South Korea: Country Attractiveness Report

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FACULTY OF BUSINESS AND ECONOMICS KATHOLIEKE UNIVERSITEIT LEUVEN D0M19B - International Business Strategy SOUTH KOREA Shortened Country Attractiveness Report Antoine Hirschland Prof. Dr. Sleuwaegen Leo – 2010 – I. Introduction Thanks to the globalization, Asian economy is drawing more and more the attention of the rest of the world. Nevertheless, when we talk about economic growth in Asia, we think mostly about China, India or Japan whereas South Korean economy is staying quite unknown in Belgium. However, since the war in the Korean peninsula and the formation of the Democratic People's Republic of Korea (North Korea) and the Republic of Korea (South Korea) in 1948, South Korea has becoming a major economic…show more content…
Regarding technologies, South Korean industry has always been a pioneer in the technological know-how which has allowed the country to become one of the most advanced countries in this field. Lastly, the education system has always been based on rigour and excellence (South Korean higher education and training ranked 15th in the GCR) that allowed the country to build up a high-skilled workforce. B. Demand conditions The Korean home demand is characterized by high buyer sophistication. Indeed, according to the GCR, South Korean buyer sophistication ranks 11. This can be explained (in part) by the high level of education. Moreover, this sophisticated home demand means that consumers require products of high quality and influences positively the development of capabilities and pressures South Korean firms to be competitive and to innovate in order to respond to this demand. C. Firm strategy, structure, and rivalry The Korean industry organisation is characterized by the predominance of large groups (as LG, Hyundai, Samsung etc.) called chaebols doing business in a large diversity of activities. The structure is therefore principally oligopolistic. Currently, chaebols are responsible of the majority of Korean exportations. The Korean economic growth has therefore been mostly concentrated on the development of those -3- chaebols supported by financial institutions and the government at the expense of small and

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