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Why many businesses in Korea fail
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eaglenovan

Joined: 02 Feb 2003

Posted: Mon Feb 05, 2007 10:32 pm Post subject: Why businesses fail in Korea

Deleted Last edited by eaglenovan on Wed May 16, 2007 9:03 pm; edited 1 time in total

antoniothegreat

Joined: 28 Aug 2005
Location: Yangpyeong

Posted: Tue Feb 06, 2007 10:42 am Post subject:

I remember reading an article in a newspaper somewhere in Korea saying that Korea is just now changing to a consumer based economy. basically, before now, the majority of businesses made more money from loans granted than by actually making money from customers. this really struck me, as basically, they started a business to get a loan, where as back home, people get loans to start businesses. this explained a lot of the attitudes and incompetence i have seen in business practices here.

jeffkim1972

Joined: 10 Jan 2007
Location: Mokpo

Posted: Sat Feb 10, 2007 10:55 am Post subject:

markhan wrote:

Jeffkim.

Do you actually know what you are saying or did you just get the pieces and bits from information printed decades ago?

I've been doing business and living in Korea the past year.

markhan wrote:

First of all, no companies become one of the top Electronic/IT companies in the world for merely copycatting something. Samsung, LG, (and to some extent, Posco, Hyundai, KT, etc.) are highly regarded companies that hold many patents.
Concerning patents, Korea ranks fifth in the world in 2006 after: US, Japan, Germany, and France. At the current pace, it is predicted that Korea will pass France and Germany very soon.
For further details on patents, refer to the http://www.mapsofworld.com/world-top-ten/most-patent-registering-countries.html

First of all, when you file a patent, you must file in every country separately. Having a patent granted in the US is much more rigorous than having it granted in Korea. Also, patents are classified as either utility or design. Which ones Korea are filing, i have no idea. I hardly doubt this has any meaning. You can obtain a patent on a mobile phone shape. The real measure of a patent's value is who is paying money to use it? I can patent anything at the moment, but can i make any money off of it? 99 percent (or some very high percentage) of all patents are never used to generate any profits. Hey, if you're giving work to your patent attorney and to the patent office, they wouldn't care of you were patenting something the world will never use. I know in the US, it costs about minimum $10,000 to get a patent filed, and to get it filed in nearly every western country will cost you almost half a million bucks.

If a foreign company doesn't bother filing a patent in Korea, then a Korean company can do it in Korea.

http://www.theinquirer.net/default.aspx?article=33447

Is the Kimchi refrigerator considered patentable?

Also, the thousands of software companies in America hardly patent their software and just declare them "trade secrets".

Intel doesn't patent all of it's greatest secrets because it's impossible to reverse-engineer their products anyhow. In a patent filing, you are supposed to describe the idea so that someone (with the sufficient means) can build it themselves. I also believe military research is hardly patented, just classified as being top secret.

markhan wrote:

Second, what you dismiss as "pali pali!" and subsequent lack of �patient craftsmanship� is, to put it mildly, rather na�ve. Jack Welch, a former CEO of GE, actually pointed out "pali pali!" quality as one of the biggest strengths of Koreans given the fast-changing 21st century.

First of all, you obviously missed the other criticism of GE. That they have hardly any competition for their products and they just run very simple businesses. Which sort of mirrors the Korean Chaebols. most of the money from GE comes from their financial services division. But you must ask how is "pali pali' achieved? 24 hr shifts? scheduling optimization? engineering CAD advances? fast diligent workers?

markhan wrote:

As for �patient craftsmanship�, hmm,, do you know that most of the top fashion design houses outsource their works to countries like China? For instance, when Prada outsource their work to Chinese factory, they give the factory 120% of raw materials to make the Prada bags. Why 20% more? - to make up for the possible faulty bags. So what happens when they make bags without any mistake? Well, the extra remaining bags are either destroyed, some are smuggled to places like Itaewon, and whatever.
�Patient craftsmanship� may have played a greater role back in the 19th century when the technology was in its infancy, but when companies like Samsung or Sony can create a chip that deals in diameter of 1/ 10000th of hair, it really has no relevance in present days. �Craftsmanship� or the idea of it, is merely a marketing ploy, or a deliberate reduction of supply to make it �rare and priceless� or in advance in technology.

You have misunderstood whati mean by "patient craftmanship". Korea is the largest commercial shipbuilder in the world, but can they build a luxury megayacht, no. Korea is becoming a major automotive manufacturer (because of strict import restrictions), but can they build a luxury car or high end sports car? (the Equus is a Mitsubishi car, branded Korean), Korea is the leader in computer memory, but are they anywhere near world class in more sophisticated semiconductor technology? Microprocessors? Have you ever seen a luxury home in Korea? Have you ever been in a luxurious high class Korean restaurant? They have so many video cameras for traffic, but have you ever seen a traffic light that senses and changes based on traffic intensity? Can Korean design a supercomputer on it's own? Is there a pharmaceutical industry in Korea? good carpentry work using real timber, rather than fake artificial (MDF) wood with laminates? good work with marble and granite?

I still can't find a digital microwave oven. Agriculture here is still low tech. Trash compactor? Garbage disposal? A computer mouse with a trackball on top?

Korea is still much in it's industrial manufacturing stage (that's why everyone wants to call themselves "--- Heavy Industies". You cannot apply the rational of pali pali to every product you build. Some products end up in disaster.

Craftmanship industries are an entirely different working procedure and mindset.

Come on, can Korea even make a luxury watch?

http://english.chosun.com/w21data/html/news/200608/200608080015.html

I can go on and on...

Concept designs for architecture.. still mostly done by Foreigners.

Korean Banking. Your check card only working from 6 AM to 12 AM midnight? What's up with that?

superacidjax

Joined: 17 Oct 2006
Location: Seoul

Posted: Sun Feb 11, 2007 7:15 am Post subject:

RACETRAITOR wrote:

I like seeing lots of small businesses rather than one giant mega-store where you have one employee per city-block's worth of merchandise, and 98% of the profits go up the chain past those workers. The Korean way affords many more sustainable wages than ours.

Sustainable wages? Like what? 2-3000 per hour? And actually that's an inaccurate statement. The big stores sell at lower prices due to economies of scale that the one-man shop can't match. So products cost more with the one-man shop. So people spend a higher percentage of their income on their purchases and so that "sustainable wage" in real terms is actually much less. You have to consider the "cost" to the consumer. I could make 45,000 per hour, but it milk costs me 10,000 instead of 2,000 then I'm spending a higher percentage and that effectively cut my wage by 8,000. Obviously, I exagerated the figures for clarity.

I personally like shopping in small stores, however I am paying much more than I normally would.

Satori

Joined: 09 Dec 2005
Location: Above it all

Posted: Sun Feb 11, 2007 8:16 am Post subject:

Princess is a man, one of the most transparent socks ever to grace these boards, just don't respond to him...

billybrobby

Joined: 09 Dec 2004

Posted: Sun Feb 11, 2007 8:30 pm Post subject:

jeffkim1972 wrote:

Can't find a digital microwave?

You're kinda undercutting your position as an authority on Korean industry if you can't find a digital microwave.

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