Annually, I share thoughts for the new year in an executive-level commentary. My purpose has been to communicate Korea-based global business cultural insights and popular trends. Last year the message was quite simple—it was all about the economy. 2010 will be more complex. Concerns over an economic recovery exist, but they are tempered by amazing 2009 global market gains by Korea’s leading corporate groups.
First, expect continued austerity. Marketing budgets and especially head counts will initially stay the same—even though cuts in personnel early last year have left many organizations lean and understaffed to meet bolder sales goals and expectations. Why? I feel there are 2 reasons. The first reason is to uphold record profitability. (Watch for a strengthening Won against the U. S. Dollar). Second, is more subjective—it’s a “what do we have to lose by trying,” and a “let’s see what we can achieve without adding staff and resources” approach. In other words, there is sentiment among some leadership to press for results, and then see what unfolds—making adjustments as needed. The exception is R&D, which should see more resources allocated.
Next, expect Korea’s export-driven firms to push their organizations to carve out even greater market shares. Interestingly this was an old mindset. Korea’s industrial groups from the 1960s to the late 1990s strove for market share. It was all that mattered. In the wake of the 1997 IMF Crisis firms were forced to restructure with profitability and financial controls driving operations. This year profitability will be stressed, but so will demands to maintain and acquire higher market shares. In turn, look for bolder targets such as #1 in global sales or production vs. the older “Top 10” or “Top 5” quest.
Finally, expect more foreign firms to aggressively target South Korea. In other words with Korea performing well, many global firms once focused on North American or European business partnerships will now seek out Korean opportunities. This will unfold with global businesses looking to launch new product lines (and brands) in Korea, as well as leading international firms offering their services to Korea’s top firms. With the later, I expect things to get very competitive.
To conclude, now more than ever, understanding the dynamics of Korea’s economy, markets, and major business groups is vital. It is critical to take into consideration Korea’s past and current trends. Culture, global influences, cyber-communication, and a 24-hour workday add to this complexity. Bridging Culture Worldwide is dedicated to providing much needed research, analysis, and critical thinking to provide you with answers and insights 24-7-365.
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Happy New Years