B u ild bran d im ag e by m e an s of
e x h ib ition s
[E le c tric h om e appli an c e s s e c t or : Chu n g P o on g ]
Br an d does m atter . T hese day s , people un der st and th at the life of m any
companies depends on br and pow er . T o surviv e in the competitiv e
m arket , firm br an d pow er is
a mu st . How ev er , sm all and m edium
companies need a m ajor effort to build their br and n am e v alue.
Regular ex hibition s held in
and out side of Korea giv e sm all and
m edium companies the opportunity to pr omot e their company br ands as
w ell as their own technology . Air Cleaner producer , ChungP oon g (CP ), is
one case of success in prom oting a br and through such ex hibition s .
[In n o v ation pro c e s s ]
Hi s o w n pro du c t , t e s t e d on him s e lf
Air Cleaner producer , CP , is selling anion s which people can not "see".
Of cour se y ou can see the plastic body of the cleaner , but you ar e
actu ally buying anion s . Anion s ar e untouch able and invisible an d are
therefore difficult t o sell without fir st building cu stom er s ' under st andin g
and tru st . Anion s are n atu ally gener at ed in a for est or n earby the beach .
An anion air cleaner artificially gener ates fr esh air utilizin g anion s .
T he air cleaner s CP produces differ from air purifier s . While purifier
filter s the air with m otor and filter (s ), an air cleaner b alan ces the am ount
of anion s and cation s, and optimizes the lev el of anion s which ar e
healthier th an cation s .
Cation s do not m ov e in the air , but
anion s m ov e v ery
activ ely .
How ev er , anion s are ab sorbed or lost du e t o m any factor s . T her efor e,
anion s
should
be
supplemented .
CP ' s
air
cleaner
gener at es
500,000- 1,000,000 anion s per squ are m et er .
ChungPoong ' s Pr esident ' s , Choi Jin - Soon . pr oduct dev elopm ent pr ocess
r eminds people of the old s aying , " necessity is the m other of inv ention ."
T he reason he st art ed an air cleaner bu sin ess w as purely becau se of the
disease he suffered from in his early 40 ' s . He w as a running tex tile
factory at th at time and he lost his liv elihood becau se of diabetes and
palsy . He heard th at anion s w ould be g ood for his health fr om a
J apanese buyer and st art ed t o study it him self fr om 1983. How ev er , the
t erm "anion " w as not familiar to the av er age Kor ean at th at tim e.
T her efor e, he h ad t o study by him self with foreign scientific book s and
journ als .
T her e h ad been m any ups and down s until he inv ent ed the product .
When ev er he thought he h ad perfected an anion m achine, the product
produ ced t oo much anion or too little. Som etim es he tested the pr oduct
on him self. He thought he him self should be the object of ex periment
becau se he w as
dev elopin g
it
for
him self. In
fact , President
Choi
continues to ex perim ent by sleeping with the air cleaner on in his sm all
r oom .
[IP R S pro c e s s ]
U tiliz e in t e rn ation al in v e n tion e x hib ition s
T her e are so m any inv ent or s with patent s in the w orld, but there ar e
n ot m any bu siness people who actu ally succeeded in commercializing
patent ed it em s . President Choi h as built a strong mid. sized company
with his pat ented ' anion air cleaner .'
He differentiat es "inv ent or s who like the inv ention it self" and "inv ent or s
who w ant to becom e a bu sines s per son ." His str ategy is to becom e a
bu siness per son , by concentr ating on on e item and dev elopin g a firm lead
in t echn ology , and not t o w ast e tim e inv enting m any different it em s .
Curr ently , there are 200 companies which pr oduce anion air cleaner s .
CP form ally sued m any such companies by hirin g lawy er s t o prot ect
patent right s, but soon it becam e evident th at r ather th an w asting t oo
much m oney on such effort s, CP should adv ance it s own technological
lev el. CP str engthened pr oduct im age by r eceiving aw ards at m ajor
inv ention fair s .
