Entering a new market demands scrupulous research on various kinds of aspects. Before choosing certain strategy, a country with proper development, demand needs to be selected. In addition, desired and deficit product has to be determined and compared with available conditions.
Entering a new market is a responsible commitment. It is also an extremely important decision and before final one, certain research needs to be done. Only analyzing key points it is possible to consider prospectively and worthwhile. There are a lot of issues to take into account. Appropriate and wise strategy will back the company up and help to become a long-term successful competitor.
According to the research, Asia seems to have been developing greatly past decades. It includes countries that show advanced and fast speed developing economies, especially such ‘giants’ as China and Japan. However, these both countries are already have huge market and highly demanding consumers, in order to technology. Among all the choices, I would strongly recommend to enter the South Korean market. Its economy has decent growth and relative stability: its inflation stays on the relatively low level. The most harmful issue can be a conflict with North Korea, that can affect further country’ development. To all intents and purposes, it is necessary to consider such factors as economical, financial, political, social and technological.
I would relate political to one of the most sufficient. Talking about South Korea, political aspect is formidable and won’t counteract for entering its market. Now President’s party holds the majority of places in the National Assembly, thus political structure is homogenous enough and there is less possibility for appearing menacing to the regime opponents’ disagreement. The relationships in between South Korea and North Korea are strained enough, which limits its area of distribution and lessens affection from northern neighbors. South Korea has stable government with sustainable democracy that assists investors to allocate their assets there. Liberalism always has been charactering by such terms as ‘fair’ and ‘free’. However, I would not recommend entering the market in country, where democracy has just been formed, as different kinds of vacillations between forces could appear. While in South Korea political system operates in such conditions over 30 years (since 1980) it means that it is in ‘mature shape’ and absolutely polar changes are less possible to arise.
The country is open for FDI. According to the numbers, it has increased up on 53.7% in 2012 in comparison with 2011. Especially, having noticed the potential, US enlarged its investments on 13.1 %. In addition, there is beneficial trade agreement between US and South Korea that testifies low tariff and low trade barrier. This country has liberal terms and conditions for private property, as for local as for foreign. It has liberalized its property law in 1998 and since then foreign investors have the same rights in purchasing and using land for enterprises. There are almost no restrictions for foreign ownership of stock, however there are several completely close sectors: nuclear power generation; radio broadcasting; television broadcasting; hydro electronic and other power generation. But as chosen distributed product were shoes, this restrictions could not be taken into consideration. Looking from tax policies point South Korea has implemented few beneficial measurements for FDI: reduced taxes on corporate income, reduced on taxes relating to the registration of assets; reduced taxes on capital goods and property. From the other side, American investments and business activity are more the welcome due to the US decolonized South Korea from Japan. Since then relationships between two countries remain loyal. (economywatch.com, 2010)
Second most important factor is stability and development of the economy. South Korea shows outstanding economical...
References: 1. ‘From Tradition to Consumption: Constructing a Capitalist Culture in South Korea.’ – author D.Hart (2003) – retrieved Feb 1 2013.
2.’South Korea labor cost’ – author, http://www.tradingeconomics.com/south-korea/labour-costs (Jan 2013) - retrieved Feb 1 2013.
3. ‘South Korea Economic Forecast’- author, http://www.economywatch.com/world_economy/south-korea/economic-forecast.html (Jun 29,2010) - retrieved Jan 31 2013.
4. ‘Investment Climate’- author, http://export.gov/southkorea/doingbusinessinskorea/investmentclimatestatement/index.asp (2012) - retrieved Jan 31 2013.
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