• Title/Summary/Keyword: Overseas market entry costs

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The Effects of Medium and Small-sized Venture Firms' Liability of Foreignness on Business Performance - Comparison of Taiwanese and Korean Firms - (대만과 한국 중소벤처기업의 외국비용이 경영성과에 미치는 영향)

  • Cho, Dae-Woo
    • International Area Studies Review
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    • v.12 no.3
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    • pp.293-319
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    • 2008
  • Medium and small-sized venture firms as well as multinational companies pay liabilities of foreignness. We defined these costs as three different factors which are liability of handicaps(deficit of time, money, experience and, increase of financial risk), overseas market entry costs(information gathering costs, network building costs, marketing costs, channelling costs, monitoring costs), internationalization preparing costs(forecasting and market research of local markets, ex-ante cooperation with local firms), and then empirically tested how each of these factors affects on their business performances. The more important both Taiwanese and Korean firms consider liability of handicaps, the more bigger they pay overseas market entry costs(H1). On the contrary, the more important they consider overseas entry costs, the more they focus on internationalization preparation(H4) and get the better business performances(H5). The more important Korean firms consider liability of handicaps, the bigger they focus on internationalization preparation, on the contrary, the less Taiwanese firms do this(H2). Taiwanese firms as well as Korean firms rejected Hypothesis 3 and 6 which mean both liability of handicaps and internationalization preparation are no relation with their own business performances.

Effects of Market Diversity on Performance of Exporting Companies: An Inverted U-shaped Relationship

  • Lee, Jungeun;Kim, Chang-Bong;Lee, Dong-Jun
    • Journal of Korea Trade
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    • v.24 no.8
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    • pp.121-132
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    • 2020
  • Purpose - The principle aim of this study is to further investigate the relationship between market diversity and export performance. We examine the benefits and costs of geographic market diversity regarding the number of countries exported to by firms on their export performance. Based on the financial risk reduction model and the entry costs model, we propose a way to incorporate the costs and benefits aspects of market diversity. Design/methodology - To empirically investigate our research question, the curvilinear relationship between market diversity and export performance, we built a secondary panel data set between 2015 and 2019, containing 17,863 observations of Korean exporting companies. A generalized least squares panel estimator with fixed effects was employed to test the hypothesis, and the statistical package, Stata 14, was used. Findings - Our main findings are as follows: As market diversity increases, export performance increases because exporters can diversify and reduce financial risks in export markets. However, the relationship between the two does not grow. As it peaks, the entry costs increase due to the high market diversity, thereby outweighing the benefits, leading, eventually to decrease in the export performance. Consequently, there is an inverted U-shaped relationship between market diversity and export performance. Originality/value - In the export and trade literature, the impact of market diversity on export performance has not been addressed yet, despite the importance of this subject. Many scholars have assumed a positive linear relationship between the two, considering only the decrease in market risks as the number of overseas markets increases, without examining the increase in the entry and management costs. Therefore, our study contributes by providing a new perspective for analyzing the characteristics and outcomes of market diversity.

A Case Study on the Overseas Patent Application Strategies of Korean Innovative Companies (사례를 통해 살펴본 기술혁신형 기업의 해외출원 전략)

  • Kwak, Hyun;Kwak, Choong Mok
    • The Journal of Society for e-Business Studies
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    • v.25 no.4
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    • pp.169-183
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    • 2020
  • In order to strengthen competitiveness of Korean companies in the intensifying global market, it is crucial to establish preemptive strategy for filing and securing overseas patent in connection with the company strategies. Therefore, this study conducted in-depth interviews with technology innovative companies such as bio-life, manufacturing industry, information and communication, and information service industries with overseas application experience. By analyzing overseas patent application strategy for selecting a patent application route and country, reducing costs, utilizing agents, and adjusting the timing of the examination request according to the internal and external environment of the company, the direction of establishing an overseas patent application strategy for companies considering the overseas market entry was suggested.

A Fundamental Study on the Analysis of R&D Investment Ratio in Korean and Japanese Construction Companies (한국과 일본 건설기업의 R&D 투자비 분석에 관한 기초 연구)

  • Park, Hwan-Pyo
    • Proceedings of the Korean Institute of Building Construction Conference
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    • 2023.05a
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    • pp.343-344
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    • 2023
  • In order to expand its entry into not only the domestic construction market but also overseas global markets, it is necessary to secure technological competitiveness, and as a fundamental measure, it is necessary to increase the proportion of R&D investment and establish and revitalize R&D organizations. Therefore, the purpose of this study is to analyze construction sales and construction R&D investment for global construction companies in Korea and Japan, derive implications, and provide basic data for government policy establishment and global construction company strategy establishment. As a result of analyzing R&D investments in construction companies in Korea and Japan, it can be seen that Japanese construction companies have higher R&D investment costs compared to sales compared to Korea. In particular, the proportion of R&D investment continues to increase year-on-year, strengthening global competitiveness due to technology development. In addition, Japanese construction companies have established a technology research institute to discover and conduct future R&D research such as advanced IT, disaster prevention, and environment.

