Background of Homeplus

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Background of Homeplus
“Homeplus” was initially owned by Samsung Corporation[1] in 1994. During the Asian financial crisis in 1997, Samsung was affect by the crisis and tried to strive its business in the retail industry. It eventually collaborated with Tesco, a major British retailer in 1999[2]. The joint venture benefited both Samsung and Tesco. Samsung was saved from bankruptcy, in the same time, Tesco was able to enter the tough local retail business because of the partnership with Samsung[3]. Tesco took over 94.68% shares of the company in 2011[4].

Vision - Great Stone Face
Homeplus’s vision is to be recognized as the most admired company in South Korea[4][5][6][8]. The company concerns with two major value creation, which are the market and social value.

“Face of Growth” is based upon the market value creation. It involves in stimulating value for customers by clearly understanding customers’ needs, in turn, providing these value to them, which benefits the company in terms of market value maximization[4][6][8]. Referring to customers’ satisfaction, Homeplus emphasizes on reliable shopping value. According to figure 3, there are several factors that the company must consider i.e. low price, wide range, high quality and great services or products.

Figure 3 Homeplus - Great Stone Face[6]
Figure 3 Homeplus - Great Stone Face[6]

“Face of Contribution” reflects the relationship between Homeplus and its stakeholders. It refers to the social value creation. That is, the company gives importance to its stakeholders and understands their expected value[4][6][8].

Figure 4 Stakeholder Viewpoint[5]
Figure 4 Stakeholder Viewpoint[5]

According to figure 4, it can be seen that Homeplus is the leading company among its competitors measured by the involvement with its stakeholders especially the local community. The integration of these two faces gives the “Great Stone Face”, which is Homeplus’s vision of two values creation must be achieved in order to sustain its business long – term. The sustainable growth, together with social contribution is the key driven to gain higher market value and becoming the most admired and respected company in the world[6]. Mission - Artience House

Homeplus created its own management structure called ‘Artience House’. The house’s structure logically explained the correlations between each of the elements being applied in its management framework.

Figure 5 Homeplus Vision House[5]
Core Purpose - Foundation
To found a basis of house, Homeplus regards to ‘create increasing value for customers to earn their lifetime loyalty’ as its core purpose explaining the reason why it exist. Values - Pilling
To make the foundation firm, Homeplus focuses on ‘values’ in its business execution, which are ‘No one tries harder for customers’ and ‘treat people how we would like to be treated’.

4 Generations Development of New Concept Stores
Homeplus has continuously developed its hypermarket concept as shown in the following figure.

Figure 6 Homeplus 4 Generations of New Concept Stores[6]
Homeplus has developed its store concepts up to the 4th Generation. The following explanation of each generation will be described in details as follows.

1st Generation
Homeplus (Samsung and Tesco) entered the retail industry in 1999[2][4]. The 1st generation’s concept was known as “One Stop Shopping Service”. The company focused on offering low price products to customers. Like other retailers, Homeplus experienced many threats such as high competitiveness and the warehouse – like style discount stores did not really attract customers etc. 2nd Generation

A year later, the “Value Store” concept was introduced in the 2nd development phase in 2000[6][7]. The “Value Store” was created based upon the customer oriented Korean style[6]. It comprised with “One Stop Shopping Service” and “One Stop Living...
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