Hyundai Heavy Industries

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  • Topic: South Korea, Shipbuilding, Hyundai Kia Automotive Group
  • Pages : 10 (3542 words )
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  • Published : April 1, 2013
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CASE OF STUDY:

HYUNDAI HEAVY INDUSTRIES: BEGININGS AND NEW CHALLEGES

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SOUTHKOREA, MARCH 2013

1. INTRODUCTION…………………………………………………………………………….| 3| 2. PRESENTATION……………………………………………………………………………..| 4| 3. ANALYSYS……………………………………………………………………………………..| 6| 4. CONCLUSION…………………………………………………………………………………| 12| 5. LIST OF REFERENCES……………………………………………………………………..| 13| 6. APPENDIX……………………………………………………………………………………..| 14| INDEX

1. INTRODUCTION
In 1947 Ju-Yung, a man from a peasant farmer family, launched a new company; Hyundai Civil Industries, focusing on the construction of dams, roads, harbors and housing projects, this company helped the country to reconstruct its infrastructures both after second world war and Korean war. At the same time Hyundai civil industries become to be well know overseas undertaken important projects in Thailand, Australia or Alaska. The success of this activity is due to the tight control Mister Ju-Yung exerted over his business and the skills of the staff, which got used to develop different kind of projects. This ability to adapt to changes was probably the key of the company to face and succeed in different sectors such as shipbuilding or car manufacturing. In 1968 Hyundai Motor Company was established, firstly as a partner of Ford company and some years later, with Mitsubishi support, developing its own models for the local market, which was introduced in North American market at the end of 1970s. Turtle Ship used during Joseon Dynasty 1

The Next milestone of the Company was entering in shipbuilding activity, what happened in 1973. Maybe it was the biggest challenge of company because it was going to develop an activity focused in overseas market and which demands high technical knowledge. How the Hyundai Heavy Industries Co became the biggest shipbuilder over the world in hardly 30 years inside a very aggressive and unknown environment is the propose of this case of study.

2. PRESENTATION
Regarding the shipbuilding worldwide sector it is mandatory to make a stop and try to understand how Korea became the largest ship constructor in the world, facing, competing and overtaking the European leadership in this ancient industry, and how Korea was able to do it along a virtual short term. And it is said “Korea” on porpoise because, as we will find out throughout this case, it has been a project driven by a country but developed by a company, or being more exact, developed by a group of strong companies not all of them with the same successfully story. The role plaid by South Korean Government leaded by General Park Chung Hee is the key to understand how South Korea arose from a devastating war (1950 – 1953) to become the 12th economy over the world in terms of GDP. General Park took the power in 1961 after a military coup and immediately started to work in an economic development plan to promote the growth of the economy. A very important point of this plan was established the appropriated tools to create heavy and chemical industries, including iron, steel and machinery. Involved inside this plan the Hyundai Shipbuilding and Heavy Industries, later renamed Hyundai Heavy Industries (HHI), was created by Ju-Yung from the successful activity of civil construction of Mother Company. But HHI was not the only one cheabol which approached to the shipbuilding sector. The two largest shipbuilding operations in terms of ships delivered, apart from HHI, were Daewoo Heavy Industries and Samsung Heavy Industries. Both companies entered shipbuilding by acquiring bankrupted firms. Spite of investing huge amounts of capital and receiving subsidies from the Government, those companies have never had the same success of HHI. Even Daewoo, which continued operating after the collapse of the cheabol in 1997 crisis, had money losses along its long trajectory sometimes hidden...
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