Betting the farm -- again

The subject of this issues cover story ought to provide a tonic for those timid souls who believe entrepreneurship has no place in a large corporation. Kim Woo-Choong, founder and chairman of Koreas US$64 billion Daewoo Group, is betting his fortune on an ambitious global strategy that he says will boost Daewoos revenues to a stratospheric US$200 billion by 2000 -- and one that analysts say might break the company if it fails.

Risky? Of course. But as IW Asia Correspondent Laxmi Nakarmi relates in "Solo Success?", Kim is no stranger to high stakes. After all, he founded Daewoo with just US$10,000 in 1967, in 30 years building one of Koreas traditional chaebols (conglomerates with interlocking ownership of related companies) in a most untraditional way: by deliberately seeking out troubled or failing companies for acquisition. Kims talent for turning around insolvent firms in a variety of industries -- at one machinery company, he slept on the floor to convince workers of his commitment to them and the company -- not only built an international powerhouse, but also inspired his boldest strategic gamble yet: to vault from Koreas third-largest automaker into the worlds top 10 by 2002.

After trying, then abandoning, a partnership with General Motors Corp. in which neither company prospered, Kim has embarked on an audacious expansion plan that ignores most of the worlds well-established auto markets in favor of emerging ones such as China, Eastern Europe, and India. In those markets, Kim has already bought the worst-run, most-troubled automakers he can find -- often wringing large government concessions in return. He believes that by reengineering management and improving marketing at these firms, Daewoo can boost its worldwide production from 1.625 million units to 2.475 million by 2002 -- a staggering 52% increase in just five years. Equally staggering is the debt load he has placed on Daewoos shoulders to finance his global buying spree; more than one analyst believes that if the strategy fails, all of Daewoo will collapse in a sea of red ink.

Kim, of course, seems unconcerned. "The goal is achievable," he says with an equanimity that only an entrepreneur who has already turned $10,000 into $64 billion can affect, "if we succeed in achieving synergy among the main subsidiaries in marketing, product development, finance, and management."

Try that line on your CEO or board the next time they balk at a new investment. Compared with Kims $64 billion gamble, what have they -- or you -- got to lose?

* * *

Technology gurus, sharpen your pencils or turn on your modems. Its nomination time again for IWs annual Technology & Innovation Awards.

IW has long prided itself on reporting the future of management well before it actually arrives -- and significantly before other media catch even the faintest scent of a trend. None of IWs annual programs exemplifies this commitment to the future better than our yearend Technology & Innovation issue, in which we recognize outstanding technological achievement with two different awards: Technologies of the Year, which honor 25 organizations for developments that will significantly change management and society; and Technology Leader of the Year, which honors an individual for a lifetime (or a lifetimes worth) of technological innovation.

Why mention a December issue in sweltering June? Because we are once again inviting readers to nominate candidates (including self-nominations) for both awards. See Page 17 of this issue for more details or log on to IWs Web site at www.industryweek.com for an online nomination form. A mail-in form is available by calling the IW Customer Service Center at 800-326-4146. Nominations for both categories must be received by Sept. 15, 1997.

Send e-mail messages to John Brandt at [email protected]

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