Question 2
Samsung Electronics is a Seoul (South Korea) based diversified electronics giant. It is
doing
very well in within the Asian sub-continent. Samsung Electronics has a desire for aggressive
growth. To achieve this it embarked, over the last 10-years on a two-pronged strategy: product
innovation and efficient production. It commissioned a Market Research Report by Bloomberg
Financial and has recently been provided with a condensed analysis indicating that that Samsung
Electronics’ Asian sub-market is saturated across all segments and it cannot continue capturing
market-share from competition anymore. Samsung Electronics has decided to refocus the
company on the Americas and has decided to launch an audacious bid and have a subsidiary in
5
New York. However, because it invested heavily in innovation and efficiency over the past
decade, Samsung Electronics is constrained of funding at the moment and is considering various
financing options including listing on the New York Stock Exchange. Samsung Electronics has
commissioned research to understand these funding options and has asked you, as a Financial
Consultant to advise the Board.
a) With a clear example, define cross listing and state the four advantages of cross-listing to the
Samsung Electronics Board for Samsung Electronics on the New York Stock Exchange.
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