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A study on the activation plan of domestic franchise companies third party logistics (국내 프랜차이즈 기업의 제3자 물류 활성화에 관한 연구 : 본아이에프 사례 중심으로)

  • Cho, Jun-ho;Lee, Sang-Youn
    • The Journal of Industrial Distribution & Business
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    • v.2 no.2
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    • pp.15-24
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    • 2011
  • Modern enterprises should concentrate their efforts on continuous improvements in focusing their development in the core areas of business and to reduce their expenses and to enhance the quality of service for customers. The enterprises should focus on their core business while outsourcing the non-core areas of business to external specialists for the purpose of reducing cost. In South Korea, the enterprises are becoming increasingly interested in outsourcing their logistics function, especially in using IT technologies to the 3PL. The underlying reason for this trend is because the logistics costs of Korean businesses are much higher than that of other advanced countries. This higher logistic costs weakens the price competitiveness of Korean companies in the overseas export markets and even dampening the balance of international trade. Domestically, the higher logistics costs have the effect of raising prices in the local markets and thus affecting the local economy. Therefore a solution is urgently needed to save the logistics costs for the Korean companies in the interest of increasing national competitiveness. Outsourcing to the 3PL is becoming an attraction solution to this problem. Thanks to the increasing supply of professional logistics companies, many of the enterprises are switching to the Third Party Logistics. Nevertheless the enterprises do not yet utilize the integrated third-party logistics services on a full scale. This study analyzes present conditions and problems of the domestic third-party logistics market and suggests directions for future development. To solve the problems in the domestic third-party logistics market, four actions are recommended. First there should be new supporting policies in the laws and regulations and a system for small and medium sized companies to grow. Solutions to structural problems such as abnormal multilevel merchandising, illegal operation of private cars, and freight dumping should be implemented concurrently. Furthermore, standards for new companies entry into the market should be enhanced to allow only the competitive distribution companies to enter the market. Second, development of variety of educational programs is needed through establishing human-resource development system and specialized formal educational institution focused on this market. Third, the third party distribution companies, which seek long-term relationships with the owners of goods, should endeavor to strengthen their communications capability. Fourth, adoption of high-tech distribution system and the advent of U-Logistics, making use of RFID is urgent. This study has the limitation of objectivity because it does not include various comparative case studies about companies relating to the Third Party Logistics and domestic franchise companies. However, this study is significant to the extent that it analyzes the general present conditions and the problems of domestic Third Party Logistics and suggests recommendations for revitalization of Third Party Logistics. For future studies, analyzing the successful cases of international third party logistics companies' empirical data and studying the application into domestic franchise companies would improve the objectivity of the results. This would assist the domestic third party logistics companies not only to perform excellent domestic logistics function but also to enter into the global market for international logistics.

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A Study on the Advancement of Domestic Logistics Enterprises to the Specialty Logistics Market in accordance with Changes in the Logistics Industry (물류산업 변화에 따른 국내 물류기업의 특화 물류시장 진출에 관한 연구)

  • Shin, Seok-hyun
    • Journal of Korea Port Economic Association
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    • v.37 no.2
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    • pp.55-71
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    • 2021
  • While major alliance container carriers in the post-corona era are enjoying the largest boom in history with their fleet reduction strategy, shippers companies are in a state of deteriorating import and export price competitiveness due to increased logistics costs, and forwarders who act for shipping companies' logistics services are also experiencing the burden of rising freight rates It is in a state of overheated competition and worsening profits for attracting shippers. For this purpose, research data, literature studies, statistical data and data from overseas specialized networks were used as prior research. Online surveys and telephone interviews were conducted, and as a result, four areas of cold chain (including perishable cargo), project logistics, UN procurement logistics, and dangerous goods logistics, which were found to be particularly in high demand, were analyzed to suggest entry strategies.

