1. Woongjin Coway Water Purifier
템플릿 뒤에 좀 뭐 넣기
Woongjin Coway Water Purifier
CHOI, Jaehoon LEE, hyojung Kim, yejin

2. 0. Index Rental Service & Cody(1997) Development of RO Membrane
Problem
Development of RO Membrane
(2007)
Strategic Alliance
Problem
Success

3. 1. Introduction – Company Overview
Establish the company
Obtain Clean Mark
Launch air cleaner
Start the rental service system
Launch water-softener and bidet
Be listed on KOSPI
Category of business
Manufacturing and Retail
President CEO
Hong, jun-gi
Annual Turnover
12,131,000
The Number of Employees
1,746

4. 1. Introduction – Purifier market in 1990s
<How have water purifier market grown?>
First appearance of mineral water for foreigners
The first water purifier in Korea was used in the U.S. army
Raising demand in clean water caused by the pollution case and improved economy
Environmental pollution caused by the Industrialization
 Awareness of water problem
Phenol pollution case in Nakdong River
Asian Games
Seoul Olympic … …
1948
1970
1986
1988
1991
Water purifier Market has grown since 1990s

5. 2-1. Woongjin Coway’s Rental Service
<Why water purifier was not popular before 1998?>
Expensive : Only big company or public place had the water purifiers
Not high-technology : There was a distrust on the functions of the product
No following-up service : Many complaints arose from filter problems
At 1998 : IMF
- Contraction in consumption
필터는 계속 쓰면 더러워지는 데 사후처리를 안하면 안됨
Sales
Expensive Luxuries!!
Year

6. 2-1. Woongjin Coway’s Rental Service
<Why rental service is needed?>
Customer didn’t buy it or couldn’t be satisfied with it
Failed to attract customers
Then, let the customers rent a clean water purifier( first released).
<What benefits can customers get from the rental service?>
\1,000,000  \26,000/month + additional service(CODY service)
방문판매 방식. 판매사원들이 100만원 이상의 고급 정수기를 가정과 업소를 돌아다니며 판매.
렌탈 서비스가 무엇인지
렌탈 서비스를 어떻게 받는것인지
기존의 렌탈 서비스는 어떠했는지
렌탈 서비스는 수지에 맞지 않을 것이다?, IMF인데 2년동안 어떻게 기다리느냐?, 렌탈을 어떻게 관리하느냐?  코디 등장!
Woongjin’s rental water purifier

7. 2-2. Woongjin Coway’s Cody Service
<What is Cody?>
Cody(Coway-Lady)
Experts of managing the water-purifier
Providing follow-up management
<What do Cody does?>
Carrying out regular inspection and changing the filter at free
Before Service System
Filter-replacement time, The time to change component, How to change them
<What benefits can Woongjin get?>
The number of Cody : 13,500(2011)
Deliver the careful image and trust of customers

8. 3. Innovation of RO Membrane
<Why Woongjin innovated their technology?>
The need for pure water is a problem of global proportions
Water treatment has become an area of global concern
RO systems have emerged as an effective solution
Huge quantity of water treatment with less chemicals & smaller space
But, it was produced only by five foreign filter makers and one domestic company
Growth rate was under depression in 2006~2008
Something new to allure customer 
The annual number of new customers
The need for pure water is a problem of global proportions. With each passing year, the quality of the planet’s water measurably deteriorates, presenting challenges for the major users: the municipal, industrial, military, and agriculture/environmental sectors. Water treatment has become an area of global concern as individuals, communities, industries, nations, and their national institutions strive for ways to keep this essential resource available and suitable for use. RO systems have, over the past 30 years, emerged as an effective solution to transform saline, brackish, and contaminated water into a useable and/or potable product. The RO technology sector still has areas of promising activity and a market for replacement and upgraded equipment.

