Globalization Strategy of Korean Cosmetics Industry Targeting Western Market: Analyzing the Competitiveness of Amore Pacific

Abstract

Global demands for Korean cosmetics are increasing with the recent K-beauty trend, and many Korean cosmetics firms are trying to strategically expand their business to the Western market. This paper examines the key success factors of the leading Korean cosmetics company Amore Pacific through the lens of foreign direct investment (FDI) and strategic positioning analysis. An in-depth analysis on Amore Pacifics unconventional FDI case to France in 1990 is provided by applying Moon and Roehls Imbalance Theory and comparing the changes in the OLI (Ownership-Location-Internalization) advantages before and after the FDI. Moon and Hurs Eight Generic Strategies extended from Porters Generic Strategies is also applied to examine the strategic positioning set forth by Amore Pacific to stay competitive in the North American market. The paper demonstrates how Amore Pacific could balance out its critical disadvantages in the past and increase competitiveness in the global market today by developing core technologies and differentiated products that fit the needs of the sophisticated consumers of the Western market.