• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.15 no.5
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• pp.1-11
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• 2020

Increasing the number of unicorn startups has recently received much attention. In this study, we attempt to investigate that startups achieving an extremely high valuation could postpone their exit to raise more investment and receive more benefits. This study tested the hypotheses using data from Crunchbase, World Bank, Global Competitiveness Report, and Global Entrepreneurship Monitor. Using 140 unicorn startups that have already exited through an initial public offering (IPO) or mergers and acquisitions (M&A), we find out that unicorn startups tend to acquire higher valuation as their investment duration increases. Furthermore, we also examined the moderating effects of governmental policy and institutional distance from foreign investors in order to consider the institutional aspects of startups. The results of the moderating variables show significant supports. We expect to provide a better understanding with respect to making an exit decision of unicorn startups. Furthermore, managers and investors need to acknowledge the institutional factors of startups when they decide to fund.

• Journal of Distribution Science
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• v.13 no.10
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• pp.65-72
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• 2015

Purpose - A rapidly changing business environment places great demands on small and medium-sized enterprises (SMEs). These SMEs need to find strategic alternatives for continued growth and, ultimately, survival. Thus, mergers and acquisitions (M&A) are deemed an acceptable solution. Research to date has dealt with M&A in major organizations and focused on post merger integration (PMI). Our study focuses on SMEs, as they are relatively new and unknown to the public. Therefore, this study highlights successful M&A and decision making for SMEs through a case study analysis. Research design, data, and methodology - For this study, we examined an M&A case between company S, which produces cell phone parts, and company P, which produces SSD cases. We reviewed theories and previous studies in M&A literature. We comprehensively examined the decision-making procedure at each M&A stage, describing the situation of the buying company and the selling company from the period of the M&A announcement through deal completion. In addition, we conducted interviews with both companies. The data regarding this case study were collected through interviews with managers of both companies who actively participated in the M&A process. When necessary, we asked them about additional relevant information during the interviews. Results - The result of the M&A between company S and company P was deemed acceptable with the exception of the long negotiation period. However, company S was not able to prepare for PMI after the acquisition due to a controversy over acquisition values. Moreover, the employees of the newly formed company, especially those who came from company P, complained about the M&A and attempted to leave. Thus, implications for successful M&As of SMEs are as follows: First, the procedural compliance of the M&A is needed. Second, support is needed from the CEO for the working group, rather than excessive intervention during due diligence. Third, the right, talented members of the organization should be part of the process of the M&A. Fourth, the use of various types of outside expert or business consultants is needed. Fifth, the strategic intervention by Human Resource managers is required. Last, sharing M&A information among employees is important as information dissemination will help employees be more receptive to such a change. However, this study has several limitations as a single case study; more varied SME M&A case studies are needed in order to generalize the results of the study. Conclusions - Most of the research dealing with M&As has focused on major companies and PMI and neglected SMEs. Thus, our study focuses on SMEs and the decision-making procedures for M&A. This study has significantly contributed to the literature in this area and has provided practical information around the implications of sound decision-making during M&As. Specifically, the results of the study contribute to the need for research on M&A among SMEs, which to date has often been neglected as a topic of choice.

• Journal of Digital Convergence
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• v.14 no.12
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• pp.73-84
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• 2016

The purpose of this study is to examine the global value chain of the global automotive industry to investigate the success factors through the example of the value chain of Hyundai Motor. It looks at the value chain of the well-known Korean automaker, Hyundai Motor, to find success factors with cases. It examines the process to build the supply chain of Hyundai Motor to analyze what impact it has on the growth of Hyundai Motor to look closely at the vertical division of labor of vehicle parts manufacturers. Korea's automobile industry has been expanding cooperation between two sectors as a multifunctional promotion focusing on electronic communications technology in machinery and technology center. Through introducing the nation's first vertical integration in the sector, Hyundai Motor has secured competitiveness of cost reduction and prestige car production. Hyundai Motor has operated and established factories in the United States, India, Turkey, the Czech Republic, Russia, and Brazil. Hyundai Motor operates 51 affiliates, such as Hyundai Mobis, by restructuring, mergers and acquisitions, and building their own vertical division of labor around it. Hyundai Motor has been overcoming dependence on foreign modules businesses and maintaining the supply value chain around Hyundai Mobis.

