86.6B
90.74B
88.66B
86.71B
86.85B
31.39B
31.15B
25.6B
45.13B
71.19B
ANALYSIS(NOKIA)
ANALYSIS(SAMSUNG)
INTERPRETATION
From the above analysis of NOKIA and SAMSUNG we can say that there exist a correlation between Independent and dependent variable as follows :
FOR NOKIA :
1.market share and COGS had a positive correlation as there level of significance is 0.071. 2.market share and eqity in affiliates had a positive correlation as level of significance is 0.068. 3.market share and Gross income had a positive correlation as there level of significance is 0.111. 4.Market share and Income tax had a positive correlation as there level of significance is 0.200. 5.Market share and EPS had a positive correlation as there level of significance is 0.007. 6.Market share and Net income had a positive correlation as there level of significance is 0.0001.
7.Market share and EPI had a positive correlation as there level of significance is 0.089.
FOR SAMSUNG:
1.market share and COGS had a positive correlation as there level of significance is 0.629. 2.market share and eqity in affiliates had a positive correlation as level of significance is 0.04. 3.market share and Gross income had a positive correlation as there level of significance is 0.579. 4.Market share and Income tax had a positive correlation as there level of significance is 0.688. 5.Market share and EPS had a positive correlation as there level of significance is 0.727. 6.Market share and Net income had a positive correlation as there level of significance is 0.707. 7.Market share and EPI had a positive correlation as there level of significance is 0.718.
FINDINGS
1.From the above correlation we can say that NOKIA market share is declining on the basis of COGS as the correlation is 0.071 and on the other hand SAMSUNG is catching up fast against NOKIA as the level of significance on the basis of correlation is 0.629. 2. From the above correlation we can say that NOKIA market share is still on the better half on the basis of equity as the correlation is 0.068 and on the other hand SAMSUNG level of significance on the basis of correlation is 0.04. 3.From the above correlation we can say that NOKIA market share is declining on the basis of GROSS INCOME as the correlation is 0.111 and on the other hand SAMSUNG is catching up fast against NOKIA as the level of significance on the basis of correlation is 0.579. 4. From the above correlation we can say that NOKIA market share is declining on the basis of INCOME TAX as the correlation is 0.200 and on the other hand SAMSUNG is catching up fast against NOKIA as the level of significance on the basis of correlation is 0.579.
5. From the above correlation we can say that NOKIA market share is declining on the basis of EPS as the correlation is 0.007 and on the other hand SAMSUNG is better against NOKIA as the level of significance on the basis of correlation is 0.727. 6. From the above correlation we can say that NOKIA market share is declining on the basis of NET INCOME as the correlation is 0.001 and on the other hand SAMSUNG is accelerating against NOKIA as the level of significance on the basis of correlation is 0.707. 7. From the above correlation we can say that NOKIA market share is declining on the basis of EPI as the correlation is 0.089. and on the other hand SAMSUNG position is improving against NOKIA as the level of significance on the basis of correlation is 0.718.
SUGGESTIONS
1.Nokia should go for advancement in technology with a low price product as in this competitive market as its market share is falling continuously. 2.Nokia should come out with improve quality product. 3.Nokia should plan for optimum utilization of resources to reduce its expenses in various fields. 4.Nokia should plan for much better operating cycle/cash conversion cycle/inventory management. 5.Nokia should observe the competitive market strategies adopted by SAMSUNG so as to increase its market share and profitability level. 6.Nokia should aim for negative working capital.
CONCLUSION
NECESSITY IS MOTHER OF INVENTION this is true everywhere.In the study first of all we tried to find out the causes of the decrease in the market share of NOKIA.We got the answer after analyzing last few years market structure and companys income statement that demand of NOKIAs product is decreasing and its competitor Samsung is gaining fast in the race and so we gave suggestions to improve its market stake and also to improve its profitability to regain its position in the market.
BIBLIOGRAPHY
1.Moneymantra.com 2.Financialguru.com 3.Google.com 4.Moneycontrol.com 5.Relevant newspaper and articles. 6.Investopedia.com 7.Nokia.in 8.Samsungmobile.in 9.indiatimes.com