Case Analysis Of Daewoo

A. CURRENT SITUATION

1. CURRENT PERFORMANCE

Market Cap = 489.7M Total Revenue = 516.8B

Return On Asset = 3.43 Return On Equity = 7.87

*M = Millions B = Billions | Data values shown in US Dollar

2. STRATEGIC POSTURE

Ð"? Mission: dedication to growth for shareholders and employees through quality, innovation, and profitable reinvestment

Ð"? Objective: as a leading electronics company is to enhance people's health and quality of life based on corporate philosophy.

Ð"? Strategies: low cost leadership, investment strategy, geographic expansion, quality differentiation, design differential strategy, and

Ð"? Environment Management Policy

Daewoo Electronics' environmental management is embodied in a policy, organization and approach dedicated to building environmental challenges into the company's global strategy.

v The corporation's mission, objectives, strategies and policies are clearly stated by the company itself.

B. CORPORATE GOVERNANCE / STRATEGIC MANAGERS

Structurally dominated by its controlling shareholder, the company failed to maintain proper accounting, internal controls, and financial discipline. Meanwhile ineffective private and public enforcement also led to the lack of corporate governance discipline. Corporate governance remained a secondary priority behind growth and expansion. In the end, Daewoo's boards of directors, officers, auditors, shareholders or stakeholders alike did not act as diligent monitors that provided oversight over the controlling shareholder.

C. EXTERNAL ENVIRONMENT: OPPORTUNITIES AND THREAT

1. Societal Environment

o Economic Ð'-employment rate, amount of disposable income

o Technological Ð'- highly technical inventions that are coming out in the market, international standards of Electronic products

o Political-Legal - increasing government regulations, trade and tariff agreements between nations

2. Task Environment

o Threat of new entrants Ð'- high

Ð'* Economies of scale Ð'- existing major players in this industry have already achieved significant economies of scale and it becomes difficult for new entrants to be competitive

Ð'* Capital requirement- enormous capital for manufacturing and research and development presents formidable entry barriers in this industry

o Threat of Substitute Products Ð'- high

The availability of substitute products places limits on the prices, market leaders can charge in an industry

o Bargaining power of suppliers Ð'- moderate

The availability of same products having varied features give tremendous bargaining power to the buyers in this market.

o Rivalry of competing firms - Intense

There are many firms today who are into Electronics that brings the competition more stiffly than usual especially with China's entrance to this industry.

3. Summary of External Factors Ð'- The opportunities of Daewoo are the following: the growing demand for consumer durables in emerging markets and the developing world, the trend for some of its products like plasma TV's, and the potential for high tech, high quality consumer durables in developed markets. Their threats are the increasing financial constraints, the government's withdrawal of their support, and the growing and intense competitive pressure in both domestic and foreign markets.

D. INTERNAL ENVIRONMENT

1. Corporate Structure Ð'- the company has a managerial autonomy in place. The structure as of now is not clear for those outside the company. Its founder's conviction may have created an inconvenience with regards to their structure but the company is now still on the process of restructuring.

2. Corporate Culture The company fortunately has a highly educated and motivated workforce that are presently redefining their culture based on the failures that the company undergone.

3. Corporate Resources Ð'-Daewoo is doing its best to improve its profitability and it also takes care of its high debt-equity ratio (financial). It is also focusing on research and development related to technology and production process (r&d). In the human resource development, the company is designing extensive in-service training inputs to remold their employees to meet the needs of their new strategies.

4. Summary of Internal Factors Ð'- the strengths and weaknesses of Daewoo that are important to be considered at present are the following: its access to economies of scale