It appears that during the course of fast-food chain existence in South Korea, a number of changes have occurred. The market was transformed in the 30 years leading up to 2001, where South Korea’s economy was deemed a success.
The transformation of South Korea was attributed to a high-level of “westernization” in some departments of growth, i.e. the fast food industry. America’s McDonald’s was the leader in countries such as Japan and Taiwan. Other industrialized countries, Singapore and Hong Kong were also very successful for McDonalds, where convenience is highly desired.
South Korea differs from other East Asian countries in a number of ways.
South Koreans are said to be very patriotic, more likely to support Korean companies before American chains. Another issue that lies for the South Korean market is their eating traditions. Compared to other cultures like Japan and Singapore, who opt for fast, convenient foods, Koreans enjoy family time at a sit down dinner/lunch. This creates issues of space and questions the appropriateness of American style fast-food chains as they are able to exist in other East Asian countries.
A final problem created for American fast food chains is high cost of production in South Korea. The cost of land and farming supplies to produce enough beef for the chain is much larger than in the US for example. This increases overall costs for the companies, decreasing likelihood of profit when paired with their low-cost meals and promotions.
For these reasons I do not think South Korea is an “ideal” market for American fast food chains, however I do believe some limited success could be seen there with alterations to the products and services.
2. If you were Matthew Wolf, would you recommend his company to pursue the South Korea market at the present time?
The information presented in the case study has led me to believe Wolf should not enter the market at this time. To begin, Mr Wolf and his team need to be highly educated on the location, culture, people, habits, traditions, economy, competitors and more before they can enter the market with a vision for success. These global consumer markets are said to be changing rapidly and is reason for caution when entering a new market (Byfield & Caller, 1996).
South Korea’s fast food industry faces some…