The prospective for foreign business entities to establish business in Asia is immense. China, Japan, India, South Korea and Indonesia are developing at fast pace. Other countries of the region that are members of ASEAN equally offers plethora of opportunities to conduct business. The entire economy of the region is worth 4.5 billion people that is sixty percent of the world population. The GDP and PPP of the Asians countries are growing at fastest pace. Along with that there are certain global economic undercurrents that need consideration, the ongoing US-China trade war and the shift of United States towards a protectionist policy. The withdrawal of US from the Trans Pacific Partnership is overhauling the hitherto western led International order and need to search new alternatives. In this context Asia is a lucrative avenue for economic investment and business ventures.
The economic ambient of the Asian countries is conducive for the business operations. The economy of majority of countries is registering unprecedented growth. China is making strides in bringing Europe and Asia closer by its OROB (one road one belt) initiative. As John Glowacki (2011), pointed out that China’s reserves are gaining global attention and it should open doors for companies to use its resources global integration. As observed by Aileen Cowre Nandi 2008, India is soon to become third largest global economy and an attractive avenue for foreign companies. It is liberalising its policies towards foreign investment in terms of easy entry and exit, credit flow, arbitration process by way of technology. As pointed by Mustafa Mohamed (2012), ASEAN countries are committed towards and open, inclusive and market-driven economy. In aftermath of US withdrawal from the TPP, the role of Japan has increased in facilitation the Trans Pacific Partnership (Solis, 2013). South Korea has emerged out as the world 11th largest economy.
One of the most promising Business avenues for foreign ventures in Asia is South Korea. A company that deals in Health Care and Skin Care products will make fortune in Korea. If one aims to start a business venture in the Health Care and Cosmetic field, South Korea’s Political, Economic. Social, Technological, Legal and Environmental conditions should be taken into consideration.
The political system of South Korea is constitutional democracy with separation of powers among executive, judicial and legislative. The president is the head of the state. He appoints prime minister with the consent of the national assemble. The president is the head of all the committees which results in smooth functioning of the government and decision-making process. That is why even during the economic recession of 2008, South Korea’s stern political will returned the country’s growth curve to normal which in turn normalised Asia’s financial sector. Since then the government has taken continued economic reforms which has led South Korea to the path of economic stability.
Economically, South Korea is the fourth largest economy in Asia and eleventh largest in the world. Its GDP has reached 33,346 USD in December 2018 and is growing at the rate of 1.6%. It has experienced high economic gains in just one generation and has developed into high-income country in the world. It is also part of elite groups like OECD and G-20. It is expected to dominate the global economy in the coming decades. It offers huge market and growth opportunity for Health Care and Cosmetic Company. South Korea is the 10th largest cosmetics market in the world that is 2.9% of the global market (Asia Personal Care &Cosmetics Market Guide, 2016). The export of South Korean is continuously growing. It’s Cosmetic and health care products have a global presence (Asia Personal Care &Cosmetics Market Guide, 2016).
The social condition of South Korea is favourable in terms of business expansion. The country’s literacy rate is high. Its labour force is well educated and technically qualified, thus earning high wages. Urbanisation is growing at fast pace and unemployment rate is very low. Majority of South Korean population lives in highly urbanized cities. Korean society specifically spends huge part of their income in Health Care and Cosmetic products (Asia Personal Care &Cosmetics Market Guide, 2016).
South Korea is highly advanced in terms of technology which has assisted its economic growth. Its electronic, robotics, semiconductors and biotechnology industries are highly developed. The development in these industries would enhance the growth of business model hinged upon e-commerce.
The legal system of South Korea is an amalgamation of European Civil laws and Anglo-American law. The judiciary works independently. It has been ranked 45th out of 175 countries in terms of corruption index (Transparency International, 2018).
In the age of climate change every country is facing some sort of environmental issue. The rapid industrialisation and urbanisation have made South Korea one of the most polluted country in the world with worst air quality index. The government has laid environment policy that targets to control pollution. However, a Health Care and Cosmetic company would gain in this context as the company products would be utilized by the consumer to reverse pollution damage on their health and skin.
