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Competitive advantage and the transformation of value chains over time: The example of a South Korean diversified business group, 1953–2013

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  • In Woo Jun
  • Chris Rowley

Abstract

We examine the historical evolution of different elements in value chains that create value-added and competitive advantage. This is achieved by using the conceptual model of the ‘smile curve’ with a longitudinal case study of a diversified business group, CJ Group, a former affiliated firm of Samsung Group. We found that the value-added structure graph in the industrialisation period displayed an ‘upside-down U shape’, indicating that production and manufacturing were the most value-adding sectors. However, in the more recent knowledge-based economy period, the graph shows a quite different shape, indicating R&D, firm infrastructure, manufacturing, logistics, service, and marketing as sources of value-added. This shows that competitive advantage diversified into other fields to fit with the changed economy. We also investigate what type of organisational structure, strategy, and capabilities were adopted for organisational change. We found an evolution, with an unrelated diversification strategy by altering capabilities from contacts and generic to organisational and technological capabilities.

Suggested Citation

  • In Woo Jun & Chris Rowley, 2019. "Competitive advantage and the transformation of value chains over time: The example of a South Korean diversified business group, 1953–2013," Business History, Taylor & Francis Journals, vol. 61(2), pages 343-370, February.
  • Handle: RePEc:taf:bushst:v:61:y:2019:i:2:p:343-370
    DOI: 10.1080/00076791.2018.1430141
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