The old king of the empire passed away, and the crown prince Lee Jae-yong ascended the throne. His first priority will be to prevent Samsung from being split up.

Samsung Chairman Lee Kun-hee died in his own hospital, but a new era did not begin.

As a crucial helmsman in the history of Samsung's growth, Lee Kun-hee's significance to Samsung is no less than that of Steve Jobs to Apple. It can be said that Lee Kun-hee has raised Samsung's status to its current height by his own efforts.

With the death of Lee Kun-hee, Samsung's rich legacy will, if nothing unexpected happens, be officially passed on to Lee Jae-yong, the "Samsung Crown Prince" who previously served as "regent".

For Lee Jae-yong, although he no longer has to worry about being deposed and can work hard, with the passing of Samsung's leader Lee Kun-hee, can Samsung still have such a strong cohesion to cover up the emerging problems such as equity and confrontation between government and enterprises?

The successful "ascension to the throne" is just the starting point of Lee Jae-yong's journey at Samsung. Where will Lee Jae-yong lead Samsung in the future? Judging from the world pattern and Samsung's position in South Korea, division may be a big trouble that Samsung will have to face.

Lee Kun-hee's Samsung

Although Samsung had already become a representative company in South Korea when Lee Kun-hee took over in 1987, in Lee Kun-hee's eyes, Samsung was like a paper tiger that was "strong on the outside but weak on the inside". Therefore, when he first took office, Lee Kun-hee announced that Samsung would start a "second venture".

Lee Kun-hee led Samsung to change its previous attitude of copycat products. In 1994, Samsung Anycall mobile phone was hastily launched, and the defect rate once exceeded 11%. After discovering the problem, Lee Kun-hee gathered the employees of Samsung's mobile phone department in an open field and destroyed 150,000 defective Samsung Anycall mobile phones worth 50 billion won in front of them.

It was also from then on that Samsung mobile phones began to gradually occupy the market and quickly took off with the help of smartphones, becoming one of the few players that safely transitioned from the era of feature phones to the era of smartphones.

Second, it took the lead in developing cutting-edge industries. As early as the 1970s, Lee Kun-hee suggested his father to enter the semiconductor industry and prompted Samsung to acquire 50% of the shares of Korea Semiconductor Company. With Lee Kun-hee's vigorous promotion, Samsung Semiconductor began to emerge in the late 1980s.

Coincidentally, in May 2010, Lee Kun-hee also pushed Samsung to invest 23.3 trillion won in solar cells, rechargeable batteries for electric vehicles, LEDs, etc. It is speculated that after 2020, these new growth engines will bring Samsung 44 billion US dollars in revenue.

Thanks to Lee Kun-hee's iron-fisted rule and cutting-edge strategy, Samsung has become the leading technology company in South Korea and even the world in just three decades. In the 2020 Fortune Global 500 list, Samsung Electronics ranked 19th with a total revenue of US$197.704 billion, and three of Samsung's subsidiaries were also on the list.

If he were an emperor, after completing such a great feat of expanding territory, Lee Kun-hee might have left his successor the ancestral motto of "never increase taxes as long as the population increases" to ensure the eternal prosperity of his foundation. However, in 2014, faced with the rapid changes in the technology industry, Lee Kun-hee expressed uneasiness, saying, "In the past, we had advanced companies abroad as beacons, but from now on we can only advance in the vast ocean on our own."

As the saying goes, it is easy to conquer the world but difficult to keep it. Lee Kun-hee did leave an enviable foundation for Lee Jae-yong, but it is not easy for Lee Jae-yong to keep it.

The Prince's Dilemma

Lee Kun-hee passed away in a hurry. In fact, as early as 2014, he was hospitalized for heart disease. In addition, Lee Kun-hee only had one son, Lee Jae-yong. Therefore, for Samsung, the change of power is very orderly. For example, in September 2016, under the arrangement of Lee Kun-hee, Lee Jae-yong entered the board of directors of Samsung Electronics. This is obviously a step-by-step promotion of Lee Jae-yong, but this road is not smooth.

Looking back at history, no matter what system, the biggest and most important problem faced by the successor is the problem of organization and personnel, and Lee Jae-yong is no exception.

Unlike traditional commercial companies, Samsung is a family-owned enterprise, so its family has always maintained control over the entire group through complex cross-holdings. In contrast, Lee Kun-hee can rely on his strong influence to ignore these redundant equity intersections, while Lee Jae-yong, as a newcomer, must simplify the company structure and enhance cohesion, both for practical and strategic needs.

