A Special Report for Korean Global Management and Teams

Market Entry: Part Two, A Special Report For Korean Brands
Expanding Globally

By Don Southerton, CEO Bridging Culture Worldwide

Localization and understanding the market are key to any successful
overseas' expansion.  My consulting work focuses on assisting
Korean brands entering the US market and US brands entering the
Korean market. Last week, I discussed Korean market entry. This
article now addresses Korean brands, both furthering their global
reach and launching for the first time in Western markets.

In a recent Korea Herald article I was quoted saying, "Over the
years I witnessed firsthand cross-cultural issues that surfaced
when Korean companies expanded globally. My role has been to
address these issues, such as trust among the Korean and Western
teams, lack of lines of communication, local employee turnover and
managing expectations."

To add to this, I believe that global expansions require Korean
brands to alter many of the practices, which have made them
successful in their own local markets. One example is the model of
dispatching a Korean expat to a new market to launch the brand.
This has its challenges because the expat has limited knowledge of
the local market and few contacts within the business sector.

Equally challenging is hiring a consultancy or firm. While a firm
may have that has high expertise in the local market, more often
than not, these firms have limited understanding of the specific
Korean companies norms, practices, and expectations....

Even when the western staff or company has some experience working
with other Asian or Korean brands, they seldom have insights into
the new company's mindset. In fact, I constantly preach, "No two
Korean firms are alike."

A third path Korean brands take in western expansion is to target
markets in which they feel comfortable, namely local Korean
communities. What seems like a smart strategy actually will require
the brand to again alter most of their western business model
before expanding beyond the Korean diaspora.  In fact, little
knowledge will be gained in these early efforts that will translate
to the next phase of the expansion. This includes personal and
staffing. In many cases it will be like starting all over again.

In conclusion, most brands face challenges going global. Success
requires a sound strategy, high awareness of the pitfalls,
flexibility, and some luck. That said, nothing beats experience-not
only in executing a solid market entry strategy but also in
modifying what has worked successfully in past Korean expansions
into new markets and avoiding what does not work.

Recognizing and respecting that each company and brand is unigue, I
would be happy to discuss your needs and potential opportunities.

Contact Info

Don Southerton

+1-310-866-3777

dsoutherton@bridgingculture.com

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US Korea Connect: Hidden Benefits of KORUS FTA 2013

The following article appears in U.S. Korea Connect. See Link below

by Don Southerton
I have long followed and supported both successful market entry of Korean business into the US and American firms to Korea. This mutual success has centered on product, retail and quick service restaurants, with limited opportunities in the service sectors. The KORUS FTA will make a huge change in this exchange. In the area of services, I see KORUS FTA as a game changer.

A few weeks ago, United States Secretary of State John Kerry visited Korea and spoke about the importance of trade between our two nations. This month, President Park will visit the White House to reaffirm our countries’ mutual commitment and celebrate the 60th anniversary of the U.S.-Korea strategic alliance. Since its implementation last year, the KORUS FTA has given that alliance a new dynamic. One area of the agreement that should receive more attention is trade in services.

At its core, trade in services is trade in ideas. Whether legal, financial, technical, or in the tourism industry, the services exchanged between the U.S. and Korea expand mutual access to highly skilled talent. That talent is vital in generating the ideas that will define our economies tomorrow. In fact, today’s leaders in the U.S. service industries are using the KORUS FTA to recruit and nurture that talent.

Unlike the banking and insurance sectors, non-Korean legal and accounting firms faced entry barriers prior to the KORUS FTA. Today, American law firms like Cleary, Gottlieb, Steen & Hamilton are able to open offices in Korea under the KORUS agreement. Law firm Ropes and Gray, Another U.S. Korea Connect success story, sees their new ability to open physical locations in Korea as a way to show their dedication to Korean clients.

Outside the obvious benefits to service related firms, under the KORUS FTA, U.S. businesses are generating and exchanging ideas more freely. But the best is yet to come. American companies have expressed the need to hire additional Korean professionals to help them navigate the Korean marketplace. Professional visa reforms under consideration by the U.S. Congress will fulfill that still unmet need, allowing companies to take greater advantage of the KORUS FTA.

