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Amore Pacifics Successful Cosmetic Brand - sss KIM Donghwan 20080887 CHA Myunghun 20071136 TANG Thierry 49001538 JANG Hyukmin 20051261.

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Presentation on theme: "Amore Pacifics Successful Cosmetic Brand - sss KIM Donghwan 20080887 CHA Myunghun 20071136 TANG Thierry 49001538 JANG Hyukmin 20051261."— Presentation transcript:

1 Amore Pacifics Successful Cosmetic Brand - sss KIM Donghwan CHA Myunghun TANG Thierry JANG Hyukmin

2 Contents Company Overview About Sulwhasoo Types of Innovation Timing of Entry Internal, External Analysis Summarization Suggestion

3 Company Overview Leading Chemical and Cosmetics Company Revenue 1,531,337 Million KRW (2008) 35% of Korean Cosmetic Market Cosmetics AMOREPACIFIC HERA Sulwhasoo LIRIKOS Laneige IOPE MAMONDE Primera Lolita Lempicka Odyssey MIRAEPA INNISFREE ÉTUDE Espoir Personal care Mise-en-Scène Ryoe Happy Bath Dantrol Median Songyeum Health care O'Sulloc VB Program Ogarden Natural Beauty Food Ketotop

4 Company Overview * According to the AmorePacific.com

5 Company Overview * According to the AmorePacific.com

6 Korean Costemics Market - Market Size is gradually increasing (About 10% every year) : 9 thousand billion KRW (9 billion USD) Severe Competition Low Market Barrier According to the newspaper article, ,, 591 Local Company More Global Company According to the webpage of

7 Sulwhasoo - Cosmetic brand using Korean herb, launched 97 - Revenue 690 Billion KRW (2010) - Total sales over 4 Trillion KRW (2010) - Revenue is keep growing (About 9% every year) According to the blog article,,

8 Sulwhasoo Harmony & Balance - Persuasion of oriental Beauty - Inner Beauty & Physical Beauty - Tradition and Science According to the webpage, Sulwhasoo.com Concept of Brand - Interaction between ingredien ts - Balance of Yin and Yang( ) for glowing skin - Identify root causes of a singl e symptom Concepts of Technology

9 Sulwhasoo - Basic Principle : Yin and Yang - They found that the early signs of aging, such as dryness and dullness begins at the age of 35, and the graying of hair and furthers the skins aging start from the age of 42, with their research. - Oriental medicine says that these symptoms are originated from imbalance of Yin and Yang in the body. - Jaeumdan and Jaeunboweedan are the core component of Sulwhasoo, supplementing and protecting Yin energy in skin. Various Ingredients Treatment with AmoreParifics Unique Poje Technology Core Component Final Product (Sulwhasoo)

10 Sulwhasoo Korean herbal cosmetic brand Market RankCompanyBrand Market Share % % % 46.80% 54.10%

11 Sulwhasoo Earliest Launching + Biggest Market Share First Mover of Korean Herbal Cosmetics? RankCompanyBrand Launching Year

12 Types of Innovation Brand new cosmetics with oriental medicine Product Innovation vs. Process Innovation AMORE PACIFIC researched on oriental medicine for a long time Incremental Innovation vs. Radical Innovation It attempts to share existing market Competence Enhancing vs. Competence Destroying

13 Timing of Entry High Competition of Cosmetic Market

14 Timing of Entry Distribution Channel Long History of R&D Patents Complimentary Goods No Marketing with Celebrities

15 Timing of Entry Success Factor 1 : Distribution Channel 26% 32% 21% Multi-Store Door-to-Door Sales Shop in Department Store of Whole Revenue * According to the Amore Pacifics Report of 2006

16 Door-to-Door Sales Timing of Entry Role HistoryNow Walking from the door to door Trying to sell a product or services to the general public * According to the Wkiepedia Founder of the AmorePacific made this system Since 64 20% of whole Korean cosmetics market(2008) Sales Person

17 Door-to-Door Sales Salespeople offer total services for customers Timing of Entry - Example 1 Salesperson A help making kimchi for her VIP customers. Kimjang, kimchi making process, is time and labor consuming activity, so she could make a lot of conversation and make their relationship better. - Example 2 Salesperson B sometimes takes care of her customers children. In some cases, she goes their graduation instead of her customers. It means that their customers consider the salesperson as their relatives. Salespeople is a TACIT Resource of AMOREPACIFIC ! * According to the newspaper Article,,, 2008,

