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2. (1) the change of Korean business ecosystem - pain of labor & mgt’ dispute in 1980 - business diversification in 1990 - collapse of venture burble in 2000 ** Large corp. obtain global competitiveness through business restructuring and business innovation 2

3. (2) appearance of Korean representing corp. Samsung Electronics, Hyundai automobile, LG electronics, POSCO, Hyundai heavy engineering, SK telecom. - Samsung Electronics, POSCO, SK telecom: 10 -10 club (sales 10 trillion won, 10% profitability) IT manufacturing, IT services - accumulate core competence through business innovation for a long time, not temporarily * Choice & focus by business restructuring, virtuous cycle by strengthening competitiveness in core business( p 102) 3

4. (2) appearance of Korean representing corp. Samsung Electronics, Hyundai automobile, LG electronics, POSCO, Hyundai heavy engineering, SK telecom. - total market price of 6 corp. is 24.5% of whole price - Samsung Electronics : D Ram, flash memory, cellular phone, display: quality oriented business - Hyundai automobile : globalization & improvement of quality, collaboration with Hyundai Mobis p100 parts modularity leads increase of quality, decrease of cost(economy of scope) - LG electronic: cellular phone, display, home appliance (air-con, refrigerator): TDR(tear down and redesign) process innovation leads increase productivity 4

5. (2) appearance of Korean representing corp. Samsung Electronics, Hyundai automobile, LG electronics, POSCO, Hyundai heavy engineering, SK telecom. - POSCO: 3 rd largest in scale in 2006 Finex construction method lead cost down as 82% - Hyundai heavy engineering : 1 st shipbuilding in global, manufacturing ship engine, propeller, motor development of ice-breaker boat - SK telecom: CDMA, cellular phone(growth based on domestic market)quality, new entry to global market ▶ choice and focus by business restructuring ▶ virtuous cycle by strengthening competitiveness in core business 5

6. (3) growth factors as representing corp. choice & focus by business restructuring, virtuous cycle by strengthening competitiveness in core business - secure substantiality by focusing from outer oriented business to core business(growth vs. profitability) - internal innovation to save cost & strengthen competence - attention to core human talent & change of payment system from seniority-based to annual & incentive - development high value core technology by increasing design & brand power - secure global competitiveness 6

7. - brand value: 2010(19th), 2011(17th), 2012(9th) - brand market value: 23,430(million $) - Management principle committed by Samsung observe the law and ethics. maintain clean and fair organizational culture. respect customers, stockholders, and employees. consider the surroundings, safety, and health. accomplish social responsibilities as a member of global citizens. 7 talent, technology, contribution to human Contribute to human by creating the best products and services based on the talent and technology (management principle) 2012 brand value Global Top 9

8. - business performance(trillion) net profit: 24.5 won(2010), 20.3 won(2011) sales: 254.6 won(2010), 274,3 won(2011) total assets: 391 won(2010), 435 won(2011) 254(debt)/180(equity) 8 2011 brand value Global Top 9 talent, technology, contribution to human Contribute to human by creating the best products and services based on the talent and technology (management principle)

9. - interrelated enterprises electronics: Samsung electronics, Samsung SDI, Samsung SDS, Samsung electricity, Samsung display…. finance: Samsung stocks, Samsung insurance, Samsung card, Samsung venture investment… heavy chemistry: Samsung heavy chemistry, Samsung oil chemistry, Samsung precision chemistry, Samsung techwin independent: Hotel Shilla, Samsung medical center, Samsung planning, Samsung products, Everland, Jaeil textile, Samsung economy institutes, Samsung biologics… 9 2011 brand value Global Top 9 talent, technology, contribution to human Contribute to human by creating the best products and services based on the talent and technology (management principle)

10. (4) digital economy & the growth of IT corp. environments which Samsung electronics, LG electronics have grown up successfully and rapidly - price down & promotion of consumption through IT & related tech. - creation of new markets in new digital products - creation of profit caused development of new products & creation of new demand-supply structure - big growth of digital TV, digital camera, DVD globally - new competition starts on the zero base - disappearance of corp. stick to analog in the global market - emerging of new middle standing corp.:Prime(construction), C&(marine, logistics), S&T(automobile parts), youjin(cement) 10

11. [Digital economy?] [Digital economy?] 11 Digital Economy means economic activities which depends on production elements of information and knowledge that is digitalized and networked. [definition of digital economy] internet economy major economic activities are realized on virtual space through internet network economy focus on transmission of information through network nets knowledge-based economy diffusion & creation of knowledge, innovation by learning application, ▶ These become the sources of competitiveness

12. (5) Venture burble and collapse venture company: creative small & medium company which challenge new business by developing high tech. and ideas. - new-born business of tech innovation & ideas - high risk but expect high profitability - entrepreneurial spirit - the number of venture corp. : 2,042(1998 year), 11,392(2001year, increase 5 times) - causes of venture burble: Global IT venture burble affects that of Korea Rapid diffusion of internet in Korea fostering policy by government 12

13. (5) Venture burble and collapse - venture corp. are just on external appearance by governmental supply of man power & land, tax support, tech. development - bad check of venture corp. & arrestment of CEO: Serom technology ‘Dial pad’, Gold bank - Madison, Hangul & computer, Daum communication, Bit computer. growth strategy by establishing ‘venture confederation’ & inter - equity investment 13

14. standard of judgment in business performance: growth(increase in sales), profitability(operating profit rate), stability(equity capital rate) (1). Improvement of financial structure & decrease of business growth - 1987 ∼ 1996: growth rate(9.6%), profit rate(6.9%), debt ratio(300%) - 1997 ∼ 2006: growth rate(4.6%), equity capital rate(38.1%) corp. 14

15. (2) slowdown of profitability - slowdown of profitability caused by decrease of business growth - increase of competition by market liberalization & globalization - polarization of business performance (3) Korean leading 10 corp.: apparent polarity of business performance, general polarity phenomenon( 빈익빈 부익부 ) (4) insufficient number of candidates of Korean global corp. 15