I need a reply to the below discussion post, the reply must be at least 250 words. Do not just say “good job” or “I learned something from your post.” Replies are not a cheering exercise. Instead, your replies must be substantial, reflecting what you learned from reading the post, offering an extension, or correcting a mistake. Use what you learned in researching for your post (or knowledge gained from other classes or personal experience) to either supplement or critique the post you are writing about.
Discussion board 2
Samsung Company Risks Assessment
Samsung as a is exposed to a variety of uncertainties in the market. Some of the uncertainties faced by Samsung can be either internal or external factors. Internal factors are within the company’s range of control, while external factors are out of the range of control by the firm itself. The effects of both internal and external factors are losses that cause losses to shareholders when sharing dividends.
Some of the risks faced by Samsung include research and development expenditure. The company’s research and development have failed on some occasions, including the explosion of batteries by the Samsung Note Seven Samsung series. To ensure such cases do not happen again, the firm has one of the most significant research and development expenditures in the electronic industry. The company was estimated to have utilized above 2 million dollars in research and development in 2003 (Loveridge et al., 2018). The company employees over a hundred thousand employees in over eighty thousand offices, exposing the company to the risk of personnel managing. To manage risks associated with employees, Samsung ensures qualified personnel, training, and development of their employees. Competitors also expose the firm to risks such as mergers and acquisitions. To manage the risks associated with mergers and acquisitions, the firm has a long-term relationship with its suppliers and acquires most of its key suppliers.
Samsung is exposed to external risk factors such as earthquakes, typhoons, competitors’ decisions, and market impacts. The factors affect productivity, logistics, market power, and consumer preferences hence reduced revenues. For instance, during the autumn of 2001, logistics were severely affected by the terrorist attack on the world trade center and occasional typhoons southeast of Asia. Air transport was disrupted, contributing to the firm’s one hundred and fifty million loss during the third quarter of the year (Ballesteros, 2017). Samsung counters such a situation by ensuring product deliveries per projected sales rather than waiting until the order arrives. The risks associated with the capacity to produce and sell are another risk faced by the firm. To counter the risks associated with the capacity required in the market, Samsung makes the existing capacity more flexible. The firm employees accommodate the change from one product assembling to the other (DuHadway, Carnovale & Hazen, 2019). For instance, the firm’s computer monitors and color televisions have a common platform that enables quick change from televisions to monitors according to market demands. Intellectual property risk is another risk that Samsung has to tend. The company mitigates copyrights by licensing their intellectual properties to avoid their competitors copying their designs and ideas.