From being a friend, being a sui family to a sworn enemy and a ‘ceasefire’ after nearly 3 decades

From being a friend, being a sui family to a sworn enemy and a ‘ceasefire’ after nearly 3 decades


2021-07-02 06:06:47

At the technology fair taking place in Berlin, Germany in 2014 an embarrassing incident occurred. Accordingly, Samsung has accused the director of LG’s home appliances division of destroying a series of its high-end washing machines displayed here at a price of $ 2,700 each.

The Samsung side pointed out that the name of the LG leader is Mr. Jo Seong-jin. However, through a spokesman, Mr. Jo denied this accusation and confirmed that the damaged washing machine was caused by Samsung’s weak design of the drum door. The case was later settled, but the truth is that the feud between these two leading Korean corporations has been smoldering for nearly half a century.

These two corporations are constantly chasing each other in the international market with products such as televisions, refrigerators, smartphones, etc.

In his home country of Korea, even the battle between Samsung and LG has become much more fierce. The two always try to outdo each other, regularly announcing new products and finding answers about who sells more devices or who steals the other’s technology secrets. Until now, even the battle between Samsung and LG does not stop at “claiming king” in Korea, but also in Asia and the world.

Up to now, Samsung is somewhat “better” as the largest chaebol in Korea with 2014 revenue of 206.2 trillion won (equivalent to 171 billion USD), accounting for 17% of the total GDP of Korea.

Meanwhile, LG is currently ranked 4th in the top 5 chaebols of Korea and according to the data of the Korea Free Trade Commission, in 2014, LG’s 3 electronics, chemical and telecommunications businesses brought home 3 businesses. sales of 116 trillion won ($104 billion). According to a spokesman for LG Group, the group’s revenue in 2014 was 150 trillion won ($136 billion).

Friendship, sui family

In 1938, Mr. Lee Byung-chull set up a trading company in his hometown of Gyeongsang Province, and named it Samsung. However, after the war with Japan, Mr. Lee almost lost everything. With the little capital left, he founded a sugar refining company called Sugar BC.

Meanwhile, LG founder Koo In-hwoi was also born in Gyeongsang. After a relative success in the dry goods and import business, he opened the Luk Hai cosmetics company – specializing in the production of “Lucky” cream in 1947.

The classic war between the two families of LG and Samsung: From being a friend, a sui family to a sworn enemy and a 'ceasefire' after nearly 3 decades - Photo 2.

In 1958, he continued to establish Goldstar – the root of LG Electronics later. Goldstar is best known for its A-501, Korea’s first home radio device. It can be seen that LG is one step ahead of Samsung when it comes to the electronics market.

Originally from the same hometown, founders Byung-chull and In-hwoi have a close friendship and mutual respect. The two even attended elementary school together, and especially when they grew up, they became inbred when Mr. Byung-chull’s second daughter married Mr. In-hwoi’s third son. After becoming husband and wife, Mr. In-hwoi’s son worked for Samsung for a while.

Star Wars

That said, the word Samsung in Korean means “three stars”, and the original “G” in LG means “Goldstar” – “golden star”. These are considered two elite representatives, the two brightest stars in the Korean sky.

As a pioneer in the field of electronics, LG has received a lot of support from the government and thanks to that, they have grown very strongly. Things began to arise when the founder of Samsung also realized the great potential and decided to enter this field.

According to Mr. Lee’s son, the founder of Samsung met directly with Mr. Koo to announce his plan to enter the electronics market. Of course, Mr. Koo received this news with an unpleasant attitude because they had previously made a tacit commitment never to jump into each other’s fields. The founder of LG even shouted at the old man. On the contrary, Mr. Lee was also surprised by Mr. Koo’s reaction and left.

Since then, the two leaders LG and Samsung have never been close again. Immediately after the incident, Mr. Koo’s son (and also Mr. Lee’s son-in-law) quickly left Samsung.

Difference between 2 cultures

Records show that Mr. Koo’s family is very devoted to Confucianism – the traditional religion of Korea. This makes LG’s corporate culture, up to now, still considered “old-fashioned” compared to other chaebols. A typical example is LG’s absolute adherence to the principle of “giving the throne to the eldest son”.

