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South Korea: Economy, Culture and Market Analysis Research Paper

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Updated: Sep 20th, 2021

Introduction

South Korea is officially known as the Republic of Korea. Korea traces its founding to 2333 BCE by Dangun Wanggeom. Archeological research shows that Koreans occupied the peninsula since the lower Paleolithic period with territories expanding as far as Mainland China and eastern Russia during the Gojoseon period. Korean history has been turbulent throughout the last empire of Korea dating back to the age of the Korean Empire. Since the establishment of the modern republic in 1948, South Korea struggled with the after match of the Japanese control (Nahm, 1996).

South Korea had one of the most economic developments in the world since the 1960s and is now the third-largest economy in Asia and the twelfth largest economy in the world. Many developing nationals refer to this progress as the miracle on the Han River. It is also one of the world’s most technologically and scientifically advanced countries. It is the only country in the world having nationwide 100Mbps Broadband internet ACCESS, full HDTV broadcasting, DMB, and 3rd generation HSDPA. It is currently the most wired nation in the world, with 90 % of homes connected to cheap broadband internet (Nahm, 1996).

Economy

South Korea is a major international economic power. It has the twelfth largest (list of countries by GDP) in the world and the third-largest in Asia, behind Japan and China. Its largest trading partner and export market today is China. South Korea has achieved rapid economic growth through exports of manufactured goods and is one of the four Asian tigers. Major industries in South Korea today are automobiles, semiconductors, electronics, shipbuilding, and steel (Nahm, 1996).

In the 1950s South Korea was one of the poorest countries in Asia. This was partly due to the destruction of much of the countries infrastructure during the Korean War. After the war, South Korea became heavily dependent on U.S aid. Following the military coup led by general park Chung-hee in 1962, South Korea embarked on a series of ambitious five-year plans South Korea for economic development similar to the macroeconomic schemes of the Soviet Union. Emphasis shifted to foreign trade with the normalization of relations with Japan. The South Korean model of encouraging the growth of large, internationally competitive companies through easy financing and tax incentives led to the dominance of the family-controlled conglomerates. These companies known as the chaebol flourished under the support of the parking regime. Some such as Hyundai motor company, Samsung and company became global corporations. In 2004, South Korea joined the trillion-dollar club of world economies (Seoul, 2004).

South Korea’s economy is characterized by moderate inflation, low unemployment, an export surplus, and a fairly equal distribution of income. Today there are several strong South Korean industries. Its largest automaker, Hyundai motor company, and its subsidiary KIA motors are the sixth-largest car group in the world. Its shipbuilding industry is also the largest in the world (Seoul, 2004).

Demography

Most South Koreans live in urban areas; due to rapid migration from the courtside during the countries rapid economic expansion in the 1970s, 1980s, and 1990s. The capital city of Seoul is also the countries largest city and chief industrial center. It had 10.3 million inhabitants in 2006, making Seoul one of the most populated single cities in the world. Other major cities include Busan, Incheon, Daegu, Daejeon, Gwangju, and Ulsan.

The population has also been shaped by international migration. Following the division of the Korean peninsula, after world war 11, about four million people from North Korea crossed the border to South Korea (Seoul, 2004).

Religion

As of 2005, approximately 22 million of the South Korean population expresses no religious preference. Of the remainder, 13.7 million are Christian and 5.1 million be Catholics, 10.7 million are Buddhist, and less than half a million belonging to various minor religions including Jeungsando and Wonbuddhism. The largest Christian church in South Korea, Yoido full gospel church, 11 of the world’s 12 largest churches is located in Seoul. It is also the second-largest missionary-sending nation on earth, after the Islam in Korea estimated to be at 45,000 in addition to some 100,000 foreign workers from Muslim countries (Seoul, 2004).

