• KDI Journal of Economic Policy
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• v.13 no.1
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• pp.3-33
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• 1991

Since the early 1980's, the Korean government has gradually been widening the Korean market to foreign consumer goods. This, combined with the increased purchasing power of the Korean consumers resulting from the continued economic growth of the country, has sparked a spectacular influx of foreign consumer goods into Korea, ranging from BMW's to chopsticks. Import of foreign consumer goods amounted to more than 6 billion dollars in 1989 and is continuing to grow at a rapid rate. The increased import of foreign consumer goods doubtlessly improved the overall welfare of the Korean consumers by providing them with a wider range of options to choose from, by lowering the prices of some of the consumer goods domestically produced, and also by forcing the producers of some Korean goods to face competition with better foreign goods, thus giving them an incentive to raise the quality of their products. However, it is agreed by most economists that this increase in general welfare has been much smaller than what they had expected at the outset. Consumer prices of most imported consumer goods are easily double the import price, and in some cases, more than treble the import prices. Further, there has not been a noticeable drop in the prices of domestically produced consumer goods. Much of the blame has been attributed to the distribution sector of Korea. The objective of this paper is to analyze the imported consumer goods distribution sector of Korea, focusing on the possible sources of the poor performance of that sector, and to make policy suggestions that could potentially increase the welfare. This paper differs from all the previous research by others on this subject in that it analyzes the imported consumer goods distribution sector of Korea as a vertical structure. The distribution sector of an imported consumer good is a vertical structure since it consists of an international market, an import stage, and domestic wholesale and retail markets, in that order vertically. Our study naturally includes the analysis of the vertical restraints as well as the analysis of the industrial organization of each horizontal stage in the vertical structure. Each horizontal component of the imported consumer goods distribution sector is basically a monopolistically competitive market differentiated by characteristics of goods and by the locations and the services of firms. Further, restrictive dealership and resale price maintenance are found to be widely in use. Our main findings are the follwing; First, most consumer goods are imported monopolistically or oligopolistically through restrictive dealership contracts between foreign producers and domestic importers. Such restrictive dealership gives importers market power in the domestic market and explains many of the large discrepancies betwen the consumer prices and the import prices of many goods. Korean anti - trust law does not cover the issues arising from the market power of an importer resulting from a restrictive dealership contract. Second, some major producers of Korean goods are also importers of foreign goods that are substitutes of their products. The import of substitutes by major domestic producers is anti - competitive because it tends to raise the prices of both domestic goods and foreign goods, and also because it reduces the incentive of the domestic producers to raise the quality of their products. Third, wholesalers and retailers widely use resale price maintenance as a price fixing mechanism, and while this is against the anti- trust law, it seldom gets noticed. Fourth, the high level of rents of real estate for commercial use works as an entry barrier to the distribution sector and results in reduced competition by the firms in that sector. Finally, there are information problems. Consumers have inferior information to firms about the quality of a foreign consumer good that they have not tried before. Such information asymmetry often enables firms to raise prices. In addition, information asymmetry between importers frequently delays the import of cheaper substitutes. In order to alleviate the problems indentified above, we suggest the following policy changes. The government should strengthen the anti - trust law and its enforcement to regulate restrictive import contracts, import of competing goods by major domestic producers, and RPM by wholesalers and retailers that is aimed at price fixing. In addition, the government should loosen its tight real estate policy to encourage investment in the distribution sector. Finally, we suggest that the import price revelation policy that has been in use for some items since 1990 be expanded to most imported consumer goods that are introduced for the first time to give consumer better information and be used only for the period of time needed to inform sufficient number of consumers.

• 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.

• Journal of Navigation and Port Research
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• v.46 no.6
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• pp.530-537
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• 2022

Tug services are essential services to ensure port safety. However, due to the relatively low barrier to entry into the tug service market, the number of service companies has increased, which has led to growing concerns about excessive competition among companies and poor service quality. To solve these problems, it is necessary to prepare a service quality evaluation system, but full-fledged implementation remains far away. The purpose of this study is to develop a tug service quality evaluation model that can be practically applied. To this end, an evaluation model consisting of two major categories, eight middle categories, and 25 detailed evaluation indicators was developed through a literature review, case studies, and expert interviews. AHP analysis is also conducted to derive the relative importance of the evaluation items. As a result of the analysis, it was found that the weight of user satisfaction was higher than that of management evaluation. In addition, the weights for each detailed indicator of management evaluation were in descending order of facility management, company management, and financial soundness, and it was analyzed that the management of facilities directly used for services was important. User satisfaction is in descending order of safety, punctuality, service satisfaction convenience, and transparency. These results show that securing safety is a top priority, and that the inherent quality of services such as safety and punctuality is more urgent than those of the convenience and transparency of the process in terms of providing preliminary services.

