Comparative analysis of debts financing between Apple Inc. and Samsung Electronics Co., Ltd. on product pricing strategies

Abstract

For over 30 years, there has been numerous studies on firm’s pricing strategies influenced by financing decisions. The evidences of such effects are undeniably true but surprisingly less known and discussed in the corporate world. This paper hence demonstrates real-case firms such as Apple Inc. and Samsung Electronics Co., Ltd. in a methodological research such that financial statements are analyzed and strategies are theoretically explained accordingly. The findings are nothing unexpected but remarkably motivating nonetheless, as there is a strong implication of debt financing, especially of short-term debts on Apple Inc.’s pricing directions. Whereas its rival, Samsung Electronics, even though dominating different capital structure, is also dependent on both long-term debts and high operating fixed costs in determining pricing strategy.