BUSINESSWEEK ONLINE : JANUARY 10, 2000 ISSUE
COVER STORY Overhauling Samsung KEY ACCOMPLISHMENTS Profits up tenfold in '99, to $2.4 billion, on sales up 24%, to $22 billion Share price up more than 200% in 1999 These have not been easy times for South Korean executives. Two years after the worst economic meltdown of the post World War II era, many are still struggling to get their companies back in gear. Few have succeeded in as dramatic a fashion as YUN JONG YONG, CEO of Samsung Electronics. His secret? A willingness to jettison decades-old ways of doing things in favor of basic business common sense and Western management ideas. By doing so, he is spearheading a revolution in Korean industry. Yun, 55, had been CEO less than a year when the Asian financial crisis hit in the fall of 1997. With Korea's currency trading at depressed levels, many of its giant corporate chaebol were cranking up production in an attempt to flood foreign markets. After all, the mantra in South Korea had long been to build market share, no matter what. But Yun, a 30-year Samsung veteran, broke with tradition. He slashed production of TVs and other appliances, cut a third of Samsung's workforce, and streamlined inventories, shaving $3 billion in costs and accounts-receivable. Next came a restructuring. Samsung sold or spun off dozens of companies unrelated to its core businesses and wrote off investments in such money losers as Samsung Motor and computer maker AST. Most important, Yun has diversified into new high-margin businesses. Back in 1995, the company had been dependent on memory chips for 50% of sales. That's now down to 20%, with the rest spread over telecom equipment, liquid-crystal displays for computers, and other high-technology gear. Today, Samsung is stronger than ever. Sales and profits are soaring. Well positioned for the digital revolution, Samsung may soon rank alongside the likes of electronics star Sony. As for Yun, he has emerged as a model executive for a still struggling Korea. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS INTRODUCTION MANAGERS TO WATCH THE TOP ENTREPRENEURS THE TOP 25 MANAGERS Minuro Arakawa Bernard Arnault Arthur Blank Peter Bijur Gordon Binder Steve Case John Chambers James Curvey Thierry Desmarest Bernie Ebbers Tom Engibous Chris Gent Irwin Jacobs Steve Jobs Mel Karmazin James Kelly Timothy Koogle Ken Lay Jenny Ming Thomas Siebel Masayoshi Son Martha Stewart Keiji Tachikawa Jack Welch Yun Jong Yong ONLINE EXTRAS TO BUSINESS WEEK INVESTOR INTERACT E-Mail to Business Week Online

Copyright 1999, by The McGraw-Hill Companies Inc. All rights reserved. Terms of Use   Privacy Policy