The Korean Miracle

7/28/2019 The Korean Miracle

1/20


2/20

KOREA

Japanese colonial rule (1905-1910)

Cold war politics

The division of Korean peninsular

(Korean war 1950-1953)

American economic and

military support

Confucianism ethics emphasizing

hierarchy and ethics (Dictatorship)


3/20

In 1910- Independence

Japan colony Industrial development in

Northern Korea

General Park Chung Hee 1961 -Autocratic

Leadership

Develop five years plan for economic

development


4/20

Chaebol:range of industries.(south Korea)-

Hyundai,Daewoo,Samsung and Lucky Gold star.

Economic Planning Board(EPB)-

Govt.association for future growth

Credit with low interest rate.

Massive investment in capital intensive

industries-1970


5/20

Samsung History


6/20

In 1993 Sonymarket leader(premium price)

Try to improve quality

Arranged meeting in Japan , US , Europe


7/20

General Chun Doo gained control of the Korean govt.

after General Park.

He believed in opening the domestic market to foreign

competition

First five year plan in 1982 was a watershed in

Korean industrial policy

Chun regime reduced the govt. role in economic

planning and promoted market forces as the primary

mechanism for allocating capital, labor and

technology.


8/20

Pressure from China and Japan

Questioning the octopus like diversificationstrategies of the Chaebols.

The strategies led chaebols to emphasize mass

production of commodities rather than develop

the technical and marketing capabilities


9/20

Lee Byrung Chull started in 1983 with reporting

dry fish

Entered the sugar production in 1950 after

abandoning the operation in Seoul.

By 1959,Samsung emerged as one of the

largest business groups in South Korea

Five year management plan in 1967

Entered variety of unrelated activities.


10/20

Samsung introduce structured programs such

as SIX SIGMA and TQM

the line stop system was first used in Samsung's

washing machine

In November 1993 Samsung announced major

changes in the composition of top executive

In 1994 Lee reorganized Samsung in to four

core sectors


11/20

Electronics,machinery,chemicals and financialservices

In 1997 Samsung had financial problems

In 1998 Lee reduced the size of the secretarys

office from 250 to 150 employees

In April 1998 Lee eliminated the position of

chairman of the Samsung group.


12/20

Samsung accounted 26% of the total market

value

as In 2000 Samsung surpassed Hyundai as the

group in south Korea


13/20

Kim woo choong founded the Daewoo industrial

corporation in 1967

During the next decade, the Korean government

became more liberal in economic policies

Daewoo responded by establishing a number of

joint ventures with U.S. and Europeancompanies.


14/20

Kim won the international business award

Kim took steps to improve Daewoo affiliate

competitive position

In August 1993 Kim announced a plan to

achieve world class technology by building a

group level research center


15/20

Kim used the profits from textiles for rapid

expansion and getting loans at 40% interest.

Kim brought renamed Daewoo industries (

Hancock machinery) to profitability.

Close relationship with General Park

General Park assassinated in 1979

Kim maintained close relationship with govt. until1992


16/20

Managing Daewoos operations required

extraordinary efforts

In 1993 Samsung introduced new

management

Kim initiated Daewoo's global management

initiative


17/20


18/20

Govt. Intervention

Labor Market

Operation in global economy

Product quality from Korea

Daewoo leveraged

Battle in cheaper market segment

Investing in all fields(R&D, Production, Finance etc.)


19/20


20/20

Documents

The Korean Miracle