9. 3. Innovation of RO Membrane
<What did Woongjin succeed?>
Woongjin successfully developed RO membrane(2007)
The 4th largetest RO membrane market share in the world
The durability of the filter was enhanced
When the pollutant is accumulated, it makes the purification function worse, consequently, the filter should be replaced
<What’s the impact of RO system? >
The development of source technology for the RO membrane will enable them to save costs by 30%
 Save 50billion won annually!!
A base for a future growth in the water treatment industry including desalination, etc
역삼투 멤브레인은 머리카락 굵기의 100만분의 1정도로 가는 구멍으로 이뤄져 있다. 그래서 중금속 등 이온상태의 물질까지 분리할 수 있어 가정용 정수기, 해수담수화, 도금폐수처리 등에 사용 된다. 이 기업은, 필터의 내구성을 높이는데 주력하고 있다. 오염물질이 계속 쌓이게 되면 정화기능이 떨어져 멤브레인을 교체해야 하기 때문이다.
화학섬유업체인 웅진케미칼은 필터에 들어가는 원료를 최종제품까지 생산하는 일괄 생산라인을 갖추고 있어 원가를 절감할 수 있는 이점을 갖추고 있다. 환경가전기업인 웅진코웨이의 계열사로 빠른 기술상용화도 용이하다.
The filter is the core component in water purifiers. In
Approximately 70% of domestic water purifiers use the
membrane, and ultra filtration (UF) membrane purification.
general, purification methods are divided into RO
water. The RO membrane requires advanced technology;
that enables the removal of impurities and sediment in
RO membrane method. It is the membrane in the filter
it should be very permeable and the salt rejection rate
pressure. At present, the RO membrane is produced by
mechanics should be strong enough to endure feed
should be high. At the same time, the membrane’s
Chemical, and one domestic company Saehan Industries.
five foreign filter makers, including the US-based Dow
membrane, we expect purifier production costs to
As Woongjin Coway successfully developed an RO
by as much as 30% or W60bn annually. The counter
of RO membranes will drive down filter production costs
plummet. The company believes the in-house production
its profitability improve as internally-produced membranes
a W22.2bn investment. We predict the company will see
established a water purifier filter production complex with
will be fully adopted from 2008.
looking at the bigger picture, we see that the company
membrane will enable the counter to save costs. When
The development of source technology for the RO
in 2010F. The company plans to increase its market
market should expand from W500bn in 2007F to W700bn
secured a future growth driver. The purifier RO filter
expansion of overseas sales.
2010F through the creation of new revenue sources and
share to more than 15% (or annual sales of W100bn) by
membranes, making it the first RO membrane producer
Korea, Woongjin Coway will mass produce RO In
among global water purifier makers. In the meantime, it
into the industrial filter market.
could take some time before the company branches out
Industries (008000, NA). Saehan Industries owns RO
selected as the preferred bidder for the sale of Saehan
On Sep 14, a consortium led by Woongjin Capital was
membrane manufacturing technology for both household
of industrial RO membrane technology.
Industries, it would quicken Woongjin Coway’s acquisition
and industrial uses. If the Woongjin Group buys Saehan
//////////////////////////또다른 자료///////////////////////
Reverse osmosis membranes are used widely for brackish water desalination. CSM brackish water RO membrane is especially more effective when the feed water is within 10,000 ppm of concentration. Because of its high performance rate and chemical resistance, it can be used for a variety of purposes. It is used in producing drinking water, industrial water, pharmaceutical water, waste water treatment and concentration of food and/or medicine.
//////////////////
STEP 3 (REVERSE OSMOSIS MEMBRANE FILTER FOR THE REMOVAL OF VARIOUS POLLUTANTS)

10. 3. Innovation of RO Membrane
Backgrounds
<What is a membrane?>
Selective separation : A separator or filter that allows the selective removal of a molecule from liquid or gas compound
Major types : microfiltration, ultra-filtration, Reverse osmosis( depending on permeability, selectivity)
Used as high-molecular materials, ceramic and metal materials.
A membrane is a separator or filter that allows the selective removal of a
molecule from liquid or gas compound. Although membrane manufacturing
differs by application such as water treatment, fuel cells and batteries, all
membranes have one thing in common – selective separation of a molecule.
Major types of membranes include microfiltration, ultra-filtration and RO
depending on permeability and selectivity and membranes are used as highmolecular
materials, ceramic and metal materials. Reverse osmosis
membrane filters out ion materials and are used for desalination projects and
the semiconductor manufacturing process, which require high-purity water
Treatment
The filter is the core component in water purifiers. In
general, purification methods are divided into RO
membrane, and ultra filtration (UF) membrane purification.
Approximately 70% of domestic water purifiers use the
RO membrane method. It is the membrane in the filter
that enables the removal of impurities and sediment in
water. The RO membrane requires advanced technology;
it should be very permeable and the salt rejection rate
should be high. At the same time, the membrane’s
mechanics should be strong enough to endure feed
pressure. At present, the RO membrane is produced by
five foreign filter makers, including the US-based Dow
Chemical, and one domestic company Saehan Industries.
Reverse osmosis
Microfiltration
Utrafiltration