• The Journal of the Convergence on Culture Technology
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• v.9 no.2
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• pp.525-531
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• 2023

In Korea, which is entering a super-aged society, the number of elderly patients who have difficulty walking independently is expected to increase rapidly, and it is necessary to develop wheelchair products with various functions to improve the quality of life of people with walking disabilities. Recently, wheelchair power assist devices that provide propulsion power by being attached to a manual wheelchair has been developed and is entering the domestic and global markets. In this study, we compared and analyzed the process of obtaining medical device certification for wheelchair power assist devices in Korea, the United States, and Europe. In Korea, a Class 2 medical device certification process was developed in 2021, and in the US FDA, it corresponds to Class 2 like the existing electric wheelchair and must pass the 510k certification process. In the case of Europe, it is uniquely regulated as Class I, and the CE mark can be attached through a relatively easy self-declaration of conformity. The Korean medical device industry, which is struggling with MDR certification, a new European medical device regulation, should pay attention to the relatively easy entry into the global market for wheelchair power assist products.

• Journal of the Korean Society of International Agriculture
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• v.30 no.4
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• pp.328-338
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• 2018

Central Asia (Uzbekistan, Kazakhstan, Kyrgyzstan) is a hot and arid continental climate, with most areas (68%) consisting of barren vegetation, desert, and meadows. The main agricultural areas for crop production include irrigated farmland, non-irrigated farmland, grassland, prairie and mountain. We are experiencing climate change with recent climate variability increasing. Agriculture is one of major economic sectors and provides a means of livings for the rural population of Central Asia, especially the poor. In the past two decades, Central Asia has experienced a high population growth rate, with Kazakhstan at 16.8%, Uzbekistan at 34.5% and Kyrgyzstan at 28.4%. As a major industry, Kazakhstan has the largest share of exports of agricultural products followed by petroleum, mineral resources, steel, and chemicals. Uzbekistan is the fifth largest cotton exporter as well as the sixth largest cotton producer in the world. Kyrgyzstan exports ores, stones, cultured pearls, and minerals. These three countries are rich in mineral resources, agricultural products, and energy resources. However, not only do they have difficulties in economic development due to the weakness of logistics and industrial infrastructure, but they also have imperceptible cooperation and investment among countries due to insufficient research and development. Through this study, we will investigate national outlook, economic indicators, major agricultural products, import and export status, and agricultural technology cooperation status, and study how Korean agricultural industry advances into these countries through SWOT analysis. Through this, we hope to contribute to the basic data of Central Asian studies and cooperation and investment in agriculture in each country. In addition, in order to increase cooperative exchange and investment in these countries, we will prepare a Central Asia logistics hub for the rapidly changing interKorean railroad era.

• The Journal of Small Business Innovation
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• v.19 no.4
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• pp.19-39
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• 2016

With increasing adoption of smart products and complexity, companies have shifted their strategies from stand alone and competitive strategies to business ecosystem oriented and cooperative strategies. The win-win growth of business refers to corporate efforts undertaken by companies to pursue the healthiness of business between conglomerates and partnering companies such as suppliers for mutual prosperity and a long-term corporate soundness based on their business ecosystem and cooperative strategies. This study is designed to validate a theoretical proposition that the win-win growth strategy of Samsung Electronics and cooperative efforts among companies can create a healthy business ecosystem, based on results of case studies and surveys. In this study, a level of global market access of small and mid-sized companies is adopted as the key achievement index. The foreign market entry is considered as one of vulnerabilities in the ecosystem of small and mid-sized enterprises (SMEs). For SMEs, the global market access based on the research and development (R&D) has become the critical component in the process of transforming them into global small giants. The results of case studies and surveys are analyzed mainly based on a model of a virtuous cycle of Creativity, Opportunity, Productivity, and Proactivity (the COPP model) that features the characteristics of the healthiness of a business ecosystem. In the COPP model, a virtuous circle of profits made by the first three factors and Proactivity, which is the manifestation of entrepreneurship that proactively invests and reacts to the changing business environment of the future, enhances the healthiness of a given business ecosystem. With the application of the COPP model, this study finds major achievements of the win-win growth of Samsung Electronics as follows. First, Opportunity plays a role as a parameter in the relations of Creativity, Productivity, and creating profits. Namely, as companies export more (with more Opportunity), they are more likely to link their R&D efforts to Productivity and profitability. However, companies that do not export tend to fail to link their R&D investment to profitability. Second, this study finds that companies with huge investment on R&D for the future, which is the result of Proactivity, tend to hold a large number of patents (Creativity). And companies with significant numbers of patents tend to be large exporters as well (Opportunity), and companies with a large amount of exports tend to record high profitability (Productivity and profitability), and thus forms the virtuous cycle of the COPP model. In addition, to access global markets for sustainable growth, SMEs need to build and strengthen their competitiveness. This study concludes that companies with a high level of proactivity to invest for the future can create a virtuous circle of Creativity, Opportunity, Productivity, and Proactivity, thereby providing a strategic implication that SMEs should invest time and resources in forming such a virtuous cycle which is a sure way for the SMEs to grow into global small giants.

