Table of Contents

1.0 Introduction

2.0 Company Background

3.0 Type of Product & Unique Selling Point

4.0 Target Country

5.0 PESTEL Analysis

5.1 Political

5.2 Economic

5.3 Social

5.4 Technology

5.5 Environmental

5.6 Legal

6.0 SWOT Analysis

6.1 Opportunity

6.2 Threat

7.0 Competitor Analysis

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

Asia. Nowadays, all the quality of product is established.

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

theirs product to China.

2.0 Company Background

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.

"Openness" means communication with the outside world, ie "communication with

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

your own family." Challenges "cannot be settled in the status quo.

3.0 Type of Product & Unique Selling Point

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

China from the aspects of product, R & D and sales.

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

department stores, establish the status of the global high-end brand.

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

booos up the name of their product.

4.0 Target Country

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

First, the political - legal analysis:

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

"Cosmetic Nomenclature" (hereinafter "Regulations" and "Guidelines"), specifying the terms

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

long-term development planning of the cosmetics industry, from a national perspective, it is

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

bankrupt. However, the open market reforms in China served as a remarkable

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

Second, economic factor analysis:

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

corresponding restrictions. Cosmetics industry is facing a full upgrade of the challenge, so

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

Third, social - cultural factor analysis:

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

demand of makeup is high in China.

Therefore why Amore Pacific choose China to enter this huge market.

5.4 Technology

Fourth, technical factor analysis:

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,

there is no shortcut to go, can only rely on technological innovation.

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,

nanotechnology, space engineering and natural plant extraction technology.

One of the new technologies: bioengineering technology. Biological biological materials

characterized by biological high-tech has become an important technology for the upgrading of

the cosmetics industry.

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

high output and high efficiency .

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

best way to prevent adverse reactions.

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

good results and no toxic side effects of natural raw materials.

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

create the BB cushion. This technology cause imitation by other company.

5.5 Environmental

The product of Amore Pacific is pollution free and it is a green product.

6.0 SWOT Analysis

6.1 Strength and opportunity

“Korean Wave” and interest in Asian beauty

The “Korean Wave” or popularity of Korean pop culture greatly contributed to

heightened status of Korean cosmetics in the Chinese market. In addition, steeply

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

Olympics and global financial crisis in 2008 served as opportunities to boost

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

popularity surge in the country.

Selective focus through clear positioning strategies; leading brand building

However, the Korean Wave and interest in Asian beauty are not sufficient to

explain AmorePacific’s success in the Chinese market.

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

direct selling model, Amore (China) seems to be still entangled.

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

background of China is the main threat to be consider.

7.0 Competitor Analysis

Before Amore Pacific enter China already have many different country with different brand

enter China. This is all the competitors from the survey.

References

1. AMOREPACIFIC International Business Strategy. (n.d.). Retrieved December 29, 2017,

from

https://www.ukessays.com/essays/business/international-business-strategy-of-amorepacific.p

hp

2.