11. 3. Innovation of RO Membrane
Backgrounds
<What is RO membrane?>
70% of domestic purifiers use the RO membrane method
Through its – micro pores, RO membrane filter is capable of removing water contaminants such as heavy metals, water-borne microorganisms and other harmful organic chemicals.
Requires advanced technology;
Very permeable, the salt rejection rate↑
The mechanics; strong enough to endure feed pressure
A membrane is a separator or filter that allows the selective removal of a
molecule from liquid or gas compound. Although membrane manufacturing
differs by application such as water treatment, fuel cells and batteries, all
membranes have one thing in common – selective separation of a molecule.
Major types of membranes include microfiltration, ultra-filtration and RO
depending on permeability and selectivity and membranes are used as highmolecular
materials, ceramic and metal materials. Reverse osmosis
membrane filters out ion materials and are used for desalination projects and
the semiconductor manufacturing process, which require high-purity water
Treatment
The filter is the core component in water purifiers. In
general, purification methods are divided into RO
membrane, and ultra filtration (UF) membrane purification.
Approximately 70% of domestic water purifiers use the
RO membrane method. It is the membrane in the filter
that enables the removal of impurities and sediment in
water. The RO membrane requires advanced technology;
it should be very permeable and the salt rejection rate
should be high. At the same time, the membrane’s
mechanics should be strong enough to endure feed
pressure. At present, the RO membrane is produced by
five foreign filter makers, including the US-based Dow
Chemical, and one domestic company Saehan Industries.
How RO membrane works
RO membrane filter in the process of water filtration

12. 3-1 Types of Innovation Product Innovation vs. Process Innovation
RO membrane was totally new type of membrane
Incremental Innovation vs. Radical Innovation
Woong jin coway kept developing new membrane technology
Architectural vs. Component
Membrane was a part of the water purifier
Competence Enhancing vs. Competence Destroying
Because of its superiority, customer do not choose other membranes but, RO membrane
A membrane is a separator or filter that allows the selective removal of a
molecule from liquid or gas compound. Although membrane manufacturing
differs by application such as water treatment, fuel cells and batteries, all
membranes have one thing in common – selective separation of a molecule.
Major types of membranes include microfiltration, ultra-filtration and RO
depending on permeability and selectivity and membranes are used as highmolecular
materials, ceramic and metal materials. Reverse osmosis
membrane filters out ion materials and are used for desalination projects and
the semiconductor manufacturing process, which require high-purity water
Treatment
The filter is the core component in water purifiers. In
general, purification methods are divided into RO
membrane, and ultra filtration (UF) membrane purification.
Approximately 70% of domestic water purifiers use the
RO membrane method. It is the membrane in the filter
that enables the removal of impurities and sediment in
water. The RO membrane requires advanced technology;
it should be very permeable and the salt rejection rate
should be high. At the same time, the membrane’s
mechanics should be strong enough to endure feed
pressure. At present, the RO membrane is produced by
five foreign filter makers, including the US-based Dow
Chemical, and one domestic company Saehan Industries.

13. 4. Strategic Alliance <Pay Free Service>
Strategic alliance with KEB, hyundai card, lotte card, and SK marketing company.
5. Rental fee
4. Cash
Coway
Customer
Point management
In 2008, financial crisis occurred. So, coway wanted to unburden customer’s rental fee.
Replace rental fee with card point
Unburden customer’s rental fee
Rental device
3. Change point to cash
1.Join
Pay free
card
Card company
2. Point accumulation

14. 4. Strategic Alliance <Results of pay-free service> 124.9%↑
In 2009, 1 million customer joined payfree membership service, including 110 thousands new credit card.
현재까지 페이프리 신용카드 가입자는 11만1150명"이라며 "신용카드를 포함해 페이프리 포인트 혜택을 누릴 수 있는 멤버수 회원수가 이번달 초 100만명을 넘어섰다"고 말했다. 
Rental growth
124.9%↑
about 7300 contracts↓

15. 4. Strategic Alliance Woongjin Saehan <Saehan M&A>
Woongjin wanted to quicken acquisition of industrial RO membrane technology and reduce cost
- The ratio of the materials of Saehan used in the Woongjin products was more than 50%
In 2007, the RO membrane was produced by five foreign filter makers, including the US-based Dow Chemical, and one domestic company Saehan Industries.
Saehan Industries owned RO membrane manufacturing technology for both household and industrial uses.
Established in 1972
Producing textiles and environment substances such as filters and sheets.

