Doosan Group is unique in Korea in that it has completely changed its core business from retail to manufacturing.
It started as a trade shop for cosmetic powders in Seoul in 1896, and grew by selling Coca Cola, Kodak film and Polo Ralph Lauren in Korea. It also had the largest brewery and was the first to sell packaged kimchi. But from the 1990s its management decided to sell the retail businesses and instead went into the heavy manufacturing industry.
Only a handful of other big Asian business groups have experienced such a complete change. Fujifilm, Hoya, and Olympus are examples of those that have similar transformations in Japan, but they were not as drastic as Doosan, says professor Takashi Nawa of Hitotsubashi University, who used work with with Doosan as a consultant of McKinsey in Korea. “I think that Doosan‘s case is one of the most successful in Asia,” he said.
McKinsey was a major partner in the restructuring and Doosan’s Chairman Park Yong-maan recruited several consultants as executives. In an interview with Business Focus in February, Park said that he had closed 33 deals since 1996, selling 18 subsidiaries and buying 15 firms.
“I can sell anything,” he said. “We don’t make emotional decisions. There is a reason why Doosan has lasted more than 100 years...... I can even change the name Doosan if that’s necessary.”
Critics say that Doosan’s transformation was not voluntary, as the Asian financial crisis forced many firms to sell their assets and merge with others under the guidance of the government.
LG and Hyundai were forced to offload their semiconductor and mobile phone businesses, respectively, and swap them, in a deal orchestrated by the government. Samsung Group handed over its newly launched automobile business to France’s Renault.
But Park denies this theory. He says that Doosan’s restructuring had been planned years ahead, though he was indeed lucky to buy beneficial firms at cheap prices during the economic crisis.
Nowadays, Doosan is one of the world’s leaders in building power plants, desalination plants and digging machines. Of the initial core, one of its oldest surviving units is the Doosan Bears, a professional baseball club founded in 1982.