Expansion Strategy of Samsung Opera House

SAMSUNG

Corporate Real Estate Asset Management

Anusha Shridhar | 8921031

Faculty: Dr. Priti Pandey

List of Figures

List of Tables

1 COMPANY OVERVIEW

In Seoul's Samsung Town, Samsung is a South Korean company that makes electrical devices. In 1938, Lee Byung-Chul founded Samsung Electronics as a trading company. With its headquarters in South Korea, Samsung is a multinational corporation that operates a diverse portfolio, including those in electronics, heavy industry, development, and financial sectors. One of the biggest producers of cellphones, televisions, and memory chips worldwide is Samsung Electronics, the division in charge of the business's electronic products (Shrivastava, 2021).

Samsung Electronics' line of smartphones, which includes the well-liked Galaxy series, are currently its most well-known products. With the production of premium OLED and QLED televisions, the business has also emerged as a significant participant in the TV industry. Furthermore, Samsung is a significant memory chip supplier, making NAND and DRAM chips used in a variety of products such as cellphones, computers, and servers (Shrivastava, 2021).

Samsung operates a wide range of companies in addition to electronics, such as construction, shipbuilding, and financial services. With its Bixby assistant and investments in startups developing machine learning, the corporation is also engaged in this field Over the years, Samsung has been involved in a number of disputes, including product recalls, litigation, and claims of anti-competitive activities. Despite this, the business continues to be a significant force in the electronics sector, with a presence in many countries and a repute for performance excellence (Shrivastava, 2021).

Samsung Electronics, Samsung Heavy Industries, Samsung Engineering, and Samsung C&T are a some of the company's well-known industrial businesses. Samsung Life Insurance, Samsung Everland, and Cheil Worldwide are some further significant affiliates Samsung has a significant impact on the economy, politics, media, and culture of South Korea. Samsung was a major contributor to the "Miracle on the Han River." A fifth of South Korea's total trade are produced by its sister companies. Revenue from Samsung accounted for 17% of South Korea's $1,082 billion GDP (Shrivastava, 2021).

1.1 Background of Samsung

Lee Byung-chul established Samsung on March 1st, 1938 in Daegu, Korea, as a modest commercial business with 40 staff members. Originally known as Samsung Sanghoe, the business specialised in textiles and food manufacturing. The Korean term for "three stars," which denotes something "large, numerous, and powerful," is where the name "Samsung" originates (Shrivastava, 2021).

Samsung expanded their company into new sectors in the 1950s, including retail, insurance, and securities. The business founded Samsung Electronics in 1969, which would go on to become one of the most significant and successful divisions of the Samsung Group. Black and white television production was Samsung Electronics' main focus, but the company swiftly branched out into other electronic products like home appliances and processors. Samsung continues to grow its business and diversify its product offerings during the 1970s and 1980s. The business made significant investments in R&D, which helped it rise to the top of a number of industries. Samsung has started to increase its global presence by opening up offices and factories in several nations (Shrivastava, 2021)

Samsung rose to prominence in the semiconductor market in the 1990s by creating memory chips that were utilised in a variety of electronic gadgets. The business of consumer electronics was also expanded by the corporation, which debuted the first cellphone in 1988 and the first digital tv in 1998. As the world's leading producer of LCD panels and the second-largest producer of cellphones in the 2000s, Samsung continues to expand and develop. In 2010, the business also unveiled its well-liked Galaxy brand of smartphones, further cementing its status as one of the foremost technology businesses in the globe (Shrivastava, 2021). Now a multi-national corporation, Samsung operates in a variety of industries, including electronics, construction, heavy industry, and financial services. The business has a presence around the world and is renowned for its excellent products, innovation, and dedication to sustainability (Shrivastava, 2021)

1.2 Vision & Mission

Vision: "Inspire the World, Create the Future"

The company's commitment to innovation and opening up new opportunities for people all across the world is reflected in Samsung's vision statement. Samsung wants to have a positive influence on society and the environment while inspiring and empowering its consumers with its products and services (Annual Report, 2022)

Mission: "To inspire the world with innovative technologies, products, and designs that enrich people's lives and contribute to a sustainable future."