After 4 year s of effort , CP m ade it s fir st pr oduct in 1987 and obt ained
a pat ent . How ev er , CP h ad no distribution ch annel becau se the m edia at
th at tim e portr ayed such item s as "ozone producer s " which are h armful
t o hum an health . CP
filed for
b ankrupt cy
in
1992. President
Choi,
how ev er , r em ained activ e. He st art ed to participate in intern ation al fair s .
He needed int ern ation al r ecognition for his product ' s innov ation
and
qu ality .
F in ally ,
ChungP oon g ' s
Anion
Air
Cleaner
succeeded
in
m any
int ern ation al inv ention fair s , such as Gen ev a Intern ation al Inv ention F air ,
and Kor ean Inv ention F air . Aft er the product receiv ed aw ards from m any
int ern ation al fair s , tru st in the product steadily gr ew , quickly building
br and n am e loy alty .
CP receiv ed a Gold Aw ard in Germ any ' s Int ern ation al Inv ention F air as
w ell as in Switzerland and the U.S .
CP
set the recor d by
Envir onment
and
winning
Medical
In the intern ation al inv ention fair s,
8 con secutiv e Gold Aw ards in the
cat egory ,
and
is
currently
list ed
in
the
Guinness B ook of W orld R ecords .
President Choi also receiv ed m any Korean aw ards : T r ade Minist er ' s
Aw ard of Kor ean Inv ention Prom otion (1995), Prime Minist er ' s Inv ention
Day Aw ard (1995), In du strial Sector Gold Aw ard of the J ang Young - Sil
Science Cultur e Aw ard (1999), the 100 P at ent Product Selection (2002), and
other s . T he list of aw ar ds fills 2 pages of Mr . Choi ' s r esum e.
[Com m e rc i aliz e pro c e s s ]
In c re a s e c on s u m e r s at i s f ac t ion th rou g h m ail - orde r s ale s
ChungPoong ' s str ength prov ed it self during the IMF crisis . While m any
bu sinesses w ere failing , CP ' s sales an d net profit increased. T his w as the
r esult of the President ' s belief th at , ' the risk giv es the ch ance,' and his
concentr ation on one product .
President Choi st at es th at CP is exporting it s pr oduct s t o prev ent n ew
import s from
ov ert akin g
CP ' s
domestic m arket . Actu ally , n ot
m any
imported air cleaner s are sold in Korea. CP is pur suin g a distinctiv e sales
m ethod. He is selling b ased on m ail- order sales , r ather th an on selling
through a dealer netw ork . CP w ant s to rem ov e the middle distribut or so
th at con sum er s can h av e low er prices .
CP av oided the st andar d for a m an agerial sy stem and adapted a "sm all
president sy stem " encour agin g employees t o think of the company as
their own . T he distin ctiv e distribution ch ann el and sales m ethod is b ased
on "integrity " which President Choi believ es is the highest policy in
company m an agem ent . T his viewpoint is b ased on his own w ork as a
m an of int egrity for 40 y ear s who receiv ed help fr om client s , employ ees ,
and con sum er s .
CP , with it s s ales at 20 Billion w on in 2002, already recorded 18 billion
w on by June, 2003 and is striving to reach 50 Billion w on in 2003. CP
n ow also ex port s to J apan and Chin a, and holds the lead in m arket sh are
in Beijing , Chin a. CP is planning t o div er sify it s m arket s and sell h alf of
it s product s ov er seas by 2005.
Ev en though larg e conglomer at es are trying t o penetr ate the food
supplem ent - m edicin al food m arket these day s . CP is confident th at it will
r em ain the leader of the air clean er m arket becau se it s pr oduct h as
already firmly est ablished it s br and n am e and t echnological strength .
T ak e adv ant ag e of g ov e rn m e nt s upp ort prog ram s
[D aily c are s e c t or : W at o s Core a Co ., L T D .]
W atos
Cor ea
co., LT D.(W C) w as
est ablished
30 y ear s
ago, and
specializes in m anufacturing b athroom equipment su ch as t oilet bowls and
w ashb asin s . T he turnov er for y ear 2002 w as 14 billion w on , proving th at
size is not the only factor for a sm all yet pow erful company .
W C expect ed w at er short ag e to be one of the greatest issues in the
90 ' s and beg an to inv est heavily int o resear ch and dev elopm ent for m ore
efficient w at er u s ag e.
