International Studies Reivew Vol. 13 No.2 December 2012

pages:113-133

By using a new conceptual model of ‘Smile Curve’, this research
strives to examine how Cheil Industries Inc. (CI) has been
transforming its value chain to create its competitive
advantage. According to the results, CI’s value-added structure
in the past (conventional industrialization economy) was
heavily reliant on the manufacturing sector, and therefore,
the profit graph shaped an ‘Upside-down Shape of U’ indicating
that production and manufacturing are the most value-
added fields. However, CI’s current (knowledge-based
economy) graph shows a ‘U with Fluent Curve’ indicating
that R&D, human resources, corporate culture, firm infrastructure,
manufacturing, logistics and marketing are simultaneously
creating value-added for the company. This implies
that CI’s value-added source is more diversified to fit with
knowledge-based economy.