Why Is Samsung Too Big To Fail‽ (In South Korea 🇰🇷)
On a recent episode of Cold Fusion, I came across a video about Samsung & I was shocked to learn that the tech company is responsible for over 20% of South Korea's 🇰🇷 Gross Domestic Product (or GDP).
In 2022, the revenue of Samsung Group-affiliated companies accounted for about 22.4 percent of South Korea's gross domestic product (GDP). These affiliates generated total revenue of around 486.4 trillion South Korean won that year, having first surpassed the 400-trillion mark the previous year. Samsung's share of revenue in GDP remained constant at around 20 percent during the surveyed period. [...]
Samsung owns about 60 affiliates that are among the leading companies in their respective industries. For example, Samsung Electronics – best known for its Galaxy smartphones – is a global player in consumer electronics and telecommunications. Samsung Heavy Industries is one of the three leading companies in the domestic shipbuilding industry, while Samsung Group's affiliated financial companies, such as Samsung Fire & Marine Insurance and Samsung Life Insurance, have a strong influence on the South Korean financial market. [...]
Samsung is the biggest chaebol group in South Korea — a large family-run conglomerate owned and managed by an individual or their family members. Chaebol groups typically have numerous affiliates, operate in multiple and diverse business sectors, and usually maintain a monopoly position in the relevant market. (Statista)
As mentioned in the video above, Samsung's dominance in South Korea 🇰🇷 is so influential that the ruling corporate family can allegedly receive reduced criminal sentences as they are considered too important to jail (note: I honestly hope this is not true, but history in America 🇺🇸 is rife with examples).
Although Samsung's dominance in South Korea 🇰🇷 is undisputed, its presence on the world stage is not, as the South Asian tech giant is facing increased competition from smaller rivals who are more nimble and arguably more innovative than the tech titan.
While every conglomerate on earth envies Samsung's dominance within its respective home country, allowing Samsung to reign unchallenged creates a very dangerous situation for South Korea 🇰🇷.
If Samsung ever faced financial hardship across multiple industries (unlikely but not impossible), the South Korean 🇰🇷 nation would enter a recession, as Samsung's fall would pull down the rest of the country.
Despite past threats by the government, it is unlikely that South Korea 🇰🇷 will break up Samsung. However, South Korea 🇰🇷 needs to figure out how to nurture strong alternatives to Samsung, & (most importantly) prevent them from being absorbed by another local conglomerate (which is easier said than done).
👨🏾💻 by @darnell@darnellclayton.com 🔛 @darnell@darnell.day 📧 darnell@darnell.day
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