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Seven Winner Corporations in Global Economic Crisis

Seven Winner Corporations in Global Economic Crisis

JUNG Tae-Soo

Apr. 5, 2010

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Since the fourth quarter of 2009, global companies have entered the recovery phase, wrenching themselves out of shocks stemming from the economic crisis. Indeed, the average quarterly revenue growth, which turned negative after peaking in the first quarter of 2008, turned positive again in the fourth quarter of 2009. The fact that companies in the US, where the crisis originated, are driving the momentum in recovery, posting 3.5% in revenue growth, is particularly noteworthy.

Meanwhile, analyses indicate that the current crisis brought an economic shock eight times larger than that endured after the IT bubble burst in 2000. If a slowing in demand were defined as the post-recession shock suffered by companies, and the magnitude of a shock were measured by the impact on revenue growth, the current global economic crisis would measure four times stronger than and twice as long as the IT bubble burst.

What is also interesting is that, despite being hit harder by the financial crisis, companies with higher revenues are recovering much faster than those with lower revenues. Although the former saw earnings worsen in the first quarter of 2009, causing the revenue gap between the two groups to narrow, they have since widened the gap on the back of consistent revenue gains. In other words, it seems the winner is moving closer to taking it all.

Some companies have performed admirably despite the depressed economic environment. Of course, earnings vary according to business type, but some companies have done remarkably well relative to their peers. Samsung Economic Research Institute (SERI) selected notable companies that have successfully overcome the crisis and presented implications derived from its analysis.

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