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Daewoo: What Went Wrong?

An activity for Strategic Mangement under Mr. Peter Daniel Fraginal. A case analysis about the Korean company Daewoo.

Valerie Itom

on 5 January 2013

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Transcript of Daewoo: What Went Wrong?

Actions that Leads to its Bankruptcy A case study as to what went wrong with the second largest conglomerate in South Korea Background of the Case Alternative Solutions Daewoo is known to be the South Korea’s second largest company till it started to fell down due to Asia’s financial crisis, liabilities are greater than assets, labor market, and government intervention. Focused more on expansion rather than earning profit
No contingency plan
Fatal policy mistake
Plenty of small loans and big loans
Lost of jobs I. Statement of the Problem •To come up with way/s on how to pay up for the company's liabilities.
•To gain back the loyalty of banks and loan institutions, and of the government. III. Objectives IV. Analysis of External Environment For the remaining companies left under the Daewoo Group, we suggest that the companies consolidate their assets, prepare "work-out" programs for its remaing companies, and form a new company. We could also suggest that the company downsize their management, since having a big management will not be cost efficient in their current situation.
THANK YOU Ralph | Valerie | Marion | Karizza | Walter b. Minor a. Major How to compensate the Daewoo's liabilities?
How to prevent Daewoo's bankruptcy? Threat of new entrants is strong because others might see Daewoo's fall as an opportunity.
Bargaining power of buyers is weak because their products are affordable.
Bargaining power of suppliers is strong because as a conglomerate with different types business, supplies are essential.
Threat of subtitute is strong since consumers might look for other substitutes since they know that the company is already near bankruptcy.
Rivalry among competitors is weak since they are one of the chaebool that dominates South Korea.
Government intervention
Labor market
Operating in a global economy
Product quality from Korea
Daewoo Group: was heavily leveraged, major markets were stagnant, expenditures on R&D were increasing, labor unrest was continuing, and government policy was turning against the company
Factors that affected Daewoo's performance Sources:
en.wikipedia.org/wiki/Daewoo S – Second largest conglomerate in South Korea
W – Liabilities are greater than assets
O – Expansion and Connections
T – The developing world’s demand for cheap cars, TV sets and other goods the company produces did not grow as expected SWOT
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