The emphasis on innovation, customer satisfaction, and sustainability is emphasised in Samsung's mission statement. The firm is dedicated to creating innovative products and technologies that improve people's lives while also making sure that its current operations are ethically and socially sustainable (Annual Report, 2022).

1.3 Success factors

There are several factors that have contributed to Samsung's success, including:

1. Innovation: Samsung has a strong focus on research and development, which has allowed it to innovate and stay ahead of its competitors. The company invests heavily in new technologies and is constantly developing new products and features (Pratap, 2022).

2. Diversification: Samsung has a diverse range of businesses, which has allowed it to weather economic downturns and fluctuations in specific industries. The company's ability to pivot and adapt to changing market conditions has been a key factor in its long-term success (Pratap, 2022).

3. Brand Recognition: Samsung is one of the most recognizable brands in the world, with a strong reputation for quality and innovation. The company's products are highly regarded by consumers and are often considered to be among the best in their respective categories (Pratap, 2022).

4. Global Reach: Samsung has a strong global presence, with operations and customers in countries around the world. The company's ability to leverage its scale and global reach has been a key factor in its ability to grow and compete on a global level (Pratap, 2022).

5. Corporate Social Responsibility: Samsung is committed to sustainability and corporate social responsibility. The company has implemented a variety of programs and initiatives to reduce its environmental impact, promote ethical business practices, and support social causes. This commitment to sustainability and social responsibility has helped to enhance the company's reputation and build trust with consumers (Pratap, 2022).

1.4 Business Strategy

Samsung is now Apple Inc.'s main competitor thanks to its recent advancements. Samsung is currently the largest tech company in terms of revenue and the sixth most important brand. Samsung Electronics was inspired to become a company that drives innovation in the industry by the displaying strategy it used (Shrivastava, 2021)

Since it assisted a cost-driven firm in changing its structure and becoming a power generator, the Samsung marketing strategy was one of the greatest ever devised. Businesses had to keep up with the demands and provide dynamic, cutting-edge equipment to their customers because consumer preferences in the technology industry were continually evolving (Shrivastava, 2021)

Samsung uses 4 marketing strategies that are mentioned below:

1. Promotional Mix of Samsung

2. Skimming Price

3. Focused Pricing

4. Putting in Samsung Marketing Strategy

Samsung has employed several business strategies to achieve its position as one of the world's leading technology companies. Some of these strategies include: (Shrivastava, 2021)

1. Diversification: Samsung has a diverse portfolio of products and services across multiple industries, including smartphones, home appliances, semiconductors, and more. This diversification helps to reduce its reliance on any one product or industry, and allows it to capitalize on opportunities in different markets.

2. Innovation: Samsung has a strong focus on research and development, and invests heavily in developing new technologies and products. This focus on innovation has helped the company stay ahead of its competitors and maintain its position as a leader in many industries.

3. Customer-Centric Approach: Samsung places a strong emphasis on meeting the needs and expectations of its customers. It has established customer experience centers around the world to provide customers with personalized support, and has implemented various initiatives to improve customer satisfaction.

4. Partnerships and Collaborations: Samsung has formed partnerships and collaborations with other companies to develop new products and technologies, and to expand its market reach. For example, it has partnered with Google and Microsoft to integrate their software into its devices.

5. Cost-Cutting Measures: Samsung has implemented various cost-cutting measures to improve its financial performance, such as streamlining its operations and reducing its workforce. This has helped the company remain competitive and profitable in a rapidly changing market.

6. Social Responsibility: Samsung has implemented various initiatives to promote social responsibility and sustainability, such as reducing its environmental impact and supporting local communities. This helps to improve its brand reputation and attract socially conscious customers.

1.5 Existing Expansion Strategy

Samsung's existing expansion strategy includes several key initiatives aimed at expanding its market reach and strengthening its position as a leading technology company. Some of these initiatives include (Simonin, 2014):

1. Increasing investment in R&D: Samsung continues to make significant investments in R&D to foster innovation and create new goods and technology. This includes financial support for developing fields like 5G, IoT, and artificial intelligence.

