Thoughts on Korean Business by Don Southerton

The growth of imports in Korea intrigues me. Specifically, why foreign brands do well, despite huge VAT (value added taxes). Status is but one aspect. Korean media note: Foreign carmakers operating in Korea have raised their sales target for the year. Amid consumers' affection for imported cars, 21 foreign carmakers, including BMW and Ford, said they expect combined sales to surpass their initial target of 34,500 units to reach 40,000 units or more. About 30 new imported models have been or will be unveiled in the second half of the year. The Korean Automobile Importers and Distributors Association (KAIDA) predicts their market share to be 5 percent of the domestic market in 2007. Foreign automakers hold a combined market share of 4.2 percent as of September, up from 3.2 percent at the end of 2005. Honda Korea sold 400 CR-Vs, a new sport utility vehicle, in 15 days after releasing it on Oct. 12 and Nissan Korea sold some 200 New Infiniti 35s in 10 days. Officials in the imported ...

Global Cultural Awareness In my work with multi-cultural teams building rapport and strong business relationships is a challenge. I’ve found it important to learn as much as possible about my global partners. Outside understanding cross-cultural indicators like collectivism vs. individualism or high and low content communication style, I look at a society and its people. On one level, this means being aware and sensitive to issues relevant to a specific global team or region. This is especially important when presenting workshops to diverse multi-cultural and multi-national groups. I like to share several ways I’ve learned to look at global teams: Past and Present My academic background is as a historian. I’ve found that understanding a region and nation’s past as valuable. For example, “looking back,” tells me lots about a country, especially to sensitive issues from the past that linger. This might include the impact of the 1910-1945 Japanese Colonialism of the Korea peninsula…on...

Fall colors at Joosan Lake, an artificial reservoir built in 1721 at Mt. Chuwang in South Gyeongsang Province.

Seoul retail area Myongdong is among the most popular shopping areas in Korea. Its roots reach back to the opening of Korea to the West more than a century ago. This article cites it success and popularity. Korea Times: Myongdong in downtown Seoul ranked as the worldÂ’s 9th most expensive place to open shops, with the yearly rent costing $376 per square foot, or 17.7 million won per pyong per year, according to the global real estate services firm Cushman & Wakefield. Demand for prime retail high street space is currently exceeding supply, ’ said Richard Hwang, executive director of Cushman & Wakefield Korea. Hwang said that local food and beverage businesses, as well as international fashion brands requiring large prime locations, grew the market. He added that department stores are also actively seeking joint ventures with mega fashion brands to open flagship stores. We predict that these trends will continue to create new demands and are likely to further drive up rental p...

One trait of Korean-run big business is that most are family managed. LG is no exception, but has tended to nor get much press when compared to Hyundai and Samsung. This article does a great job or highlighting LG and its family succession plans. Korean media notes... While Lee Kun-hee of Samsung and Chung Mong-koo of Hyundai suffer setbacks in their attempts to evade inheritance taxes, LG Group’s Koo family is taking silent and steady steps in their own succession plan, so far with little opposition. LG said yesterday that Koo Kwang-mo, a 28-year-old stepson of Chairman Koo Bon-moo, has joined LG Electronics as a junior manager of finance in September, after finishing studying in New York at the Rochester Institute of Technology. He is the son of Koo Bon-neung, chairman of Heesung Group and younger brother of the chairman, and was adopted in 2004 by his uncle who had no son but two daughters. Though the group made no official comment on the chairman’s family succession plan, it did ...

The Samsung chairman is in the news....two points surface. 1. A new management keyword--Creative management. 2. Concerns over the investigation into Samsung's transfer of wealth. (This is an ongoing issue with most of Korean family-run conglomerates) Chosun Ilbo and other Korean media note: The Samsung Group chairman has returned to Korea after an extended trip abroad. Visiting New York, London and Dubai, Chairman Lee emphasized his new management keyword. {Creative Management} Chairman Lee has done this often in the past, causing radical shifts in the conglomerate'’s management priorities. By given a broad directive, Lee reduces the burden of giving specific directions to the group. Upon his return from the trip on his corporate jet Monday night, South Korea's richest man gave an obligatory but noncommittal reply when asked for his reaction to summons from law officials regarding allegedly illegal wealth transfers to his children. Lee Hak-soo, the chairman'’s righ...

When I quiz non-Korean teams to list top global Korean firms, many people note Samsung and LG. In fact, they often show me their mobile phone. Interestingly, although Korean firms have strong global presence in shipbuilding, construction, textiles, appliances, and steel...mobile phones rank high in quality, design and price among many worldwide. Korean mobile phone manufacturers seem to be making great strides in a tough, competitive market. For more details see: http://times.hankooki.com/lpage/tech/200610/kt2006102315170311780.htm

Traveling to Seoul soon? Note some changes starting in early next year... From early next year, passengers can use their credit cards to pay taxi fares in Seoul, city officials announced yesterday. The Seoul Metropolitan Government said it will introduce the system next year for a three-month trial in 3,500 to 5000 taxis. The city will then review the system and expand it to cabs throughout Seoul. The system will enable credit cards and the transit card T-Money to be used to pay fares. The T-Money card was introduced in July 2004 to make it easier for people to ride on subways and buses in Seoul. The city said the system will be implemented in a bid to entice passengers to increase their usage of Seoul's 72,000 registered taxis through the convenient payment method. In addition to the new taxi payment system, the city also said it will introduce special traffic cards for foreign visitors next month. The special traffic card for visiting foreigners will debut on Nov. 1, allowing un...

