Assignment 1
Assignment 1
Assignment 1
1.0 Introduction
5.1 Political
5.2 Economic
5.3 Social
5.4 Technology
5.5 Environmental
5.6 Legal
6.1 Opportunity
6.2 Threat
7.0 Conclusion
References
Appendix
1.0 Introduction
Amore pacific is a well know cosmetic company in Korea since 1945. Amore pacific company
has its own research centre to create different type of cosmetic and their overseas branches
across the world. The initial target of the company is to become the top cosmetic company in
Amore Pacific has many subsidiaries to fulfil different category and budget of customers. This
is the reason why it is lit in Asia. The next target of Amore Pacific Company is to promote
Amore Pacific ia Korea globalise company founded 1945 until now has 70 years history. this
company has its own research team and centre to create more and new product to fulfil
customer need, the overseas branches had over 40 countries. This company has many
subsidiaries such as IOPE, Sulwhasoo, Hera, Hanyul, Laneige, Mamonde, Etude House and
Innisfree. This is the main reason that Amore Pacific success in the Asia because can attract
different type of customers. Amore Pacific also is the pioneer to create BB cushion in the world.
The mission and vision of this company is to become the Asian Beauty Creator. This is the core
value of corporate culture, but also the staff's code of conduct. Openness, Innovation, Intimacy,
Integrity, Challenges - These five values are the benchmark for all Amway Pacific decisions.
consumers". "Innovation" is the passion of showing new things to the world at any time.
"Intimacy" means physically and mentally eliminating the distance from consumers. Integrity
"means that whatever you do, you can do everything you can to manage your own business and
Group in China established a perfect logistics research and development system and a
comprehensive product portfolio. This article will sort out the development of the Group in
Amore Pacific will use "Laneige" brand test the Chinese market, a small gain. In order to
occupy a place in China for a long time, Amore started to set up factories in China and
introduced "Dream Makeup" and "Sulwhasoo" brands successively to perfect Amore's high,
medium and low-end product lines in China. Laneige will be the pioneer become lneige is the
medium class make up product among the company. If successful will try innnisfree and etude
house which is lower price make up product and Sulwhasoo which is high class make up
product to expand the different market. AMORE PACIFIC brand has entered the top
Laneige will have all the makeup product from care product which is top sales and good
reputation in Korea. Laneige also is Is currently the highest share of Korean women cosmetics
market cosmetics brand, by many female friends of all ages. They also use the kpop , kdrama to
The rapid development of China's cosmetics industry is becoming the world's major cosmetic
brands market. In addition to the cosmetics market in China has been favored by consumers in
Europe and the United States and Japan brand, South Korea's brand in recent years continue to
open up the market and gradually get the love of Chinese consumers. After more than 30 years
of development, China's cosmetics industry has become the second largest consumer of
cosmetics in the world after the United States, and the market size is still growing at a rate
exceeding 10% per year. In contrast to the huge market size, per capita spending on cosmetics
in China is only 25.7 U.S. dollars, only 1/8 of Japan's per capita consumption, while 1/14 of
that in the United States. Per capita consumption level is still far behind that of developed
countries. With the development of economy in China, the per capita disposable income
increases. There is still huge potential for development in the cosmetics market. Therefore, the
major well-known cosmetic groups all over the world have taken the Chinese market as their
main market and continuously increased their investment in the Chinese market. China's
cosmetics market, Europe and the United States well-known brands account for most of the
market share. The population of China is 1.3 billion while Korea is 51 million. That mean the
population of China is 25times than Korea. The market in China is very huge if launch overseas
branch in China.