• Journal of the Korea Convergence Society
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• v.8 no.3
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• pp.245-252
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• 2017

The purpose of this study is to analyze the effects of mergers and acquisitions of domestic IT companies on strategic aspects of internal capacity enhancement. Empirical analysis applied to this study analyzed the business performance in the market through the merger of Daum Communications and Kakao Group. After Daum pursued the merger with Kakao, it showed that the platform business of kakao is expanding to the domain of the existing portal site. The merger was completed, and the total value of the stocks went up to the highest level, but soon its value declined. The merger shows that the growth potential of the enterprise is temporarily declining, which seems to be the internal cost of the merger. Even in the case of profitability, the merger did not show positive results. In the case of stability, the expectation due to the merger was reflected and slightly increased. The following two companies were interested in the kakao when they viewed the merger through a chronological analysis. However, after the merger, the interest of the next kakao was similar. This is seen as a result of the expansion of kakao's diverse platform business rather than the following search sites. From the results of this study, it is suggested that domestic IT companies should approach by analyzing the strategic factors that generate synergy when pursuing M & A to strengthen their resources or capabilities.

• The Journal of the Korea Contents Association
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• v.19 no.5
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• pp.644-657
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• 2019

This study examines the types of strategic alliances formed between terrestrial broadcasters and content start-ups, their resource inter-dependence and the dynamic evolution of their relationship through a case study of KBS Labs, a strategic alliance between KBS and content start-ups. Mergers, acquisitions and strategic alliances sought by large media companies or strategic alliances made only between disparate providers in broadcasting and telecommunications industries are now actively pursued by traditional media and start-ups. The alliances between traditional media and start-ups are beneficial to both parties: traditional media can quickly implement start-ups' innovative ideas and business models and start-ups can tap into not only vast amounts of content being created by or in the archives of traditional media but also their capital, office space and reputation. Therefore, the case study of KBS Labs will help draw out important implications for motivating strategic alliances between traditional media and start-ups. To this end, the resource-based view and the evolutionary theory of the firm are adopted to explore the characteristics and development process of the KBS Labs business.

• Journal of Cadastre & Land InformatiX
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• v.50 no.2
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• pp.101-115
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• 2020

In this paper, big data analysis method was used to find out global trends in autonomous driving and to derive activate spatial information services. The applied big data was used in conjunction with news articles and patent document in order to analysis trend in news article and patents document data in spatial information. In this paper, big data was created and key words were extracted by using LDA (Latent Dirichlet Allocation) based on the topic model in major news on autonomous driving. In addition, Analysis of spatial information and connectivity, global technology trend analysis, and trend analysis and prediction in the spatial information field were conducted by using WordNet applied based on key words of patent information. This paper was proposed a big data analysis method for predicting a trend and future through the analysis of the connection between the autonomous driving field and spatial information. In future, as a global trend of spatial information in autonomous driving, platform alliances, business partnerships, mergers and acquisitions, joint venture establishment, standardization and technology development were derived through big data analysis.

