Building the Entrepreneurial Machine

Building the Entrepre-neurial Machine

Jay 제이Ito Moeko 이토 모에코

Yeji Song 송예지Eunsoo Shim 심은수

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CONTENTS01 THE EMERGENCE OF CHAE-BOLS

02 KOREA’S TOP 4 EN-TREPRENEURS

2.1 SAMSUNG2.2 HYUNDAI2.3 LG2.4 SK

30. CHAEBOL VS KEIRETSU

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CHAEBOLS

재벌CHAE-BOL

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CHAEBOLS

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CHAEBOLS

Definition of CHAEBOL: a family-controlled industrial conglomerate in South Korea : a closely held, integrated, yet diversified corporate entity that produces a wide array of product lines for global consumption

Origin of CHAEBOL

재 財 chae wealth, property벌 閥 bol faction, clan

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CHAEBOLS & FAMILIES

Hyundai 현대 - Jung Family, Jung Ju Young ( 정주영 )

Samsung 삼성 - Lee Family, Lee Byung Chull ( 이병철 )

LG Group 엘지 - Koo & Huh Family, Koo In Whoi ( 구인회 ) Huh Man Jung ( 허만정 )

In the year 2004, after 57 years of partnership,

LG Group

GS Group

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RISE OF THE CHAEBOLS

- Early 1960s President Park Jung Hee encouraged business to invest in the productive economy

- With other late industrializing countries after World War Ⅱ, Korean firms had to industrialize by borrowing and improving technology that had been developed by experienced firms in more advanced economies

- Korean firms began their rise by combining reengineered technology and mass production with competitive labor costs

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SAMSUNG

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SAMUNG’S HISTORY

SamsungFrom 1938 ~ Present

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SAMSUNGLee Byung-Chull ( 이병철 )

1938 - Samsung Trading Company( 삼성상회 ) in Daegu

1953 & 1954- Cheil Sugar & Co. , Cheil Wool Texitle & Co.

1960s- Moved into the service sector- End of 1960s total sale: $100 million

1970s - Entered Electronics and Heavy Industries - End of 1970s total sales: $3 billion

1980s - Succeed in making 64KDRAM - Started to make “Worlds First” different types of semiconductors

SAMSUNG Samgyeop-sal

1990s - Digital Frontier Samsung - With it’s digital and internet technology Samsung became a “Digital Company”

2000 – Present- Represents Korea- Selected in Top 5 Brand Company- Take 21% of Korea’s export

Lee Kun Hee ( 이건희 )

124,100,000 EUR220,120,400,000 KRW

SAMSUNG Samgyeop-sal

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SAMSUNG’S BRAND VALUE

Machinery & Heavy Indus-tries- Samsung Heavy Industries

Electronics Industries- Samsung Electro-Mechanics- Samsung SDI- Samsung Corning Precision Ma-terials- Samsung SDS- Samsung Techwin- Samsung Mobile Display- Samsung Digital Imaging

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SAMSUNG’S AFFILIATES & SUBSIDIARIES

Chemical Industries- Samsung Total Petrochem-icals- Samsung Petrochemicals- Samsung Fine Chemicals- Samsung BP Chemicals

Financial Services- Samsung Life Insurance- Samsung Fire & Marine Insurance- Samsung Card- Samsung Securities - Samsung Investment Trust Man-agement- Samsung Venture Investment

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SAMSUNG’S AFFILIATES & SUBSIDIARIES

OTHER AFFILIATED COMPANIES- Samsung C&T Corporation- Samsung Engineering- Cheil Industries- Samsung Everland- The Shilla Hotels & Resorts- Cheil Worldwide- S1 Corporation- Samsung Medical Center- Samsung Human Resources Development Center- Samsung Economics Research Institute- Samsung Lions- The Ho-Am Foundation- Samsung Foundation of Culture- Samsung Welfare Foundation- Samsung Life Public Welfare Foundation

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SAMSUNG’S AFFILIATES & SUBSIDIARIES

현대 　現代

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HYUNDAI

1940s 1947 Establishment of Hyundai Togun by Chung Ju-Yung Chun Ju-Yung November 25, 1915 ― March 21, 2001

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HYUNDAI’S HISTORY

1960s

1965 Hyundai Construction become the first construction company to go overseas ex) → Thailand, South Vietnam, Australia Alaska, and Guam1968 Hyundai Motors was established

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HYUNDAI’S HISTORY

- Hyundai Merchant Marine- Hyundai Securities- Hyundai Elevator- Hyundai Logiem- Hyundai Asan- Hyundai U&I- Hyundai Research Institute- Hyundai Investment Network

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HYUNDAI’S AFFILIATES & SUBSIDIARIES

Chung Ju-Yung resided as the president of the Federation of Korean Industries (FKI)

Hyundai Motor Com-pany

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HYUNDAI’S HISTORY

Pony

Sonata more upscale midium-sized car →North American Market

1990~21C

Hyundai kicked off high-technology R&D and restructuring auto, machine ship building, and elec-tronics→ over 10% of the total revenue into R&D　1994 　 U.S sales of Hyundai cars topped 125,000, a company record

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HYUNDAI’S HISTORY

HISTORY•1998 – Visit to the North Korea with a herd of cows and the launching of Mt. Kumgang tourism•1999 – Establishment of Hyundai Asan•2000 – Former CEO Jung Mong-hun continues inter-Korean economic cooperation•2001 – The honorary chairman, Jung Ju-yung passed away and the completion of Hyundai group restricting•2003 – Chairman Jung Mong-hun passed away and commencement of a new system and structure for further breakthroughs under CEO Hyun Jung-eun•2004 – Proclamation of Vision 2010.

