Prompt: create or develop an existing business within 'Shinsegae Food', fulfilling both

profit maximization and corporate social responsibility (CSR)

● Convenient Store (Fresh food)

● Delivery system for the elderly
○ Delivering pre-made food in a certain schedule
■ Perhaps monthly basis
■ Paying every month
● The internet ordering system can be done with younger
generation for the ordering part.
● Farming - have own farm for production

https://www.koreabusinesscompetition.com/event-info

브랜드 별 매출 이윤
http://file.mk.co.kr/imss/write/20170926152036__00.pdf
https://www.shinsegaefood.com/upload/2017/05/29/20170425_ktb.pdf

Research:
● Industry Analysis
● Strength
● Weakness

For the international Market:

Paket change - environmental, health
Country choose
Transportation fee

Some Possible Markets To Focus On

- Seniors
- As I researched some of the issues in our country (currently), one that came up
was low birth rates and the increase in seniors. Since there are low birth rates, I
thought things like baby food wouldn’t be a good market to focus on but the
senior market might be a possible market to focus on. A lot of seniors don’t live
with their children/grandchildren (although some do), which results in them
skipping meals, always eating outside, or eating something small, unhealthy, and
unbalanced. I think that it may be a possible idea to design a business to provide
nutrition and a healthy meal that may be 반조리 or easy to cook for seniors. The
point of the business would have to be healthy but also easy to make/cook. This
is because a lot of seniors would not like to cook a whole meal for just the 2 of
them to eat. At this time of life, grandmas are basically done with all the cooking
in their life (meaning they don’t like to cook) and most grandpas do not have
knowledge on cooking (because they spent most of their life working outside),
 or it may be the opposite of course. If we did this business, I think it would not
only be loved by seniors but also by young people (the children of the seniors).
This is because young people are busy living their lives but they do care a lot
about their parents and if this business helped the parents to eat more healthy
meals, the young people would be thankful and would try to use SSG food for
themselves as well (maybe, idk, this is just a thought).
- Delivery service
- One on one system

- target: 20~30s
- Healthy diet
- Cargill
- International goals
__________________________________________________________
History
●

__________________________________________________________
Overview
●

__________________________________________________________
Gyuri & Jihoon & Taeyeon- Products and Services
● “we believe that improving the lives of cocoa farmers goes hand-in-hand with
our business success.”
● Offering Region
○ North America
○ Asia Pacific
○ Latin America
○ Europe, Middle East, Africa
● “We provide food producers, retailers and foodservice operators with
wholesome meat and poultry products all around the globe.”
○ Beef - North America
○ Turkey - North America
○ Poultry - Europe
○ Poultry - Asia
● Along the way, we treat animals with respect and care, using animal welfare
techniques we pioneered with the world’s foremost experts.
--Image making

JP Hong & Ricky - Careers

Nourishing the world
- Professional jobs
- BasicFinance & Accounting
- Credit Organization
- Managing Risk and compliance
- Animal science
- Animal nutrition and feed solutions to meet production goals
- More than 17,000 employees just for animal science
- Environmental Health and safety
- Sales & Marketing
- Animal Welfare
- Food Safety
- Food safety requirements
- Global Food Safety Initiative(GFSI) continuous
improvement in food safety
- Transparency of food safety issues -> Trust of quality
- hourly/production jobs
- Usually in meat and poultry processing places
- Biggest difference between Cargill and ADM (a public company)
- Military recruit system

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Debon & Drew (Cargill )
● “Farm to the table”
○ Environmental issues→ battle for resources→ farmland
ownership=reliable, secure supply and production
● Vertical Integration
○ Raw Material→ Manufacturing→ Distribution→ Retail→ After Sale
Service
● Competition
○ Louis Dreyfus Company (Private Company)
○ Bunge (Public Company)
○ Archer Daniels Midland (Public Company)
 ● Reading the trends→ environment friendly; organic healthy foods and other
products
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Ryan’s Idea -
Explaination -
The topic is “create or develop an existing business within 'Shinsegae Food',
fulfilling both profit maximization and corporate social responsibility”. This idea
focuses on the fact that Shinsegae will mainly pinpoint on maximizing profit for
‘shinsegae food’. Thus, as a member of KBC, I strongly urge shinsegae to build
franchinse food restaruants, and not only in Korea, also focussing on United States.
According to research, korean foods are sold in much expensive price in US. Profits
could be made through this process. Although the cost between Korea and United
States, the profit will outweigh due to the cost of Korean foods such as Korean BBQ.

https://arstechnica.com/civis/viewtopic.php?f=23&t=314935

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Jiah & Woo - Sustainability
Vision : “Connecting our global food system to nourish the world and protect the
planet”
- working to nourish the world in a safe, responsible and sustainable way
- Regulating the food supply
- Working together with farmers to raise the demand for food
- Having high food security
- Help support the primary and secondary education for children
- Control Land usage, and conserve them
- Partners
- WWF (World Wildlife Fund)
- WFP (World Food Programme)
- CARE
- Connecting domestic food resources to the world’s markets

Shinsegae Food Research topics

● competition (who are the strongest)
● Is it declining or growing?
● Which brand from the company is the most powerful? (research about those
companies)
 ● Which brand from the company is lacking? (research about those companies)
● Financial statement? Are they keeping up with it?