T heir expect ation w as correct as W C ' s str ategy m atched gov ernm ent
policy and social trends, an d helped it capture 70% of the b athroom
equipment m arket in Korea.
[In n o v at ion pro c e s s ]
Con tin u ou s in v e s tm e n t in R &D i s th e k e y
W C ' s m ost import ant and succes sful product , the W ater S aving T oilet
w as dev eloped in part by accident . In 1996, Pr esident Song , the founder
of WC, s aw a brick in the toilet w ater t ank when he visited a hou se for
m ainten ance, and he beg an to calculat e the am ount of w at er per flu sh .
According to his calculation , a t oilet with a 13 lit er s w at er t ank can
completely flu sh a bowl of stool with 11 liter s of w ater and a bowl with
urine with 7.5 lit er s . Most of the toilet s in the m arket u se the m ax imum
19 lit er s of w at er . It w as a trem en dou s w ast e.
As a result , President
Song dev eloped a pr oduct th at could easily contr ol this am ount of w ater
per flu sh . T he produ ct he h as dev eloped is the Noiseless F eel Valv e.
How ev er , he receiv ed an urg ent m ess ag e th at the produ ct w as leaking .
S and fr om the w at er pipe in the con struction site where the toilet bowl
w as in st alled m ade the pr essure flu ctu at e, cau sing the leak .
Due t o these failures, W C increased it s inv estm ent in r esearch and
dev elopm ent fr om 20 million to 100 million w on and the dev elopm ent
period from 1 year t o 3 y ear s .
produ ct lost cr edibility .
Unfortun ately , within this time, the
T hu s, President Son g rest arted his studies and
after 5 year s u sing 150 million w on and his trem endou s passion , he
created the
Noiseless F eel Valv e.
Befor e the dev elopm ent of the Noiseless F eel Valv e, the company u sed
the
Fr esh Valv e which disch arg es the w ater in the w at er t ank into the
bowl. T his product is a 2 step w at er saving device, which differ entiates
the qu antity of w ater accordin g t o st ool and urine. In the dev elopm ent
st age of this product , there w er e t w o places for possible leaks becau se
there w ere t w o v alv es .
W C sometim es h ad t o compen s at e 1 million w on for a 1,000 w on
produ ct , and
in st alling .
som etimes
h ad
to r eplace
all product s
2 y ear s
aft er
Yet , the know - how W C accumulat ed through these error s and
cost s ar e the asset s it now h as .
[IP R S pro c e s s ]
M ak e th e m o s t o f t h e g o v e rn m e n t s u pport
W C is focu sing it s en deav or s int o t echnological impr ov ement s and
patenting .
T echnological adv ant ages giv es a company the competitiv e
edge needed to succeed in the m arket . F urtherm ore, leg alization , an d
st andardization of it s pr oduct s and their conformity to environm ent al
st andards help pr om ot e sales .
t o ret ain all it s leg al right s .
patent s, 54
utility
In addition , W C m ade con sistent effort s
Currently , the company h as 111 r egist ered
m odels, 40
design
registr ation s,
19
tr ade
m ark
r egistr ation s, 1 ov er seas pat ent , 6 ov er seas tr ade m ark , an d other s .
When the gov ernm ent m ade it oblig atory t o in st all w at er saving t oilet
bowls and show er s , W C dev eloped show er nozzles with autom atic closing
function s .
T he gov ernm ent provided 60 million w on of the 100 million
w on r equir ed in tot al dev elopment cost s .
[Com m e rc i aliz ation pro c e s s ]
P ay att e n tion t o g o v e rn m e n t po lic y
A lon g road full of trials and failur es ev entu ally becam e Noiseless F eel
Valv e, the cash cow for W C, with a pr oduction cost 30 % low er th an
conv ention al pr oduct s but with a selling price 20% higher .
T his produ ct
sold 2 million unit s in 2002.
Behind W C ' s success, is the g ov ernm ent ' s w at er s aving policy .
Larg e
companies h ad t o in st all w ater saving devices which w as a golden
opportunity for W C.
