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CH40 | Heir
🕑 Added 2025-03-22 04:12:02 +0000 UTCTaewoo Group had always been a company that bought and used technology rather than developing its own.
As a result, Grandpa knew very well how lucrative technology royalties could be. At the mention of receiving royalties, he even gazed lovingly at the flip phone.
"Of course, the current flip phone we’ve developed won’t achieve a 30% operating profit margin. Most of its components are purchased from other companies, and we even have to use externally developed software."
"Even so, it says here that the maximum operating profit margin can reach 15%."
"That’s a perfectly achievable figure. It’s a much higher margin than what Taewoo Electronics earns from its TVs, washing machines, or microwaves."
The home appliance market was massive.
However, Taewoo Group’s operating profit margin for home appliances often fell below 5%.
In particularly competitive periods, it was not uncommon for the margin to drop into the 0% range.
"Even if mobile phones have a high operating profit margin now, wouldn’t it naturally decline once competition with other companies intensifies, just like with home appliances?"
"If we secure loyal customers, that issue can be resolved. Our plan is to cultivate a customer base that will buy every new product we release."
"So you’re saying you’ll rely on marketing. But no matter how much money you pour into marketing, building a loyal customer base is no easy feat."
I took out a document.
Inside, the name of Jonathan, the designer of the flip phone, was listed, as well as Steve, who had overseen its production.
"This flip phone was developed in collaboration with key figures from Apple. What better marketing strategy could there be?"
"Apple? Are you talking about the American company that made the Macintosh?"
"That’s right. By leveraging Apple’s name, we can differentiate the flip phone from other mobile devices and adopt a premium branding strategy."
"Apple still has some brand value, but it’s not the company it used to be, is it?"
Grandpa didn’t yet recognize Apple’s true potential.
No matter how keen his business acumen was, it was difficult to foresee Apple’s comeback at that time.
In fact, not just Grandpa, but many experts believed Apple was beyond recovery.
"Don’t think of it as using Apple’s name—think of it as working with Steve Jobs. The world is still waiting for the next revolutionary product he will create. And our flip phone is the first step in that journey."
"You certainly dream big. It sounds like you truly believe the flip phone will be the future of Taewoo Electronics."
"I prioritize operating profit. No matter how high sales are, if we end up in the red, it’s ultimately a losing business."
Grandpa furrowed his brows.
His reaction made it clear that he thought differently from me.
"Operating profit is important, but revenue is just as crucial for a company. The larger the revenue, the harder it is for anyone to challenge us. Do you know the term daema bulsa in Go?"
"I understand it to mean ‘a large group never dies.’ Are you saying that as long as revenue is high, a company becomes a daema and will never collapse?"
"Exactly. To do business in Korea, you must become a daema. No matter how high the profit margin is, if we don’t become a daema, we’ll just be tossed around like a fragile reed."
I understood why Grandpa had adopted this philosophy.
During the harsh military dictatorship era, survival required a daema bulsa strategy.
In the pursuit of survival, quantity often outweighed quality, which is why he had acquired and merged even seemingly unnecessary companies.
"The mobile phone market alone can make us a daema. It’s larger than Taewoo Electronics, Heavy Industries, and Shipbuilding combined."
"If your report and your insights are correct, that might be possible. But that doesn’t mean we can just abandon all our other businesses."
Success doesn’t happen overnight.
I wasn’t suggesting we shut down other divisions immediately.
Of course, if that were feasible, it would be ideal. But to minimize disruption, a gradual transition was necessary.
And that transition would start with Taewoo Electronics.
"We don’t need to abandon other businesses. We just need to make mobile phones the core focus of Taewoo Electronics."
"Every year, Taewoo Electronics' home appliance market share is increasing. We can’t suddenly sideline that and jump into mobile phones."
"Then are you planning to just give away the flip phone we worked so hard to develop?"
"Oh-ho! How could I give away something my grandson created? Of course, Taewoo Electronics should produce it."
Grandpa clearly recognized that the flip phone was a profitable product.
However, he struggled with the concept of selection and concentration.
He wanted to hold onto both the home appliance and mobile phone businesses.
"With Taewoo Electronics' current production capacity, mass-producing the flip phone will be difficult."
"The flip phone you created is an excellent product, even in my eyes. But it’s not something that will sell in the hundreds of thousands, is it? I believe our current production capacity will be sufficient."
"What will you do if sales increase?"
"In that case, we can always build additional factories."
As expected, Grandpa preferred quantitative expansion.
Instead of cutting unnecessary parts and filling them with something new, he wanted to keep everything and add more.
"I will follow your decision, Grandpa."
"I hope you take an interest not only in mobile phones but also in home appliances. Just as you developed the flip phone, couldn’t you create an innovative product in the home appliance sector as well?"
"With the authority I currently have, that would be difficult. To develop the flip phone, I had to use not only the research lab's funds but also my own personal money."
"Haha, that won’t do. I’ll arrange additional research funding for the lab. Furthermore, I’ll ensure you have the authority to oversee all of Taewoo Electronics’ products."
Should I be satisfied with this?
I had now gained influence not just over the research lab but over Taewoo Electronics as well.
One more step forward, and Taewoo Electronics would be in my hands.
To achieve that, I first needed to remove Taewoo Electronics' president, Park Jin-hoon.
How do you bring down an opponent?
Through confrontation and competition.
In the hierarchy battles between male lions, the victor becomes the leader, while the defeated is wounded and exiled.
