Amore Pacifics Successful Cosmetic Brand - sss KIM Donghwan 20080887 CHA Myunghun 20071136 TANG...
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Transcript of Amore Pacifics Successful Cosmetic Brand - sss KIM Donghwan 20080887 CHA Myunghun 20071136 TANG...
Amore Pacific’s Successful Cosmetic
Brand - sss
KIM Donghwan 20080887CHA Myunghun 20071136
TANG Thierry 49001538JANG Hyukmin 20051261
Contents
• Company Overview• About Sulwhasoo• Types of Innovation• Timing of Entry• Internal, External Analysis• Summarization• Suggestion
Company Overview
• Leading Chemical and Cosmetics Company• Revenue 1,531,337 Million KRW (2008)• 35% of Korean Cosmetic MarketCosmeticsAMOREPACIFICHERASulwhasooLIRIKOSLaneigeIOPEMAMONDEPrimeraLolita LempickaOdysseyMIRAEPAINNISFREEÉTUDEEspoir
Personal careMise-en-ScèneRyoeHappy BathDantrolMedianSongyeum
Health careO'SullocVB ProgramOgardenNatural Beauty Food™Ketotop
Company Overview
* According to the AmorePacific.com
Company Overview
* According to the AmorePacific.com
Korean Costemics Market
- Market Size is gradually increasing (About 10% every year)
- 2011 : 9 thousand billion KRW (9 billion USD)
• Severe Competition
• Low Market Barrier
• According to the newspaper article, 2012 년 국내 화장품 시장규모 ‘ 9 조 7000 억원’ 예측 , 고희정 , 메디컬투데이
591Local
Company
MoreGlobal
Company
• According to the webpage of 식품의약품안전청
2008 2009 20100
20000
40000
60000
80000
100000
120000
Market Size(KRW)
Sulwhasoo
- Cosmetic brand using Ko-rean herb, launched ‘97
- Revenue 690 Billion KRW (2010)
- Total sales over 4 Trillion KRW (2010)
- Revenue is keep growing(About 9% every year)
• According to the blog article, 한방화장품 시장 ‘빅뱅’ • , 경제플러스리스보아카지노
2008 2009 20100
1000
2000
3000
4000
5000
6000
7000
8000
Revenue(KRW)
Sulwhasoo
Harmony & Balance- Persuasion of oriental Beauty
- Inner Beauty & Physical
Beauty
- Tradition and Science• According to the webpage, Sulwhasoo.com
• Concept of Brand
- Interaction between ingre-dients
- Balance of Yin and Yang(음과 양 ) for glowing skin
- Identify root causes of a single symptom
• Concepts of Technology
Sulwhasoo- Basic Principle : Yin and Yang- They found that the early signs of aging, such as dryness and
dullness begins at the age of 35, and the graying of hair and fur-thers the skin’s aging start from the age of 42, with their research.
- Oriental medicine says that these symptoms are originated from imbalance of Yin and Yang in the body.
- Jaeumdan and Jaeunboweedan are the core component of Sulwhasoo, supplementing and protecting Yin energy in skin.
Various Ingredients
Treatment with AmoreParific’s Unique ‘Poje’ Technology
Core Component
Final Product(Sulwhasoo)
Sulwhasoo
• Korean herbal cosmetic brand Market
Rank Company BrandMarket Share
1 52.20%
2 13.50%
3 10.20%
4 6.80%
5 4.10%
Market Share
12345Others
Sulwhasoo
Earliest Launching + Biggest Market Share
First Mover of Korean Herbal Cosmetics?
Rank Company BrandLaunching
Year
1 1997
2 2003
3 2003
4 2007
5 2004
Types of Innovation
• Brand new cosmetics with oriental medicine
Product Innovation vs. Process Innovation
• AMORE PACIFIC researched on oriental medicine for a long time
Incremental Innovation vs. Radical Innova-tion
• It attempts to share existing market
Competence Enhancing vs. Competence De-stroying
Timing of Entry• High Competition
of Cosmetic Market
Timing of Entry
Distribution Channel
Long History of R&D
Patents Complimen-tary Goods
No Marketing with Celebri-
ties
Timing of Entry
• Success Factor 1 : Distribution Channel
26% 32% 21%Multi-Store Door-to-Door SalesShop in Department Store
of Whole Revenue
* According to the Amore Pacific’s Report of 2006
Door-to-Door SalesTiming of Entry
Role
His-tory
Now
• Walking from the door to door
• Trying to sell a product or services to the general public
* According to the Wkiepedia
• Founder of the AmorePacific made this system
• Since ‘64
• 20% of whole Korean cosmetics market(‘2008)
SalesPerson
Door-to-Door Sales
• Salespeople offer total services for customers
Timing of Entry
- Example 1 Salesperson A help making kimchi for her VIP customers. Kimjang, kimchi making process, is time and labor con-suming activity, so she could make a lot of conversation and make their relationship better.
- Example 2 Salesperson B sometimes takes care of her cus-tomer’s children. In some cases, she goes their gradua-tion instead of her customers. It means that their customers consider the salesperson as their relatives.
