Introduction
Building a sustainable business strategy is more crucial than ever for any firm to prosper and stay competitive in the fast-paced global economy of today. The top e-commerce giant in South Korea, Coupang, is an indicative example of a business that has seen phenomenal success while redefining online buying. Despite the Chaebols’ campaign and controversies surrounding the business’s labor policies, it continues to be a market leader in the area (Coupang, Inc., n.d.).
Coupang may differentiate itself from the competition in several strategic ways by assessing its cutting-edge tactics, operational effectiveness, and unwavering dedication to client happiness. Its strong competitive advantages in the market and any possible weaknesses or improvement areas can serve as a solid foundation for putting into practice the solutions required to respond to criticism and address shortcomings.
Aim
Different effective aims might be set for the corporation so that it can improve its financial and competitive situation. Firstly, there is a lot of room for flexibility when it comes to strategy at the business level. Coupang can discover prospects in emerging industries like food delivery. Thanks to Coupang’s robust logistics network and well-known brand, it can grow vertically in South Korea’s still-developing industry and benefit from it (Kling et al., 2023). This may boost client retention and open new income sources per growth portfolio management theoretical underpinnings (Oh et al., 2023).
Secondly, the company might also concentrate on enhancing its sustainability activities at the functional level. This aim might bolster the business’s CSR reputation and appeal to environmentally conscientious customers through retrenchment (Kim & Mo, 2022). The third option is to focus on consolidation and enhance operational efficiency by reducing redundant operations and personnel (Kravchenko et al., 2019). Considering Coupang’s recent issues with employee safety and poor working conditions, consolidation can help the corporation narrow its focus.
Direction
When certain aims are set, the organization needs to choose its direction. Following growth portfolio management theory, Coupang has the potential to develop worldwide into the Asian market, capitalizing on the region’s rising demand for digital services. This can become the key direction of the strategy, providing vertical moves.
In addition, addressing unethical behavior at Coupang’s distribution facilities and emphasizing the historical significance of Chaebols to South Korea’s economy would strengthen the brand’s position in the local market by a horizontal move. Referring to market and product tactics, when entering a new market or improving the business’s CSR reputation, Coupang can pair with robust and effective content marketing.
Advertising their changes and enhancements can make the corporation more loyal to its client base and improve its relations with buyers. Additionally, through diversification, the company receives an opportunity to expand the range of services it offers and ensure that it has more clients who are satisfied with what they receive from Coupang.
Method
The next step of the strategic options framework is to review a number of methods the firm can adopt depending on the aim and direction chosen. Firstly, according to Oh et al. (2023), if Coupang decides to enter another market, it will especially have to adopt a collaborative approach. This will allow the firm to ensure that the teamwork within the new units and departments is approached in a healthy, effective, and ethical manner (Oh et al., 2023). Moreover, creating a long-term plan through collaborative approaches to safeguard its position in the industry and obtain a competitive edge is also a good method for Coupang.
Next, unlike competitive strategic options, the corporate strategy can use a different method where the business may thrive and function through organic growth. This will also consider the various possibilities for action and their potential financial success (Donkers, 2021). Eventually, entering the new market can be implemented through efficient mergers. For instance, if Coupang decides to act together with another company that operates in the industry but has low performance and potential to achieve competitive advantages, this mutual support can help both prosper.
Competitive Stance
Lastly, the competitive stance aspect needs to be reviewed to draft strong strategic options. For example, taking into account Bowman’s clock concept of local positioning, Coupang’s competitive strategy can yield substantial benefits within the context of the traditional role of Chaebols in the South Korean economy. It can also present Coupang with a strong competitive stance as it allows for making informed decisions about differentiation, pricing, and marketing (Mind Tools Content Team, n.d.).
Noticeably, the company needs to understand the key difference between the two strategies. While corporate strategy aims at arranging business assets, the competitive one builds the company’s potential by adding new variables to existing methods, as per the blue ocean strategy. The latter can be used to draft an option for the firm, proposing to focus on lowering costs and differentiating products to increase demand and make the client base more loyal and satisfied. Finally, Porter’s generic strategies can also be effective in the described situation. For instance, when entering a new market and focusing on advertising approaches, Coupang can pay increased attention to winning the competition with other firms by making its services unique in this exact market.
Limitation and Mitigation of Issues
Despite its quick expansion, the e-commerce market is very competitive. Coupang must contend with tough opposition from domestic heavyweights like Lotte and global giants like Amazon (Pesqué-Sela et al., 2021). Additionally, macroeconomic issues that impact consumer buying patterns and Coupang’s revenue growth include currency changes, economic slowdowns, and political unrest (Kim et al., 2021).
Coupang’s client base might suffer from a deteriorating macroeconomic climate, including inflation and supply chain issues. If the issues prove to be more severe and last longer than anticipated, the company’s financial forecast should be modified (Kim & Mo, 2022). These factors can hinder the implementation of strategic options on the corporate level. However, these variables can be mitigated by diversifying the company’s portfolio and investing in counter-options, such as more aggressive and focused marketing or relenting to new customer pools.
Conclusion
In conclusion, Coupang has become a market leader in e-commerce thanks to its effective business strategy despite controversial issues surrounding the company. Coupang must ensure its dedication to providing value to its clients, shareholders, and workers does not wane as it grows and encounters more competition. Coupang can act as a standard for newly established e-commerce businesses. If the strategic options are implemented properly, observing how the business can adapt and develop in the modern market that is changing quickly and becoming more competitive will be interesting.
References
Coupang, Inc. (n.d.). Web.
Donkers, H. (2021). A review of organic growth in China’s agricultural and food systems. The International Journal of Organic Agriculture Research and Development, 17(1), 126-157. Web.
Kim, J., Kim, M., Im, S., & Choi, D. (2021). Competitiveness of e-commerce firms through ESG logistics. Sustainability, 13(20), 11548. Web.
Kim, S. J., & Mo, J. (2022). Factors affecting consumers’ acceptance of e-commerce consumer credit service: Multiple group path analysis by Naver Shopping and Coupang. Journal of Society for e-Business Studies, 27(2), 66-85. Web.
Kling, G., Oh, I., & Rowley, C. (2023). Alibaba and Coupang are in the spotlight. Asia Pacific Business Review, 29(2), 267–278. Web.
Kravchenko, M., Pigosso, D. C., & McAloone, T. C. (2019). Towards the ex-ante sustainability screening of circular economy initiatives in manufacturing companies: Consolidation of leading sustainability-related performance indicators. Journal of Cleaner Production, 241. Web.
Mind Tools Content Team. (n.d.). Bowman’s strategy clock. Mind Tools. Web.
Oh, I., Koh, Y., & Kim, Y. K. (2023). A new global division of labor in venture capital flows to Coupang’s IPO success at the New York Stock Exchange. Asia Pacific Business Review, 29(2), 279-298. Web.
Pesqué-Sela, V., Li, J., & Kim, Y. K. (2023). Overcoming the liability of foreignness in US capital markets: The case of Alibaba and Coupang. Asia Pacific Business Review, 29(2), 323–349. Web.