U.S. Economy vs. South Korean Economy

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U.S. Economy vs. South Korean Economy

By | Jan. 2014
Page 1 of 7
Phase 1 Applied Managerial Economics
DB 2
Tony E. Madison
Colorado Technical University Online
ECON616-1304B-04
Nov. 24, 2013

Introduction the Problem
Lester Scholl, Chairman of the Board at AutoEdge, told me during my interview, the company has been floundering since product quality issues caused millions of automobiles to be recalled. This morning he explain what he wants me to focus on initially. The board is considering several proposals in response to their situation, and they need me to create a list of the legal, cultural, financial, and economic factors that AutoEdge needs to consider about the location of our manufacturing operations. Most members of the board aren't familiar with this aspect of the business, so they want you to briefly describe the factors, rank the factors, and explain your reasoning. They want me to be specific when I explain my rationale. Background Information

We are looking at Korea, which I know from experience, was at one time one of the Four Asian Tigers (Taiwan, South Korea, Hong Kong and Singapore) favored nation status. This designation came from the four wealthiest nations on the planet, which held about 82% of the world’s wealth but were only 1/5th of the world’s population (Western Europeans, North America and Australia). Korea which at one time was ruled by Japan until the end of World War II, after which because of differences in the economic policies between them and their fellow countrymen in the north were in a civil war. When they emerged from this war they were a divided country thus this is where you get North and South Korea. South Korea was a capitalist nation while on the other hand North Korea was a communist country; this spurred the U.S. to give them many advantages including protection from their brothers in the north. The Koreans took advantage of their status as a member of the Four Tigers and reinvested wisely in education infrastructure and the economy. By the 1980’s they had become...

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