Among 71 Korean Chabols, only 3 companies including Nongshim have a desirable growth structure 2nd World Knowledge Forum was held in Marriot Hotel, Seoul, from Oct. 17 through 19. In this forum, Bill Gates, Donald Johnston, OECD Secretary General, Yves Doz, Professor at INSEAD in France and John Donahugh, CEO of Bain & Company participated. During the forum, 5 plenary sessions, 5 special lectures, 2 workshops, and 27 sessions were held. On 18th, John Donahugh held a press conference with Chris Juke, Leader of Strategy Practice, Bertrand Panto, Managing Director at Korea Office and Park Chul Jun, Partner at Marriot Hotel and presented on the recent analysis of corporate growth strategy.
Bain & Company drafted a report on 71 Korean companies as to their business performance for the past 10 years, looking at their revenue, profit and shareholder value creation. The industry composite of real revenue and profit growth rate indexed to inflation rate for the past 10 years is 5.5% on average per annum. Firms with sustainable growth potential were defined as the one that its incremental shareholder value crated exceeds cost of capital.
Among the 71 firms surveyed, only 4 firms including Nongshim, Samsung Electronics, SK Telecom and Samsung Fire & Marine Insurance Co. were defined as firm with sustainable growth potential. Companies such as Hyundai Motors, KT, SK Global, Shinhan Bank, Samsung SDI, Hanwha, Hyundai Dept. Hansol Paper and Daesang were included for the analysis.
The managing director of Bain & Company Seoul office said that Nongshim and its archival Haetae have taken a different path since 1997. While Nongshim has diversified its business into the areas such as soft drinks that are adjacent to its core business, Haetae has diversified its business into irrelevant areas with its core business. Comparing the two companies, they had recorded a similar growth rate before 1997 but Haetae has fallen due to its excessive expansion
. The four companies including Nongshim recorded the lowest level of debt ratio as they had continued to lower it for the past 10 years.

Samsung Electronics and Daewoo Electronics topped the semiconductor and electronic appliance market, respectively but Daewoo outpaced the second place company with a very slight margin.