• Journal of Global Scholars of Marketing Science
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• v.19 no.2
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• pp.40-52
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• 2009

Franchising is one of the fastest growing types of business. It is already popular and well-known in the U.S., and has been growing in many other countries including Korea. Furthermore, many Korean franchising companies have expanded their business overseas actively. According to the data by the Ministry of Industry and Resource, 82 companies out of a sample of 500 franchising companies are already operating in many foreign countries and 48% of them have started their foreign business since 2006. This clearly indicates the fast growing current trend of foreign operation by Korean franchising companies. In spite of the fast growing trend of foreign expansion in the industry, academic research on internationalization of franchising companies is extremely difficult to find. Accordingly, academic research on the issue is necessary and urgent in Korea. Among the various research questions on internationalization of franchising business, this study intends to investigate the difference in organizational factors between the franchising companies doing foreign operation and those doing business only domestically. More specifically, this research has the following purposes. First, considering the lack of theoretical basis of previous studies, resource-based theory and agency theory are employed as the theoretical bases. Second, this study explains the difference in internationalization based on organizational factors such as company size, history and growth rate. Third, the five hypotheses regarding the difference in organizational factors are presented and tested empirically, which is the first attempt in the area of this topic. Finally, the study attempts to clarify the conflicting implications among theories regarding some organizational factos such as growth rate. As the theoretical background, resource-based theory and agency theory are discussed. According to resource-based theory, a firm can grow continuously when it has competence and resource, and also the ability to develop them. The competence and resource can include capital, human resource, management skill, market information, ability to manage risk, etc. Meanwhile, agency theory views the relationship between franchisor and franchisee as an agency relationship. In agency theory, bonding capability and monitoring capability are the two key factors which promote internationalization of franchising companies. Based on the two theories, a conceptual model is designed. The model consists of two groups of variables. One is organizational factors including size, history, growth rate, price bonding and geographic dispersion. The other is whether a franchising company is operating overseas or not. We developed the following five research hypotheses basically describing the relationship between organizational factors and internationalization of franchising companies. H1: The size of franchising companies operating overseas is larger than that of franchising companies operating domestically. H2: The history of franchising companies operating overseas is longer than that of franchising companies operating domestically. H3: The growth rate of franchising companies operating overseas is higher than that of franchising companies operating domestically. H4: The price bonding of franchising companies operating overseas is higher than that of franchising companies operating domestically. H5: The geographic dispersion of franchising companies operating overseas is wider than that of franchising companies operating domestically. Data for the analyses are obtained from 2005 Korea Franchise Survey data co-generated by Ministry of Industry and Resource, GS1 Korea, and Korea Franchise Association. Out of 2,804 population companies, 2,489 companies are excluded for various reasons and 315 companies are selected as the final sample. Prior to hypotheses tests, validity and reliability of the measures of size, history, growth rate and price bonding are examined for further analyses. Geographic dispersion is not validated since it is measured using nominal data. A series of independent sample T-tests is used to find out whether there exists any significant difference between the companies internationalized and those operating only domestically for each organizational factor. Among the five factors, size and geographic dispersion show significant difference, growth rate and price bonding do not reveal any difference and, finally, history factor shows conflicting results in the difference depending on how to measure it.