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[Focus] Business groups hone strategies for 2001

Posted December. 15, 2000 14:04,   


Sound management, new future-oriented businesses, integration of online and offline -- these are the names of the game that Korean chaebol groups are playing with. Their priorities might differ, but these are the keywords for their management strategy for the new year.

In particular, Hyundai, LG and Kolon stress sound management. Hyundai is in a position to focus on massive restructuring next year. Hyundai might have to suspend its North Korean investment projects until it can attract massive investment from Japan.

Kolon is going to screen its businesses and will close some unprofitable or unclear businesses. LG Group is planning to make massive investment in the information technology sector, but it might limit investment in other business sectors, playing top priority in cash flow.

Samsung, Kolon and Hyundai Motor will strengthen their existing capabilities, while Lotte, Doosan and Pohang Iron & Steel (POSCO) are expected to challenge in new businesses. Yoo Han-Ho, a research fellow at Samsung Economic Research Institute, said that it is necessary to adopt a business strategy to strengthen core sectors and abandon unprofitable units.

"Samsung Electronics is expected to make huge investment in non-memory semiconductors and wireless Internet businesses," he said.

Samsung has discarded its plan to establish a biotechnology company. It must have judged that the current economic situation is too uncertain to make a massive investment in a business that takes a long time to recover investment.

Hyundai-Kia has almost no choice. It is required to focus on strategic collaboration, expand overseas sales and source parts and components through e-commerce to sharpen its global competitiveness.

Lotte Group and Doosan Group are expected to accelerate fostering their existing businesses based on their financial soundness. Doosan already has acquired HANJUNG, and Lotte took over a home shopping firm.

POSCO is advancing into information technology (IT) and environment businesses for the future. SK and LG are expected to concentrate on IT businesses for the time being.

It is believed that Korean corporations now consider the Internet not as a revenue-generating means but as means required for corporate activities such as procurement, manufacturing, distribution and sales, just like the role of air to a human being.

Particularly, each group is focusing on business to business.

SK and Kolon might not reduce their investment in venture businesses. The business circle is paying close attention what will be the strategy of e-Samsung, which will be led by Lee Jae-Yong, son of Samsung Group chairman Lee Kun-Hee.

Lee Byong-Ki eye@donga.com