5.0 PESTEL Analysis
5.1 Political
The current legal documents for health supervision of cosmetics and their supporting
documents mainly include the Regulations for the Supervision of Cosmetics, the Detailed
Rules for the Implementation of the Regulations for the Supervision of Cosmetics, the Code of
Hygienic Practice for Cosmetics Manufacturers (Enterprise Code), the Code of Hygienic
Practice for Cosmetics (Product Health Standards , Including standard test methods). The State
Food and Drug Administration issued the "Nomenclature of Cosmetic Products" and
of medical treatment, and the words that express or imply medical effects and effects are
forbidden for cosmetics Name, must not be misled, deceive consumers, the naming of
cosmetics since then there is a more clear guidelines. The Administrative Measures on
Cosmetic Ads has been approved by the State Administration for Industry and Commerce for
Administration and is hereby promulgated and will come into force on October 1, 1993. In the
imperative to develop and utilize resources rationally to promote technological progress and
innovation in the cosmetics industry, oppose the impact of Western trade protectionism on
China's cosmetics industry and promote the sustainable development of the cosmetics industry.
From the enterprise perspective, we formulate a series of related strategies such as cost control
strategy, pricing strategy, competitive strategy, M & A strategy, marketing strategy, human
resources strategy, financial management strategy and international strategy to ensure the
long-term development of the enterprise. Every foreign company must be go though the
government process. Normally China won’t easy support a foreign company enter China.
China more on build their company with the same concept will surpass the foreign company.
The government also encourage citizen use domestic gods. This is the thing that Amore pacific
company should take note. As a symbol of capitalism, the cosmetics sector was under Beijing’s
strict control
up until the early 1980s. Back then, companies were not allowed to manufacture
products other than soap and emulsion, not to mention staging marketing or R&D
efforts. Even Shanghai Jahwa, the no. 1 Chinese cosmetics company which
boasts a history of more than 120 years, managed to launch a brand with a full
lineup featuring basic skincare to makeup products only in 1984. In the process,
most local cosmetics companies, due to a lack of capital and brand power, went
milestone for the Chinese cosmetics sector. Deregulation of the sector coupled
with rising income levels drove up cosmetics demand exponentially in the country.
Moreover, foreign cosmetics companies armed with capital and brand power (P&G,
L’Oreal and Shiseido) entered the Chinese market and launched marketing blitzes,
which further expanded the market. Foreign company will face high tax policy too.
5.2 Economic
The United States is the world's largest cosmetics market, France is the world's largest exporter
of cosmetics. Cosmetics market growth has been transferred from the western hemisphere to
South America, Eastern Europe, Asia, especially China and other developing countries.
Despite the global economic crisis, the cosmetics and perfumery industries are still performing
well with an average annual growth rate of 5%. At present, there are about 5,000 cosmetic
manufacturers in China. Small and medium-sized cosmetics companies account for 90% of the
cosmetics companies and 20% of the market share. Only a small number of them are Jahwa,
Longliqi and Yaqian. High-end cosmetics market is still foreign brands, such as: L'Oreal,
Shiseido and other occupation. In the context of China's rapid macroeconomic development,
the cosmetics and beauty industries have enjoyed rapid growth in China and have enjoyed
rapid growth in recent years with broad market prospects. It is estimated that in 2011, the
demand for the global cosmetics and beauty chemicals market will exceed 190 billion U.S.
dollars, an average annual growth rate of 5%. As the world economy continues to grow
stronger, the demand for chemical active agents for cosmetics and beauty products has
increased steadily. Demand growth in developing countries in particular has been growing
faster as the markets in developed countries have basically become mature. In China, cosmetics
are transitioning from maturity to maturity. Rapid product upgrading, competition and market
pressures continue to increase, consumers are more and more concerned about the quality of
products and the existence of health threats, the government also introduced some
enterprises in order to survive and develop in this process, the strategy must be adjusted
accordingly and change. Market size of China is huge for makeup product because population
of China have 1.3 billion. Although taxes will be a bit high due to foreign company but the
economic stability is quite high because every women must make up when go out from the
house. However, the competitive market also huge before Amore Pacific enter China there are
already have two big makeup company which is Shishedo and L’oreal.