2. Expanding into new markets: Samsung is concentrating on growing its market share in developing nations like India, Africa, and Southeast Asia. For the purpose of assisting its global expansion, it has constructed industrial facilities and research facilities in various areas.

3. Strengthening partnerships and collaborations: In order to produce cutting-edge products and technology and to increase its market share, Samsung is working with other businesses. As an

illustration, it has collaborated with significant mobile network providers to speed up the implementation of 5G networks.

4. Emphasizing sustainability: Samsung is dedicated to sustainability and has put in place a number of programs to lessen its negative effects on the environment and foster social responsibility. This encompasses programs aimed at lowering greenhouse gas emissions, enhancing energy efficiency, and assisting regional communities.

5. Developing new business models: Software-as-a-service (SaaS) and platform-as-a-service (PaaS) are two new business models that Samsung is looking into in order to expand its income streams and expand its line of business.

6. Improving its brand: Through activities like advertising campaigns, sponsorship of significant events and sports teams, and other initiatives, Samsung is concentrating on strengthening its brand recognition and reputation. This increases its market share and draws in new clients.

2 EXISTING EXCLUSIVE CENTER OF SAMSUNG

Samsung Opera House is a big milestone of the company by becoming world’s largest mobile experience store. It is a unique customer experience center located in the heart of Bangalore, India. It is designed to showcase Samsung's latest products and technologies, as well as provide a space for customers to interact with Samsung experts and receive support and service. The Samsung Opera House spans three floors and features a range of interactive exhibits and displays. Visitors can try out Samsung's latest smartphones, tablets, wearables, and other devices, as well as experience virtual reality and other cutting-edge technologies (TOI, 2018)

In addition to showcasing Samsung's products, the Opera House also features a range of services and support options for customers. Samsung experts are available to provide product demonstrations, answer questions, and offer technical support and advice. The center also has a repair service center and a training room for customers to learn more about Samsung's products and technologies. The Samsung Opera House is one of several similar experience centers that Samsung has opened around the world. These centers are designed to offer customers a unique and immersive experience, and to reinforce Samsung's brand reputation for innovation, quality, and customer service (TOI, 2018).

In research conducted on Bengaluru for Samsung some time ago, a third of the participants stated that the city's archaeological sites and architecture, which include a mix of colonial and art deco structures scattered throughout the city, characterized the city's identity. Then, a sizable 77% and 63% of nonmillennials stated they would want to repair built heritage and see them being renovated into public spaces for art, culture, and other activities centred around technology and startups to refine the dreams of its citizens (Samsung, 2020).

After two years of restoration work by Samsung India, the British-era building is now known as Samsung Opera House and serves as the leading mobile experience centre in the world. While the building's outside still retains its spectacular original appearance and feel, the interior has been transformed into a contemporary immersive area that makes heavy use of technology (Samsung, 2020)

The expansive plaza area outside the building, which hosts events related to stand-up comedy, technology, startups, fitness, photography, gaming, music, and movies, is slowly transforming into a hub for ideas, art, and culture (Samsung, 2020).

2.1 Property Details of Samsung Opera House

3 PESTLE ANALYSIS

A PESTLE analysis is a tool used to analyze the external factors affecting a company's operations. Here is a PESTLE analysis of Samsung: (Unacadamey, 2022)

1. Political:

A multinational tech corporation with operations all over the world is Samsung. For the most part, Samsung's markets have favourable political climates in which to conduct business. However, there have been cases when the brand has encountered difficulties because of political standards in various nations, including India, several African nations, and countries in Latin America. Additionally, political pressure brought on by the conflict between South Korea and North Korea lately had an impact on Samsung. Samsung has been able to overcome these obstacles and has not had any substantial negative effects as a result of political concerns.

2. Economic:

The purchasing power of people throughout the world has been significantly impacted by the present economic climate. The economic downturn has resulted in a drop in disposable money, which presents a problem for the business. To overcome these obstacles and grow in emerging areas, Samsung has adopted successful techniques, allowing it to compete in the global market.

