LEE KUN-HEE (1942-2020)
LEE KUN-HEE (1942-2020)
Dear Readers,
Today, we will talk about another business tycoon from South Korea. It will cover the following information:
1. A brief biography of the chosen business tycoon from birth to present age.
2. Business ideas and information, starting and the current amount of capital, current international markets.
3. Reasons for Success.
4. Limitations.
5. Suggestions for improvements for long-term growth, survival and sustainability.
A BRIEF BIOGRAPHY
He
graduated in economics from Waseda University, Tokyo. Further went to George
Washington University to earn a Business Administration Master degree. He was
an active sportsman and amateur athlete. He spent most of his leisure time raising dogs, riding horses, and racing his sports cars. Moreover, he served as
Amateur Wrestling Association’s president. Married to Hong Ra-hee, he has four
children one son and three daughters.
BUSINESS IDEAS
Lee
started working with his father in 1968. He served as the chairman of
conglomerate Samsung Group, for more than 2 decades, initially from 1987-2008
and later from 2010-2020. He also served as chairman of Samsung Electronics
from 2010-2020, which is its flagship company. He became a member of the International Olympic Committee in 1996.
In 1993, he took the courageous decision of making Samsung
internationally competitive. According to global standards, Samsung has rated the second standard, and to overcome these shortcomings Lee took the drastic decisions
of radical reforms and innovation. He asked his employees to change everything
and focus on product quality rather than quantity even if it meant fewer sales.
Samsung electronics was ranked as the leading memory chip exporter of the world by
1996. This decision of Lee increased the total revenues of Samsung group to 87
billion dollars.
He
faced conviction twice in his lifetime, first in 1996 and second in 2008 on
charges of tax evasion and corruption and on both instances, he was pardoned. Because
of the Samsung slush funds scandal, Lee resigned in April 2008 but resumed chairmanship in March 2010. He suffered from a crippling heart attack leaving him
in a coma until his death and his son, Lee Jae-Yong as the de facto chairman of
Samsung group in 2014.
He
held the position of South Koreas richest businessman since 2007 with a net
worth of $21 billion. He was ranked 35th most powerful Business
tycoon in 2014 by Forbes.
REASONS OF SUCCESS
Lee
was a skilled man with an assertive personality and had all the qualities of a
great leader. He was courageous, fearless, a risk-taker, and had a bird’s view.
He had great foresight for uncertain circumstances. He had forensic knowledge
about where and how to make investments and gain profits.
His
bold decision of shelling out money to develop new production units of memory
chips and screen panels in the fast-evolving technology industry during the
financial crises of 2008 fueled the rise of Samsung, makers of Galaxy
smartphones. The company is a supplier of semiconductors to its rivals Google
Android and Apple Inc. Today company’s revenues have increased to 39 folds
compared to 1987 and it helps the South Koreas economy to propel around 20%.
He
considered that the key to his successful business empire has been and
continues to be the talent, dedication, and professionalism of his employees.
He made sure that providing market-leading training to employees is the
priority of Samsung. He introduced a new management concept to overcome the
shortcoming Samsung was facing, where employees had the right to put forward their
viewpoint and pinpoint the errors to their managers. He stressed product
quality over quantity.
LIMITATIONS
Samsung
group faced a major failure in 1990 when it expanded into the auto industry and
later sold almost bankrupted Samsung motor to Company named Renault. Although Samsung is maintaining impressive designing and manufacturing capabilities, it
has lost its edge in the marketing field, perhaps, the company needs to revamp the
marketing strategy. Its U.S. market shares of smartphones dropped by 2.3% during
2014 and 2015. As China is producing low priced products, it has impacted sales
of Samsung badly. Whilst Samsung is a hardware leading brand it lacks its own
Operating System and is too dependent on android OS. As Samsung is a supplier of
semiconductors, its profit margin is relatively low as compared to its
competitors which affect its revenues.
Since its,
establishment Samsung has been under hereditary leadership, even though it
provided immense stability and success, the company could stagnate because of a lack of fresh ideas and minds. Heir of Samsung Jay Lee vowed that transfer to the next generation would end with him.
SUGGESTIONS
Following are some suggestions for Samsung to spice up their market game:
1. Although Samsung faced failure in gaining market share with its Tizen Mobile OS, it should give another try in making its own impactful Operating Software for mobile phones and tablets.
2. Samsung should focus on manufacturing the best quality smartphone and tablet application processors which can help Samsung in gaining bargaining power over its competitors.
3. It should work on product and technological variation and flexibility. By providing variety to its customers, it can compete with higher market shares. It should also work on providing products with advanced technology.
4. It should encourage its employees to be innovative and creative like Lee once introduced a radical management style in which employees were given equal opportunity to put forward their ideas.
5. It should provide health and safety to its employees to increase their job satisfaction and to lift the team morale for achieving its set SMART goals.
6. It should focus on expanding to unchartered geographical areas and exploring Asian and European markets and increasing its market area aggressively so that it ends U.S. dependency.
7. Products prices should be maintained while providing the best quality as it is vital to the sales market.
CRUX
Though Samsung is facing an abundant number of challenges, it is very promising for the future. It just needs to play with promising opportunities to outdo its rivals and competitors.
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