Government

The government of South Korea is divided into three branches, executive, judicial, and legislature. The executive and legislative branches operate primarily at the national level, although various ministries in the executive branch also carry out local functions. The governments are semi-autonomous and contain executive and legislative bodies of their own. The judicial branch operates at both the national and local levels. Its government structure is determined by the constitution of the Republic of Korea. As with the most stable three-branch systems, a careful system of checks and balances is in place. For instance, the judges of the constitutional court are partially appointed by the executive and partially by the legislature (Seoul, 2004).

Culture

South Korea shares its traditional culture with North Korea but the two Koreas have developed distinct contemporary forms of culture since the peninsula was divided in 1945. The South Korean ministry of culture and tourism actively encourages the traditional arts, as well as modern forms, through funding and education programs (Seoul, 2004).

South Korea market analysis

South Korea is a major international economic power. It has the twelfth largest country in the world as far as GDP is concerned and in Asia, it’s the third-largest after Japan and China. The country has several industries and one of the most popular ones is the Shipbuilding industry which happens to be the largest in the world. It became the largest as it overtook Japan in 2004. South Korean shipbuilding has become so efficient that a total of $80 million vessels are manufactured every four working days. In 2006, approximately one in every three new vessels was constructed in Korea. Hyundai heavy industries built ships totaling $10.6 million compensated gross tones or 34.6 % becoming the first nation to breach the ten million CGT mark. Other Korean shipbuilding industries in Korea include Samsung heavy industries and Daewoo marine engineering and construction companies (Sung, 1999).

Another industry in South Korea is Hyundai motor company and its subsidiary KIA motors is the 6th largest car group in the world. Mitsubishi Motors had technologically supported them during the 1980s and 1990s. Korean carmakers are planning to increase its exports, even more, when it finishes its FTA with the European Union.

The transportation sector has facilitated the growth of the country in general as the networks of railways, highways, bus routes, and air routes provide the transportation industry with adequate means of transport. Korail commuter lines are already linked with Seoul’s subway system and several commuter lines connected with Busan and Daegu systems are under construction (Sung, 1999).

Best Buy stores in South Korea

Best Buy Co, Inc operates a global portfolio of brands with a commitment to growth and innovation. The employees strive to provide customers around the world with superior experiences by responding to their unique needs and aspiration. They sell consumer electronics, home office products, entertainment software, appliances, and related services through more than 1,150 retail stores across the United States, through Canada, and in China. The fiscal 2008 growth plan includes approximately 35 new international stores and 95 new US stores. Minneapolis as part of its ongoing strategy of listening to customers to provide a differentiated experience and serve unmet needs. Best Buy Company, Inc said that it plans to open approximately 130 new stores in the United States, Canada, and China during its 2008 fiscal year. Its focus is on reaching new customers in new markets or new ways. As a result, these Best Buy, Inc can be introduced in South Korea because of its diverse economy and large population. South Korea is a major international economic power. It has the twelfth largest (list of countries by GDP) in the world and the third-largest in Asia, behind Japan and China. Its largest trading partner and export market today is China. South Korea has achieved rapid economic growth through exports of manufactured goods and is one of the four Asian tigers. Major industries in South Korea today are automobiles, semiconductors, electronics, shipbuilding, and steel (Nahm, 1996).

Two recent events precipitated a revolutionary reconstructing in South Korea’s overall electrical retail picture. First following the liberalization of the sector to allow foreign ownership in 1996, foreign investors began introducing hypermarkets, supermarkets, and convenience stores. Second, the economic crisis that started in 1997 forced the existing supermarkets, faced with more competition and a stagnant economy to begin consolidation. The coming of larger stores and the consolidation of existing supermarkets have proved to be a bonanza for sales of US consumer electrical to South Korea which topped $ 1.25 billion in 2002, up 36% from 2001 (Dennis, 2003).

Consumer crave convenience

The average Korean households spend about 15.5 % of its annual income on purchasing electrics. Though traditional markets still account for two-thirds of retail sales, the larger stores led by hypermarkets will likely continue gaining market share.

