기업창업후 성장과정에서의 회생전략

Abstract

An Empirical Study on Turnaround Strategies through Business Growth Process of the Startup

Kim, Sung-Hwa Advisor: Prof. Choi, Hyo-Sang, Ph. D. Department of Convergence Technology Startup, Graduate School of Industry Technology Convergence, Chosun University

The purpose of this dissertation is how to convert a loss-making company into a profit-making company by implementing turnaround strategy. According to an OECD report in 2013, only a few startups in Korea survived while passing through the valley of death in research and invention stage and then crossing the chasm in the marketing stage such as technology obsolescence and hostile M&A. Most startups face the ups and downs in their business which is called as ‘ business life cycle.’ Turnaround strategy is to turn the company from a negative point - caused by the valley of death or the chasm - to a positive one, and to reverse the position from loss to profit, from declining sales to increasing sales, from weakness to strength, and from an instability to stability. It is a process that involves conducting diagnostic analyses, preparing action plans, taking action, and evaluating plans. To prove the usefulness of turnaround strategy for business failures, a case study of LS Cable Co.,Ltd. was conducted. The main results of the study were as follows: Firstly, all the startups did not succeed without technology oriented management. Secondly, after achieving their core competency, startups showed a tendency to diversify their products and businesses. However, its success depends heavily on how to diversify: whether it was deployed horizontally or vertically. Thirdly, closing down of a loss-making unit should be evaluated considering the cash flow and the retrenchment of fixed cost. Forthly, companies which own various business units needed to be evaluated by the advanced financial indicators such as ROIC. Finally, it was highly recommendable to adopt the combination of two or more categories of turnaround strategies when passing through the valley of death. To sum up, the key success factors of a startup were the entrepreneurship of the founder and management skills. The entrepreneur needed to seek sustainable competitive advantage through the external adaptation and the internal integration.

Key words : Startup, entrepreneurship, valley of death, chasm, turnaround strategy