Business Policy & Strategic Mgmt
Birla Institute of Technology and Science
Kun Hee Lee is the chairman of Samsung Electronics, a Korean major in semiconductor industry. Semiconductor industry can be divided into logical chips and memory chips. Samsung overtook its Japanese rivals in 2003 and became leader in memory segment of the industry. By 2003 it showed the second largest net profit of any electronics company outside US.
The memory industry is one with high degree of competition and rivalry. Currently Samsung is facing threat from Chinese companies. Chinese companies have the advantage of obtaining capital from the world market and with the ...view middle of the document...
From the ROA trend of all the four companies, it is very evident that Samsung is more profitable and is more effective as a company. Samsung never ended up making losses and thus the ROA value is always positive. Samsung is the only company able to make profits in the initial years.
Even though Micron started off making losses, it was able to bring it on course and maintained its state of making profits for around 10 years. The next three years ended up in losses. Infineon started off in losses, but was able to rise to a good profitable situation in the next 2 years and again into losses. Infineon turned profitable all for two years in their journey. Hynix was profitable only for one year and then it slipped into large losses in the consequent years.
Observations and Understanding from the financial figures:
Effectiveness and Efficiency of R&D investment can be observed by taking the ratio of R&D Expenditure to Net Revenue. So, after the analysis among the 4 companies we came to realize that if any company has made investment in R&D then it could see similar returns in terms of Net Revenues. Thus, raising debt to invest in R&D could be a favourable option.
On looking at...