3. Social:

Even though Samsung is a worldwide corporation with a presence all over the world, it is still a South Korean family business and a Korean brand. Samsung consistently develops its goods and introduces new ones to cater to the distinct needs and tastes of clients in other nations in order to stay competitive in the global market. Since socio-cultural elements fluctuate from nation to country and affect lifestyle choices, Samsung must design tailored methods to keep up with the rapidly shifting desires of customers throughout the globe.

4.

Technological:

In the technology sector, Samsung is a very powerful brand with a strong history of innovation. The goal of the business is to continue to dominate the technology sector and to rank among the world's leading tech firms. Samsung has seen remarkable success with certain consumer-favorite features, but they have also run into legal issues. The success of Samsung, a company that is always advancing in technology, may be an important example for up-and-coming businesses. Instead than trying to quickly copy competitors to get customers, Samsung's strategy is to concentrate on getting the fundamentals right

5.

Legal:

Legal issues that multinational corporations must contend with can be particularly challenging for wellknown brands to navigate. Therefore, it is essential for businesses like Samsung to abide by all legal standards in order to avoid legal consequences and preserve a strong brand reputation. As a major global technological company, Samsung is required to abide by local laws. As was already noted, Samsung paid

a heavy price for copying Apple's designs. Samsung must have methods in place to securely negotiate the legal intricacies of the global market in order to prevent future legal issues. By taking precautions, Samsung may avoid unintended losses and legal problems for the company.

6. Environmental:

Samsung gives ethical corporate conduct and environmental issues top attention. As a significant leader in the global technology industry, Samsung takes care to guarantee that not only do its operations satisfy the demands and preferences of its clients, but also stringent moral and environmental standards. To live up to the moral standards of its discriminating customers, Samsung must make sure that none of its commercial endeavours injure anybody. Therefore, Samsung focuses on sustainable business practises while also taking measures to promote a good and inclusive work atmosphere.

4 SWOT ANALYSIS

SWOT analysis of Samsung:

5 REAL ESTATE FINANCIAL METRICS

The following real estate financial metrics includes employees, revenue, profit and real estate asset of the company for the year 2020, 2021 and 2022. T

(Source: Annual Report 2020,2021,2022) RATIOS:

6 PROBLEM IDENTIFICATION

1. Establishment of Samsung as a premium brand similar to Apple Computers.

2. Samsung faces heavy competition from its competitors, so it has to enter a new metropolitan city and expand its stores.

3. To establish Samsung as a socially responsible company to caters the interest of the public through socially relevant initiatives.

7 QUALITATIVE ANALYSIS

The below details mentioned about the expansion of the property of Samsung Opera House:

• Current Location: Bengaluru

• Location for Expansion: Areas of Mumbai

• Type of Space Occupied: Heritage Site

• Proposed Store Area (approx.): 25,000 – 30,000 sq.ft

• Existing Store Area (approx.): 33,000 sq.ft

• Real Estate Strategy: Leasing

7.1 Latest Transaction:

1. In Bengaluru, the Samsung R&D institute purchases a 4 lakh square foot office facility.

2. The world's largest manufacturer of electronics, Samsung, has received a Rs 4.3 crore stamp duty waiver for a plot of land in Sector 81 Noida where it is constructing a display facility.

8 CONSIDERATIONS FOR EXPANSION OF STORE

Samsung can consider the following points for their exclusive store and experience centre expansion:

1. Market Research of Samsung Product

Understanding the interest of Mumbai market in the company’s products so they can understand the flagship models from their product line to showcase at the Samsung exclusive store and experience centre

2. Real Estate Market Research

Conduct the real estate market study for finding an apt historical site and establish Samsung exclusive store and experience centre by restoring the heritage site and keeping it open for the public.

3. Design Theme

To establish a design theme which inclusively hold the basic design of the heritage site and also to incorporate the design philosophy of Samsung.