• Korea Trade Review
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• v.43 no.2
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• pp.87-105
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• 2018

We investigate the effects of inward foreign direct investment on innovation in Korean industries from 1998 to 2015 by first dividing FDI into greenfield and M&A (mergers and acquisitions). Furthermore, we use the number of patent applications as the proxy of innovation. Our empirical results are as follows: First, inward foreign direct investment has a significantly positive effect on the number of patent applications. This result suggests that the transfer of technology or knowledge through the inward foreign direct investment has a positive impact on innovation in Korean industries. Second, the greenfield investment has a positive impact on patent applications. This result is consistent with Liu and Zou (2008)'s assertion that greenfield investment has a positive impact on innovation by increasing facilities or plants. The M&A investment, however, has no significant effect on patent applications. This result is consistent with Stiebale and Reize (2011) who argue that the host countries do not benefit from technology transfer through M&A investments. In addition, this supports Liu and Zou (2008) and Garcia et al. (2013)'s hypothesis that foreign parent firms do not influence the innovation of host countries by employing strategies to increase market power rather than R&D activities through M&A investments. It is meaningful that this study first analyzes the impact of foreign direct investment on innovation in Korean industries and uses the number of patent applications as a proxy of innovation. Our empirical evidence provides policy implications for innovation and attraction of inward foreign direct investments.

• Korea Trade Review
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• v.41 no.4
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• pp.157-183
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• 2016

This study examines the effects of the acquirer's experience on cross-border mergers and acquisitions(CB M&A) performance. We posit that various types of experience on M&A, including heterogeneity of experience, strategic alliance experience, first CB M&A, domestic and CB M&A experience may have an influence on the performance of CB M&A. The hypotheses are tested with multiple regression on global M&As made by Korean firms over the period of more than fifteen years. The empirical results indicate that firms with domestic M&A experience and the ones with CB M&A experience improve firm performance. Specifically, CB M&A experience more strongly and positively affects CB M&A performance. It also reveals that M&A experience and first CB M&A positively affect CB M&A performance. However, heterogeneity of experience negatively affects CB M&A performance and it has found no significant relationship between strategic alliance and firm performance. In addition, data show that the better explanation is an overall U-shaped relationship than a linear one between CB M&A experience and Performance. Overall, this study contributes to the literature on CB M&A by examining the effect of various types of experience such as heterogeneity of experience and alliance experience and offering a different explanation based on experience, more specifically, addressing the negative relationship between heterogeneity of experience and M&A performance.

• Asia Marketing Journal
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• v.15 no.4
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• pp.1-32
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• 2014

The purpose of this paper is to investigate upon a diversification strategy through market creation of CJ Group, which has contributed in positioning of the firm as one of the leading conglomerates in South Korea. With such objective, the background of CJ Group, followed by its business diversification strategies were explored, with reference to several case studies. The history of CJ Group began with establishment of CheilJedang Industrial Corporation in 1953, as the first domestic sugar producer and exporter of South Korea. The corporation gradually expanded its business ever since at both national and global level, to include the fields of food production, pharmaceutical, biotechnology, and life chemicals. Later, CheilJedang (CJ) Group was established as an affiliate of CheilJedang Industrial Corporation. With such independence, extension of business has been witnessed across the industries of media, entertainment, finance, information technology and distribution. Thus, the current CJ Group pursues to define itself as a progressive global living culture company with four major business categories from food and food service, biotechnology, entertainment and media, and logistics. Despite its success in today's market, CJ Group underwent hardships in its business diversification in 1990s due to indiscreet management, along with the Asian financial crisis. Here, many firms overcame the financial difficulties by taking advantage of the exchange rate for overseas expansion. Though, CJ Group tried to differentiate itself by focusing on the domestic market by creating something out of nothing. Hence, CJ Group takes a unique position among many cases of business diversification and their categorization. In an effort to identify and classify the types of growth experienced by the top 30 companies in South Korea, the firms were categorized into four groups according to their diversification strategies adapted after the Asian financial crisis. Based on the mode and time of entry, corporations were identified either as the 'Explorer', 'Invader', 'Venture Capitalist', or 'Assimilator'. Here, the majority of the firms showed the qualities of Invader, entering mature markets through large-scaled mergers and acquisitions. However, CJ Group was the only firm that was categorized as an Explorer, for its focus on the newly emerging service sector in culture-contents industry. This diversification strategy through market creation is worth examining, due to its contribution in generating simultaneous growth between the market and the company itself. Diverse brands of CJ Group have been referred to as case studies in this regard, from 'Hatban', 'Cine de Chef', 'VIPS' to 'CJ GLS'. These four businesses, each to represent processed food, film, restaurant service, and logistics industries respectively, show CJ Group's effectiveness in creating a whole new category of goods and services that are innovative. In fact, such businesses not only contributed in advancement of consumers' wellbeing, but toward generating additional value and employment. It is true that the diversification strategy of CJ Group requires long-term capital investment with high risk, compared to the other strategies mentioned in the paper. However, this model does create high employment and additional values that are positive to both the society and the firm itself. Therefore, the paper comes to a conclusion that the diversification strategy through market creation conveys the most positive impact relative to the others.

