Student

2406 words 10 pages
Teaching Note

AMORE PACIFIC

Case Synopsis

AmorePacific, the leader in the Korean market for beauty products, was established in 1945 with a strong focus on researching and developing products based on Korean home remedies. The company 1959, listed its shares in the Korea Stock Exchange in 1973, and changed its name to AmorePacific Corporation in 1993.
Industry dynamics and pace of development at Amore Pacific accelerated greatly during the 1990s. Domestically, anticipated entry by multinationals forced major changes in corporate and business strategy with a rigorous refocus on cosmetics by the mid-1990s, slashing of affiliates and reduction of headcount.[At the business level, it repositioned itself and its brands
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2) Assess the performance of MNC’s - how do they compare against local competitors? What are the reasons for local companies outperformaing MNC’s?

Amore Pacific L’Oreal P&G Unilever Shiseido
Global Expansion strategy Mainly centering around acquisitions in the Asian market starting off with Mininurse in China which was a well penetrated skin-care brand and later Yue-Sai. This enabled L’Oreal to bank on the existing company’s consumer and market expertise in the region without initiating heavy investment in product development, distribution or marketing strategy. Focus on Inorganic growth. Shiseido favored a joint investment with local partners.
Protectionism Large established share; FDI’s welcomes at much later stage in country
Financial support Global presence provided the backbone for investments in the wake of Korea’s financial and money market crisis.
R&D Vertical integration aiding operations and quick product development. Successive launches of Hera, IOPE and Sulwhasoo focusing on different age groups, SEC’s and distribution channels. Focus on developing products as per Korean tastes rose after 10 years of its presence in Korea
Distribution Rationalized distribution: AmorePacific was operating at three distribution markets. One was mass, the other one was door to door, and the third one

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