As the pace of business quickens, service providers need a regulatory framework that provides them maximum flexibility. A fluid business mechanism that promotes and enhances innovative ideas is essential for prosperity in both countries. That’s precisely what the KORUS FTA does for the service industry.

About Don Southerton
Don Southerton has held a life-long interest in Korea and the rich culture of the country. He has authored numerous publications with topics centering on the Korean auto industry, new urbanism, entrepreneurialism, and early U.S.-Korean business ventures. Southerton is often called upon by the media (the BBC World Service, CNN Fortune, Bloomberg TV, Korea Herald, Korea Times, Yonhap, Wall Street Journal, Forbes) to comment on modern Korean business culture and its impact on global organizations. His firm Bridging Culture Worldwide provides strategy, consulting and training to Korea-based global business.

Link to Article
http://www.uskoreaconnect.org/blog/2013/04/trade-in-ideas-a-hidden-benefit-of-korus-fta/

Denver Artist Anna Cash-Mitchell Reveals Her "Depth"

By Don Southerton, BCW Editor

Outside an artist's need to create, their work also reveals a yearning desire for self-expression. For Denver-based Anna Cash-Mitchell her paintings are meticulously crafted to take on a three-dimensional perspective. On closer examination of the paintings, much of the work is set back within the canvas—a process Anna has perfected over the past 5 years.

Anna notes, “My paintings play with bold color and form. I use elements of sculpture with visually hidden layers to create a feeling of depth when you move around each piece. This depth invites you to experience my art in a physical way, which doesn’t come through a two-dimensional photo. In a sense, it is a reminder to be present here and now in our ever expanding digital world..."

The Net

As for the artist, Anna grew up in the foothills of the Colorado Rockies where she earned a BA in Fine/Studio Arts and a Master of Humanities at University of Colorado, Denver. Her education as an artist also included a summer painting intensive in Feltre, Italy.

More recently, and after spending nine years in Santa Monica, La Jolla and Carlsbad, CA where sun, sand, and waves had their influence on her work, Anna is now back in her home state with a renewed passion to share her art.

Anna is a member of 40 West Arts in Lakewood, CO and Kanon Art Gallery on Santa Fe Drive in Denver, CO. Anna exhibits her art throughout the Denver region. See
http://facebook.com/studioacm.

Anna Cash-Mitchell's "Depth" exhibition runs from May 3 to June 2, 2013 at Kanon Collective. For more information go to http://www.kanonart.com

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BBC World Service and Hyundai Fuel Cell Vehicles of the Future

By Don Southerton, BCW Editor
As mentioned in the previous post, I hosted BBC World Service Click journalist Gareth Mitchell in Korea earlier this year. In BBC Click's latest series "A Route 66 of the Future", Gareth explores the ideas behind a smart highway in the Netherlands and gets behind the steering wheel of a hydrogen fuel cell powered car at the R&D Eco labs of Hyundai Motor Company in South Korea. Very cool technology. This is Hyundai's 3rd Generation of FCEV and will be first production model in the industry.

Hyundai Motor's Dr Byung Ki Ahn with Gareth, and the hydrogen fuel cell SUV

Audio Link
http://downloads.bbc.co.uk/podcasts/worldservice/digitalp/digitalp_20130430-2032a.mp3

Questions? Comments? 

BBC World Service Click, Songdo IBD and CISCO Smart & Connected

By Don Southerton, BCW Editor

In February I hosted BBC World Service journalist Gareth Mitchell in Korea.  This is second in Gareth's well done series on Korea, emerging technology, and Songdo International Business District.  

This episode interviews Wim Elfrink Chief Global Strategist for Cisco. The interview took place in Songdo IBD via Cisco's TelePresence. Here is the audio link. 

Cisco and Songdo IBD at 13:12 in the program... 

http://www.bbc.co.uk/programmes/p016x52w

BTW Hard to top Cisco's TP technology. Below is photo of me working with teachers via TP in Songdo IBD in 2009. I was in Irvine, California, the teachers in Incheon, South Korea :)

Korea Herald: No Two Chaebol Alike...

