Homeplus: Riding the Korean Retailing Rollercoaster

Problem Statement
How can homeplus adapt to the expanding struggle against the small store
owners in order for them to develop the companys growth internationally and improve
their performance in the future amidst the very strong competition?
Objective
The objective for the tesco is to strengthen the structure of the organization itself
by reconstructing their current team as well as their distribution channels for them to be
able to maximize the international business trade.
Brief Description of the Case
In the business world today, there are still a lot of growing industries trying to
diverse their products to consistently increase their profit. These companies still keep on
innovating new ideas, advanced technology, and the best quality for their target market
to assure the loyalty of their customers. These business people or companies have
always been competitive and determined in expanding and spreading their business to
have a larger scale and percentage of their market.
In the given case, Giovanni Buton has a very good result in the business that
they have. They gain profit from what they sell and there is no problem in their earnings.
Giovanni Butons products are also famous because it serves and gives its customers
the quality that they deserve. They had become Italys largest spirits producer.
Years later, there were also companies that started to rise. What they did is they
hired good business partners to help them in developing their marketing strategies to be
able to compete with the other rising companies in Europe. They have reviewed the
trends of consumption, distribution, and marketing of the spirits. They have decided to
focus on West Germany, Spain, and Greece. They have encountered a problem too and
that is the national anti-alcohol campaign that served to be a restrain in sales. Despite

of this event, their products still became one of the best and their sales remained strong
and stable though their imported brand experienced particularly buoyant growth.
Areas of Consideration
Strength

TESCO is diverse, by being diverse they provided more value to their customer
with a more comprehensive range of products and services.

TESCO is strategically developing private brand products to pursue higher

profits.

The company expanded also on wide variety of formats, ranging from

hypermarkets to convenience stores, as well as online and catalog channels.
Weaknesses

Potential negative effects of nationalistic sentiments of domestic buyers toward

foreign retail brands.

As homeplus expanded its private product line to a wide range of products, their
quality management had become more complex than ever.

TESCO lacks flexibility to start a new business or try a new store format
compared to their main competitors

If the company is caught up in a law suit related to product defaults or hazardous

effects of products to consumer, it could damage the company image a great
deal and it would potentially inflict a financial burden that could threaten the
companys financial stability.

Opportunities

TESCO had established one of the most advanced online home delivery services

in the world which attracted customers because of its convenience

TESCO introduced a customer loyalty program called Clubcard in 1995 this can
give them the opportunity to make their customers loyal to them.

The company is competing and expanding internationally.

Homeplus used a localization strategy to lure local customers.

Threats

Competitors like chaebols also known as the business groups are very
widespread in the Korean retailing industry.

Many customers believed that foreign firms were not only driving out small local
stores but were also transferring the wealth derived from the local economy to
their overseas headquarters.

Korean consumption trends were changing rapidly

The only strong discriminating factor in TESCO is the disparity of their income
levels.

Alternative Courses of Action

ACA1: Homeplus should implement and develop an internationalization strategy

Advantages:
Economical: This can be costly but since we are having a joint venture, all costs
could be shared or divided respectively.
Political: This does not violate any law.

Psychological: This would have a positive effect to the persons involved

because these would create good communication and can create good
harmonization for companies present in the joint venture.
Social: This is acceptable to the community because a given state wherein the
joint ventures would be working on, this could benefit the state itself knowing
GNP and GDP would be present and they would also earn money in behalf of the
products being sold by the joint ventures.

ACA2: Expand their online sales

Homeplus may widen their online sales by developing more virtual stores rather

than spending a lot of money opening new shops. This concept may bring the goods
customers want using the online site. They can choose the goods that they want to
buy on the website using their smartphones. The products they ordered can be
delivered to their homes.

Economical: It would be not that costly since the company will just create a new
online based retail.
Political: This does not violate any law otherwise stated by a given state.
Psychological: This has a positive effect on the people living in Korea especially
for many working professionals with limited time since roaming around the huge
supermarkets can be a daunting task, especially after a week of hard work.
Social: It will be acceptable to the community because it will not be a burden to
customers since they can use their smartphones to shop in the virtual market. It
will not just be a site but it would be effective and efficient to the customers, take
for example when they are in traffic places their waiting time can already be
converted into shopping time.

ACA 3: Conduct a business research especially in European Communities

It is vital to conduct a research in European Communities to keep up with market

trends in a particular country and to maintain a competitive edge among its competitors.
Conducting a business research will also help the company to understand its target
market and formulate ways on how to increase sales.

Advantages:
Economical: The cost to be incurred will depend on the companys approach on
how they will conduct a business research in European communities.
Political: This does not violate any law.
Psychological: This would have a positive effect to the persons involve because
you would the different preferences of each person when it comes to business
research, this would also try to create great camaraderie.
Social: This is acceptable to the community because the research can be useful
to for future events as basis or research reference.

Recommendation
On this study, the recommendation raised by the researchers is to expand their
online sales. As we all know, most of the people today have their smart phones with
them, and they are updated into the growing technology in the business world. The
buyers would likely prefer online shopping because it is really convenient and
transactions are fast through the internet. They would prefer just a few clicks and
touches on their smart phones than riding a cab or taxi, and getting tired of walking
through the malls or supermarkets. It is also recommended to offer the finest or best

service in the transactions knowing that there is a big number of population in online
shopping. This will also be better if their online offer is greatly spread worldwide.
Action Plan
Activity/Plan
Have
a
meeting with
other
European
companies or
communities
and
brainstorm

Implementing

Monitoring

Person(s)

Scheme

Scheme

Responsible

By having joint
ventures with
other the other
European
Communities

-A copy of an
agreement
between the
company of
Giovanni
Buton
with
the
other
European
communities

Target Date

Needed

-Management Within
only
of Giovanni one year for
Buton
them to be
-Management able to run
their industry
of the other
smoothly
European
Communities when it comes
to competing
internationally.

-Legal
Requirements
needed since
you have to
undergo
a
process
for
your business
entity to be
able to have a
partnership
with the other
European
Countries

Activity/Plan

Implementin
g Scheme

Monitoring
Scheme

Person(s)
Responsible

Budget/Resources

Target Date

It would most likely

cost a large amount
of money, but since
it would be an
agreement between
a certain company
with
the
other
European countries,
all costs might be
divided respectively.

Budget/Resources
Needed

Create a
website

new

Activity/Plan
Conduct a
business research

By trying to
communicate
to
other
countries

-Legal
requirements

--The head

Implementin
g Scheme
By gathering
certain people
to be part of
the marketing
research

Monitoring
Scheme
-Permission to
use
certain
reference
or
documents
from
given
sources

Person(s)
Responsible
- International
Strategic
Development
Team
of
Giovani Buton
Reseach
Department

and members
of the
International
Strategic
Development
-Management
of Giovani

Within
only
one year for
them to be
able to run
their industry
smoothly
when it comes
to competing
internationally.

It would either be
costly
or
not
depending on the
company on how
they will do it.

Target Date

Budget/Resources
Needed

Within
only
one year for
them to be
able to run
their industry
smoothly
when it comes
to competing
internationally.

It would either be
costly
or
not
depending on the
company on how
are they going to
approach
this
activity/plan.

Conclusion
The researchers therefore conclude that offering these online transactions will be
less expensive than of expanding their business or supermarket through physical assets
like buildings, plants, and land. There are greater opportunities and openings in socialnetworking sites and it is the most convenient way of buying and spending for what the
people demand and prefer. Having a good online service will also help in advertising
because of good feedbacks from the buyers and loyal customers.