| Abstract |
The main purpose of this research is to discuss the strategy of Taiwan and Korean LCD makers. Through the analysis of the financial report of these companies, I would like to track the action and strategy of these LCD makers , and find out what make Korean LCD makers
winner in the last 10 years. My research will analyze with 3 activities , operating , investing and financing. Through investigating the interaction of these activities, I would like to find out at which point did Korean maker conduct the correct strategy. And the following conclusion are contained :
1. The enormous investment in LCD industry makes the price fluctuation drastic, which makes the flexibility of cost a key of surviving in the industry. And to build to flexibility of cost, LCD maker must invest actively compare to other makers.
2. Korean makers are more active on investing activities. They co-operate with LCD instrument makers to control the technology of next-generation instrument. As of the key component controlling, they co-operate with top 4 glass substrate maker so they could stabilize the price of the components and gain the flexibility of cost.
3. Under the price war during the financial crisis, Korean makers make progressive price cutting . As a result , they prevailed the LCD market. On the other hand, LG Electronics provide stable orders toward LG Display, which give LG Display an competitive bargaining power.
4. Korean makers’ success on operating activities provide the sufficient fund for investing, preventing them from debt raising, keeping them a healthy financial position. The optimistic stock performance and the strong solvency gave Korean makers a favorable cost of capital. However , the higher interest rate in Korea set the LCD maker in
disadvantage on financing.
5. As a result of the 3 activities, the EVA shows the advantage of Korean makers because of the advantage of operating and the active investing. |
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