Consumers are contributing to the trade towards larger stores as they indulge a taste for international electrical and demand greater value, safety, quality, and convenience. Increasing numbers of dual-income families and single-parent households have upped the demand for in-store prepared and microwave-ready items. (Dennis, 2003)

Best Buy stores are one of the most leading electronics retailer dealers in the world. North American consumer electronics retailer best buy company, Inc recently said that it would be entering the Korean retail market soon with its first store there. Just like countless retailers before it, best buy wants to catch the wave of consumer spending in Korea as the economy there continues to be red hot.

Best Buy if introduced in Korea is expected to offer the same things that best buy everywhere offer i.e. computers, printers, T.V. sets, audio appliances, DVD players, digital cameras, digital camcorders, cell phones, electrical gadgets, kitchenware, fridges and air conditioner due to the large crave of these customers and the enormous population. Consumer electronics sales volumes are expected to reach $ 100 billion on the Chinese mainland. Double-digit growth is expected in each of the coming 10 years that is $ 230 billion by 2016 and the company is expected to sell these products more cheaply (Dennis, 2003).

Retail entry strategies

Since most of the South Korean population live within a radius of 25 miles in Seoul City, market entry for best buy stores is easy as there already a market for their goods.. This center forms a huge retail market and as a result, best buy stores can enter this markets easily since already there is a large population to purchase their products. Also due to the distribution problems for large stores in Seoul, the smaller deliveries for convenience stores allow easier and faster access consequences and as a result, it becomes easy for best buy stores to enter this market easily. (Dennis, 2003)

Marketing mix

The marketing mix is a very crucial consideration as far as a market entry for goods and services in any given market is concerned. Due to this reason, a feasibility study is crucial in determining the right market for the goods and the price to charge for a particular product.

Besides producing the right product for the market, all the other p’s must be considered to achieve the overall objectives of an organization. For this case, the right product has to be a product the one that would fit a specific market. The other factor to consider after producing a product is to determine the price to charge in the market. The price must be worth that particular product taking into consideration the competitor’s prices. The other factor to consider is how the product is to be distributed to reach the consumer. A promotion mix is also vital in marketing as the organization has to come up with ways of making its product known in the market (Spooner 2004).

Conclusion

South Korea is one of the economically stable countries in the world with a slightly small population. It is also one of the world’s most technologically and scientifically advanced countries. It is the only country in the world having nationwide 100Mbps Broadband Internet access, full HDTV broadcasting, DMB, and 3rd generation HSDA. As a result, these best buy stores should be encouraged the economy of the country. So in conclusion, these stores should be encouraged since they lead to the growth of the economy. Also, South Korea has a wider economy than China, and hence if introduced these stores can perform better and we know that these stores already exist in China.

References

  1. Andrew, C. (1996). A history of the Korea people
  2. Cumings, B (1997): Koreas place in the sun. New York
  3. Dennis, H. (2003). From traditional to consumption: Constructing a capitalist culture in South Korea. Seoul.
  4. Michael, B (2004). The Koreans: who they are, what they want, where their future lies
  5. Nahm, A. (1996): A history of the Korean people.
  6. Seoul (2004): From tradition to consumption: constructing a capitalist culture in South Korea.
  7. Sung, C. (1999): The north and South Korea political systems
  8. Boyle, M. (2006): Best Buys giant gamble.
  9. Chris, S. (2007). Adaptation is key for best buys. Star tribune.
  10. Staff Writer (2001): DSN honors best buy with specialty retailer award. Discount stores news.
  11. Busch, S. (2006): Best Buy to acquire majority interest in Jiangsu five stars.
  12. John, V. (2006): Best Buy stars to eliminate mail in rebates
  13. Spooner J (2004): Best Buy initiates a battle of the brands.
  14. Wildmon, D (2006). Best Buy barn use of merry Christmas in advertising.
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