A Study on the Activation of Convention Hotel : The Case of KangwonLand Convention Hotel (컨벤션호텔의 활성화 방안에 대한 연구 -강원랜드 컨벤션호텔을 사례로-)

  • Han, Jin-Young;Ji, Ke-Yung;In, Sung-Ho
    • Journal of Digital Convergence
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    • v.12 no.10
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    • pp.97-108
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    • 2014
  • The purpose of this study was to seek for solutions of activating convention hotels entering to the newly created market, focused on the case study of the convention hotel in KangwonLand in the competitive MICE environment. According to the analysis for reception setup for MICE, it is urgently required to improve shopping facilities, securing manpower, the accessibilities in KangwonLand convention hotel. This study suggests several ways to identify differentiation such as facilities discriminations, reasonable prices when holding conventions/events. It is also proposed that there is a need to focus incentive tour when marketing. To succeed in hosting events of MICE at the convention hotel, it appears to be considered to host large scale of domestic or overseas events, to measure reasonable room rates, promote niche market through middle or small scale events, attract customers to revisit and save transportation costs for participants. From the study, it is expected to find efficient ways to activate convention hotels through MICE market entry.

International Success the Second Time Around: A Case Study (제이륜국제성공(第二轮国际成功): 일개안례연구(一个案例研究))

  • Colley, Mary Catherine;Gatlin, Brandie
    • Journal of Global Scholars of Marketing Science
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    • v.20 no.2
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    • pp.173-178
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    • 2010
  • A privately held, third generation family owned company, Boom Technologies, Inc. (BTI), a provider of products and services to the electric utility, telecommunications and contractor markets, continues to make progress in exporting. Although export sales only equaled 5% of total revenue in 2008, BTI has an entire export division. Their export division's Managing Director reveals the trial and errors of a privately held company and their quest for success overseas. From its inception, BTI has always believed its greatest asset is its employees. When export sales struggled due to lack of strategy and direction, BTI hired a Managing Director for its export division. With leadership and guidance from BTI's president and from the Managing Director, they utilized the department's skills and knowledge. Structural changes were made to expand their market presence abroad and increase export sales. As a result, export sales increased four-fold, area managers in new countries were added and distribution networks were successfully cultivated. At times, revenue generation was difficult to determine due to the structure of the company. Therefore, in 1996, the export division was restructured as a limited liability company. This allowed the company to improve the tracking of revenue and expenses. Originally, 80% of BTI's export sales came from two countries; therefore, the initial approach to selling overseas was not reaching their anticipated goals of expanding their foreign market presence. However, changes were made and now the company manages the details of selling to over 80 countries. There were three major export expansion challenges noted by the Managing Director: 1. Product and Shipping - The major obstacle for BTI was product assembly. Originally, the majority of the product was assembled in the United States, which increased shipping and packaging costs. With so many parts specified in the order, many times the order would arrive with parts missing. The missing parts could equate to tens of thousands of dollars. Shipping these missing parts separately in another shipment also cost tens of thousands of dollar, plus a delivery delay time of six to eight weeks; all of which came out of the BTI's pockets. 2. Product Adaptation - Safety and product standards varied widely for each of the 80 countries to which BTI exported. Weights, special licenses, product specification requirements, measurement systems, and truck stability can all differ from country to country and can serve as a type of barrier to entry, making it difficult to adapt products accordingly. Technical and safety standards are barriers that serve as a type of protection for the local industry and can stand in the way of successfully pursuing foreign markets. 3. Marketing Challenges - The importance of distribution creates many challenges for BTI as they attempt to determine how each country prefers to operate with regard to their distribution systems. Some countries have competition from a small competitor that only produces one competing product; whereas BTI manufactures over 100 products. Marketing material is another concern for BTI as they attempt to push marketing costs to the distributors. Adapting the marketing material can be costly in terms of translation and cultural differences. In addition, the size of paper in the United States differs from those in some countries, causing many problems when attempting to copy the same layout and With distribution being one of several challenges for BTI, the company claims their distribution network is one of their competitive advantages, as the location and names of their distributors are not revealed. In addition, BTI rotates two offerings yearly: training to their distributors one year and then the next is a distributor's meeting. With a focus on product and shipping, product adaptation, and marketing challenges, the intricacies of selling overseas takes time and patience. Another competitive advantage noted is BTI's cradle to grave strategy, where they follow the product from sale to its final resting place, whether the truck is leased or purchased new or used. They also offer service and maintenance plans with a detailed cost analysis provided to the company prior to purchasing or leasing the product. Expanding abroad will always create challenges for a company. As the Managing Director stated, "If you don't have patience (in the export business), you better do something else." Knowing how to adapt quickly provides BTI with the skills necessary to adjust to the changing needs of each country and its own unique challenges, allowing them to remain competitive.