CHAEBOLs

Of South Korea

International Marketing

Submitted by:

Shashank P. Shanbhag
Class II . Roll# 25

CHAEBOLs Of South Korea

What are CHAEBOLs -
Chaebol refers to a South Korean form of business conglomerate. They are powerful global
multinationals owning numerous international enterprises. The Korean word means "business
family" or "monopoly" and is often used the way "conglomerate" is used in English. The chaebol has
also played a some significant role in South Korean politics. In 1988 a member of a chaebol family,
Chung Mong-jun, president of Hyundai Heavy Industries, successfully ran for the National Assembly.
Since 2000, Hyundai has played a role in the thawing of North Korean and South Korean relations.

Sneak Peek into the South Korean and CHAEBOL History –

South Korea's economy was small and predominantly agricultural well into the mid-20th century.
When the military took over the government in 1961, there was increased cooperation between
corporate and government leaders in modernizing the economy. Government-chaebol cooperation
was essential to the subsequent economic growth and astounding successes that began in the early
1960s. Driven by the urgent need to turn the economy away from consumer goods and light
industries toward heavy, chemical, and import-substitution industries, political leaders and
government planners relied on the ideas and cooperation of the chaebol leaders. The government
provided the blueprints for industrial expansion; the chaebol realized the plans. However, the
chaebol-led industrialization accelerated the monopolistic and oligopolistic concentration of capital
and economically profitable activities in the hands of a limited number of conglomerates.

Chaebol were used as a means towards economic growth. Exports were encouraged, reversing the
older policy of reliance on imports. Performance quotas were established. The chaebol were able to
grow because of two factors—foreign loans and special favors

Growth resulted from the production of a diversity of goods rather than just one or two products.
Innovation and the willingness to develop new product lines were critical. In the 1950s and early
1960s, chaebol concentrated on wigs and textiles; by the mid-1970s and 1980s, heavy, defense, and
chemical industries had become predominant. While these activities were important in the early
1990s, real growth was occurring in the electronics and high-technology industries. The chaebol also
were responsible for turning the trade deficit in 1985 to a trade surplus in 1986. The current account
balance, however, fell from more than US$14 billion in 1988 to US$5 billion in 1989. The chaebol
continued their explosive growth in export markets in the 1980s. By the late 1980s, the chaebol had
become financially independent and secure—thereby eliminating the need for further government-
sponsored credit and assistance.

Characteristics of CHAEBOLs –

 Chaebol are still largely controlled by their founding families

 Chaebol are centralized in ownership.
 Chaebol often formed subsidiaries to produce components for exports
 Chaebol are prohibited from owning private banks, partly in order to increase the
government's leverage over the banks in areas such as credit allocation. In 1990,
government regulations made it difficult for a chaebol to develop an exclusive banking
relationship

CHAEBOLs Of South Korea

The CHAEBOLs

Top 45 Chaebols of South Korea

Rank Chaebol Rank Chaebol
1 Hyundai 23 Haitai
2 Samsung 24 Hanil
3 LG 25 Keo Pyung
4 Daewoo* 26 Miwon (Daesang)
5 SK 27 Sinho
6 Ssangyong 28 Kang Won Ind.
7 Hanjin 29 Saehan
8 Kia 30 Dong Yang
9 Hanwha 31 Cheil Jedang
10 Lotte 32 Shinsegae
11 Kumho 33 Oriental Chemical Ind.
12 Halla* 34 Woosung
13 Dong Ah 35 Byuck San
14 Doo San 36 Shin Won
15 Daelim 37 Tongil
16 Hansol 38 Taihan Electric Wire
17 Hyosung 39 Tongkook
18 Dong Kuk Steel 40 Chong Gu
19 Jinro 41 Keumkang
20 Kolon 42 Sam Yang
21 Kohap 43 Hankook Tire Mfg.
22 Dongbu 44 Pum Yang
45 Tae Kwang Industries

* indicates Chaebol is encountering financial problems.

CHAEBOLs Of South Korea

Some of the more notable present and former conglomerates include the following:

The "Big Four"

 Samsung
o Samsung Electronics
 LG (formerly Lucky Goldstar, now separated into LS, GS and LG)
o LG Electronics
 Hyundai
o Hyundai Motor Group
 Kia Motors (Formerly a chaebol called Kia in its own right, now owned by the
Hyundai Motor Group)
 Hyundai Motor Company
o Hyundai Asan
o Hyundai Heavy Industries
o Hyundai Engineering and Construction
 SK Group (formerly Sunkyung Group)
o SK Telecom
o SK Corporation
o SKC Group

Other notable chaebol

 CJ Corporation (formerly Cheil Jedang)

 Dong Ah
 Doosan
 Daelim
 Daewoo
o GM Daewoo Auto and Technology (66.7% share owned by General Motors)
 Dongbu
o Dongbu Engineering
 Dongkuk Steel
 GS Holdings
 Halla
 Hanil
 Hanjin
o Hanjin Shipping
o Korean Air
 Hansol
 Hanwha
o Hanwha Chemical
 Hyosung
o Hyosung Motors and Machinery Inc.
 Haitai
 Keo Pyung
 Kohap Limited
o Kohap Chemical Corporation
 Kolon

CHAEBOLs Of South Korea

  Kumho Asiana
o Asiana Airlines
o Kumho Tires
 Kyobo
 Jinro
 Lotte
o Lotte Chilsung
o Lotteria
o Lotte World
 Nongshim
 Shinhan Financial Group
 Shinsegae
 SsangYong Group
o SsangYong Motor Company

Bibliography –
1) http://wiki.galbijim.com/Chaebol
2) http://www.country-data.com/cgi-bin/query/r-12303.html
3) http://en.wikipedia.org/wiki/Chaebol
4) http://en.wikipedia.org/wiki/List_of_South_Korean_companies

끝.끝.끝.끝.끝

CHAEBOLs Of South Korea