Fall of Daewoo Motors

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MANAGEMENT FOR MANAGERS Course Instructor: Mr. Usmah Billah Subject: Case Study “Fall of Daewoo Motors” Submitted by: Mr. Arslan Bhatti 12E0014 Mr. M. Waqas Ali 12E0042 Mr. Umar Mansoor 12E0041 Mr. Waqas Mahmood Jaffar 12E00 Mr. Mansoor Fayaz 12E0003 “THE FALL OF DAEWOO MOTORS” Q# 01 International Expansion Strategy: Daewoo and GM were business partners in automobile business. But both of them have different views on capacity enhancement, debt leverage, profitability objectives and marketing strategies. Because of these differences, GM finally withdrew from investment in 1992. Daewoo’s strategy to grow in business was always very aggressive and risk oriented. They always want to go in global market and their owner had the dream to make Daewoo as one of the top automobiles manufacturers. First of all, Daewoo group separated sales and manufacturi ng operations in 1993. The main motive behind this move was to invest deeply in manufacturing operations and construct manufacturing sites in developing countries for low cost manufacturing. They also established assembly plants i n East Europe and Asia in 1993 and they also got ISO 9001 certificates for these assembly points. They also did not hesitate to invest in developing and risky markets like Ukraine, Romania, Vietnam, Uzbekistan, India and Poland. To gain more and more market share, Daewoo brought s ome attractive packages for customers. They reduced their prices, and offered interest free instalments but for this, they had to take more foreign debts. Secondly, Daewoo group not only invested in manufacturing plants but also acquired technical centres like IAD in UK, and Munich Technical Centre in Germany. One astonishing move made by Daewoo group was to negate general automobile trend of having dealership. Daewoo established its own direct selling

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