• Journal of Intelligence and Information Systems
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• v.26 no.3
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• pp.51-69
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• 2020

Now, it is a stylized fact that a small number of technology firms such as Apple, Alphabet, Microsoft, Amazon, Facebook and a few others have become larger and dominant players in an industry. Coupled with the rise of these leading firms, we have also observed that a large number of young firms have become an acquisition target in their early IPO stages. This indeed results in a sharp decline in the number of new entries in public exchanges although a series of policy reforms have been promulgated to foster competition through an increase in new entries. Given the observed industry trend in recent decades, a number of studies have reported increased concentration in most developed countries. However, it is less understood as to what caused an increase in industry concentration. In this paper, we uncover the mechanisms by which industries have become concentrated over the last decades by tracing the changes in industry concentration associated with a firm's status change in its early IPO stages. To this end, we put emphasis on the case in which firms are acquired shortly after they went public. Especially, with the transition to digital-based economies, it is imperative for incumbent firms to adapt and keep pace with new ICT and related intelligent systems. For instance, after the acquisition of a young firm equipped with AI-based solutions, an incumbent firm may better respond to a change in customer taste and preference by integrating acquired AI solutions and analytics skills into multiple business processes. Accordingly, it is not unusual for young ICT firms become an attractive acquisition target. To examine the role of M&As involved with young firms in reshaping the level of industry concentration, we identify a firm's status in early post-IPO stages over the sample periods spanning from 1990 to 2016 as follows: i) being delisted, ii) being standalone firms and iii) being acquired. According to our analysis, firms that have conducted IPO since 2000s have been acquired by incumbent firms at a relatively quicker time than those that did IPO in previous generations. We also show a greater acquisition rate for IPO firms in the ICT sector compared with their counterparts in other sectors. Our results based on multinomial logit models suggest that a large number of IPO firms have been acquired in their early post-IPO lives despite their financial soundness. Specifically, we show that IPO firms are likely to be acquired rather than be delisted due to financial distress in early IPO stages when they are more profitable, more mature or less leveraged. For those IPO firms with venture capital backup have also become an acquisition target more frequently. As a larger number of firms are acquired shortly after their IPO, our results show increased concentration. While providing limited evidence on the impact of large incumbent firms in explaining the change in industry concentration, our results show that the large firms' effect on industry concentration are pronounced in the ICT sector. This result possibly captures the current trend that a few tech giants such as Alphabet, Apple and Facebook continue to increase their market share. In addition, compared with the acquisitions of non-ICT firms, the concentration impact of IPO firms in early stages becomes larger when ICT firms are acquired as a target. Our study makes new contributions. To our best knowledge, this is one of a few studies that link a firm's post-IPO status to associated changes in industry concentration. Although some studies have addressed concentration issues, their primary focus was on market power or proprietary software. Contrast to earlier studies, we are able to uncover the mechanism by which industries have become concentrated by placing emphasis on M&As involving young IPO firms. Interestingly, the concentration impact of IPO firm acquisitions are magnified when a large incumbent firms are involved as an acquirer. This leads us to infer the underlying reasons as to why industries have become more concentrated with a favor of large firms in recent decades. Overall, our study sheds new light on the literature by providing a plausible explanation as to why industries have become concentrated.