"New channel policies will drive our IT business this year"

At a time when Samsung India is going through a restructuring phase — the
company is in the process of injecting the much needed vigour within its vibrant
channel community. Harry Ahn discloses company's new channel policies and the
impact of recent resignations of key personnel.

With a number of key personnel leaving the company, the past
few months have been quite turbulent for Samsung. What were the specific reasons
for so many senior people including Vivek Prakash to leave Samsung?

We look for honesty, integrity and loyalty in our employees
who adhere to the company's systems and processes and do not compromise on our
value systems. We as an organisation abide by these principles, and will not
allow any employees to compromise on these. Thus, while, I would not like to
comment on the specifics, I would like to say that as an organisation, we
continue to focus on strengthening the systems and processes to make the our IT
business grow stronger and more profitable for our trade partners.

Consequent to the departure of these senior people, what is
the current organisational structure for Samsung IT business in India? Are there
any changes in the company's operations?

There are no changes in the company's businesses. We will
continue to have the IT Business Division being structured into Value and Volume
Business. While the Value Business will be headed by Princy Bhatnagar, we are in
the process of selecting a new head for our Volume Business. Meanwhile, the
Product Teams under the Volume and Value Business Heads continue to remain
unchanged-Raman Singh Khosla, PM-HDD; Harikrishna Pandey, PM-OMS; and Vineet
Kanaujia, PM-Colour Monitors. In terms of Value Business, we have Ramanjeet
Singh, PM-Note PCs; Anil Chandna, PM-Laser Printers; and Sunil Murlidharan, PM-TFT
Business.

Barring Anil who has joined us recently, all other product
managers have been with the company for around three years and constitute our
core team. We are also strengthening the IT sales staff by adding 10 sales
managers across the country to address the corporate reseller segment. This
sales team will be focused on TFTs, Note PCs and Laser business.

I am directly handling the IT business and as of this week,
we will also get the support of Ravinder Zutshi for our IT Business. He has been
made the Deputy MD.

Channel players all over the country are saying that these
resignations have left a vacuum. What steps are being taken to make sure that
channel partners enjoy the same level of vibrancy as before?

With our new, transparent and process oriented guidelines, we
seek to strengthen our IT business as well as grow the business of our trade
partners. Our guidelines for the channel this year are as per the following
framework-Star Elite partners will enjoy special programs to offer
performance-based differential support. Star partners should not carry more than
10 days inventory since we will not offer price protection on dealer stocks.

On the retail front, we will drive Samsung business through
our brand stores. We have identified 1,400 SIs with whom we will work closely to
promote Samsung products to end-customers. We will price our products in a way
that ensures minimal price protection and maximizes business potential.

Large deal pricing support will be provided only against
end-user confirmation by Samsung sales team and receipt of order details. We
will focus investments in developing Note PCs, TFTs and MFPs market size. These
three combined will form the growth engine for SIEL in 2005. In May, we will
also organise channel meets to share with our trade partners our schemes and
business plans.

There is considerable resentment amongst the Samsung Star
Elite partners due to several pending claims, which have been due for quite some
time. What is Samsung doing to resolve these cases and by when?

We have cleared a significant proportion of pending claims
and are carefully sifting the others to segregate the genuine claims from the
false claims. Our endeavour will be to clear all genuine dealer claims at the
earliest and I think we should be able to do so within a month's time.

Market reports indicate that Samsung as a brand has lost
considerable amount of market-share in the JFM quarter to competition. How far
is this true and what steps are being taken to correct this situation?

I would not concur with the statement that we have lost
considerable market share. We lost some business on account of our internal
constraints. But in the JFM quarter, we also gained market share in some
categories, that is, combos, CD-RWs and DVD-RWs in Volume Business and TFTs and
laser printers in Value Business.

Due to duty revision and VAT, channel stocking for most
brands saw a decline in the JFM quarter. Hence, none of the color monitor brands
saw a radical increase in Q1-05 volumes over Q1-04. Our Q1-05 sales amount for
color monitors, however, was relatively much higher than the Q1-04 sales amount
due to higher focus on high-ends.

ZIA ASKARI