Showing posts with label Valuation. Show all posts
Showing posts with label Valuation. Show all posts

Saturday, August 25, 2012

Another Customer Service Issue for Samsung? Is it Endemic?


In my earlier blog, a recent experience with Samsung in the Philippines was highlighted. In fact, after several months in the Philippines, I never received an e-mail or text message from them about the status of the product of interest. To my knowledge the Galaxy Y Pro, Duo Sim has still not been launched there or in the US.

In a recent article in the New York Times, another poor to no Customer Service experience was high lighted (attached below as well as the link). Maybe, this is a more endemic problem going back to the culture of the company? It seems to go deeper than just to one or two people.

If you do a Google search, the two top sites to check out about Samsung customer service brings up:

Samsung Customer Service - Customer Service Score Board

In this survey (the above link) they ranked #344 out of 555 companies. Pretty poor to say the least.

The second site was Amazon's and it appears to be even worse. Many of these issues, at Amazon, were concerning Large Screen TV's and customer service related to them.

Amazon's Customer Service Discussions = HORRIBLE

Sadly, it seems that Samsung has a lot of work to address in the Customer Service area. This sure will not help their new product launches, or the recent court ruling between Apple and Samsung Jury Court Case in San Jose, CA where they were fined $ 1.05 Billion (Apple did not violate any Samsung patents). Apple Wins Big in Patent Case


It seems that they are lacking training, and core values that support a culture of good Customer Service.

While the stock price has doubled in a year and a half, the question is how much more growth could they have realized without these negative customer service (CS) reports. In the Amazon Discussions (link is above) there were a number of references to people not buying a Samsung product or being aware of the problems and "hoping" that they were "lucky" not to have problems that would necessitate the need to contact customer service. If this trend continues in CS, then the stock price and valuation, and their sales may have more than a few rough spots in the coming months and years.

The Haggler

A Printer Freezes Up, and the Maker Does, Too

Christoph Hitz
Q. In September 2010, I bought a Samsung all-in-one laser printer. It performed well until early 2012, when Samsung changed something in its toner cartridges. The cartridges have the same name and product number, but they no longer work with my printer. I realized this after buying and returning several Samsung-brand toner cartridges, all of which produced paper-feed and other problems.
I called Samsung support, and a rep told me that I could not use the new cartridges, and that, because my printer was beyond the one-year warranty period, a technician would have to come to my office, at my expense, to update the printer’s firmware. The charge for that visit, I was told, would probably cost as much as a new printer. In other words, Samsung made a change, without telling me or other customers about the change, that instantly made a relatively new printer obsolete and basically unusable.
Just as a comparison, the printer that was replaced by the Samsung was a Hewlett-Packard laser printer that I bought in 1995 that finally gave up the ghost after 15 years of use and many, many toner cartridges.
This seems like a case of planned obsolescence designed to enrich Samsung, does it not? Jon Showstack
Kentfield, Calif.
A. Let us stipulate at the outset that this is a strange case. The strange part is that Mr. Showstack unquestionably has the problem he describes — as we will later see, Samsung sends out a technician and confirms as much. But if the company actually manufactured lots of cartridges that did not work with printers of such recent vintage, you would expect a lot of noise on the Internet’s many complaint Web sites.
Instead, there is a little bit of noise, on sites like CNet. Not exactly an outpouring of rage.
When the Haggler wrote to Samsung, a woman named Rachel Quinlan, who works for the public relations firm Weber Shandwick, sent an e-mail that she said should be attributed to a “spokesperson” for the company. She declined to name that person.
Really? A spokesperson — a person who speaks for a living — who wants to be anonymous? Not only does this sound ridiculous, it also makes Samsung seem tin-eared. Actually, that is unfair to tin, which is far more supple than Samsung is in this circumstance. What consumers and the Haggler want when products break is some sense that human beings are trying to fix them. (Note to corporations: the anonymous spokesman is a dreadful idea.)
“We are sorry to hear of the problem described by Mr. Showstack and have investigated his concerns,” the person wrote. “Samsung printers work with all cartridges except counterfeit or gray market cartridges. To the best of our knowledge, the problem described by Mr. Showstack is an anomaly; and we have received no similar complaints from other customers on the referenced model. We have since spoken to Mr. Showstack and offered a courtesy on-site repair, which he has accepted.”
The part about counterfeit and gray market cartridges strongly implies that the problem here might be Mr. Showstack’s reliance on non-Samsung cartridges. But Mr. Showstack sent photographs of the cartridges and the boxes they came in, and they sure look like Samsung’s own. The Haggler forwarded those photos to Ms. Quinlan. She did not comment. Nor did the anonymous spokesperson.
As promised, Samsung sent a technician to Mr. Showstack’s office. It did not go well. The printer did not work with a new cartridge brought by the technician.
Ms. Quinlan then sent another e-mail from the anonymous spokesperson repeating that Mr. Showstack’s issue appeared to be an anomaly. And further: “Nothing indicates that there is a general compatibility problem with this printer model and replacement cartridges. Mr. Showstack has accepted our offer of an exchange unit so that we can bring his printer and cartridge to our labs and conduct tests to investigate the problem.”
The Haggler detects a lawyerly quality to the wording here. By saying that there is no reason to think there is a compatibility problem with this printer model and new cartridges, an obvious question is raised: What about other models?
Further, in trying to look into the problem himself, Mr. Showstack says he heard that Samsung had printed an internal bulletin stating that there is indeed a compatibility problem with the printer and cartridges he’s been using.
So the Haggler wrote to Ms. Quinlan: What about other models of Samsung printers? Do they have a compatibility problem? And is it true that Samsung has published an internal bulletin on this subject, suggesting that this is a known problem?
Here is Ms. Quinlan’s response, in its entirety: “We have no further information to share.”
Signoffs don’t get more Nixonian, do they? A technician did return to Mr. Showstack’s office and traded his faulty printer for a new one. The Haggler applauds that move, but was confounded a few days later when Ms. Quinlan wrote to say that Samsung’s tests had found that the root of Mr. Showstack’s problem was a faulty cartridge. Huh? A bunch of different cartridges had failed, not just one. 
When the Haggler said how nonsensical this explanation was, Ms. Quinlan replied with this: “At this point we have nothing more to share.” 
Less than illuminating, to say the least. But a fitting end to Samsung’s ham-handed approach to public relations. 