Therefore, it seems that the PESTLE (Political, economy, social, technology, legal and environment) analysis of South Korea seems favourable for starting a health care and cosmetic company.
For a company to register high growth it is important to understand that company’s own business strategy would be of eminent importance in deciding its growth rate. South Korea’s beauty and health care market is comprised of several regional and global companies. For a Health Care and Cosmetic Company, it would be beneficial to run several units-Hair-care, skincare, oral care, men’s grooming and cosmetic products to surpass competition in the industry. (Mordor intelligence, n.d.).
The problematic of new entrant in the industry in South Korea especially in health Care and Cosmetic industry is huge. On the one hand South Korean market is flooded with local Korean products which are in demand and on the other hand global brands are equally high in demand. Thus, it is imperative to frame a business model that attracts the eye of the consumer in South Korea. Utilization of E-commerce, use of organic ingredients in the products, diversity in products and a grasp on the mindset of the targeted consumer who are generally tech-savvy would weed out the dangers of getting lost amid several other players.
The suppliers have power over the cost to company thus it would be economically beneficial to have large number of suppliers for one’s company. Equally, it is important to have large number of customers to increase profitability. South Korean Customers are upgraded and follow latest beauty and health care trends. Therefore, up gradation in the products will be of outmost importance.
The threat of substitute products in the Health Care and Cosmetic Company looms large. To address this, it is important to identify the appeal of substitute product and to innovate company’s product accordingly.
Therefore, in our discussion about considerations for establishing Health care and Business Company in South Korea, we found that the macro factors will be favourable for the growth of the company. South Korean consumers are appreciating highly sophisticated and efficient beauty products. The consumer includes both men and women. Thus, by modelling the business operations internally, in the way which would result in high growth and continuously redefining the products as per customers demand, South Korea is indeed a favourable destination for doing business.
AsiaPersonalCare & Cosmetics Market Guide, (2016). Retrieved fromhttps://www.trade.gov/industry/materials/AsiaCosmeticsMarketGuide.pdf
John, G. (2011). Panel on China. Symposium on Business Globalisation conducted at The School of Business, George Mason University, Virginia, USA. Retrieved from http://www.youtube.com/watch?v=XQQCkq6xZII
Mohamed, M. (2012). In D. Kan (Chair), East Asia 2012 - ASEAN Connectivity: Roadmap to 2015, World Economic Forum on East Asia, Thailand. Retrieved from http://www.youtube.com/watch?v=XQQCkq6xZII
Mordor intelligence. (n.d.). South Korea beauty and personal care products market - growth, trends, and forecasts (2019-2024).Retrieved from https://www.mordorintelligence.com/industry-reports/south-korea-cosmetics-products-market-industry
Nandi, A.C. (2010, February), Doing Business in India: Why India? Why Now (Webinar). U.S. Commercial Service Webinar. Retrieved from https://youtube/XQQCkq6xZII
Solis, M. (2013).Japan boosts the trans-pacific partnershipRetrieved from https://www.cfr.org/interview/japan-boosts-trans-pacific-partnership
Transparency International, (2018).South Korea. Retrieved from https://www.transparency.org/country/KOR
5 Stars to their Experts for my Assignment Assistance.
There experts have good understanding and knowledge of university guidelines. So, its better if you take their Assistance rather than doing the assignments on your own.
What you will benefit from their service -
I saved my Time (which I utilized for my exam studies) & Money, and my grades were HD (better than my last assignments done by me)
What you will lose using this service -
Unfortunately, i had only 36 hours to complete my assignment when I realized that it's better to focus on exams and pass this to some experts, and then I came across this website.
Kudos Guys!Jacob "
Proofreading and Editing$9.00Per Page
Consultation with Expert$35.00Per Hour
Live Session 1-on-1$40.00Per 30 min.
Doing your Assignment with our resources is simple, take Expert assistance to ensure HD Grades. Here you Go....