Country Analysis Report - South Korea
Country Analysis Report
In the fiscal period from year 2000 to 2004, Allergan Inc. has seen a continuous rise in sales and profits. In the year ended 2004, net income reached a high of $377 million and there is certainly no reason to believe that number won't continue to grow . Although most of our company's sales comes from our line of eye care pharmaceuticals, It is the BOTOX/neuromodulators line that sees the most promise in growth.
With 80% of our BOTOX products being used for cosmetic purposes, a great market potential is seen in South Korea where the demand for skincare and cosmetic products is soaring. With sales capabilities in over 100 countries, direct sales offices have only been established in a little over 20 countries1. The goal of this report is to provide an analysis on the feasibility of establishing a direct sales office in South Korea. Feasibility will be determined through a three part analysis in the following areas:
· South Korea's business climate as depicted by political, legal, and economic environments
· Suitability of infrastructure in terms of South Korea's tangible resources
· Cultural and managerial challenges of conducting business in South Korea
South Korean Business Climate
Political conditions:
Incumbent president Roh Moo-Hyun was elected in December 2002 to a 5-year office term. South Korean democracy has been firmly established since 1987 with presidential elections free of any controversy . With much thanks to former President Kim Dae-Jung, sweeping political reform has largely opened up the South Korean market, making investment in the country very viable. Although the many reforms have improved the business environment for foreign investors, there is still room for more improvement. President Roh Moo-Hyun has promised to pursue more reform concerning the large conglomerates in the country that present market barriers for foreign investment. There has been bumps in Roh Moo-Hyun's presidency that threatened
In the fiscal period from year 2000 to 2004, Allergan Inc. has seen a continuous rise in sales and profits. In the year ended 2004, net income reached a high of $377 million and there is certainly no reason to believe that number won't continue to grow . Although most of our company's sales comes from our line of eye care pharmaceuticals, It is the BOTOX/neuromodulators line that sees the most promise in growth.
With 80% of our BOTOX products being used for cosmetic purposes, a great market potential is seen in South Korea where the demand for skincare and cosmetic products is soaring. With sales capabilities in over 100 countries, direct sales offices have only been established in a little over 20 countries1. The goal of this report is to provide an analysis on the feasibility of establishing a direct sales office in South Korea. Feasibility will be determined through a three part analysis in the following areas:
· South Korea's business climate as depicted by political, legal, and economic environments
· Suitability of infrastructure in terms of South Korea's tangible resources
· Cultural and managerial challenges of conducting business in South Korea
South Korean Business Climate
Political conditions:
Incumbent president Roh Moo-Hyun was elected in December 2002 to a 5-year office term. South Korean democracy has been firmly established since 1987 with presidential elections free of any controversy . With much thanks to former President Kim Dae-Jung, sweeping political reform has largely opened up the South Korean market, making investment in the country very viable. Although the many reforms have improved the business environment for foreign investors, there is still room for more improvement. President Roh Moo-Hyun has promised to pursue more reform concerning the large conglomerates in the country that present market barriers for foreign investment. There has been bumps in Roh Moo-Hyun's presidency that threatened
Cited: "Background note: South Korea" U.S. Department of State, April 2005, http://www.state.gov/r/pa/ei/bgn/2800.htm "Country Report – South Korea", E.I.U., http://portal.eiu.com.offcampus.lib.washington.edu/index.asp?layout=displayIssueArticle&issue_id=1518256351&article_id=1908256390 "Ecommerce soars in South Korea" Nando Times, 2000, http://www.nua.ie/surveys/index.cgi?f=VS&art_id=905356205&rel=true "Major Trends and Outlook", Globus/NTDB, 2003, http://www.stat-usa.gov.offcampus.lib.washington.edu/mrd.nsf/vwCCG_Country/D196C20BA2D1976A85256FB10032F21E?OpenDocument&sessID=C05D05D327A52D5 "South Korea Business Etiquette" Executive Planet, http://www.executiveplanet.com/business-etiquette/South+Korea.html "South Korea Country Commercial Guide" FY 2004, http://www.stat-usa.gov.offcampus.lib.washington.edu/mrd.nsf/vwNoteIDLookup/NT006406BE/$File/X_1783466.DOC?OpenElement Sullivan, Jeremiah, "2004 World Development Indicators", International Business 300, Pearson: Boston, 2005, pg. 53-80. "Transportation in South Korea" Nationmaster, 2005, http://www.nationmaster.com/encyclopedia/Transportation-in-South-Korea "Wrinkle Free Injection" Shanghai Star, 2001, http://app1.chinadaily.com.cn/star/2001/1129/fe19-1.html WWW.allergan.com, online. May 23, 2005. http://www.allergan.com/site/about/home.asp?id=&largeText=