Cecchinel SeleneDe Nardi Beatrice

Korean Cosmetic Company

1945 Suh Sung-

Whan

1993 Amore Pacific

1959 Exports

Door-to-door sales

70s - 80s Internationalization

Korea China France U.S.

19th century

Main western firms Different sense of

beauty

↓

Corporate Rebranding: objective of creating “a holistic identity system that merges Eastern and Western inspirations but with Korean accent”

Vision: become “World Class”

Distribution of exports

55%

17%

9%

12%

6%

France

China

U.S.

Hong Kong

Taiwan

TARGET 2015: deriving 30% of sales from

overseas

↓

CAGE FRAMEWORK

CULTURAL DISTANCE GEOGRAPHIC DISTANCE

ADMIN. DISTANCE ECONOMIC DISTANCE

FRANCE

Different sense of beauty

Reluctance to buy cosmetics from

foreign countries

Physical distance

Different time zones

Lack of land border

Different currency and legal system

Lack of colonial ties

Lack of shared regional trading block

Mature market

Home of cosmetics

L’Oreal

CHINA (Affinities!) (Closeness!)

Closed market until 1980s

200% - 300% Tariffs on cosmetics

Prohibition of FDI

Law against door-to-door sales

U.S.

Different language and ethnicities

Different norms and values

Differeces in national work system

Physical distance

Different time zones

Lack of land border

Different currency and legal system

Lack of colonial ties

Lack of shared regional trading block

Differences in consumer incomes

Different economic size

Different availability of resources

FRANCE: Premium segment but with local brand

Two skin-care products

Attempt of Aggregation - Failed

Perfume market “Made in France”

“We didn’t want people to associate Korea with our Brand”Catherine Dolphin

ADAPTATION

CHINA: Bottom-up penetration

Cultural Affinities BUT Entry Barriers

Profit of new legislation, lighter entry barriers and the “Korean Wave”

ADAPTATION AGGREGATION

US: Top down penetrationFocus on Korean\Chinese immigrants

THENStarted to focus on Luxury products

ARBITRAGE – ADAPTATION

EVALUATION: Better off and Best alternative test

FR US CHI

Industry

Attractiveness

x

Differentiation x

Dual Effects x x

Risk x x

Cost effect x

Better – off Test

Subsidiaries were main strategy

Acquisition

Joint Ventures

Franchising ?

Strategic alliances

Licences

Best alternative Test

CONCLUSION

“France, China and US are very different markets from South Korea. What worked in South Korea is not

our strategy in these other continents.”

Senior executive of AmorePacific