16. 4. Strategic Alliance <Results of Saehan M&A> + SAEHAN
With the acquisition of Saehan, Woongjin Coway expected
To augment its proprietary filter technologies
To reduce costs through vertical collaboration with substance manufacturer.
Saehan could secure a steady customer, Woongjin Coway
In conclusion, Woongjin can get the development of new materials related to textile and environment in order to sharpen competitive edge in original substances.
“Leveraging years-long experiences and technology prowess of Saehan in environmental materials sector, Woongjin Coway expects to gain significant synergy in improving competitive edge”

17. 4. Strategic Alliance <Water treatment companies M&A>
Business diversification through M&A
Woongjin have its own RO membrane technology
Woongjin entered water treatment field by merging water treatment engineering companies(GET in 2010, KC삼양정수 in 2011)
Synergy effect : Membrane technology + water treatment engineering
In 2011, Woongjin won a lot of contracts in water treatment field
(Totally 90 billion won)

18. 5. Success of Woongjin Coway
Increasing sales revenue
In 1994, sales was 84.8 billion won and kept growing steadily
After introduction of the rental service in 1998, the sales revenue has been increasing steeply in spite of the IMF crisis
Annual revenue
지난해 2005년 매출 1조 70억원, 영업이익 976억원을 기록했다. 1998년 IMF 외환위기 당시 웅진
코웨이개발의 매출액이 894억이었던 것에 비하면 7년 만에 11배 이상 성장한 수치다.
웅진코웨이가 1조 클럽에 입성할 수 있었던 것은 환경가전 제품의 속성을 활용한 렌탈 시스템의 성공으
로 소비자들의 만족을 이끌어낼 수 있었기 때문이다. 웅진코웨이의 렌탈 및 멤버십 회원 수는 2005년
말 기준으로 380만 명으로, 지난 해에 비해 14%가량 늘어났다. 제품 관리 및 서비스로 고객 만족을 위
해 활동하는 코디도 1만 명을 넘었다.
또한 지난 해 5월 웅진코웨이개발과의 합병이 성공적으로 마무리 된 것도 생활환경가전 업계 최초로 매
출 1조를 달성할 수 있었던 요인으로 꼽힌다. 실제로 합병 이후 매출원가의 감소와 지속적인 시너지 창
출을 통해 매 분기마다 영업이익률이 지속적으로 향상되었다.
2005년 11월 380만 렌탈회원(멤버쉽 포함)을 확보했다. 이것은 다섯 집 건너 한 집이 웅진코웨이 제품
을 렌탈해 사용한다는 의미로 렌탈 마케팅 도입 7년 만에 거둔 엄청난 성과라고 할 수 있다

19. 5. Success of Woongjin Coway
The number of rental customers also keep growing
Up to about 5millions totally
# of total rental customers(unit. 1000)
Purifier
Air cleaner
Bidet
Water softener
Leftover cleaner
Others
Total

20. 5. Success of Woongjin Coway
Certification & Award
WQA Certified Water Quality Specialist
WQA Gold Seal Mark
Certified Institution Approval, ISO 9001, ISO Certification
WQA Certified Water Quality Specialist
This is to certify that Coway Co., LTD., established in 1989, has an annual production of 700,000 units and total sales of 1,300,000 units, and is the greatest corporate enterprise of water purification systems in the Republic of Korea.
WQA Gold Seal Mark
The Gold Seal is a quality mark certified by the WQA for products that improve water quality. In March 1995, Coway acquired the Gold Seal for its entire product line, a first in the industry.
Certified Institution Approval
ISO 9001 Certification
Coway's quality control system was certified by TUV, the world's leading third-party inspection organization. TUV Bayern was founded in Germany in 1872 to carry out product development, design, manufacturing, inspection, testing, installation and services.
ISO Certification
Coway has worked to protect the environment, through efforts such as operating Korea's largest research center for environmental technology, home to some 170 scientists. The company has passed the TUV Bayern Group's ISO inspection and has been recognized for its environment-friendly management system.
Company & Brand Power
Global Brand Competency Index Number 1
GBCI (Global Brand Competency Index) No. 1 for 3 consecutive year (2004 ~ 2006) for Coway from JMAC (Japan Management Consultants)
GBCI: Global brand rating index by International Consulting Firm, JMAC. This brand index research is done in 8 of the world's leading countries including Japan, the U.S, France, China, and Korea, with the same rating standards to score the brand management level of each company in an industry.
Guiness Book of Records Coway Co., Ltd.
In September 1995, Coway became the first Korean company to obtain this certificate. The certificate recognizes entities that properly use knowledge and technology for water quality improvement and operate with honesty, sincerity and integrity based on WQA Ethics Principles.
No. 1 in Brand Power
The Korea-Brand Power Index (K-BPI) indicates the influence of a brand being marketed in Korea on consumers’ purchasing behavior. It was developed in 1998 by KMA Consulting Inc. Coway has ranked at the top of this index for seven consecutive years, from 1999 through 2005
Winner of the Korea Marketing Grand Prize for five consecutive years
In 2001, Coway was awarded the "Grand Marketing Prize" by the Korean Management Association. The company won in the Market Leadership Activity category for its exceptional performance in the area of marketing strategy and activities, and a company-wide survey based on market-oriented thinking.
Guiness Book of Records Coway Co., Ltd.
Global Brand Competency Index Number 1
No. 1 in Brand Power …