In actu ality , the sales of w ater saving produ ct s w ere not th at high due
t o the lack of un der st anding by con struction companies . How ev er , the
g ood qu ality of it s w ater savin g product s heightened the im ag e of WC,
and as a result , it w as able to supply other product s .
T he newly dev eloped W atos w ater sav er toilet s w ere w ell- recognized
by con sum er s as w ell as centr al and region al g ov ernm ent s . T he produ ct
w as nomin at ed for
Ex cellent Pr oduct by the Office of Supply and
Procurem ent .
W C is bu sy dev elopin g ov er seas m arket s . In the U .S ., there is an
incentiv e sy st em for ev ery hou sehold t o earn a 100 dollar reb ate from the
g ov ernm ent when r eplacing toilet s with w at er saving equipm ent .
WC is
prom oting it s pr oduct by adv ertising the effectiv eness of in st alling only
the w ater sav er r ather th an replacin g the whole t oilet .
T he product s WC h as dev eloped need continuou s after service. T he
company is pr ou d of it s highly efficient after service sy st em . President
Song believ es the company ow es it s succes s to their superb cu st om er
service, the effort t o dev elop it s technology , and gov ernm ent support .
Con c e nt rat e all y ou r c ap ac ity on a s in g le produ c t
[Life g o o d s s e c t or : H an a Cobi , Lt d .]
T his is the success st ory of Han a Cobi(HC), a company th at gr asped
the adv ant ag es of a str ong m arketing str ategy t o turn a simple solution
int o a 50 billion w on bu siness . A product with high pot ential in the
m arket m ay nev er leav e the w arehou se if it is not effectiv ely prom oted in
the m arket . T his is often the case with
sm all and m edium
sized
companies th at are limited in capit al and w eak in sales net w ork .
HC beg an as a company focu sing on importing and m anufacturing
r est aur ant , kit chen , b athroom , picnic, and children - r elat ed pr oduct s with a
t ot al of 600 differ ent it em s .
Kim Jun - Il, the founder of HC, knew th at
the company ' s w ould be limited if it continued only importin g produ ct s
without it s own br and. T hu s , company est ablished it s own fact ory in
1993 and within on e year beg an m anufacturin g product s .
Now a gr owing company with high pot ential in the w orld m arket with
it s innov ativ e sealed cont ainer , HC is
a succes s case th at , h avin g
m easur ed it s pot ential, ex panded it s m arket and cu stom er b ase through a
competitiv e m arketing str at egy via the ch annels of m edia and prom otion s .
[In n o v at ion pro c e s s ]
S e le c t th e it e m w ith hig h m ark e t c om p at ibility
A side fr om the str on g arom a of Kor ean food, foods like kim - chi and
soy bean
soup cont ain high m oistur e, which if not
sealed properly
dev elops int o a pungent odor in side the refriger at or .
T hough m any
r efriger at or deodor ant s and detergent s h av e been created to pur ge this
odor , there h ad been few dev elopment s t o prev ent the sm ell ruining the
r efriger at or in the fir st place.
It becam e apparent t o Pr esident Kim th at Kor ean s did not h av e a g ood
solution for sealin g off the strong sm ell of tr adition al Kor ean foods, and
conv ention al sealed bowls could n ot completely seal in the m oisture.
Opening and closing the lids of ev ery type of cont ainer s, he beg an
experim enting to dev elop a new produ ct . In 1998, Pr esident Kim created
Lock & Lock .
While conv ention al sealed bowls w ere adapt ation s of a sealing m ethod
dev eloped 50 y ear s ago, Lock & Lock is b ased on a 4 side locking
m ethod which is m ore suit able for food with str on g sm ell an d high
m oisture.
Moisture tr an smission prot ection r ate is m ade 100 tim es bett er
with Lock & Lock becau se of the silicon pads att ached t o the sealing
sides .
Lock & Lock are m ade of tr an spar ent polypropylen e an d silicon ,
which are dur able, sh atterpr oof and safe t o keep food. T his r aw m at erial
w as lat er dev eloped int o poly carbon at e, which in addition to the qu alities
of the previou s, m ade the fin al product impenetr able t o the sm ell of
kim - chi and other foods .