Thursday, November 24, 2011

Interactive Display comparison of top 20 Multinationals vs top 10 Companies in each Asian Country

Below is a link to a very interesting comparison of top Asian companies vs top 20 MultiNational copmanies operating in Asia. It is interactive so you can select Multinational vs different country's top 10. Or you can compare the top 10 in one country vs another country.
Enjoy the analysis. CEOs and Senior Executives in particular may find this of interest.

Compare countries and industry groups, and measure local companies against the top 20 multinational companies operating in Asia-WSJ

Wednesday, November 16, 2011

Acquisitions and Tax implications for Overseas Cash

Acquisitions are always interesting and the article below helps to take into account tax implications for companies with large amounts of cash and what happens upon repatriation. It is an excellent description of how to value stocks. Many times it is hard to find out cash position information. Of course you need to know the amounts involved in different countries, as there may be tax effects in those countries to take into account also.

In the past, Brazil, for example, did not allow the money to be repatriated and so companies were stuck with money in the foreign country. Then they had to either invest in the current company, invest in other companies within the country, or wait until the government policies changed.

The article below has been included in it's entirety, as it is too interesting not to be able to read it. Good reading!

    If you buy a $1 million house and find $200,000 in the basement when you move in, how much did you really pay for it? That, in a nutshell, is the question facing shareholders in Apple and other mega-cap tech companies.

    WSJ's Rolfe Winkler makes a stop on Mean Street to explain the challenges in determining the valuation of companies that hold large cash reserves. AP Photo.
    Buying a share of Apple stock for $385, Friday's close, an investor finds it has $87 per share of cash on its balance sheet. Google, Cisco Systems and Microsoft are other tech titans with gargantuan cash piles on their balance sheets. So what's the right way to think about how much investors are paying to own a piece of these companies?

    CASHHERD

    The cash lying on Apple's balance sheet is, in theory, just a bonus shareholders get when they buy the stock. With interest rates near zero, cash adds nearly nothing to earnings. So when measuring a company's valuation, many will simply "back out the cash" to understand a company's value relative to the earnings it generates. In Apple's case, analysts estimate it will earn $34.43 a share in the fiscal year ending next September. Today's price per share is 11 times earnings. If you exclude cash per share, the multiple is just 8.6 times earnings.
     
    But it isn't so simple, for Apple or any of the other tech companies noted above. For starters, most of Big Tech's cash is held overseas. In its last financial filing, Apple said two-thirds of its cash is abroad. For Google, it's nearly 50%, and, for Cisco and Microsoft, about 90%. Companies can't return cash to shareholders before they repatriate it. And that incurs a 35% tax liability. So even if investors are to take cash piles at face value, they need to discount the portion held abroad by the tax rate.
    Bondholders also have a claim on the company's cash, of course. While Apple has no debt, Cisco, Microsoft and Google do. So, for instance, investors eyeing Cisco's $44.4 billion cash pile should note the company has $16.9 billion of debt, too.

    Another reason to discount cash: Companies can waste it on ill-considered acquisitions. Google's proposed $12.5 billion price tag for Motorola Mobility Holdings seems expensive, as does Hewlett-Packard's $10 billion deal for software-maker Autonomy. When those deals were announced, the market capitalizations of Google and H-P each fell more than the cost of their respective acquisitions. It's as if shareholders not only ascribed zero value for the acquired companies but penalized Google and H-P for their lack of discipline.
    After its pricey $8.6 billion purchase of Web-telephony company Skype, which makes little money, Microsoft also seems a candidate to have its cash pile discounted.

    Apple, meanwhile, has been content to just let its cash accumulate. That could finally change: Apple's new chief executive, Tim Cook, has said he's "not religious about holding cash." So perhaps a dividend is in Apple's future, giving some confidence Apple will act responsibly.

    But perhaps the best rule of thumb when analyzing the true value of corporate cash piles: guilty until proven innocent.

    Tech Firms Find It's Not Easy Holding Green