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HYUNDAI’S HISTORY

Nowadays

consisting of 47 companies with 83 branch offices in 46 countries

Annual Sales for 1994 ＄ 49 billion more than 161,000 employees worldwide

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HYUNDAI’S HISTORY

Lucky-Goldstar

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LG

Back-ground• 1947 founded by Koo In-Whoi

Started as Lucky Chemical Company

Initially manufactured cosmetics.

branched out into plastics (combs, toothbrushes, basins…)

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LG’S HISTORY

• 1953 Establishment of Trading company.

• 1958 Creation of Goldstar. – Production of radios, refrigerators and Tvs.– Mergeance of Lucky-Goldstar.

• 1967 Pioneer in oil refinery ( South korea)• 1995 Renamed LG

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LG’S HISTORY

• 70-80’s

Lucky

chemistry

Goldstar electron-

ics

« Dual-track » product in-novations

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LG’S HISTORY

Nowadays

• 39 Affiliated companies, 39 joint-ven-tures

• 130 Branch offices around the world

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LG’S HISTORY

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LG’S AFFILIATES & SUBSIDIARIES

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LG’S AFFILIATES & SUBSIDIARIES

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LG’S AFFILIATES & SUBSIDIARIES

LG TOTAL SALES Samgyeop-sal

LG TOTAL SALES Samgyeop-sal

Differentiation

• Personality Cult• Decentralized.– Development of competent professional

managers–Major strategic decisions still made in

the chairman’s office but individual companies are free to pursue their busi-ness as they see fit.

LG DIFFERENTIA-TION

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• A Conservative company– Avoids risky ventures

• Group harmony oriented– Motto is « INHWA »

• Emphasis on the sustainability

• Emphasis on the importance of competitive-ness

LG’S SPIRIT AND VISIONS Samgyeop-sal

• Majors efforts and investments on R&D– Centered in the Central Research institutes in taedok

• Undertakes research in chemical technologies

– R&D complex in Anyang• Focused on electronics research

• Agressive production overseas

LG DEVELOPMENT & STRATE-GIES

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Strict attention on Quality

Commitment to efficiency

Strategic Management

MissionLG’s goal is to become number 1 electronics manufacturer in the world

LG DEVELOPMENT & STRATE-GIES

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DAEWOO Group•Founder : Kim Woo-jung•Founded : 1967•Defunct : 1999

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DAEWOO GROUP

DAEWOO’s Past & Present

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DAEWOO’S PAST AND PRESENT

Daewoo firstly started aggressive management and had many good effects on the development of South Korea. Also, like Samsung and Hyundai, Daewoo attracted attention from people all over the world by performing a role of enhancement of national interests as a globalized conglomerate.

Although Daewoo group is disappeared now, it’s affil-iates such as Daewoo Construction, Daewoo Internationals, and Daewoo Shipbuilding & Marine Engineering are still re-maining and being acknowledged as international compa-nies from all over the world.

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DAEWOO GROUP

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•Founder : Choi Jong-geon (최종건 )•Founded : 1939•Headquarters : Seoul, South Korea

SK GROUP

Samgyeop-salHISTORY

1953 - Sunkyung Group began when the current founders acquired Sunkyung Textiles

1958 – Sunkyung started the Korean first fiber export and producing the basic polyester thread1973 – Sunkyung established Sunkyung Petroleum1980 – Sunkyung took over the privatized Korean Petroleum Public Corporation1983 – Sunkyung started to develop overseas oil fields1985 – Sunkyung formed the basis of the general information communications business

SK’S HISTORY

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1996 – Sunkyung Telecom launched the first commercial CDMA cellular phone service for the first time in the world

1997 – Sunkyung changed its name from Sunkyung to SK

2004 – SK succeeded in launching DMB saterlite

2006 – SK launched into revitalizing mobile phone market of 3.5 generation

2007 – SK provided more advanced services by constructing nationwide HDSPA network

2010 – SK Group is now the fourth largest conglomerate(chaebol) in South Korea

SK’S HISTORY

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Energy & Chemicals- SK Energy - SK Chemicals - SKC- SK E&S - SK Gas - SK LubricantsMarketing & Logistics services

- SK Networks - SK Walkerhill - SK E&C- SK Shipping - SK Securities - SK M&C

SK’S AFFILIATES & SUBSIDIARIES

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SK’S AFFILIATES & SUBSIDIARIES

Information & Telecommunication

- SK Telecom - SK C&C - SK Broadband- SK Telesys - SK Telink -SK Communications

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SK GLOBAL

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There is a criticism about SK group that it has de-veloped itself with a improper way such as a cozy rela-tions between politics and business. When Roh Tae-woo was the president of South Korea, Roh Tae-woo’s daughter and Choi Tae-won, the current CEO of SK group, got mar-ried. Because of it, Sunkyung could make the basis to de-velop the company to the number one oil refining com-pany and telecommunication company in South Korea.

CRITICISM

KOREAN CHAEBOLS VS JAPANESE KEIRETU

KOREAN CHAEBOLS(Samsung)

＄ 62 billion　　 50　　 150,000

　 Family held

Highly cen-tralized

Early stage of development

JAPANESE KEIRETU(Mitsubis

hi)＄ 433 billion　　 189　　 400,000

　 Publicly held

Moderately decentralized

Clearly estab-lished

Size ・ Annual Sales・ Number of compa-nies ・ Number of em-ployees

Nature of owner-ship

Centralization of power

Professionalization of Management

KOREAN CHAEBOLS VS JAPANESE KEIRETU

KOREAN CHABOLS(samsung)

unequals ; government over firm

Almost exclu-sively external

financing

Employees as variable cost of

production

relative equals

Large percentage of internal financ-

ing

Employees as fixed cost of production

Business-govern-ment relations

Nature of financ-ing

Approach to hu-man resource management

JAPANESEKEIRETU(Mitsubi

shi)

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