Samsung Electronics Share of Revenue

Samsung Electronics Share of Revenue
Executive Summary
Samsung is one of the leading electronic companies in the world. It was founded in South Korea in 1938 by Lee Byung-Chull, and over the years, it has diversified and spread to all parts of the world. It is a long-time producer of electronics such as semiconductors, media devices such as televisions, mobile phones and cameras, memory cards, and home appliances such as fridges. Ajami & Goddard (2014) explain that over time, the company has expanded worldwide to be among the leading electronic instruments and a source of employment for hundreds of thousands of people across the globe. The company operates in Korean won; therefore, all the accounting records are done in Korean won. Foreign operations and currency issues play a significant role in the day-to-day growth and work of Samsung as a company.
Table of ContentsTOC \o "1-3" \h \u Executive Summary PAGEREF _Toc30143 \h 2Introduction PAGEREF _Toc5916 \h 2Geographical Area PAGEREF _Toc17896 \h 3Foreign revenue PAGEREF _Toc5643 \h 4Distribution Change PAGEREF _Toc4225 \h 6Sales Revenue Fluctuation PAGEREF _Toc7984 \h 8Diversity and location of foreign operations PAGEREF _Toc31968 \h 14Risk management strategies PAGEREF _Toc31428 \h 14Consistency of the company's translation method PAGEREF _Toc24498 \h 14Conclusion PAGEREF _Toc27337 \h 15
Introduction
Foreign operations and foreign currency risks refer to the international transaction losses that can be incurred concerning the currency fluctuations in the international currency market. It has numerous effects on the company in considering whether it operates domestically or internationally. Developments such as cash flows are affected since the foreign transaction represents the known cash flows and future. When the currency becomes weaker or more robust, it affects the contributions of the Country's deficit and supply of trade with time. Therefore, this exposure is very significant to Samsung as a company because if it is not protected from the possible changes in the foreign exchange rates, it can lead to a low profit, losses, and an inability to meet its target.
Geographical Area
Other than the company's headquarters at Gangnam station area of Seoul in South Korea, with time, the company has grown to conduct its business in more than 74 countries globally. The company has expanded manufacturing centers outside South Korea in countries such as Xi'an, China, which produces chip fabrication. In India, Suzhou Industrial Park in China also makes semiconductors, and another center in Austin, Texas, in the United States of America, produces chip fabrication and many more. Among the leading market countries of Samsung is India, which has a giant Samsung mobile factory based on the unit of production capacity and is also among the leading in the company's product usage. Because of the company's diverse production of devices, its primary target market is typically users between the age of 15 to 45, who are usually lovers of trends in lifestyle that lead to heavy consumption of televisions and other media devices. This year's study shows that the Samsung mobile phones market in South Korea was about 65.9 percent, followed by countries such as Afghanistan and China. It has sold to more than 69 million phone users around the globe. This implies that about 3 out of 10 users worldwide use Samsung phones. This represents its market share in the universe and how well it has promoted its market to every part of the globe.
Foreign revenue
This refers to the total percentage of income received concerning its product and services from outside countries or regions. Samsung has always remained the leader in smartphone shipments to foreign areas and other producers. In 2021, the company increased its foreign revenue percentage by making 69.4 million U.S dollar units. In a year, the company generates close to 21.9 billion U.S dollars as foreign revenue through the export of semiconductors only. This is the most significant segment of revenue generator from the foreign regions, followed by segments such as mobile phones and other panel display business that contributes to substantial total revenue. The company makes a profit of about 70% of the total income profit from foreign regions. It deals with U.S dollars in its big chip business but the revenue reports are converted into Korean won. The company, in the last year, managed to get 29.3 trillion won revenue from its mobile and network foreign business. This translated to about 2.6 trillion won profit in its operations for the second quarter of the year. The diagram below shows Samsung's share of foreign revenue from various regions for the last ten years.
Samsung Electronics Share of Revenue from 2011 to 2021, by region
Year North Europe China Korea Asia Others
South
America
2021 35% 18% 16% 16% 15% -
2020 33% 19% 16% 16% 16% -
2019 32% 19% 17% 15% 18% -
2018 34% 18% 18% 14% 17% -
2017 34% 19% 16% 13% 18% -
2016 34% 19% 18% 10% 19% -
2015 34% 19% 15% 10% 22% -
2014 33% 21% 16% 10% - 20%
2013 30% 23% 18% 10% - 19%
2012 29% 25% 14% 14% - 18%
2011 29% 24% 14% 16% - 17%
In consideration of foreign countries' Samsung revenue, The hard drives, one of the products, managed to get more than 9.6% foreign revenue return in the past year. These are products that are heavily sold to Seagate and other laptop users across the globe. This was attained as the company started focusing on selling both internal and external hard disks across the world with well-planned marketing strategies. The company has achieved significant foreign revenue by selling televisions to other regions such as Asia, Africa, and Europe of more than 40 million flat panel televisions, more than 2 million 3D televisions, and internet-enabled televisions that enable access to YouTube and other services; which puts the company at a better position to compete with brands such as LG. Another foreign revenue source of more than 10% is ti-zens. The company produces intelligent televisions through the incorporation of the operating system that is made from the open source Linux which is based on the Ti-zen operating system. Through such, Samsung has brought the Apple television application that was formally called iTunes movies and television shows. This product has gained Samsung as the company a lot of foreign income. As it stands, these are part of the products that generate a good income from foreign regions for Samsung company. Generally, about 18 percent of the company's sales were from Europe in the year 2021. About 34 percent was generated from America, and nearly 17 percent was generated from China. Therefore, the company can make enough profit that enables it to pay its workers across the globe, more than 280 thousand people, run its operations and make a profit.
Distribution Change
The marketing and distribution of Samsung products have changed over the last five years to meet their sales targets. In such a competitive electronic industry, Samsung had to develop innovative strategies that could upscale their product distribution easily to all parts of the globe. First, they have tried to meet users' needs by producing better-upgraded devices like smartphones daily. In 2012, Samsung introduced a windows phone with significant segments to reach a broader range of targeted buyers. As well, this was to fit with the pace of their competitors. For example, the phone had good features such as Galaxy music that suited those interested in listening to good sounds of music. Then, the company had to develop good distribution strategies to ensure that the product reaches the customers. Since then, the company has distributed the products in several ways to get a wide range of markets. The company has employed dealers who handle accounts and sells the company's products to consumers and retailers. The buyers are allowed to check the products in showrooms where they can comfortably choose what products suit their interests. Other times, the company has decided to distribute its products using a single channel sub-company responsible for ensuring the products get to the market. Typically, this consideration is territorial. Secondly, the company has its website. The customers can select and put the order of the items they find suitable. This allows customers to buy the company's devices without struggle. As well, the company can get to know about the customers who do not get to reach the dealers.
Thirdly, as per Jung (2014), the company has employed the strategy of promotion for the last five years to reach more buyers. This is because of the great competition from other leading companies that produce the same devices, such as LG and Huawei. To get along with the competition, Samsung has been doing advertisements through media and social media platforms. Sometimes, the budget for their advertisements is enormous. In the United States America the last year, 2019, Samsung used about 1.9 U.S dollars for advertising alone. This is what the company uses for most countries to maintain their market and improve it.
In those advertisements, Samsung uses known celebrities to help push the company's products. These celebrities demand huge payments as well. Other times, the company does a pricing strategy to increase customer demand. Such implementations happen when the company introduces new products, such as mobile phones. The company sets a price for the device until the competitors launch similar products. Once that happens, Samsung reduces the cost of that device to make customers buy it as the better option in the market. This implementation also works on their products, su...