Home Plus: Riding the Korean Retailing Rollercoaster

Home Plus: Riding the Korean Retailing Rollercoaster

In partial fulfilment of the requirements for

Management 220

Strategic Planning

Prepared by

Louriane Mae Gallardo

Ma. Francheska Kwan

Lord John Luza

Henry Ong

Julianne Ruth Tan

11 January 2016

1. Statement of the Problem

How could Lee maintain the company’s growth despite the competition and change in consumers’ demands?

1. Objectives

Generally, this study aims to provide a sound advice to the CEO of Homeplus.

Specifically:

• To be able to come up with an effective strategy regardless of the implementation of the Bills in Korea
• To be able to keep up with trends and changes in consumer demand through innovation

1. Areas of Consideration

Strengths:

• Innovative technology
• Established brand name
• Low cost leadership

Weakness

• Costly to improve technology

Opportunities

• Growing number of people with Internet connection and smart phones
• International expansion
• Market growth

Threats

• Increased competition
• Copycats
• System failure
• Implementation of the two bills

1. Alternative Courses of Action

1. Allow locals to own Homeplus SSM

                This first ACA is based on the fact that local store owners are the biggest threat of Homeplus. With the possibility of the bill being implemented, these local owners could bring the SSMs down or somehow inflict negative effect on their sales. Therefore, Homeplus could offer these local store owners to be a franchisee instead of competing with them. The local store owners could own SSMs which actually belong to Homeplus. This is a win-win situation for both Homeplus and the locals. By doing this, Homeplus could reduce competition and at the same time own the Korean market because of the greater number of SMMs they have compared to other companies. Moreover, the local store owners would not fade in the scene or run out of business because not only will they be able to operate an SSM but they also have direct stake in the business.

2. Implement a home delivery service

        Instead of opening another line of business or being a franchisor, Homeplus could focus more on their SMMs and further enhance it through executing a home delivery service for their consumers. Homeplus could develop a mobile application with a user-friendly interface that is similar to online shops like Zalora and Lazada wherein the consumer could directly make their purchases. He/she could just type the name of a particular item he/she wants to buy and the application will show all the available brands for that item as well as the price.