Although Lee Jae-yong has been promoting the reorganization of the group's business, adjusting and even selling underperforming subsidiaries with the help of Lee Kun-hee since 2013, the resistance he has encountered is much greater than the motivation. Considering that Lee Jae-yong failed to completely reorganize the Samsung Group when Lee Kun-hee was alive, it will be even more difficult for Lee Jae-yong to accomplish this feat in the future.

In addition to pressure at the company level, Samsung has also begun to face many challenges in the industry since 2017.

In 2016, Samsung launched the Samsung Galaxy Note 7 with great enthusiasm, attempting to snipe the iPhone 7 in the growing mobile phone market. However, surprisingly, within only three months of the release of the Note 7, no less than 35 explosions occurred around the world. At first, Samsung only said that it was an "isolated case". As the situation became difficult to control, Samsung reluctantly announced the recall of Note 7 products - but not in the Chinese market.

This directly led to the complete collapse of Samsung's mobile phone products in China. According to Strategy Analytics data, in 2013, Samsung's mobile phone market share in China reached 19.7%, but due to the impact of the "explosion gate" incident, in 2019, Samsung's mobile phone market share in China was less than 1%. For this reason, Samsung was forced to close all its mobile phone factories in China that year.

Considering that Lee Kun-hee was hospitalized in 2016 and Lee Jae-yong had already taken charge of Samsung Electronics, the handling of the "explosion gate" was obviously led by Lee Jae-yong. Ironically, both Lee Kun-hee and Lee Jae-yong experienced the test of product quality at the beginning of their tenure, but the two generations had very different solutions to product quality issues.

In fact, in addition to mobile phone terminals, Samsung is also struggling at the core industrial chain level.

Take screens as an example. Due to their early advantages, Korean companies almost monopolized the global production capacity of LCD panels. However, with the rise of China's screen supply chain, by 2020, more than half of the global supply of LCDs was in China's hands. Accordingly, under the pressure of cost, Korean companies began to be forced to abandon LCD panels.

At the beginning of 2020, Samsung announced that it would gradually shut down all LCD panel production lines in South Korea and China and turn to high-end display technologies such as OLED.

It is true that Samsung can still hold on to OLED panels, but it cannot be ignored that domestic screen manufacturers are also gradually breaking through the technical blockade of Korean companies in high-end display panels. For example, in October 2020, BOE announced that it would supply OLED panels for the iPhone in 2021, which would obviously greatly weaken the influence of Samsung's screen supply chain.

Will Samsung be broken up?

If the internal disputes of Samsung can still be controlled by Lee Jae-yong to a certain extent, then the conflicts between government and business caused by Samsung's large scale have influenced Lee Jae-yong himself to a considerable extent.

It is undeniable that with the rise of Samsung and other companies that are strongly supported by the government, South Korea has also risen to the ranks of developed countries, which is a great achievement brought by Samsung to South Korea. However, with the gradual expansion of Samsung and other companies, they have in turn influenced South Korea's politics and policies and become "chaebols", which clearly violates the free and fair market required by modern capitalist society.

This has also become a major direction of the political struggle at the top level in South Korea. In 2017, during the South Korean presidential election, Moon Jae-in said that if high growth is to be achieved, small and medium-sized enterprises must be supported and chaebol monopolies must be combated. This runs counter to Park Geun-hye's idea of ​​maintaining a balance between the regime and the chaebol.

With the fall of Park Geun-hye and the rise of Moon Jae-in, Lee Jae-yong was arrested in connection with the "cronyism scandal".

Although Lee Jae-yong was not imprisoned afterwards, the Moon Jae-in government's tough policies and Samsung's frequent violations of the law have put Lee Jae-yong in a passive position. For the government, this is undoubtedly the best solution to neither destroy Samsung nor allow Samsung to develop recklessly. In fact, for the South Korean government, a divided and split Samsung empire is the easiest to control.

With the departure of the old king, it is undoubtedly very difficult for Lee Jae-yong to keep Samsung from splitting up. In May this year, Lee Jae-yong apologized to the Korean people again for the succession of Samsung's management rights, labor and capital issues, and said that he would not let his children continue to inherit Samsung.

There is no doubt that Lee Jae-yong knows where the problem lies, and he has already compromised and made concessions. However, will the South Korean government authorities and the people who have suffered from the "Samsung Tax" for decades agree to it?

"Why was I born into a royal family?" Where will Samsung go under Lee Jae-yong's leadership? Let us leave the answer to time.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.