18 History of Sulwhasoo Timing of Entry Success Factor 2 : Long History of R&D for Korean Herb Starting Research & Development With Korean ginseng - Launching Ginseng SAMMI - Export to U.S. - - Starting R&D with 500 Oriental Herb - Launching Sulwha Highly Path Dependent * According to the webpage in Sulwhasoo.com

19 Protecting Innovation Patents to protect their assets of R&D Patent Searching with WIPS - Keyword (((( or ) and ( or ) and ( or )) or ) or ) equivalent to ((((Amore or Pacific) and (herb or ginseng) and (cosmetics or skin)) or sulwhasoo) or Jaeumdan) Success Factor 3 : A lot of Patents Timing of Entry

20 Protecting Innovation Success Factor 3 : A lot of Patents Timing of Entry

21 Protecting Innovation Success Factor 4 : Complimentary Goods Timing of Entry Sulwhasoo SPA - Premium space for VIP - Making brand image luxury - Promoting new products - Place for networking among customers Haircare Line(Ryeo) - AmorePacifics herb technologies are applied - Premium Haircare line - # 1 in Korean Herb Shampoo * According to the webpage in AmorePacific.com

22 Protecting Innovation Success Factor 5 : Low level cost of Marketing Timing of Entry * According to the webpage in AmorePacific.com No Celebrities Reduces Marketing Cost Higher Profit

23 BCG Matrix Analysis Relative Position (Market Share) Business Growth (Market Growth) The worlds first Korean herbal cosmetic making company Increasing international interest in Korean herbal cosmetics with the Korean Wave Increasing international interest in Korean herbal cosmetics with the Korean Wave Continuous investments, 170 billion won for new faculties, for the global top 10 Continuous investments, 170 billion won for new faculties, for the global top 10 Entering the overseas markets (Japan, China, and etc.) Entering the overseas markets (Japan, China, and etc.) The market leader of premium cosmetic market in the world The market leader of premium cosmetic market in the world Internal, External Analysis

24 SWOT StrengthWeakness - High reliability of customers on the br and and the company - 98 patents related to oriental medicine (35 international patents), 90 papers (5 9 international paper) - High quality and luxury brand image - Korean style design - Oriental medicine is not popular amon g young people - Limited product lines OpportunityThreat - Increasing number of free international trades - Increasing interest in oriental medicine in China - Korean Wave - Imitation cosmetic products are prospe r - Portion of international cosmetic brands in market is increasing Internal, External Analysis

25 TOWS Internal Strength 1. High reliability on brand 2. Lots of patents 3. Luxury brand image Internal Weakness 1. Low popularity of orienta l medicine for young people 2. Limited product line External Opportunity 1. International trade is increasing 2. Interest interest in orien tal medicine in China 3. Korean wave SO 1. Develop and produce cos metics specialized for Chines e market 2. Put emphasis on high qua lity and luxury brand image WO 1. Advertise products with id ol for young image 2. Develop multiple product l ines for each countries External Threats 1. Imitation cosmetics 2. International cosmetic b rands ST 1. Put emphasis on especialn ess of oriental medicine WT 1. Pioneer new market where oriental medicine is unknown Internal, External Analysis

26 5 Forces Analysis Threats of New Entrants Rivalry among Existing Competitors Threats of Substitutes Bargaining Power of Buyers Bargaining Power of Suppliers 1. Internal Rivalry - Most major companies(in Korea) already produce herbal cosmetics. And Sulwhasoo is competing with international cosmetics brands. 2. New Entrants - Many firms including Woongjin, KT&G have prepared for launching new herbal cosmetics. 3. Suppliers - There are many suppliers interchangeable, so the bargaining power of suppliers is relatively weak 4. Buyers - This is customer-driven industry, so they have strong power. However, except personal buyers, there is no threatening buyer. 5. Substitutes - Substitutes for cosmetics is not meaningful. High Moderate Weak Strong Internal, External Analysis

27 Summarization - A successful cosmetic brand using Korean herb. - First Mover of Korean herbal cosmetic market. - 5 Factors in being Success First Mover 1. Distribution Channel 2. Long History of R&D 3. Patents 4. Complimentary Goods 5. Low marketing expenses - Threat by competitors

28 Suggestion - Market Size increasing is high (About 20-30% every year) : 9 billion USD - Similar Market Size with Korea! billion of population According to the newspaper article, ,, Cosmetic Market in China First Mover Advantage in China One More Time!

29 Q&A


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