Real Options: Samsung
St. Petersburg University
Graduate School of Management
SAMSUNG GALAXY INVESTMENT PROJECT VALUATION USING REAL OPTIONS APPROACH
Project by the 1nd year students:
Dudnik Maxim
Fomin Maxim
Fakhritdinova Dilyara
Sinyakin Anton
Tkachenko Nikolay
St. Petersburg
2013
Content
Galaxy Investment Project Valuation
Company Description
Samsung Group is a South Korea is an international conglomerate company. It was founded by Lee Byung-chul in 1938 and became the key locomotive of South Korea economy growth. Nowadays Samsung is one of the largest electronic companies in the world: it employs 369 000 employees worldwide and reported global sales of 146 billion euros with the profit of 12 billion euros for the year of 2011.
Samsung’s key products include:
Consumer electronics (mobile phones, LCDs, microwave ovens,…)
Electronic components
Medical equipment
Precision instruments
Semiconductors
Ships
Telecommunication equipment
As for the mobile phones market, Samsung in 2009 had a strong portfolio of basic phones with rather unique formfactors: sliders, flippers, and usual monoblocks, and they helped Samsung to increase its share on the market from 12% in 2006 to 18% in 2008. But Samsung has already experience sales decline in the most developed countries due to introduction of touchscreen smartphones, Apple iPhone first of all, and think of the reaction to compete successfully.
Market Description
Worldwide mobile phone market is rapidly growing one with the sales more than 1 billion devices in 2006 and growth rate more than 10% annually. The main growth is concentrated on developing markets. But as for developed economies, market there is became stable due to high penetration of mobile devices and stable technologies. Many producers linked the future of the industry with new smartphone technology.
But actually speaking before the year 2007 smartphones were not really popular, which fact most analysts connect
Graduate School of Management
SAMSUNG GALAXY INVESTMENT PROJECT VALUATION USING REAL OPTIONS APPROACH
Project by the 1nd year students:
Dudnik Maxim
Fomin Maxim
Fakhritdinova Dilyara
Sinyakin Anton
Tkachenko Nikolay
St. Petersburg
2013
Content
Galaxy Investment Project Valuation
Company Description
Samsung Group is a South Korea is an international conglomerate company. It was founded by Lee Byung-chul in 1938 and became the key locomotive of South Korea economy growth. Nowadays Samsung is one of the largest electronic companies in the world: it employs 369 000 employees worldwide and reported global sales of 146 billion euros with the profit of 12 billion euros for the year of 2011.
Samsung’s key products include:
Consumer electronics (mobile phones, LCDs, microwave ovens,…)
Electronic components
Medical equipment
Precision instruments
Semiconductors
Ships
Telecommunication equipment
As for the mobile phones market, Samsung in 2009 had a strong portfolio of basic phones with rather unique formfactors: sliders, flippers, and usual monoblocks, and they helped Samsung to increase its share on the market from 12% in 2006 to 18% in 2008. But Samsung has already experience sales decline in the most developed countries due to introduction of touchscreen smartphones, Apple iPhone first of all, and think of the reaction to compete successfully.
Market Description
Worldwide mobile phone market is rapidly growing one with the sales more than 1 billion devices in 2006 and growth rate more than 10% annually. The main growth is concentrated on developing markets. But as for developed economies, market there is became stable due to high penetration of mobile devices and stable technologies. Many producers linked the future of the industry with new smartphone technology.
But actually speaking before the year 2007 smartphones were not really popular, which fact most analysts connect
References: 1) Brealey R.,Myers S., Principles of Corporate Finance, 10th edition,McGraw-Hill Higher Education,2010,pp.575. 2) Samsung company 2009 report. [Online] // Samsung, 2009. – Samsung Corporation. http://www.samsung.com/us/aboutsamsung/corporateprofile/download/2009_annual_rpt.pdf 3) Samsung company 2010 report. [Online] // Samsung, 2010. – Samsung Corporation. http://www.samsung.com/us/aboutsamsung/corporateprofile/download/2010_annual_rpt.pdf 4) Samsung company 2011 report. [Online] // Samsung, 2011. – Samsung Corporation. http://www.samsung.com/us/aboutsamsung/corporateprofile/download/2011_annual_rpt.pdf 5) Samsung Profile 2012 report. [Online] // Samsung, 2012. – Samsung Corporation. http://www.samsung.com/us/aboutsamsung/corporateprofile/download/Samsung_Profile_2012.pdf 6) Cost of Capital by Sector. A. Damodaran. [Online] // A. Damodaran, 2013. – Stern Website. http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/wacc.htm