COUNTRIES TO CONSIDER
- Low labor cost, land cost
- Distance
- Foreign Enforcement
- Condition

- Australia
- Thailand/Philippines
- Samoa
- Vietnam
- The U.S.
-
- Brazil-Seung Wan
- An acre of farmland generally costs around $500 to $1500 (But Brazil is
slightly reluctant in foreign countries buying land in Brazil since there is a lot
sold behind the backs of governments)
- Labor costs: 105.5 index points (? need some research in that)
- Although the gov is slightly reluctant, since there is a chance in all
investments getting cut off. The National Confederation of Agriculture
doesn’t want any restrictions upon this subject. The reason is probably that
37% of all jobs are agriculture related and it also takes up 23% of their GDP
- https://www.aljazeera.com/indepth/features/2012/09/2012913112137744956.h
tml
- https://tradingeconomics.com/brazil/labour-costs
- http://www.scielo.br/pdf/cint/v39n2/0102-8529-cint-2017390200393.pdf
- Iceland
- Niger
- Canada

Sorry, couldn’t make it to the meeting due to some personal problems ㅜㅠㅜ-엔즈류
I was informed that the idea of “farm to the table” through Shinsegae buying in farms and
starting everything from scratch became a problem due to the overwhelming factors that had
to be considered. So, I switched the idea a bit to lessen the complications. Here it is:

Farm to the table- a company oversees everything from the most bare form of production
(farming, animals) to the most sophisticated part of allocating the produces ( logistics, getting
it to the customer’s table properly). In simpler terms, 회사가 만드는 것부터, 파는거,
배달하는거까지 다 해먹는다 이말씀이다

● Why ‘Farm to the Table”?

○ Environmental problems becoming a big issue nowadays→ by utilizing
pastoral and farm-based products, Shinsegae is able to combat the
environment problem→ Shinsegae can create an image of themselves as an
environmentally friendly company/ ‘green’ company
○ Ability to secure steady source of supply with minimal cost fluctuation for
Shinsegae→ minimal fluctuation in selling price → steady and high number of
demand (buyers)
○ Quality control to enhance the conditions of their environmentally friendly/
healthy products
○ Going along with the trend of healthy eating/ 웰빙→ produce and sell natural,
‘green’ products

● 1)Option to purchase/ 2) Merger and Acquisition/ 3) Partnership (I prefer option 1 and

2: these two points can be used together due to its similarity in concept)

○ 1) Option to Purchase- Shinsegae will first create a partnership with an

already established farm-based company abroad. Before the companies
begin their partnership, the two companies must agree on a contract granting
Shinsegae the “option to purchase”. Such contract grants Shinsegae the
choice to purchase its partner company after a certain extent of time.
Shinsegae will decide upon the benefits that the partner company will bring if
it was purchased. It’s somewhat 시식 코너 in E-mart: getting a taste of the
partner company before you buy a them.
■ This should help you understand a bit better: an excerpt from the
‘option to purchase’ contract document
● Enter the name of the SELLER, referred to as SELLER, and
Enter the name of the OPTION HOLDER, referred to as
OPTION HOLDER, agree:.In consideration of $ Enter in
numerals the amount paid for the option (Enter in
numerals the amount paid for the option dollars), paid by
OPTION HOLDER to SELLER, the receipt of which is acknowledged,
the SELLER grants to OPTION HOLDER, the exclusive option to
acquire the following business: Enter the trade name of the
 business, located at Enter the address of the business for
a period of Enter number of months for option mont

