So as you can see Japanese keiretsu and Korean Chaebols are deeply embedded in both countries' industrial organization and the business system. For my part, I'm going to talk about do these institutions still exist in a meaningful way.

So first, start with Japanese keiretsu, there are two types of groups which are horizontal and vertical.

As Janet mentioned earlier before. Horizontal keiretsu is a business network, composed of entities and industries, normally centred around a bank and trading companies.

So when we look into today's horizontal keiretsu model, their purpose is strictly distribution of goods around the world, which helps incorporate keiretsu companies in other nations; and sign contracts with other companies to supply commodities used for Japanese industry. This shows that group can generate "smooth performances" with stronger firms serving to assist weaker firms.

Moreover, close relationships with banks and other group such as insurance companies provide the firms with ready access to financing and reduce the need to carry reserves of long-term debt or liquidity. This closely connected set of financial stakeholders also open the firms to wide-ranging scrutiny, which reduces risk for creditors, network shareholders, and transaction partners.

While a vertical keiretsu are composed of a major industrial corporation and its suppliers in a particular industry. The benefits on this vertical group membership is that they provides suppliers with a stable market for their products and the possibility of technical, managerial and financial assistance from core firms; to decrease transaction and production costs.

Moreover, the vertical keiretsu system assures the member of companies both a constant market and a constant supply source. What does mean by this, is that the formations of vertical integration policy allows suppliers to always sell their goods to the core firms. and it makes core firms to have a continual supply source. Hence, both core firms and suppliers enjoy benefits from their close ties.

Move on to KOREAN, CHAEBOLS, the chaebols are large groups of family-controlled companies in South Korea and they play an important role in the Korean economy and generate a significant part of its GDP and exports.
According to Business Korea, 2014. Three chaebols namely, Samsung, Hyundai and LG account for 50% of South Korea's GDP today, in comparison with the US where 113 corporations control 50% of its GDP.

This illustrates that, the business group have led Korean exports through the creation of global brands and competitiveness. The top five export items including shipbuilding and motor vehicles are largely from the heavy and chemical industries produced by these chaebols.

For example, Samsung has become a world leader in several key manufacturing industries such as memory-chips, flat screen TVs (the absolute leader) and smart phones.

Additionally, the brand value of Samsung is estimated at $45.4 billion in U.S. which ranked 7th in the world's most valuable brand.

Other chaebols such as Hyundai and LG Electronics have also, become among the world’s best known producers of automobiles, air conditioners, and other electronic products.

In this regard, Chaebols have contributed to creating jobs domestically and establishing the brand image of Korea globally.

And, In 2012, Former South Korean President, Lee Myung-bak described the chaebols as the “source of South Korean national wealth and the prime creator of jobs”

However, despite the benefits of Japanese keiretsu and Korean Chaebols, both network forms have been challenged by recent economic and market conditions. So next, Emily is going to talk about their current issues and survival prospects in today's economy.