21. 6. Recent Trend of Woongjin Coway
Diffusion
- Woongjin Coway has the high-level filter technology so it can adapt this technology to the many kinds of products which need the filter
Globalization
- Five local subsidiaries in USA, Japan, China, Thailand, Malaysia, Netherland
- Export to more than 40 countries
Water Softener
Bidet
Air purifier
Vacuum cleaner
Food waste treatment system

22. SWOT analysis of Woong jin coway
First mover of cody & rental service
High market share and brand awareness in domestic market
Huge amount of investment on R&D
Low brand awareness in global market
Some business part have low brand awareness
Strength
Weakness
Opportunity
Threats
Export to other countries
price advantage compared to japan product
Various consumer segment
Cheap copy and fake products
Domestic market in slump
Soaring raw material costs

23. 7. Five Forces Model Bargaining Power of Customers
Bargaining Power of Suppliers
Many suppliers
High contribution of materials to the product price
- Extreme price sensitivity
Ability to substitute
Low switching cost
Threat of Substitutes
Rivalry among Existing Firms
Threat of Potential entrants
-Growth of mineral water market
- LG Electronics, Chungho nice entered water purifier market
-Relatively low brand awareness(global market)
-High brand loyalty(domestic)
-Many competitors

24. 5th company in global market
7. BCG Matrix
5th company in global market
Woong jin coway
LG Electronics
Chung ho nice
Domestic market is growing slowly
But global market is increasing especially in China
Have 60% of Korean water purifier market share
Woong jin coway

25. 8. Conclusion Rental Service & Cody(1997) Development of RO Membrane
Service Innovation
Rental Service & Cody(1997)
Problem
Expensive
Not high-tech
No A/S
Technology Innovation
Development of RO Membrane
(2007)
Strategic Alliance
Problem
Global market change
Depression
Pay free service, M&A
Success
Sales, # customers, certificate& Award

26. Q&A

27. (Appendix) Woongjin Coway IT Infra (1/5)
To deal with huge amount of customer's information, Woongjin Coway adopted SAP ERP system
웅진코웨이는 SAP ERP를 도입했다.at
The purpose of SAP 1) efficient inventory management 2) visible cost reduction 3) enhancing customer service by delicate monitoring
By using real time PDA system linked with SAP, Woongjin coway can tag each filters, track and manage them.
So, when the filters need to be replaced, cody can provide service.

28. Woongjin Coway IT Infra (2/5)
<End to end process>
Cody’s PDA system is related with call center, logistics center, CS doctor system.  ‘end to end’ process
This system can manage more than 4 million rental customer.

29. Woongjin Coway IT Infra (3/5)
<Achievements of ERP system>
Inventory
Prime cost
35 billion won
10 billion won
By adopting this system, company can reduce inventory 35 billion won. (compared to previous year 44.4%)
Reducing inventory cost lead to reduce prime cost of making filter 10 billion won
‘end to end’ process achieve not only cost reduction but, competitive edge.

30. Woongjin Coway IT Infra (4/5)
<Woongjin’s MIS>
Woongjin wanted to check the performance of hundreds of offices on a daily basis
So, they adopted MIS system.
Not only it determine a Cody's performance, but also it provide feedback.
Woongjin can motivate their employee and provide best service by using MIS.
Woongjin Coway opened MIS system
MIS system support a creative rental system.
It can check 450 offices around the country their marketing and services on a daily basis.
Not only it determine a Cody's performance by ranking and monitoring, but also, it feedback which service part should be improved.
Company can motivate their employee and provide best service to customer.

31. Woongjin Coway IT Infra (5/5)
< Woongjin’s EIS>
Value added
Information
Effective
Presentation
Flexibility
High quality of information
Make use of active information
KPI management
Grasp at a time
Deal with rapid changing circumstances
ad hoc information
Get information at the right time
Woongjin Coway opened EIS system at the same time.
To deal with rapid changing circumstances, company systemize all the team manger can check their team performance.
Simultaneously, CEO can figure out team’s performance at the same degree of team manager.
So, CEO can run the whole company tail to head. KPIKey Performance Indicator