It isn’t hard to argue that South Korean chaebol Samsung is a dominant force in electronics: In spite of litigation with US-based giant Apple, Samsung’s annual operating profit was 85.8% higher in 2012 than in 2011 with record sales of smart phone handsets making Samsung’s market capitalization equal to the next 9 Korean companies underneath it combined.
Nonetheless, such a gigantic presence in the Republic of Korea is worrisome for South Korean leaders because when ‘When Samsung sneezes, Korea catches cold.’
Samsung’s size is reminiscent of Finnish phone giant Nokia and its large impact on the economy of Finland. Now that Nokia is no longer a preferred maker of handsets, Finland feels the effects in employment cutbacks and layoffs.
Economic analysts stress that South Korea needs diversification in its economy if it is to become a major global player. To do so, South Korea needs to create a business environment conducive to the growth of small to mid-size firms while also looking for more ways to enable the larger firms to be more competitive on an international scale.