SAMSUNG: Shakeout Year

It was a year of the shakeout for Samsung India, and the signals came almost

at the beginning of the last fiscal. In the midst of unconfirmed reports of

financial irregulaties, the company's managing director, KS Kim, moved back to

South Korea, head of sales, Vivek Prakash, decided to quit. This was followed by

another round of top-notch casualties with Sonal Anand (deputy GM, Volume

Products), Sanjay Peer (national marketing manager, Lifestyle Products), and

Aseem Kumar (senior manager, Value Products) also leaving.

HIGHLIGHTS Product offtake hit in JFM 2005 quarter MFD Inkjet and laser printer shipment down Managed pricing pressure through slew of product launches Strong brand recall and channel network Understanding of the IT product distribution business in India Low channel confidence in the all-new team Resolving channel issues may waste time l Start-up Year: 2000 l Products & Services: Monitors, LCD displays, hard disk drives, laser printers, multifunction devices, CD-ROMs, CDRWs, DVD-ROMs, NotePC l Branches: 19 l Dealer Outlets: 7,200 l Address: 7th and 8th Floor, IFCI Tower, 61, Nehru Place, New Delhi-110019 l Tel: 251511234 l Fax: 251608818/19 l Website: www.samsungindia.com

The confusion that followed, coupled with payment problems faced by the

partners, resulted in a disastourous JFM 2005 quarter, with channel offtake of

Samsung products coming to a near standstill. The net result: its overall growth

rate dipped to 8% as compared to 22% in 2003-04, with revenues growing

marginally from Rs 1,409 crore to Rs 1,519 crore. It lost shine in the MFD

inkjet segment with total shipment going down from 10,137 in 2003-04 to 7,140.

On the laser printer front too, despite retaining its #2 slab, the total

shipment went down by almost 24%-from 45,000 to 34,247 during FY 2004-05.

Monitors continued to drive the company business bringing in 54% or Rs 814.3

crore in revenues, cornering 40% of the overall market share. HDDs brought in Rs

347 crore (23%) and ODDs closed book with a 198 crore (13%) revenue. On the TFT

LCD monitor front, the company came out with its Dali range of products in

17" and 19" categories to finally close the year with over 50% growth.

It also strengthened presence in the hard disk business leading with 52% market

share.

Samsung also managed to withstand price pressures by bringing in newer

products, including a completely new lineup of PC Monitors in 15",

17", 19" and 21" screen sizes. Samsung also came out with a slew

of notebooks-from the first 17" screen Samsung M40 Notebook PC in the

country to the world's thinnest and lightest 2 spindle NotePC (Samsung X10

plus). It forayed into color laser printers in India with the launch of its CLP

500 series of printers.

Under its new leadership-deputy MD South West Asia, R Zutshi, and general

manager for IT Business, Harry Ahn-the company is looking forward to resolving

all channel issues and strengthening its distribution network. The target for

2005-06: 30% growth.