Daewoo was once one of the largest conglomerates in South Korea, founding in 1967 and diversifying into many industries including automotive. It expanded globally but faced financial troubles in the late 1990s due to overexpansion and debt. In India, Daewoo entered in 1995 but struggled due to poor market research, changing strategies, and not adapting globally successful tactics to the local market. While its cars were advanced, issues with fuel efficiency and inconsistent promotional tactics confused customers. Daewoo filed for bankruptcy in 1999 and its automotive division was acquired by General Motors.

1. *
Presentation By:
GROUP 8
JAGAT MISHRA 1321118
NIRAJ AGARWAL 1321128
NAMIT SAHAI 1321127
K.T.BOPANNA 1321121
SIKTA MISHRA 1321164
ARCHANA BHAT 1321146

2.  Largest conglomerate after Hyundai Group in Korea followed
by LG group and Samsung group.
 Daewoo Group was founded by Kim Woo-jung in March 1967.
 Daewoo initially concentrated on labor-intensive clothing and
textile industries that provided high profit margins because of
South Korea's large and relatively inexpensive workforce.
 Later diversified into trading, construction, automotive, etc-
20 divisions.
 Expanded efforts in the automotive industry and was ranked
as the seventh largest car exporter and the sixth largest car
manufacturer in the world. Automotive became one the most
important venture.
In 2001 had its operations in 123 countries.

3.  Faced tough competition in European and US market it looked
to diversify it into Eastern Europe, Latin America and Asia.
 Took over 50% equity held by Japans' Toyota in DCM-TOYOTA
 Renamed it as Daewoo motors India ltd
 Overseas investment on borrowed funds
 In 2000, company’s labor union refused to accept a
restructuring plan for the company
 Daewoo was declared bankrupt

4. * Daewoo entered in Indian market with Cielo in 1995
followed by Nexia and Matiz.
* Projected to become the 100bn company by 1998-99
* Implemented strategies to increase sales with poor
market research
* 70000 customers cancelled their booking
* Recorded a loss of 351.4 million in 6 months as sales
also declined to 1.22 billion from 2.7

5. *They borrowed foreign debts for further
expansion
*Introduced the concept of direct selling
*Price competitiveness and attractive servicing
and warranty offers gave rise to good demand
in the international market.
*They also introduced heavy discount to attract
global customers
*Entered the small car segment to attract more
customers with Matiz.

6. *
*Did not consider itself worthy to challenge Maruti in
small car segment
*There were not enough players in the mid-size
segment, Daewoo thought that it would stand a fair
chance in capturing this segment.
*Daewoo found the mid size market more alluring.
*Daewoo could not visualize that the small sized
segment would grow at a faster pace than the
segment it decided to enter in.
*The mid-sized segment got crowded with players
like Opel, Maruti, Honda and Daewoo itself.

7. *
*It has around 110 dealers all over India.
*Over 100 Authorized Service Centres to cover the
entire country.
*Appointed 14 exclusive LCV dealers across the
country to take care of sales and service
requirements.

10. * Diwali bonanza scheme for the corporates.
* Lottery schemes for individuals
* Test drive scheme
* Hefty price cut
* Val you Campaign

11. Launch of operations in extremely hurried manner.
Inefficient Production Plant
Over estimation of the market demand
Scheme Failures
Changes in positioning (rich luxury car to premium family car to
value for money car).
DECLINE OF CIELO

13. ADVERTISEMENT/PROMOTIONS
1994
1999
Focus on Cielo not Daewoo as a
Brand
Focus on Daewoo as a Brand not on a
particular Product

16. Oct 1998- MATIZ was launched.
23,265 units in Apr-Dec 1999, demand increased by 52.2 %
to 35,398 units Apr-Dec 2000
Further Cielo took a back seat after MATIZ success globally
Replaced Cielo, GLE and GLX with EXECUTIVE and NEXIA but
customers failed to see any difference
Advertising of CIELO stopped
MATIZ was operating in 114 countries
Failure in INDIA due to SANTRO

19. STRENGTHS
• Strong brand portfolio
• Technology potential
• State of art plant
WEAKNESS
• Huge debts
• Aggressive expansion
• No training to sales staff
• Lack of proper marketing strategies
• Huge discounts
OPPORTUNITIES
• Few players in mid-size
segment
• Regional Tie Ups
THREATHS
• Well established
competitors
• Fluctuation in price of
fuel and raw materials
• Government policies

20. * Merger with General Motors in 2001
* General motors took control over daewoo motors
in 2002
* Matiz was restructured as Chevrolet Spark
* It went into new models since then
* Now the latest model is known as Chevrolet Beat
*The DAEWOO commercial vehicle division was
sold to TATA MOTORS.

21. PRODUCT
Daewoo had a good feature rich product, which was more advanced than its
direct competitor(The Esteem), but it was let down by poor fuel efficiency.
PLACE
Although Daewoo was not as far spread as Maruti Udyog Limited, it had a
fairly good reach for a new entrant.
PROMOTION
Ineffective marketing was the most probable cause for the fall of Daewoo in
India.
It confused Customers with its constantly changing promotional strategies
ranging from positioning the car as a premium product to offering unheard
discounts on the same.
PRICE
Initially the company introduced the car as a premium product, pricing it
above competition. However when things did not pan out in their favor, the
price cuts that followed were very drastic, and ironically accelerated the
company’s downfall.

22. *Globally successful strategies may not always work in
certain geographies, careful customization is a must for
success.
*Price cuts should not appear to be a desperate attempt to
survive, instead must be done subtly enough to boost sales
without tarnishing the product’s image.
*Stick to your strategies- A complete overhaul is not always
the best option, the emphasis should be on making plans
work, not changing plans.
*Daewoo could have also benefitted from showcasing its
strength’s rather than justifying it’s weaknesses.(poor
fuel)