Koo Cha-kyung, In-hwoi’s eldest son, inherited his father’s presidency, and later also passed the throne to his eldest son, Koo Bon-Moo. Mr. Bon-Moo has no son, and so has adopted his own grandson – and he is expected to take over at LG in the future.

Meanwhile, Samsung adheres to the culture of “weighing all options and then making a decision”.

The classic war between the two families of LG and Samsung: From being a friend, a sui family to a sworn enemy and a 'ceasefire' after nearly 3 decades - Photo 3.

The most obvious proof of this culture is the choice of successor of the Samsung founder: He chose his third son – Lee Kun-Hee as his successor. And fortunately, it was this decision that brought glory to Samsung. At that time, LG was still the leader in electronics and chemicals, however, under the leadership of his third son Lee Kun-hee, Samsung had a miraculous acceleration.

The word Samsung in Korean means “three stars”, and the original “G” in LG means “Goldstar” – “golden star”. These are considered two elite representatives, the two brightest stars in the Korean sky.

Under pressure from not only Samsung but many other competitors, once again, under the rule of the 2nd generation Mr. Koo Cha-kyung, LG pioneered in adhering to the philosophy of “quality on quantity”. Even this president directly preached this philosophy to a large number of consumers.

However, Samsung is no less competitive. Chairman Lee Kun-Hee quickly “learned” and brought this message to consumers. Moreover, Samsung also knows how to make others pay more attention to them. Specifically, in a talk with the media, President Lee called the shortcomings on the product “tumors”. In 1995, Mr. Lee did not even hesitate to order the destruction of 150,000 faulty cell phones at the factory’s doorstep to express his strong opinion.

Winning with a “cold head”

Samsung history recorded a significant milestone in 1983 when the company’s president Lee Byung-chull announced that they would enter the semiconductor chip manufacturing field. Many people think that this is a “reckless” action in the context that Japanese giants such as NEC, Toshiba and Hitachi are the world’s No. 1 names in memory chips. Even large American corporations such as Motorola, Texas Instruments or National Semiconductor have to bow to Japan.

However, with the achievements including the successful production of 64KB, 256KB and 4MB DRAM memory chips… Samsung has in turn surpassed its competitors and become the world’s No. 1 memory chip manufacturer, and so far they still firmly in this position.

Meanwhile, although only one step behind Samsung in the semiconductor chip race, luck did not smile on LG. In 1997, within the framework of a restructuring program by the Korean government, LG was forced to sell its semiconductor chip business to Hyundai. And so, they have lost an important weapon to confront Samsung.

In addition to semiconductor chips, LG and Samsung are also chasing each other in the race to design TV screens and mobile phones.

Although Samsung was the first to enter the US and European markets, it was LG who achieved a “huge” achievement with the “chocolate phone” product in 2005. This product was very popular in the US market. . At that time, both Samsung and LG quickly caught up with Nokia – a phone company from Finland.

However, with a high focus and especially non-stop innovation in design, luck once again smiled at Samsung when this company became the world’s 2nd largest phone manufacturer (statistics 2006) and LG is modestly in 5th place. Now, this gap widens further as Samsung climbs to the throne as the world’s largest phone manufacturer in terms of sales (number of phones) was sold in Q1/2014 was 93.15 million units) and LG still remained at number 5 (phone sales in Q1/2014 were 11.74 million units).

Armistice Agreement

In mid-2015, Samsung and LG announced that they would end all legal disputes to bring peace to the two. “Both companies said they are ending the dispute to focus on improving improve product quality and customer service, the two sides will resolve disagreements “through dialogue and cooperation instead of legal action”.

There is an old Korean saying that goes, “Those who fight are often the same”. Same goes for LG and Samsung. Both have created a long story in the past, but surely Kim Chi country would have been very different without their existence.

So far, it has not been possible to conclude winners and losers. However, LG and Samsung themselves also seem to feel that they are “exhausted”.

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