AmorePacific: From Local to Global Beauty
1. Why has AmorePacific (AP) been doing so well in the home market? AmorePacific had already accomplished a leadership position in the Korean market in the mid-1960s. They implemented a door-to-door sales strategy on their own which carved out a dominant position in the sales channel. AmorePacific also led the Korean industry in initiating exports in 1959 and kept retaining export effort to global market. From the mid-1990s, AmorePacific endeavored at comprehensive cost-reduction programs, amplified R&D, restructured brand management as well as its brand portfolio, realigned long-stand distribution relationship. AmorePacific manufactured all its domestic selling products itself. It
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Marketing had long been an emphasis at AmorePacific: the company had initiated a commercial, had launched Korea’s first beauty magazine. Starting during the 1990s, because the marketing department was reorganized around and committed to small number of brands, they had to choose the new system. Under the system, brand managers worked closely with the R&D function form product concept to development in a so-called “brand manager system,” run by channel and brand. AmorePacific refocused its distribution from 200 stores, many small to mid-sized, to 60 high-end ones. They built its dominance in the door-to door distribution channel its new prestige brands. AmorePacific had also decided to launch its own chain to respond multi-brand Mom-and-Pops and other ,id/upmarket rival. Lastly, AmorePacific continued to emphasize the modernization of its management, infrastructure, and human resources. The company adopted value(discounted cashflow)-based management, promted corporate trandsparency, and “women-friendliness” towards its employees and otherwise burnished the corporate image. And they tried to break the often strict hierarchy of Korean firms.
2. Why did AP seek to globalize their business?
An important part of the vision for AmorePacific was to become world-class. By 2004, the global personal care market amounted to $150 billion. Looking forward, the global personal care market was