4. Inclusion of Sustainability

To include the idea of sustainability in the process of developing the new exclusive store and experience centre which aligns the existing expansion strategy of Samsung.

5. Employment & Hiring

To create a benchmark hiring process by hiring highly skilled individuals, through them the company can communicate its business idea and innovation to customers.

Main Assignment Part-2

9 REASON FOR EXPANSION

In 2023, the Smartphones segment will generate US$41.73 billion in revenue. The market is anticipated to expand by 7.20 percent yearly (CAGR 2023-2028) In comparison to other countries, China generates the highest income (US$119.20bn in 2023). In 2023, per-person revenues of US$29.39 are earned based on demographic data By 2028, 234.50 million smartphones are anticipated to be sold globally. In 2024, a volume rises of 5.9% is predicted for the Smartphones market. In the Smartphones section, the average volume per person is anticipated to be 0.13 pieces in 2023 (Statista, 2023)

9.1 Demand Drivers

Samsung reclaimed the top rank from Xiaomi in the third quarter of 2022 by shipping about 6.7 million cellphones to India in the fourth quarter of 2022. The third quarter of 2020 witnessed Samsung's biggest quarterly cellphone sales volume to date. One of the factors that enabled Samsung to move back up the rankings was adjustments to the pricing strategy and product lineup (Sun, Number of Samsung smartphones shipped in India from first quarter 2019 to fourth quarter 2022, 2023)

Samsung Phones Shipped in India (in millions)

With a roughly 21 percent market share in 2022, Xiaomi led all other smartphone manufacturers in shipments to India. Samsung, with an 18.1 percent market share, held the second position in a close race. In the aforementioned year, India sold 144.3 million smartphones in total (Sun, Number of Samsung smartphones shipped in India from first quarter 2019 to fourth quarter 2022, 2023).

While Xiaomi, Vivo, Lenovo, and Oppo are all Chinese manufacturers, Samsung of South Korea is the market leader with over 45%. About 650 million people used mobile devices as of 2017, with 300 million of those people using smartphones (Keelery, 2018).

FIGURE 8 SAMSUNG PHONES SHIPPED IN INDIA

Source: Statista

Chinese Vendors in Indian Smartphone Market

9.2 Revenue Generation

Samsung India's overall income for the fiscal year 2022 was 853.25 billion Indian rupees. Compared to the prior year, it was a rise. However, because the business reduced its overall expenses, the profit rose by 39%. The smartphone market accounted for over 70% of sales. Samsung is the market leader in several categories in India, including smartphones, TVs, refrigerators, and so forth (Sun, 2023).

Revenue Generation (in billions)

FIGURE 9 CHINESE VENDORS IN INDIAN SMARTPHONE MARKET

Source: Statista

Source: Statista

Samsung Xiaomi Vivo Lenovo Oppo

9.3 Consumer Behavior

Throughout a 2022 study on cellphones in all of India, more than 17% of the participants claimed to have a Samsung smartphone. Apple, with a market share of around 14%, was next, following closely. More than 11% of all smartphones shipped worldwide were from Xiaomi (Sun, 2022).

Ownership of smartphones in India (April 2022)

10 INDUSTRY BEST PRACTICES

Apple supplied approximately 6 million devices to India in 2023, according to estimates. With a shipping increase of almost 11% from the year before, it was Apple's biggest year ever in the nation. In India, Apple had a 5.5% market share in the same year compared to 4.4% in the prior year. In September 2020, Apple launched its online store in India with a strong loyalty to the nation (Sun, 2023)

Apple Phones Shipped in India (in millions)

FIGURE 11 OWNERSHIP OF SMARTPHONES Source: Statista

FIGURE 12 APPLE PHONES SHIPPED IN INDIA Source: Statista

10.1 Apple BKC Store, Mumbai

In Mumbai, India, on April 18, 2023, Apple established its first store. The artwork inside Mumbai's famous "Kaali Peeli" taxis served as inspiration for the store's design (Haris, 2023) The details of the store in mentioned below:

Source:

10.2 Apple Saket Store, Delhi

On April 20, 2023, Apple Saket, a store in Delhi, India, officially opened its doors in Saket in the south of the capital. The store's barricades have images of the Mughal-era gates of some of Delhi's numerous historical sites (Haris, 2023) The details of the store in mentioned below:

11 CORPORATE REAL ESTATE STRATEGY

11.1 Details of Retail Store

11.1.1 Dariya Building, Colaba

The first location for expanding the Samsung Exclusive Store is Fort Area, Colaba. The total leasable area for the Dariya Building is 50,000 sq.ft, out of which Samsung India according to their requirements is planning to lease out 25,000 sq.ft for the retail store. The rent for the property is Rs 15 crore annually which is high due to the location and considering the heritage history of the building. A five-year lock-in period is included in the minimum lease term of 10 years.

Here, the lease period and lock-in-period is taken as per the Samsung Stores standards. Escalation is assumed by 15% for every 3 years. TABLE 5 B

11.1.2 Utopia City, Worli

The second location for expanding the Samsung Exclusive Store is Utopia City, Worli. The total leasable area for the building of Utopia City is 80,000 sq.ft, out of which Samsung India according to their requirements is planning to lease out 27,000 sq.ft for the retail store. The rent for the property is high with Rs. 12.24 crore annually being a very buzzing area of the city with its commercial establishments and high-rise residential properties. Worli is known to be one of the posh areas of the city A five-year lock-in period is included in the minimum lease term of 10 years.

Here, the lease period and lock-in-period is taken as per the Samsung Stores standards. Escalation is assumed by 15% for every 3 years.

Source:

11.1.3 Nesco IT Park, Goregaon

The third location for expanding the Samsung Exclusive Store is Nesco IT Park, Goregaon. The total leasable area for the building of Utopia City is 8,00,000 sq.ft, out of which Samsung India according to their requirements is planning to lease out 30,000 sq.ft for the retail store. The rent for the property is Rs. 6.3 crore annually considering the importance of locating the store in a retail cum office space with a huge leasable area, this property is shortlisted. The building ground floor offers a futuristics design which in line with the design philosophy of Samsung. A five-year lock-in period is included in the minimum lease term of 10 years.

Here, the lease period and lock-in-period is taken as per the Samsung Stores standards. Escalation is assumed by 15% for every 3 years.

11.2 Location Strategy

Total three locations as alternatives are chosen for expanding Samsung Exclusive Store in Mumbai which is mentioned below:

1. Fort Area, Colaba

The image of Mumbai for a general public brings down to the old image of Bombay's fort region and its heritage buildings. The Taj Mahal Palace Hotel, the Gateway of India, and the Colaba Causeway are just a few of the well-known sites and monuments that can be found in Colaba. The closeness to these wellliked locations is advantageous for the brand inviting a good footfall and will help to reach out the experience of its product to the people. The affluent population in the locality is also a factor in considering the location. The concept applied in Bangalore of restoring a heritage building and preserving it for social purpose could be applied here.

Worli is a neighborhood in Mumbai, India, that has developed significantly in recent years. It is a favorable location for retail businesses due to its high-density population, proximity to commercial hubs, accessibility, infrastructure, and affluent customer base. It is situated close to several commercial hubs, such as Lower Parel, Bandra Kurla Complex, and Nariman Point, making it easily accessible to the corporate and business population of Mumbai. It is well-connected to other parts of Mumbai, making it

2. Worli

easily accessible by public transport and private vehicles. It has seen significant infrastructure development in recent years, with the construction of several high-rise buildings, shopping malls, and other commercial establishments. Additionally, it is home to several upscale residential complexes and commercial establishments, making it an attractive location for retail businesses targeting affluent customers.