○ 2) M ‘n A (merger and acquisition)- The process of merging two or more

companies to create a more competitive and cost efficient company with more
shareholder value. Usually, a bigger company will buy in smaller companies
that cannot survive alone (acquisition), and the two companies will operate as
one (merger) under the lead of the buyer. Shinsegae can buy in farming
companies that are having a hard time surviving alone to join forces with
Shinsegae which will benefit both Shinsegae and the business that sold itself
to Shinsegae.
■ Types of mergers
● Horizontal merger - Two companies that are in direct
competition and share the same product lines and
markets.
● Vertical merger - A customer and company or a supplier
and company. Think of a cone supplier merging with an
ice cream maker.
● Market-extension merger - Two companies that sell the
same products in different markets.
● Product-extension merger - Two companies selling
different but related products in the same market.
● Conglomeration - Two companies that have no common
business areas.
● (Click on link for more info)
■ Financial style of different mergers
● Purchase Mergers - One company purchases another.
The purchase is made with cash or through the issue of
some kind of debt instrument; the sale is taxable.
Acquiring companies often prefer this type of merger
because it can provide them with a tax benefit. Acquired
assets can be written-up to the actual purchase price,
and the difference between the book value and the
purchase price of the assets can depreciate annually,
reducing taxes payable by the acquiring company.

● Consolidation Mergers - With this merger, a brand new

company is formed and both companies are bought and
combined under the new entity. The tax terms are the
same as those of a purchase merger.
 ○ 3) Partnership- Shinsegae can establish partnerships with a farm based
companies to reap steady and constant supply of pastoral products (grains,
corn, meat). Shinsegae will not be given an ‘option to purchase’ or to ‘merge
and acquisition’; they will just stay as partners with the farm based company.

○ The ‘Option to purchase’, ‘M ‘n A’ , and ‘simple partnership’ can be applied to

established pastoral businesses as well as to private/individual farmers.

● How are these three choices (‘option to purchase’, ‘merger and acquisition’,
‘partnership’) beneficial for both Shinsegae and the partner company/individual?
○ Benefits for Shinsegae:
■ Able to secure a constant and steady supply of pastoral and animal
products (ex: grains and meats) → dependable supply with little to no
fluctuation
■ Quality control of the crops, animal products, etc
■ No need to purchase things from ground up (ex: no need to purchase
their own tractors, farmable fields, livestock, etc) because they will be
provided by the already established farm based companies
■ Foreign restrictions are have less influence- 이미 있는 해외에
회사들이니 해외의 restriction (laws against foreigners buying land,
etc) 들을 조금이나 덜 consider 해도 됀다→ we still have to consider
taxes, etc

○ Benefits for the partner/merged company/individual:

■ Able to secure a constant and steady source of demand (buyers)→
dependable demand with little to no fluctuation→ steady profit
■ Shinsegae conducts food manufacturing (ready to cook, ready to heat,
ready to eat products) , food distribution (import of food from abroad,
domestic export to starbucks, Emart, Shinsegae hotel, etc) , food
selling (convenient stores, markets, restaurants), and food service
(delivery, 회사/학교 급식 제공) = secure pool of demand/buyers

○ In case of ‘merger and acquisition’,

■ Purchase mergers→ tax benefit

● Benchmark company: Cargill (참고하자)

○ General outline of what Cargil does
■ Farming→ shipping/logistics to allocate their pastoral products→ rise
of food business—금융/ futures and forwards (선물→ 미리 가을에
나올 쌀들의 권한을 산다)
 ● Following the 해외로 나가자 trend!!
○ There are too many competitions in Korea (롯데, 현대, etc are doing similar
things) → moving out to a bigger market relieves the stress→ bigger pool of
demand
○ Since the companies/individuals that Shinsegae is in partner with or has
bought is abroad→ Shinsegae can extend their businesses by utilizing their
해외 counterparts for supply→ 해외에 있는 세끼 회사들이나 개인들을
이용하면 서플라이를 비용도 적게 받을 수 있다
○ Increase in the size of company→ synergistic energy

So what should be discussed, researched

in class/outside of class???
● We do not know the Shinsegae foods well, so we must conduct more research about
the company. Also, we should extend our research to Shinsegae itself. → to figure
out the capacity of the company and what it can do more to improve itself. Also to
figure out the weaknesses and competitions it has to patch the missing holes to
fortify the company.
○ Tools to use
■ The 3’Cs→ Competitor, Customer, Company
■ SWOT→ Strengths, weakness, opportunities, threats
○ Look up what kind of companies that Shinsegae food is supplying, what they
do, their profit, etc….
○ I think we are not taking this part of the research seriously , but it is essential
to see what we can do with the company

● Discuss about how we should go about/ or choose between the three choices
(‘option to purchase’, ‘merger and acquisition’, ‘partnership’); please conduct further
research on these if necessary

● Research about farm-based companies/ private farms that would be suitable for the
three choices. Make sure to also research about restrictions and laws of the country
that a certain company/private farms are in (taxes, foreign restriction, etc).

● Research more about Cargil and how they function/ if Cargil is too much, try to find
another benchmark company.
○ Benchmarking is extremely important!!!!!!