[IP R S pro c e s s ]
S e c ure o w n bran d an d t e c h n o lo g y
Lock & Lock cont ain er s, with no leaking and opening or closing
problem ,
w er e
dev eloped
in
1998
after
3
y ear s
of
r esearch
and
dev elopm ent .
T he patent of Lock & lock is curr ently regist ered in the U .S . and
T aiw an as w ell as in Korea and is in the process of being r egist ered in
45 countries . HC h as ev en receiv ed a sub sidy for patent application s in
foreign countries from the Kor ean Int ellectu al Pr operty Office.
F urthermor e, HC g ained inform ation about the t echnical st atu s of sealed
cont ainer s and competitor s by receiving the support of PM (P at ent M ap :
P at ent inform ation an aly sis ) from the In - cheon Region al Ch amber of
Commerce and Indu stry .
While, HC register ed it s br and, Lock & Lock , the company striv ed to
att ain official r ecognition for it s qu ality . HC passed the 30,000 tim es
"hin ge test " at the Kor ea Living Envir onment T est Research Cent er . It
also obt ained the sealed cont ainer - related certification s : Qu ality A ssur an ce
(Q) m ark , antibiotic, hygiene as sur ance, (SF ) m ark , and Hygiene safety
(HS ) m ark . HC confirm ed it s r eput ation for safety and hy gien e by
passing w orld prestigiou s hy giene test s such as Am erican F DA ' s qu ality
assur ance and Germ any ' s SGS t est .
[Com m e rc i aliz ation pro c e s s ]
M ark e tin g m e th o d an d s trat e g y th at allo w s c on s u m e rs
t o e x pe rie n c e f or t h e m s e lv e s
Lock & Lock ' s m arketin g str ategy w as b ased on finding the solution t o
their greatest obst acle: defeating con sum er br and loy alty to ex istin g
sealed cont ainer s .
T he solution w as to bring Lock an d Lock int o the
h ands of con sumer s .
T he company beg an by giving aw ay Lock and
Lock pr oduct s and vigorou sly participatin g in the 4 big gest kitchen
appliances exhibition s in the w orld and in creasing it s effort s in ov er seas
prom otion s .
HC div er sified it s
distribution
ch annel int o the Hom e
Shopping Netw ork on cable T V t o educate con sumer s on the solution s
Lock & Lock w as pr oviding .
T hrough the help of th at m edia, Lock &
Lock w as able to ent er to Kor ean and ov er seas hou seholds in a v ery
short tim e.
T he product cam e t o enjoy m ore popularity in the ov er seas m arket
when America ' s bigg est shopping ch annel QVC beg am t o adv ertise HC
produ ct s . T he su cces s in Am erica increased Korean sales becau se of
wh at is called "the Boom er ang effect ". When Am erica ' s QVC intr oduced
Lock and Lock liv e fr om Chicag o w orld exhibition in F ebru ary 2002, 5,000
set s of the product w ere sold in 7 minutes . When QVC selected Lock &
Lock am ong the most popular it em s of the year ,
60,000 set s of Lock &
Lock w ere sold.
Lock & Lock shook the w orld ' s sealed cont ainer m arket in a v ery tim e.
T h at m arket h ad been domin ated by America ' s T upperw are an d Rubber
M aid.
Lock & Lock , w as initially recognized by Am erica, Hon g Kong and
Eur ope for it s safety and dur ability . T he w orld ' s 4 larg est hou sew are
show s,
in
Hon g
Kong ,
T okyo,
Chicago,
an d
Fr ankfurt ,
fav or ably
comm ented on it by u sing the phr ases as ' Sealed cont ain er with a new
concept which will lead the nex t 10 y ear s .'
HC export ed produ ct s w orth 14 billion w on to 45 countries in 2002 and
is now
expecting 30 billion w on in export s this y ear . T h ank s t o the
popularity in the ov er seas m arket as w ell as the Korean m arket , sales
continuou sly increased from 530 million w on
in 1999 t o 17.6 billion w on
in 2001, and to 50 billion w on in 2002, a growth r at e of 100- 250%. T his
y ear ' s t arget is sales of 100 billion w on , m anufacturing 20 million sealed
cont ainer s and exporting 30 billion w on , w orth .
