REPUBLIC OF THE PHILIPPINES

RIZAL TECHNOLOGICAL UNIVERSITY

GRADUATE SCHOOL
Boni Avenue, Mandaluyong

Case Study

BA 206 – Advanced Economic Analysis

Topic:

Homeplus: Riding The Korean Retailing Rollercoaster

EDWILLEN AIRA R. UY
Student

DR. NESTOR MIRHAN JAPIS, PIE

Professor
 Homeplus: Riding The Korean Retailing Rollercoaster

Problem Statement

Given that the global economic recession and price inflation for public goods had caused a decrease

in consumer’s disposable income, Homeplus must seek new strategies in the pursuit of maintaining

its growth in the future amid the very strong competition.

Objective
The objective of the Tesco and Sumsung Group is to be able to formulate new and highly effective

marketing strategy for Homeplus to maintain or better yet to improve more its market growth towards

innovation in the continuously changing Korean Retail Market. 

Brief Description of the Case

In 1999 multinational retailing giant Tesco selected joint venture with the Samsung Group as its

market entry strategy into South Korea and created a new brand, Homeplus. The management of

Homeplus implemented various policies aimed at localizing the business, it combined localized

marketing and a globalizes management and administrative sysytem. It invested in growth and

diversification through large discount stores offering an "all in one spot" shopping experience, small-

sized super-supermarkets, private brands and online shopping. At the same time, the Korean retailing

industry had become much more dynamic as competition intensified between various types of market

players, including strong competitors with local business groups. 

Areas of Consideration

Technological: The company is very much updated with the technological changes around the world.

The developers think two steps forward than the consumers’ ideas on the change of time and

technology. 

Economical: The business affects economically for it contributes the economy of the Korea and it

provides a huge amount of growth rate in Korea’s economy.

Environmental: The company already gave an assurance to the government health organizations and

the consumers the contents of their PB products, however must provide the content of it to really

ensure safety to the consumers. 

STRENGTH

Homeplus is known to all market-goers in Korea. 

It’s famous for its convenience.

WEAKNESSES

Suppliers’ power of bargaining.

OPPORTUNITIES

Consumers’ expressive preferences.

Development of technology.

THREATS

There are serious protests against the company’s success.

There are several competitors in market such as Lotte Mart and E-Mart.

The two new retailing regulation bills that are currently being discussed by the Korean Parliament. 

Alternative Courses of Action

1. Consider in doing or conducting a new market research. 

    

Advantage: It will help a lot in finding out whether or not to change or just improve any marketing

strategy the company has.

Disadvantage: Another change may discourage other consumers, and considering the fact that the

market is continuously changing. Another change might not be effective.

2. Have a catalogue type of their product that and each of this product should have a QR code. This

will use only smart phones to scan the QR code, and this will automatically lands in the online cart.
Advantage: This would be convenient to everyone; wherever they are they can shop.

Disadvantage: Additional fund for employees who will manage the online business, and for the

deliveries.

3. Provide an opportunity in innovating the mom-and-pop businesses in merging with the company for

small grocery stores.

Advantage: It’s also a gain in profit for the Homeplus.

Disadvantage: The mom-and-pop’s owners might not agree with the plan for they will not receive the

whole revenue.

Recommendation

We recommend ACA 2 which is have a catalogue type of their product because according to the

study, Koreans are the second most hardworking people in the world and grocery shopping for a

week is a dreaded tasks, so we come up to have an idea that the store will come to you, this will

make them very comfortable to shop since they can bring the catalogue anywhere, and the products

will bring to your door.

Action Plan
Conclusion

We therefore conclude that businesses must innovate and develop different marketing strategies

whether to gain, remain or regain its market share. Time affects the consumer’s interests. However, in

applying management principles to marketing strategies, a consideration on the effects to the

environment and knowing the consumers’ preferences must be involved.