Many thanks to Korea Herald and reporter Elaine Ramirez, the article shares my views on Korea facing  global business.

http://www.koreaherald.com/view.php?ud=20130408000691

No Two Chaebol Are Alike, Author says

By Elaine Ramirez (elaine@heraldcorp.com)
While Koreans’ rising presence on the global stage is hard to ignore, how to do business with them as a non-Korean is an increasingly tricky area little covered in English-language literature. Don Southerton explores the niche with his recently published book “Korea Facing: Secrets for Success in Korean Global Business,” which picks apart how to work with a Korean conglomerate from the ground up, for non-Koreans working in Korean branches overseas.

“Over the years I witnessed firsthand cross-cultural issues that surfaced as Korean companies expanded globally. My role has been to address these issues such as poor trust among the Korean and Western teams, lack of communication, local employee turnover and managing expectations,” Southerton said in an email interview with The Korea Herald.

Cover image of “Korea Facing: Secrets for Success in Korean Global Business” by Don Southerton

Although he has long been aware and exposed to the cultural differences in Western and Korean business settings, he said, it was when he began working at a Korean subsidiary in the U.S. in the early 2000s that he witnessed the differences between how U.S. and Korean teams managed the company.

He noted that the differences in decision-making processes, for example, had been a particular source of friction between Korean and Western teams: Key decisions were always deferred to the parent headquarters in Korea, and Koreans in the overseas branches needed to scrutinize and approve even the most mundane matters, regardless of the Western team’s experience in the field.

He discovered, as he writes in “Korea Facing,” that all too many frustrations were rooted in not knowing how to do things “Korean style” ― or, for the Korean side, not knowing any other way.

In “Korea Facing” he shares his personal experiences from working particularly for Hyundai-Kia overseas branches as a coach, consultant and trainer with those Korean and Western teams, and offers experience-based advice for overcoming those workplace challenges.

His chapters explore basic business culture lessons, from the levels of the Korean managerial hierarchy, to nuances on the right timing for getting approvals, meeting protocol ― upon meeting foreign teams, Koreans line up their business cards on the table to match their seating order, and he advises doing the same ― identifying and resolving conflicting expectations and ambitions of Korean and Western teams, and insight on just how much the Korean chairman’s wife might influence the direction of the company.

But Korean companies are gradually loosening their neckties and adapting to Western business practices, he notes.

“I feel the Korean groups have seen the need to be flexible and adapt quickly to changes in global economic fluctuations,” he said. “For example, in the recent global recession they saw an opportunity to expand when others pulled back in production, R&D and marketing. They capitalized on this opportunity to leapfrog ahead of the competition.”

Additionally, young Korean employees sent overseas have often attended school or lived abroad, and increasingly more Korean executives have worked overseas as expats. And as the overseas businesses are increasingly using English to communicate, so, too, do they adapt more casual Western business norms and practices, he added.

Beyond all the differences between Korean and non-Korean working cultures, Southerton noted, Korean companies deal with many of the same challenges: How quickly projects can be approved and executed depends on the individual company; Korean and Western companies both struggle with generational gaps when trying to create harmony and cohesiveness within their ranks; and no two Koreans or Korean companies are alike, nor should they be approached as such.

The last is a theme he drives throughout his book ― affiliates under the same chaebol and even sub-divisions of affiliates have entirely different business cultures, and it is important not to work on assumptions based on experiences with other companies, he emphasizes.

“One common mistake by Western teams outside Korea is assuming that because they might have worked for other global companies such as a Japanese firm that they will have few challenges adapting to a Korean company,” he said. “Norms, expectations and mindset differ, even with Korean groups.

“Many Western overseas teams have stereotyped Koreans, often based on their interactions with the early expats dispatched to the local operation. Like Westerners, experience, training and skills vary ― some Korean expats do well while others struggle,” he added. “In global business we need be mindful of others, and recognize that Korean teams and leadership vary in their approaches to challenges and management.”

“Korea Facing: Secrets for Success in Korean Global Business” is available through iBook, Kindle, Nook and Amazon.

BBC Click Looks at Korea Tech

By Don Southerton, BCW Editor
In February I hosted BBC World Service journalist Gareth Mitchell in Korea.  This is first of Gareth's series on Korea tech. LINK http://www.bbc.co.uk/programmes/p016tl1t

Gareth Mitchell with Gary Donohue: technology integration specialist for the 'Village' School at Chadwick International School in Songdo IBD, South Korea

Questions, Comments ?