Case Analysis on AmorePacific: From Local to Global Beauty

Student’s Name
Professor’s Name
Course
Date
Case Analysis on “AmorePacific: From Local to Global Beauty”
Since its establishment in 1945, AmorePacific has continued to enjoy progressive growth both in local and global cosmetic industries. However, the increase has been subject to market challenges and the diversification of consumers of beauty products. Consequently, AmorePacific had to undergo various changes and strengthening of its capabilities to achieve significant performance in the global market and become a world’s leader in the cosmetic industry. The company capitalized in adjusting to the market conditions as well as adopting new strategies in marketing, operations and distribution channels.
Some factors characterize the Global beauty industry. First, it is highly competitive in the aspects of geography and products segments. In a general perspective, the competition is due to the presence of regional market players with Europe having the most extensive market coverage of 41 percent, while the Asia Pacific and the USA covers 27 and 22 percentage respectively (Ghemawat, Carin-Isabel, and David 2). Within the industry, the beauty products are divided into various categories including toiletries, fragrances, oral care, and skin care products, with different players dominating in different segments. One key driver for success in a highly competitive market is differentiation of products. AmorePacific differentiated their products efficiently to ensure they remain in market performance.

Another trait of the global beauty industry is high variation across the globe in the aspect of the conception of beauty. As a result, the Asian market has demonstrated remote standardization of beauty products while Europe has remained more standardized than other regions. The variation has been due to the factors such as regional income status, openness to imports, and ethnicity. One driver of success in response to high variation in the market is concentration is market segmentation to satisfy consumers in each category of needs. For example, AmorePacific developed products such as Iope, Hera, and Innisfree for people in different age groups and income classes (Ghemawat, Carin-Isabel, and David 6). It also established local departments in foreign markets to cater for specific beauty needs in the populations leaving there. Finally, the global has been demonstrated by the entry of new market layers in its market categories some of which are top competitors. However, concentrating on the differentiation of products, penetration in foreign markets, and continuous development of products have enabled the company to remain in the market ahead of other companies.
AmorePacific’s drivers for growth are many as seen in the case but the key one includes streamlining its operations, effective marketing strategies, and alignment of its distribution channels. The company developed various programs named Total Cost reduction, Total Creative Revolution (Ghemawat, Carin-Isabel, and David 5), and new band architecture to add value to its operations. Next, the company invested in its marketing strategies including the use of beauty magazines, hosting Miss Korea Pageants, and brand manager systems (Ghemawat, Carin-Isabel, and David 7). These helped it market its products both locally and globally. Moreover, AmorePacific aligned its distribution operations using new and old tactics such as door-to-door sales, departmental stores and use of subsidiary distributors instead of third parties. As a result, the company efficiently released its products to it consumers without extra costs, reduction in their profits, and disruptions.
In addition to the above factors, there are others that through which the company added value in its products and operations. These include the launching of its Research and Development department that has seen it come up with new marketing strategies, brands, and product designs. Such products that dominated the market by the year 2004 include Hera, Iope, and Sulwhasoo (Ghemawat, Carin-Isabel, and David 6).
In brief, AmorePacific has undergone changes that have proved critical to its growth and leadership in the global market. It adapted to significant market characteristics and changes such as entry of new competitors, variation, and high segmentation to establish itself well in the market. Also, it has developed various strategies that have acted as its drivers of success. These include the redesigning of market strategies, aligning its distribution activities, improving its operations and utilization of research and development department for creative and innovative developments. With such continuous growth, the company is bound to become the market leader in the beauty industry and enjoy the benefits associative with the rank. Unfortunately, it will have to keep adjusting to costly and sudden market changes not mentioning other challenges in the market.
Works Cited
Ghemawat, Pankaj, Carin-Isabel Knoop, and David Kiron. Amorepacific: From Local to Global Beauty., 2006. Print.