The Great Universe And The Big Bang

Kim Woo Choong, father of Daewoo (Korean for ‘Great Universe’), founded the company in 1967. Before building the global empire, Kim Woo Choong worked in a shipyard. Daewoo got a shot in the arm after the rigid Korean government became liberal and decided to grant cheap loans against potential exports. Subsequently, Daewoo attained global scale with the help of numerous JVs. The company became one of the quintessential Korean chaebols with product offerings ranging from consumer electronics to automobiles to telecommunications to construction and much more. Ironically, it was Daewoo’s very appetite for faster growth that proved to be its undoing. It underwent major expansions, due to which its debt crossed $16 billion in 1999. Its strategy of entering immature and risky markets like Vietnam didn’t pay off . To add to this, it started selling products at very low prices to gain market share. The South Asian crisis of 1997-98 further disturbed Daewoo’s health. Daewoo also got into trouble in the Indian auto sector. The killer, though, was financial mismanagement and corrupt corporate governance. In 2000, Daewoo’s assets were put on sale. After two years of negotiations, GM finally acquired Daewoo Motors. However, neither Choong who took only two days off in a span of three decades nor anyone else had expected this early end to Daewoo.

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Source IIPM-Editorial,2006