Transformation of CJ Group into Korea’s Media Giant: Focused on CJ CableNet

Abstract

CJ Group started its business in 1953 as the first manufacturing company within Samsung Group called “Cheil Jedang” with its primary operations in sugar manufacturing and flour milling. For the next 40 years, Cheil Jedang kept its place as the most prominent food company in Korea and eventually broke out from Samsung Group and became an independent business entity. In 1995, CJ Group put efforts to diversify its business into entertainment and distribution industry. Successfully executed, the diversification of CJ Group became the driving force that placed CJ Group as one of the top 30 business groups in Korea in just 8 years. CJ Group is now operating its core business in 4 different main areas; entertainment and media, food, bio-engineering, and distribution. Especially, CJ Group is focusing its attention in its operations in the media industry and maintaining its leading position in the Korean media market through number of subsidiaries such as CJ Internet, CJ Entertainment, CJ CableNet, and CJ Media. Currently, two dominant players, Orion Group and CJ Group, are competing for the first place in the Korean entertainment and media industry. Most notably, CJ Group is providing the best cable television service in Korea while dominating the home shopping market. However, recent advancements in the network technology enabled merges between broadcasting and telecommunication allowing telecommunication companies with their immense amount of capital to enter those markets through IPTV. This case study will provide a walkthrough of the transformation process that CJ Group had undergone which enabled CJ Group, once a food company, to successfully enter into the media industry. Also, this case study will analyze the success of CJ CableNet, a subsidiary of CJ Group responsible for cable network operations, to understand the primary factors that placed CJ CableNet in its leading position in the media industry. Moreover, this article will discuss about the strategic decisions needed for CJ CableNet in facing the collapse of industry boundaries due to advances in technology.