5.3 Social
Human beings are endless, love cleanliness, love health and love beautiful human nature will
never change. After human society has spent thousands of years using the history of primitive
primary cosmetics, one hundred two hundred years ago, with the vigorous development of
natural sciences and the European industrial revolution, the cosmetics industry gradually
improved itself due to the strong support of science and technology Of the subject - cosmetics,
and thus also have the establishment of cosmetics and cosmetics industry in the modern sense
of development, into the second phase under the guidance of science and technology theory; by
the progress of chemical extraction and biotechnology genes Engineering participation, the
rapid development of cosmetics into the third and fourth generation. Each generation's
development is driven by the development of science and technology. With the development of
information technology and bioengineering technology and the future of more glorious
nanotechnology, it will leave its deep imprint in the cosmetics industry and bring more
Vigorous development. The workforce and spending power in China is quite high so if
high-end make up product enter China market they are acceptable. The makeup culture is also
spread to young population due to the internet always encourage women to make up. The
Therefore why Amore Pacific choose China to enter this huge market.
5.4 Technology
Currently on the market to solve a lot of skin problems are usually used chemical drugs, which
contain toxic chemical elements such as sulfuric acid, ferrous sulfate, mercury, methanol, etc.,
toxic residues directly lead to human skin damage, side effects, of course They also inhibit the
way, but its effect is not satisfactory, usually only limited time within 24 hours, can not stop the
symptoms. "Science and technology are the primary productive forces," create good products,
In the modern cosmetics industry, natural, plant, and safety will undoubtedly be the overall
trend and trend of technological innovation of cosmetic products. To achieve this goal, at
present, we can perceive the new technology has four main areas: bio-engineering,
characterized by biological high-tech has become an important technology for the upgrading of
New technology two: nanotechnology. One nanometer (nm) corresponds to one in 50,000 of a
hair strand (50μm). If the use of nanotechnology to the raw materials of cosmetics crushed to
nano-scale, it can greatly increase the skin absorption rate and skin utilization of raw materials.
New technology three: space engineering technology. With the characteristics of microgravity,
sterility, high purity, strong radiation and full vacuum, space is the ideal place for human to
develop and develop new raw materials. It can develop high quality raw materials and achieve
Four new technologies: natural plant extraction technology. Through the application of natural
plant extracts and purification of raw materials to prepare cosmetics can get good results, is the
There are four new types of raw materials that can be used:
One of the new raw materials: genetic material. Gene material is currently the most potential
gene technology and genetic research, but also the most mature applications.
Two new materials: marine raw materials. Organic matter in the oceans is twice that of organic
matter on land because of the endless amount of active substances in the oceans.
Three new raw materials: green raw materials. Is away from the chemical raw materials, both
Four new raw materials: microbial raw materials. If you extract from an extremely large
number of microorganisms effective source of raw materials for cosmetics will be very rich.
Through the above analysis to understand the status of the cosmetics industry, there are
deficiencies also hope the teacher guidance and criticism. Amore Pacific is the pioneer to
5.5 Environmental
rising interest in “Asian beauty” among the Chinese has also created favorable
conditions for AmorePacific to build a stronger presence in the market. The Beijing
Chinese consumers’ pride in their culture and economic status on the global stage.
Hence, attention has been paid on premium brands of foreign companies which
know the skin types and preferences of the Chinese. That is the reason why
skincare products from Shiseido and AmorePacific, Asian companies, saw their
However, the Korean Wave and interest in Asian beauty are not sufficient to
6.2 Threat
In the traditional channel of Amore (China), the localization of brands and models is the
cornerstone of success behind the rapidly growing performance. Whether or not to localize its
Bai Chengxiu, currently the vice president of Amore (China), said in an interview with the
media: Although the product image is good and there are many mobile customers in
department stores, it is impossible for customers themselves to spend much time asking about
how to use the products or obtaining Corresponding beauty services. Therefore, through the
exclusive visit of Amore direct sales, not only to provide customers with convenient and
professional beauty services, but also for sales staff to provide better career opportunities, to
develop more and more professional beauty professionals. The different culture and religious
Before Amore Pacific enter China already have many different country with different brand
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