Podcast Update A new Podcast has been posted: … Globalization and the Virtual World Bridging CultureÂ’s Everything Korean: Insights into Korean Global Business Podcast is accessible 24/7/365 at http://www.bridgingculture.com/Site/Podcast/Podcast.html Podcasting is the method of distributing multimedia files, including audio and pictures, over the Internet for playback on mobile devices and computers. The BC programs range from 3-10 minutes. Pre-recorded topics include: 1. Korean managerial style 2. Korean communications style 3. Korean perceptions of the West 4. Korean society: How one westerner sees Korea and its people 5. Global business culture 6. Balli-balli: KoreaÂ’s competitive advantage 7. Everything Korean: A Special Edition on Globalization New Post 8. Globalization and the Virtual World Questions, comments, feedback?…just call or email. Don Southerton

Among my Korean friends Naver is the most popular search engine. This article tells of Naver's bold moves, including a launch in the U.S. market. What will determine NHN success will be its ability to localize to global markets.... Naver, the county's most popular portal, will first and foremost try to deliver a better search experience, its chief executive said, adding that its news service is of secondary concern. "I want to find a win-win model for NHN and newspaper companies," Chae Hwi-young, chief executive of NHN Corp. said. "If people keep finding faults with our news service, I might even consider scrapping the service altogether." Naver has been criticized for trying to gain the upper hand over newspapers and broadcasters and making arbitrary judgments on the value of news items. The portal uses articles supplied by newspapers, news agencies and broadcasting networks on its front and news pages. Around 6 million Koreans click on Naver news on a d...

I found this amazing...but no surprise since the Hyundai-Kia Motor Group has grown into Korea's second largest conglomerate. The Hyundai-Kia Automotive Group has unveiled a blueprint for a 110-story skyscraper near the Seoul Forest, an environment-friendly park in Ttuksom. If the tower, which will house the Hyundai Automotive Group headquarters, is built, it will change the Seoul skyline. A Hyundai spokesman said Wednesday the company decided to erect the building, which is tentatively named the Seoul Forest Waterfront Tower, on the site of a plant by affiliate Sampyo Remicon covering some 30,000 sq.m in Seongsu-dong. The company is in discussions with the Seoul Metropolitan government and Seongdong-gu District Office about the plan. Besides a convention center, electronic and IT research and development centers, a hotel and office space, the building will also house a car museum and an “experience space for future cars.” About W1 trillion (US$1=W958) will be spent on constructio...

I watch Starbucks Korea carefully.... most often from a cultural prespective. This article looks at Trademark issues. The nation's pendent court yesterday dismissed copyright and trademark infringement claims by Starbucks Corporation, the world's largest multinational chain of coffee shops against local coffee chain Starpreya. Starbucks accused Starpreya, a locally-owned coffee house and store, of pirating its trademark and coffee products and causing confusion to customers. And the U.S. company also demanded the court to nullify the registered trademark of the Korean outlet. However the appellate-level court in Daejeon denied defendant's motions and ruled that the two brands cannot be interpreted as the same or similar. The brands of the two companies are combined with the words, Star and Preya, and Star and Bucks. The word Star is commonly used in Korea, and Preya and Bucks do not hold special meanings, the ruling said. Also, we've judged that the trademarks and logo...

North Korea Update It's been a day since North Korea detonated it's first nuclear device...Irking the global community. How successful the test was is under discussion. Some say it was more of a fizzle than a true nuclear explosion. Nevertheless, I've continued to watch East Asia and South Korea carefully. One reaction has been a more hard line approach by South Koreans. In past months, many South Koreans have favored a more moderate approach to NK. The test seems to have moved many in the South to a firmer, bolder view against the regime. I think this copy from Yonhap addresses concerns by those of us who work for/ with Korean-based firms. I see little direct impact of the North's nuclear test outside raising concerns and anxiety. SEOUL, Oct. 10 (Yonhap) -- South Korean Prime Minister Han Myung-sook on Tuesday instructed economy-related ministries to map out measures to minimize any negative impacts of North Korea's nuclear test on the South Korean economy, offi...

I thought this article on changing Korea and Chuseok was fascinating. It reaffirms my observations that many younger Koreans see the Holiday as a chance to vacation and travel vs. spend time with family. To some, it's a sign of new individualism over old values of Family. Korea Herald notes: With a growing number of working women and nuclear families, more people - especially the younger generation in their 20s and 30s - are beginning to regard Chuseok season as a "vacation from work" rather than a family fiesta. Office worker Chung Yoon-jung, 31, plans to visit Singapore during Chuseok. I booked a flight to Singapore in April, after realizing that this year's Chuseok was going to be a long holiday season. I am usually totally worn out by this time of the year and need the overseas vacation more than anything, she said. In order to rest for as many days as possible, Chung saved up all her absence leave and came up with a total of 11 days to spend in Singapore. She doe...

Korean Culture Alert Chuseok-Korean Thanksgiving Day This year the traditional Korean Chuseok holiday is October 5-6. Most South Korean firms will close from several day and some firms will be closed for the entire week. Celebrated for centuries as the lunar-based Fall Harvest Festival, Chuseok is among the most important of Korean holidays, a day filled with family and tradition. Most Koreans (in Korea) travel to join their family and celebrate traditional customs of Chuseok, including ancestral memorial rituals, followed by a day of family activities and special foods. One of the most popular of the traditional foods is song pyeon, which is a pine-flavored rice cake. In Korea, during the days prior to the actually holiday, streets and stores are packed with shoppers buying food and gifts. Gift giving is an important aspect of the holiday. This year gift certificates will be popular presents to family members. In Korea, newly harvested fruit is a preferred gift for relatives and nei...