But Taewoo Group wasn’t a jungle.
Even if I lost, I wouldn’t be cast out. However, for Park Jin-hoon, the moment he was pushed out, it would be over for him.
"For now, I want to focus on mobile phones. Please grant me command over Taewoo Electronics' mobile phone development division and all related departments."
"Is that really necessary? Even if we simply transfer the developed phone to Taewoo Electronics, wouldn’t Park Jin-hoon take care of the production planning himself?"
"I want to oversee everything myself. It is a necessary measure to prevent any leakage of the technology I poured my heart and soul into while developing the flip phone."
"I can’t make this decision alone. I’ll call in President Park Jin-hoon."
Although Grandpa held absolute power over Taewoo Group, that didn’t mean he could dictate every decision within its subsidiaries.
Especially when it came to infringing on the authority of a subsidiary's president—such actions were bound to provoke resistance. That’s why a conversation with Park Jin-hoon was necessary.
"He says he can be here within an hour."
"Would you like to go over the report with me in the meantime? There are still some points I’d like to explain."
Was this a form of indoctrination?
I once again emphasized to Grandpa the importance of operating profit margins.
I repeatedly stressed that we should shut down businesses with low profitability and focus on those that generate substantial revenue.
Of course, I wasn’t suggesting shutting down Taewoo Electronics or Taewoo Heavy Industries.
I wanted to, but if I pushed too hard, Grandpa would stop listening to me altogether.
Instead, I steered the conversation toward Taewoo Tourism and Taewoo Chemicals—less critical subsidiaries with poor operating profit margins—and used their data to illustrate my point.
"Mr. Chairman, you called for me?"
Just as Grandpa finished reading the report thoroughly, Park Jin-hoon arrived.
Upon seeing me in the chairman’s office, a flicker of unease crossed his face, and his eyelids twitched slightly.
I discreetly moved the flip phone prototype behind my back, paying no attention to his reaction.
"Director Kim said he had something to discuss with you, so I called you in."
"If it's a matter that concerns me, wouldn’t it have been more appropriate to visit Taewoo Electronics instead?"
"Our conversation naturally led to this point. I apologize for the inconvenience."
I began with a polite and formal tone.
There was no need to exert my strength this early—once we got into the main discussion, voices would inevitably be raised.
"Director Kim wants to take charge of the mobile phone business."
"Aren’t you already busy with research lab duties? And now you want to take on mobile phones too?"
President Park Jin-hoon was good at hiding his displeasure.
He had sent me to the research lab as a form of exile, so he wasn’t happy about me getting involved in Taewoo Electronics’ affairs.
Well then, it was time to throw out some bait—bait he wouldn’t be able to resist.
"I understand that mobile phones make up a negligible portion of Taewoo Electronics' business."
"There’s no reason for us to force our way into a market already dominated by Samjin Electronics and major American electronics companies."
"That’s exactly why I want to give it a shot. I’ll produce visible results within a year."
"I appreciate your enthusiasm, Director Kim. However, mobile phone development requires significant resources—both manpower and money. It could disrupt the production schedules of other products."
"I’m confident. If I don’t achieve results within a year, I will never interfere in Taewoo Electronics’ business again."
Park Jin-hoon reacted immediately.
He raised an eyebrow, barely suppressing a smile.
The mobile phone market was already carved up among existing players.
Yet here I was, claiming I’d make an impact within a year?
To him, such a thing was simply impossible.
I decided to put on a little performance, making it even harder for him to resist the bait.
Widening my eyes and raising my voice, I did my best to look like an overzealous, reckless rookie.
"What’s so complicated about mobile phones? We just buy parts from other companies and assemble them! There’s a gold mine right in front of us—how can we just ignore it?"
"Ahem, Director Kim, your confidence is quite something. Chairman, what do you think? Personally, I’d like to give him a chance."
"If President Park has no objections, I’d like to let him try. He should experience firsthand how difficult it is to develop and manufacture electronic products."
Grandfather was backing me up.
Having seen the flip phone prototype, he knew there was a real chance of success.
But Park Jin-hoon was still unaware that I had already successfully produced a prototype.
"Very well. I’ll transfer the mobile phone development team under the research lab. I’ll also ensure maximum cooperation from the relevant departments."
"I’ll also need a production facility."
"I’ll prioritize your project, suspending all other mobile phone-related projects. Once development is complete, we’ll produce the phones at the Incheon factory."
"I understand the Incheon factory is relatively small. We’ll need a facility capable of producing over a million units."
Park Jin-hoon struggled to suppress another smile.
Samsung Electronics, which held about 40% of the Korean market, only sold around 200,000 units of a single model.
Yet here I was, an overconfident rookie, demanding production capacity for a million units in one go. No wonder he found it amusing.
"Alright then, I’ll also authorize the Bucheon factory for production, should you need it. However, running two factories means the risks of failure will be extremely high. Please be aware of that."
"I’ll make sure we succeed. Also, I’ll need funding for mobile phone development."
"I’ll redirect funds from other projects."
Park Jin-hoon was being surprisingly cooperative.
But there was a reason for that.
To pin all the responsibility on me, he had to provide ample resources.
By giving me everything I asked for, he could shift all the blame onto me if the project failed.
If he was offering, there was no reason to refuse.
In fact, why not ask for even more?
TL/n -
Samjin = Samsung
Hyunjae = Hyundai
