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HOMEPLUS

SWOT
Strengths
a.) The organization of a new hybrid organizational culture called
Shinbaration that aimed to allow employees to develop and
maintain an emotional attachment to the company and to go
beyond their apparent limits, while seeking to introduce
rational management practices by adopting elements of
British business culture.
b.) Expanded general merchandise range, providing both
products at low and high prices. It diversified into areas such
as clothes, home appliances, sports items and even live pet
animals and live seafood in water tanks. This means that
Homeplus has a variety of goods for every Korean customer,
regardless of the income level earned.
c.) Korean-based preference emphasis. Homeplus put emphasis
on Korean customers than on Western buyers such as on food
items.
d.) Consideration of Korean shopping preferences wherein
Homeplus display goods within the range of view of customers
where Korean mostly favor.
e.) High local employee engagement in determining and
resolving a wide range of strategic issues with the assumption
that local employees understood local customers tastes
better than expatriates.
f.) Multi-purpose convenience store with the integration of
facilities such as hair salons, food courts and culture centres.
g.) Acquired several prestigious award in representation of its
well conducted corporate social responsibilities. These award
include the Korea Service Award, Green Management Award
and Eco-friendly Management Award.
h.) Strong cash flow from its Tesco headquarters to enable
aggressive investment.
i.) Tescos know-how in operational skills and operational
efficiency, especially in terms of computing data input with a
high accuracy rate.
j.) Integration of supply chain management system that
oversees the flow of goods and services. It reduces delivery
and storage costs.
k.) Provides a an online services for Internet users to buy
groceries hassle-free.
l.) Has a PB product lines that enable them to reflect constant
changing consumption trends and control over setting up
prices.
Weaknesses

a.) Lack of flexibility to start a new business or try a new store format
compared to other competitors.
b.) Lack of security from business risks of specific retail channels.
c.) Large investment in employee training and education.
d.) Expansion of Private Brand(PB) line with a wide range of products
leads to more complex quality management.
Opportunities
a.) Since large retail giants stores provide standardized products with
low prices, it is an opportunity for Homeplus to strategize and offer
high-quality products that satisfies Koreans who are among the
most demanding consumers in the world.
b.) To enter into emerging market with high growth potential.
c.) High customer demand, particularly on fresh foods.
d.) High number of Internet and Smartphone users in Korea
e.) Limited supply range since its merchandise are supplied by local
manufacturers in Korea.
f.) Expansion to super-supermarket with potential to grow in the
Korean retail market as more business sites are said to be available.
g.) Private Brand(PB) product sales has a large proportion of Koreas
total retail sales and continually expanded its range of products.
h.) Introduction to more convenient channel of consumption, especially
through online and mobile orders.
i.) Rising demand of convenience stores and SSMs for convenience
reasons.
Threats
a.) Strong local competitors that had connections to large
conglomerates.
b.) Drastic fluctuations of income levels earned by Koreans that may
affect sales. Disparity in income levels is one of the strong
discriminating factors in Korea.
c.) Implementation of regulation bills that may restrict the SSMs and
large retailers in it operations.
d.) Possibility economic recession and price inflation for public goods
that affects discount store market.
e.) Strong bargaining power of manufacturers who provides best-selling
products that sets prices and terms with the possibility of the
discontinuance of negotiation if any contradiction has occurred.
f.) Lawsuit involvement related to product defaults or hazardous
effects of products caused by the diversification of PB lines.
Alternative courses of action

Emphasis on online retail business

In this technologically advanced generation, computers, mobile phones


and other devices have already entered and significantly influence the
business world. Based on research, E-commerce store is considered as an
effective platform of providing goods and services to customers globally with
several benefits flowing to the company and to buyers itself. In Korea, buyers
prefer a convenient shopping method. This online mode of buying products is
undoubtedly the most convenient among all selling channels. Fortunately,
Korea had been reported to have more than 10 million smart phone users in
a population of less than 50 million and online shopping only requires you
any device with an Internet service provider. One of the benefits that the
Homeplus may derive is that online retail business is free of constraints
provided one is not selling any illegal goods. It enables Homeplus to sell a
wide variety of products with a bigger customer pool since almost 1 billion
are Internet users compared with physical stores, Homeplus need to analyze
the customer preferences in a specific area. Another advantage is that it is
open and available for business 24/7. With an automated order and payment
processing, sales can be made anytime and customer has no problem of
scheduling their time allotted to shop his needs and wants. Furthermore,
setting up an online store costs Homeplus less amount of investment than
opening another outlet. It also allows to incur lower marketing costs with a
better targeting. Online promotion can easily reach to potential customers
than conventional media plus it is much more cheaper than putting up flyers
and billboards. Moreover, another added benefit of online store is the greater
flexibility wherein any changes on prices, promoting goods on sale, new
arrival goods and other information can be updated at ease. It prevents
customer to overlooks products on sale or important news because these
details is most probably being displayed in the homepage where users go
through before selecting products. In addition to the advantages mentioned,
online store may also be a marketing tool by including a section on the site
customer reviews and testimonials to gain insight of the customer
preferences. In this recommended alternative, Homeplus can remain
competitive and be a leading company in online retail market, free of
restrictions and other limitations of building a SSMs, hypermarket and
discount store market. Its sales would rapidly grow because of an expanded
customer reach and lower long term costs maintaining its good financial
condition and performance in the future.