'Business World Shaken by the Fear of R'... Completely Revising Corporate Strategies

Samsung, SK, LG Hold Consecutive Management Strategy Meetings
Supply Chain Collapse, Raw Material Price Surge 'Worsening Business Environment'
Amid Growing Crisis, Begin Reshaping Strategies

Samsung Electronics Vice Chairman Lee Jae-yong returned to Korea on the 18th through the Seoul Gimpo Business Aviation Center in Gangseo-gu, Seoul, after an 11-night, 12-day business trip to Europe, where he answered questions from the press. It is reported that Vice Chairman Lee visited Germany, the Netherlands, and France, meeting with strategic partners specializing in semiconductor equipment, electric vehicle batteries, and 5th generation (5G) mobile communications to discuss ways to strengthen cooperation. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Park Sun-mi] "International affairs, industrial environment, and global market conditions are rapidly changing." (Remarks by Han Jong-hee, Vice Chairman of Samsung Electronics, at the Samsung Executive Meeting on the 20th)

Domestic conglomerates, including Samsung Electronics, are revising their business strategies in response to the rapidly changing global economy and market environment. Due to the intensification of the US-China trade war, the impact of the Russia-Ukraine war causing supply chain instability, severe inflation potentially leading to demand slowdown, and the looming fear of a global recession ('R fear'), companies anticipate that the damage they face may be greater and more prolonged than expected.

According to the business community on the 21st, companies are currently holding 'relay' strategy meetings to read the flow of change with a long-term perspective, prepare new growth engines well, and develop capabilities to lead the future.

Samsung, following the electronics and electronics affiliates executives' meeting held the previous day, plans to review its mid- to long-term technology roadmap for developing new technologies that can lead the future through the global strategy meeting starting from this day, and to establish and implement concrete action plans. This is driven by a sense of crisis that strategies to respond to the uncertainty of the management environment must be prepared promptly. LG Electronics, which is more negatively affected by inflation compared to IT component companies, is conducting a strategy reporting meeting for about a month amid concerns that its operating profit margin in the second quarter will turn negative compared to the previous quarter and the same period last year. It is working on ways to overcome the inevitable profitability deterioration caused by rising oil prices, increased global logistics costs, and weakened consumer sentiment.

SK Group, led by Chairman Chey Tae-won, has begun preparing measures for bold management activities that can break away from the current business model. Hyundai Motor Group Chairman Chung Eui-sun plans to convene a global regional headquarters meeting starting next month to forecast the management environment for the second half of the year and take strategic responses accordingly. Since 2019, Chairman Chung has only received reports on regional issues and conveyed requests, so his direct attendance at the meeting signifies the urgency of responding to various crises such as rising raw material prices and the shortage of automotive semiconductors.

Although companies have simultaneously started reviewing survival strategies to overcome the worsening management environment, concerns remain that finding a breakthrough will not be easy. This is because the shocks from rapid increases in interest rates and exchange rates are expected to be fully reflected in corporate management in the second half of the year, and uncertainty has reached its peak due to soaring raw material prices and labor cost burdens.

This content was produced with the assistance of AI translation services.