• Salespeople is a TACIT Resource of AMOREPACIFIC !
* According to the newspaper Article, 이정연 , 불황에도 잘나가는 ‘방문판매’의 힘 , 2008, 한겨레
History of SulwhasooTiming of Entry
• Success Factor 2 : Long History of R&D for Korean Herb
Starting Research & DevelopmentWith Korean ginseng
- Launching ‘Ginseng SAMMI’- Export to U.S.
-- Starting R&D with 500 Oriental Herb- Launching ‘Sulwha’
Highly Path Dependent* According to the webpage in Sulwhasoo.com
Protecting Innovation
• Patents to protect their assets of R&D• Patent Searching with ‘WIPS’
- Keyword(((( 아모레 or 태평양 ) and ( 한방 or 인삼 ) and ( 화장표 or 피부 )) or 설화수 ) or 자음단 )
equivalent to ((((Amore or Pacific) and (herb or ginseng) and (cosmetics or skin)) or sulwhasoo) or Jaeumdan)
• Success Factor 3 : A lot of Patents
Timing of Entry
Protecting Innovation• Success Factor 3 : A lot of Patents
Timing of Entry
Protecting Innovation• Success Factor 4 : Complimentary Goods
Timing of Entry
Sulwhasoo SPA- Premium space for VIP- Making brand image luxury- Promoting new products- Place for networking among
customers
Haircare Line(Ryeo)- AmorePacific’s herb tech-
nologies are applied- Premium Haircare line- # 1 in Korean Herb Sham-
poo
* According to the webpage in AmorePacific.com
Protecting Innovation• Success Factor 5 : Low level cost of Marketing
Timing of Entry
* According to the webpage in AmorePacific.com
No Celebrities Reduces Marketing
Cost Higher Profit
BCG Matrix Analysis
Relative Position (Market Share)
Bu
sin
ess G
row
th (
Mark
et
Gro
wth
) The world’s first Korean herbal cosmetic making com-
pany
Increasing international inter-est in Korean herbal cosmet-
ics with the Korean Wave
Continuous investments,170 billion won for new facul-
ties,for the global top 10
Entering the overseas mar-kets
(Japan, China, and etc.)
The market leader of premium cosmetic market in the world
Internal, External Analysis
SWOTStrength Weakness
- High reliability of customers on the brand and the company
- 98 patents related to oriental medicine (35 international patents), 90 papers (59 interna-tional paper)
- High quality and luxury brand im-age
- Korean style design
- Oriental medicine is not popular among young people
- Limited product lines
Opportunity Threat
- Increasing number of free interna-tional trades
- Increasing interest in oriental medicine in China
- Korean Wave
- Imitation cosmetic products are prosper - Portion of international cosmetic brands in market is increasing
Internal, External Analysis
TOWSInternal Strength
1. High reliability on brand2. Lots of patents3. Luxury brand image
Internal Weakness
1. Low popularity of oriental medicine for young people2. Limited product line
External Opportunity
1. International trade is increasing2. Interest interest in oriental medicine in China3. Korean wave
SO
1. Develop and produce cosmetics specialized for Chinese market2. Put emphasis on high quality and luxury brand image
WO
1. Advertise products with idol for young image2. Develop multiple prod-uct lines for each countries
External Threats
1. Imitation cosmetics2. International cos-metic brands
ST
1. Put emphasis on espe-cialness of oriental medicine
WT
1. Pioneer new market where oriental medicine is unknown
Internal, External Analysis
5 Forces Analysis
Threats ofNew En-trants
Rivalry among
Existing Competi-
tors
Threats ofSubstitutes
Bargain-ing Power
ofBuyers
Bargain-ing Power
of Sup-pliers
1. Internal Rivalry- Most major companies(in Korea) already produce herbal cosmetics. And Sulwhasoo is competing with international cosmetics brands.
2. New Entrants- Many firms including Woongjin, KT&G have prepared for launching new herbal cosmet-ics.
3. Suppliers- There are many suppliers interchangeable, so the bargaining power of suppliers is rela-tively weak
4. Buyers- This is customer-driven industry, so they have strong power. However, except per-sonal buyers, there is no threatening buyer.
5. Substitutes- Substitutes for cosmetics is not meaning-ful.
High
Moderate
Weak
Weak Strong
Internal, External Analysis
Summarization
- A successful cosmetic brand using Korean herb.
- First Mover of Korean herbal cosmetic market.
- 5 Factors in being Suc-cess First Mover1. Distribution Channel2. Long History of R&D3. Patents4. Complimentary Goods5. Low marketing expenses
- Threat by competitors
Suggestion
- Market Size increasing is high(About 20-30% every year)
- 2010 : 9 billion USD- Similar Market Size with Korea!- 1.5 billion of population
• According to the newspaper article, 2012 년 국내 화장품 시장규모 ‘ 9 조 7000 억원’ 예측 , 고희정 , 메디컬투데이
Cosmetic Market in China
First Mover Advan-tage
in China OneMore Time!
Q&A