Lee will take over the Samsung succession plan or tax 35.2 billion

Samsung chairman Lee Kun-hee and his successor Lee lead: In the latest issue of the British economist print edition published a commentary that the Samsung successor Lee need to launch a change to fully adapt to current market trends, and he is bound to face a daunting challenge. The following is the full text of the article: change comes again except for the wife and children, everything will change. This is Samsung chairman Lee Kun-hee, 20 years ago at an emergency executive meeting. At that time, he hoped the group would no longer churn out cheap, low-cost products and instead focus on product quality as the world's leading company. Lee Kun-hee has accomplished his mission, even far beyond his final vision. Today, Samsung Group has 74 companies, with annual revenue of more than 400 trillion won (about 387 billion U.S. dollars), with a total of 369,000 employees, covering a wide range of areas including washing machines, resort hotels, container ships and life insurance. But what really makes Mr Lee proud is Samsung's electronics business: In terms of revenue, the company has overtaken its Japanese rivals to become a leader in the global electronics industry: Its chips, flat-panel TVs and smartphones are among the world's largest. After 76 years of ups and downs, the brand-new Samsung Empire has now come to the crossroads of change. If Samsung releases an expected profit warning soon, it will focus on the current situation. The threat to Samsung today is no longer a matter of life and death, but it is in a world that is unpredictable, so it has to be fully integrated into the trend. This starts at the top level first. In May this year, 72-Year-old Lee Kun-hee had a heart attack and is still hospitalized. No one thinks he'll be back at the helm like 2010. He was convicted of embezzlement and tax evasion, but was able to escape jail and continue to lead Samsung forward. (He was sentenced to 3 years ' probation and later received a pardon, so he saved the IOC membership.) Li Kun-Lee's only son, Lee, seems to be the successor to Samsung's main business, while his two daughters will be responsible for some small business operations. Lee, 46, joined Samsung Electronics in 2001 and became vice chairman after ten years. Except for some regular resumes, the outside world knows little about him. As a manager, his ability is unproven. "When Sony meets Samsung," said Zhang Shijien, a professor at the National University of Singapore. Despite Samsung's strong PR offensive, most Koreans still link him to a catastrophic internet project called Esamsung. People who have met Lee say he is approachable and does not put on airs-a huge difference from his father's Majesty management style. When Lee Kun-hee inspected the factory, the floor would be covered with red carpet, and even the staff would be barred from overlooking him. He burned and crushed tens of thousands of defective mobile phones and other devices in front of his sobbing staff in 1995. His son is more introverted in character, which may be what the current Samsung Electronics need. To continue to thrive, Samsung must attract aFlow of technicians, but also with partners to coexist harmoniously. Lee apparently got along well with grumpy Steve Jobs when he was instructed to go to Silicon Valley to negotiate with Apple, an important chip client for Samsung, but a competitor in the smartphone sector. 100.75,2.88,2.94% Perhaps that is why he became the only Samsung executive to have been invited to the Jobs memorial. Structure needs to be adjusted however, to truly inherit reins, the first step must be to complete another urgent change: To change the Byzantine corporate structure of the Samsung Group. The group's holding company, for example, has just changed its name from Samsung Everland to Cheil team, which holds a 19.3% per cent stake in Samsung Life, which holds a 34.4% per cent stake in Samsung credit cards and a 5% per cent stake in Samsung's credit card. It is by virtue of such an intricate equity relationship that the Li clan has been able to control the entire Samsung group with less than 2% of the equity. But Shaun Cochran, a Shawn Cocklen analyst at CLSA, who has long been concerned about Samsung, says it may have to simplify the relationship for a variety of reasons. One reason for this is that the South Korean government has tightened rules for such a cross shareholding structure. But the most realistic consideration is the huge tax that this succession plan may generate. It is estimated that the Li clan may have to pay 6 trillion won (about 35.2 billion yuan) tax, and need to raise cash. It also helps explain why Samsung denies any reorganization-related news: The more certain it is, the higher its share price and the higher the tax. Because of the complex ownership structure, the shares of Samsung Group's listed subsidiaries are traded at a discount. When the news of Mr Lee's sudden heart attack came to light, Samsung's shares soared-largely because of the company's restructuring chances. Despite persistent denials, Samsung's restructuring has apparently begun. Earlier this month, Samsung heavy industry and Samsung Project announced a merger plan. A further two subsidiaries will be IPOs (IPO), with Samsung SDS, the IT service provider, expected to be available as early as November, while Cheil is expected to make an IPO next year. Cochran says Cheil's listing is critical. Unlike other Samsung subsidiaries, the company is directly controlled by Mr Lee's children and his family foundation. These IPOs will not only raise money but also simplify the valuations of Samsung's cross shareholdings. In this way, the equity relationship can be dismantled without triggering a lawsuit. Facing two-sided attack. The sooner it happens, the better it will be for Samsung, because it's hard to distract executives from the effort to put them into business. Smartphones are one of the most focused businesses. It not only directly for Samsung Electronics and Samsung Group contributed a huge profit, or Samsung chip and display business of the largest customers. Samsung Electronics, a few years ago, was just nobody, but by 2012, it had won the fullBall smartphone market share of One-third. This was achieved because they had earlier placed bets on Google's Android smartphone platform, which 576.71,1.65,0.29% handsets that were similar to the iphone but were cheaper. But since then, the problem has been piling up. Samsung's current market share has slipped to 25%, according to IDC, the US market research firm. The Galaxy S5, released this January, has become the industry's laughingstock because of its cheap plastic shell. Chinese low-priced manufacturers such as Millet and Huawei, as well as emerging European brands such as Wiko and Archos, are attacking Samsung from the bottom up. And in the high-end market, Apple is also robbing the lost share. The trend seems likely to continue after Apple unveiled its big-screen iphone 6 and 6 Plus, and Samsung still has an edge in the market. In addition, the smartphone market is gradually maturing, in fact, sales of such products in Europe have begun to shrink. Samsung is still safe if its rivals can be repelled by better hardware. This is Samsung's best business, says Ben Wood, an analyst at the US market research firm CCS Insight. Since the launch of the Galaxy Gear smart watch a year ago, it has rolled out 5 models in a row. Samsung has pushed prototypes into the market. Said Wood. But the smart watch also highlights Samsung's plight from the side: Apple Watch, released with the iphone 6 and 6 Plus, may be very similar to the Galaxy Gear, but it can be integrated into Apple's software and service ecosystem, which includes a contactless payment system and complex health-monitoring applications. Samsung cannot match Apple on an ecosystem. It cannot control Android, and the Tizen mobile operating system It is trying to develop does not seem to have progressed. As a hardware enterprise that believes in Confucian culture, it is hard for Samsung to launch first-class applications and services. Therefore, IDC analyst Francisco Geroni Mo (Francisco Jeronimo) said that the company's biggest opportunity is to insist on the development of hardware, the introduction of consumers fondle admiringly products. But it must act quickly. The experience of Nokia (8.61,0.05,0.58%) and BlackBerry (10.26,0.46,4.69%) shows that the balance of fate tends to change in an instant. Apple's new iphone sold 10 million units in three days, equivalent to the 25-day sale of Galaxy S5. In short, these jobs seem to suit Lee. Samsung's observers just want to know if he can do the job. But when he is really in charge of the reins, he may have to deliver a speech that will change everything. (PEI)