Thoughts on Korean Business by Don Southerton

I was recently asked by the editors of  Korea Herald ’ s  The Investor magazine to comment on the Korean car manufacturers, in particular Hyundai Motor. My policy is never to speak about clients, but instead provide a perspective from a cultural standpoint. I’d like to share in condensed form, as well as with an epilogue, the guest contributor article titled:  New considerations loom as Korean car brands strive to become more global I noted, globally, the car industry in 2017 is more competitive than ever due to market fluctuations, shifting demand from sedans to SUVs and predictions that US car sales have peaked. According to the  Detroit Free Press  an average of three separate industry forecasts from Kelley Blue Book, Edmunds.com and LMC Automotive predict overall U.S sales are expected to fall about 1.7%. That said, Korean brands have done exceedingly well on a global scale. I see this trend continuing as Korean OEMs (original equipment m...

I am a strong advocate of Korean global business. I see great opportunities and am passionate about seeing Korean brands succeed overseas as well as international brands thriving in Korea. However, as I have shared in a previous Brand in Asia article, my experience is that companies, Korean and global, need to recognize the considerable upfront investment required to enter markets outside their home countries. In this follow up commentary I would like to share what I see as best practices. Step 1: Do your homework Invest time and resources in Discovery of the local market.  Seek out an expert knowledgeable in both the local market and business sector to perform an objective detailed competitive analysis. The report should identify the strengths and weaknesses of the competition within the market, strategies that will provide you with a distinct advantage, the barriers that may prevent you from entering your market, and weaknesses in the competition that can be exploit...

I have a history licensing Brands to Korea…. At times representing Korean firms licensing the foreign brand and at times the international company seeking a Korean partner. In the best cases, I bring partners together, resolve their differences, and work towards an amicable agreement. In less so pleasant circumstances, I have been engaged when terms of an agreement are in dispute. For entry into Korea, the current model is for an international brand to request the potential Korean company to prepare a “go to market” Business Plan. The plan would usually include background on the company, the competition, a 5-year sales and revenue projection and the number of locations they will open over that time period. This model of asking the local partner to outline their plan may work well internationally between western companies—similar norms shared. For Korea, this model has faults for a number of reasons and ends in Brands less than pleased over time. This experience is not uncomm...

With the start of every new year I am approached to consult on market entry and new business development projects that range in size and scale.  In addition to longtime and ongoing international support of major Korea Groups and their branding, marketing, sales, and manufacturing subsidiaries, I work with companies to secured overseas partnerships. This includes both Korean SME (Small to Medium size Enterprises) firms entering other countries (the U.S. for example) as well as foreign firms seeking opportunities into Korea.  Particularly for smaller Korean firms hoping to expand globally the challenges are many. In fact a recent  Korea Times article , Korea seeks to boost SME exports points out SME struggle considerably more than the large group companies. I concur.  Why? Frankly, my experience is that global companies, even SME looking at Korea, recognize the considerable upfront investment required to enter the market. The companies invest time...

Like a moth to a bright light, I am drawn to Korean facing business issues and trends. I explore and then provide commentary on the direction of Korean business from developments inside South Korea to their impact on international operations. To better define this task, my perspective is “culture.”  I’d like to share some thoughts from my most recent visit to Seoul, South Korea—the third in as many months. (This commentary is also available in  Branding in Asia )  First, I see huge leaps in the culture that nurtures an emerging “creative class.” In America, as an example, startups, technology, and innovation have tended to evolve in cities with diversity and strong counter-cultures, all of which foster creativity. Those familiar with the Korean workplace ... and by this I mean not only larger organizations but also the most progressive firms... once recognized the stark disparity in “creative” norms between Korea and the US.  That said, one can s...