Blog Assignment #2

Kia Vs. Daewoo

The business competition became more aggressive than ever. When the tangible and intangible elements that needed for any type of business become available, the ability to, successfully, combine those resources becomes more important to achieve the object of that business. This ability can be known as the ability to manage those resources, which is, nowadays, known as knowledge management. It is the knowledge that we need deal with the business environment such as competitors and business needs which can have a direct effect on the business survive. Most importantly, the knowledge management will have a significant impact on what need to be known, why does a business need that knowledge, and when that knowledge need to be used. This knowledge can be the magic generator that will help the business management to generate the appropriate ideas and make the right decisions. Consequently, lacking of such knowledge or lacking in some parts of that knowledge can lead to massive results such as bankruptcy. Daewoo Group is a great example for that lacking of knowledge.

                  Daewoo, which was founded in 1967, was one of the major South Korean manufacturing Groups or conglomerates; but it is not exist anymore. In fact, Daewoo, which had combined about 20 division, was the second largest Group in South Korea before it was break down by the Korean Government in 1999.

On the contrary, Kia Motors, which joined the automobile industry in 1986, became the second largest South Korean automaker presently.

In fact, Kia motors considered the oldest automaker company, but, in 1981, it was enforced by the Government to stop making cars and specialized on light trucks only.

Daewoo Group took the advantages of cheap Government loans in 70s and benefited from inexpensive labor cost as well. It was forced by the government to join many other activities such as shipbuilding, petrochemicals, and military Industrialization. By the late 80s, Korean government became more liberal. Although it’s notable reputation in making shipbuilding and oil rigs, Daewoo took the advantage of the government actions and started making some joint ventures with the U.S and some other western corporations.

Daewoo Group expanded significantly in the US and Europe but it was negatively affected by the Asian Financial Crisis in 1997. Due to its lacking in financial management knowledge, Daewoo couldn’t survive and forced to bankruptcy.

On the other hand, Kia was founded first in 1944 as a small manufacturer for bicycles, and then it grew until built the first car in 1974, seven years after Daewoo. After the Asian financial crises in 1997, Kia declared bankruptcy; but it was acquired later by Hyundai.

Similarly, by the late 80s when Korean polices became more liberal, Kia resumed its activity in making cars and made its first partnership with Ford in 1986. Despite its unique design, Kia involved in making some types of Mazda. Additionally, Kia stormed the US, European, and Australian markets and exported different models to each country.

Furthermore, Kia rapidly expanded after its first manufactory in the Oregon US. during 1992. Nowadays, Kia own another manufactory in Georgia which was established in 2006.