3. Goregaon

FIGURE 15 UTOPIA CITY

FIGURE 17 NESCO IT PARK

FIGURE 18

Goregaon is a rapidly developing suburb in Mumbai, India, that is a favorable location for retail businesses due to its strategic location and growing infrastructure. It is well-connected to other parts of Mumbai, making it easily accessible by public transport and private vehicles. It has seen significant infrastructure development in recent years, with the construction of several high-rise buildings, shopping malls, and other commercial establishments. It is situated close to several commercial hubs, such as Andheri, Bandra Kurla Complex, and Lower Parel, making it easily accessible to the corporate and business population of Mumbai. It also has a diverse customer base, comprising people from different socio-economic backgrounds, ethnicities, and cultures. Additionally, it offers relatively lower commercial real estate prices than other prime locations in Mumbai, which can help retail businesses save costs and improve their profitability.

11.3 Workforce

To manage the performance of the company operations, the level of mechanization and the use of innovation to optimize workflows, it is assumed that about 100 employees will be hired, depending on the unique demands and requirements of Samsung. Below mentioned are the following types of employees to be hired:

1. Salespeople are accountable for communicating with clients, disseminating information about their products, and concluding sales transactions.

2. Support staff include customer service representatives, stock clerks, warehouse workers, and administrative staff who handle the day-to-day operations of the showroom.

3. Managers and Supervisors will be hired to oversee the sales and support staff, manage inventory and finances, and develop strategies to grow the business.

11.4 Investment Planning

11.4.1 Cash Outflow

The cash outflow of the Samsung store includes property rental, employee expenses, electricity bill and property maintenance. The electricity bill is assumed to be an average of Rs. 75,950/month. The average salary of an employee is assumed to be 6,00,000/month. The average property maintenance charges is assumed to be Rs. 5,00,000/month. The security is deposit is taken as Rs. 1 Cr for the property as per the standards o Samsung company and Mumbai market.

1. Colaba

2. Worli

3. Goregaon

11.4.2 PV of Rentals

The present value of the proposed Samsung store at Fort Area, Colaba is projected for the next 10 years. The escalation of 15% is taken for every 3 years. T

The present value of the proposed Samsung store at Utopia City, Worli is projected for the next 10 years. The escalation of 15% is taken for every 3 years. TABLE 11 PV OF LOCATION 2

The present value of the proposed Samsung store at Nesco IT Park, Goregaon is projected for the next 10 years. The escalation of 15% is taken for every 3 years.

1. Colaba

2. Worli

3. Goregaon

12

EXPANSION STRATEGY

12.1 Critical Evaluation

12.1.1 Factors Affecting the Potential Locations

12.1.2 Benchmarking

The benchmarking is done for the above factors that are affecting the location to incorporate real estate strategy with the business strategy. According to the factors the weightage is given from 5% to 15%.

12.1.3 RE Metrics for Proposed Store

The below analysis shows the estimation of employee cost/area and area per employee of the proposed three locations for Samsung Exclusive store:

The below ratios are projected for 10 years for the proposed locations:

1.

2.

3.

The company will lease the facility as part of their CRE strategy for this new Exclusive Store. Finding and purchasing a suitable retail store in Goregaon that satisfies the company's needs in terms of area, location, neighborhood, visibility, and connectivity will be part of the execution plan for the new shop. For effective public transportation system, the premises should be close to the retail space and have easy access to main roads.

Goregaon has been determined to be the ideal location for expanding Samsung Exclusive Store in Mumbai following a detailed review by numerous aspects. One of the main causes is that it is ideally situated close to several commercial hubs, such as Andheri, Bandra Kurla Complex and Lower Parel, making it easily accessible to the corporate and business population of the city. It also has a diverse customer base comprising people from different socio-economic backgrounds, ethnicities, and cultures. Additionally, it offers relatively lower commercial real estate prices than other prime locations in Mumbai, which can help retail businesses save costs and improve their profitability

Goregaon also links city center and suburban area of Mumbai, making it possible for logistical and connectivity throughout the city. In addition, the site is close to the Western Expressway, making it possible to get to other parts of Mumbai more quickly Customers will find it easier to commute with good connectivity via public transportation networks. A modern infrastructure and amenities are also present in Goregaon. The proposed building has a leasable are of 8,00,000 sq.ft which allows the store to expand in future if needed or recreational activities.

14 REFERENCES

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