For the past few weeks I have been reflecting on relevant business events that occurred in 2005. I’d like to share these thoughts along with my forecast on trends that will impact 2006.
First, 2005 saw the continued growth of Korean-based big businesses not only in North America, but also China, India and Eastern Europe. Eager to embrace new markets, Samsung, Hyundai, Kia, and LG have allocated millions of dollars in global expansion projects--for example, Hyundai Motor Manufacturing Alabama’s (HMMA) billion-dollar car manufacturing plant. In early 2006, Kia should also announce the site of their first American car plant.
In the future expect more Korean big business to locate R&D, manufacturing, and production facilities in the states.
Trends…
24/7/365
After reading Thomas L. Friedman’s The World is Flat: A Brief History of the Twenty-first Century I’ve been able to better clarify my views on globalization. I recommend you get a copy. One point that stands out in Freidman’s work and is very relevant to my work (and also to many of you, too) is that we have become 24/7/365--the process helped along by mobile phones, Blackberry, Instant Messaging…and Google.
In 2006, look to embrace not simply technology but the mindset whereby you work in a 24/7/365 global business market.
Synergy
In 2005, I gained a heightened level of cross-cultural understanding through synergism. Essentially, this new level was achieved by working with different firms confronted by similar cross-cultural issues and challenges. For example, by working among sister firms including Hyundai Motor America, Kia Motors America, HMMA, Hyundai Motor Finance Company, and Hyundai Information Systems North America, I’ve been able to clarify and distill what obstacles are common within a global company. Moreover, by working with LG one day, the next with Hyundai, then Kia, and finally a Samsung joint venture, their unique qualities and cultures stand out, as do their similarities.
In 2006, we can all strive to learn more from synergic relationships. The whole is greater that the sum of the parts.
Korean car industry—a lesson in product localization
One project that stemmed from my October trip to Korea was to better study and understand the Korean car market outside the Hyundai-Kia Motor Group—with whom I work closely. What’s interesting in the Korean domestic car market is the desire for big, luxury cars. In fact, four of the five Korean carmakers offer luxury cars with strong foreign competition from Lexus, BMW, and Mercedes Benz. Ironically, when U.S negotiators pressed for the Korean government to reduce tariffs on foreign imports, America’s Big Three lobbied to reduce import barriers for U.S. compact models—something few Korean’s desire. More ironic, with rising gas costs is the demand now in the U.S. for Korean economy cars (not to mention any hybrid they can get their hands on)… go figure.
The lesson: manufacturer’s must look closely and culturally at each market--then localize their products. Meanwhile they must be prepared to move quickly as trends and markets change.
Amco, Glovis, Bontec, Autoever, Innocean
Another area that peaked my interest in 2005 included affiliates of the Hyundai-Kia Motor Group. Outside flagships Hyundai Motor, Kia Motors, and parts giant Mobis, a number of the Group’s affiliates were in the news. This included Hyundai Capital Services; steel producers INI Steel, BNG, and Hysco; construction arm Amco; logistics firms Glovis and Eukor; IT firm Autoever Systems; and ad company, Innocean, not to mention a score of parts and components firms.
One point stands out; the Hyundai-Kia Auto Group has become highly integrated horizontally and vertically. In 2006, look for more moves to strengthen this integration.
Plus, look for more impact, presence, and influence of these firms in the U.S. (BTW, If needed, I have in-depth reports on most of the affiliates and their interrelationships.)
New Publications
All authors look to plug their books. So, too, do I. In Spring 2005, my long awaited book on American entrepreneurial history was published. In addition, in October, my book on early U.S and Korean business ventures and entrepreneurship was also published. Both works are available online at https://www.iuniverse.com/bookstore/book_detail.asp?isbn=0-595-37068-3
Not one to stay idle, my latest work is a historic novel. I am shooting for a Fall 2006 publication date.
To conclude
In 2006, two strategies will prove invaluable for American affiliates of Korean-based firms. First, more than ever, I see education as the solution to cross cultural communication issues and challenges. Second, to better embrace globalization, look to develop a corporate culture that builds on and aligns both the Korean mother company and American subsidiary’s strengths. This is paramount to sustained growth and success. For example LG Electronics has made great progress implementing globally “the LG Way.” More firms should focus on this in 2006—a task Bridging Culture can assist. Finally BC is dedicated to supporting your efforts to build a strong and vibrant organization.
I look forward to working with you and your team in 2006. Feel free to call or email your thoughts and needs for the new year. (Remember I now work 24/7/365.) Have a healthy and happy New Years holiday.
Sae hae bok mani badeu say oh
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