W rit e m anu al s f or all m anu f ac t u rin g proc e s s e s
[S port in g g o o d s s e c t or : D aD a Corporat ion ]
DaDa Corpor ation , ex ported all it s product s to famou s sport s br and
companies, such as Nike, Adidas, P olo, Reebok , Bennet on as w ell as for 4
m ajor Am erican sport s leagues, NBA , NHL, MBL an d NFL . Moreov er , it
r ealized the limit ation s of the Korean m arket and dev eloped it s ov er seas
m arket sh ar e from the st art .
T her e is an old s aying , " Sh arpen both sides of the blades ". T w o
ob st acles in a m anufacturing indu stry are high labor cost an d ov er seas
factory est ablishm ent with a g ood location and condition s . In m ost cases,
companies compromise w ork pr ocess and qu ality for low labor cost and
g ood fact ory condition s .
DaDa st andar dized all it s pr oduction and defined the pr ocessing in
m anu als , when it dev eloped ov er seas pr oduction fact ories . It h as also
committed it self to continuou s t echnological dev elopment , which benefit ed
it with significant competitiv e edg e. As a r esult , DaDa Corpor ation could
sh arpen t w o blades, low pr oduction cost and g ood qu ality , and became
the w orld ' s best sport s cap m anufacturer .
[In n o v ation pro c e s s ]
S t an d ardiz e d qu ality w ith s t an d ardiz e d t e c h n o lo g y
President P ark Bu - Il of DaDa Corpor ation , fir st got an idea about caps
when he w ent to the U.S . for a bu siness trip in the 1970 ' s . He w as
impres sed by the fact th at m any Am erican s w ore sport s caps and ev en
collect ed them . A s soon as he cam e b ack to Seoul, he imm ediately closed
his tr adin g bu siness , an d st arted a cap m anufacturing bu sin ess with 5
sewing m achines in a sm all fact ory in Shillim Dong .
With the gov ernm ent ' s ex port orient ed policy at th at tim e an d DaDa ' s
ambition to become the w orld ' s best , the sm all factory propelled it self
int o a successful bu sines s .
Another su cces s factor , DaDa did not h av e a m ajor competit or becau se
other s did not w ant t o jump int o the low pr ofit m argin , cap m arket .
Most companies w er e v ery sm all and some big ger companies which w ere
selling
caps
t ogether
with
clothes
w ere
not
threatened
by
sm all
produ cer s . DaDa, how ev er , dev oted it s tim e and m oney entirely to sport s
caps .
T he r eason why DaDa focu sed on ex port w as not only becau se of the
limited Korean m arket but also the influen ce of his
professor when he
w as studying at Yeon sei Univ er sity . In early 1960s , Korea w as a v ery
poor country , and his pr ofes sor preached th at the only w ay for Korea to
surviv e w as t o increase ex port .
DaDa w as on e of a few m edium - sized companies, being only 3rd or
4th in the field in the 1980s . Due to the high labor cost , poor fact ory
location , and short ag e of m anpow er , DaDa w ent ov er seas . T here are
int ern al ob st acles in building factories . How ev er , the fact ories play ed an
import ant
role as the forem ost
fr ontline for
export
and helped the
company w ork it s w ay out fr om under IMF crisis .
DaDa ' s
competit or s
becam e foreign
companies
when
the company
tr an sferr ed facilities ov er seas and opened it s factories in In donesia in
1987, and in Bangladesh in 1991, an d 1994. DaDa succeeded in cost
r eduction
thr ough South E ast Asia ' s low labor cost and good factory
condition s . Since the w ork proces s w as ex plicitly outlined in the m anu als
for good qu ality and qu antity , production w ent sm oothly . T he point is
th at ev ery procedure h as it s st andard prin ciple. T he company m ade
m anu als for the entir e pr ocess . T he m anu als w er e applied t o all of the
factories including those in Bangladesh , Indonesia, and America.
T he ideal company th at DaDa pur sues is the company which oper at es
ex actly like a computer . People say it is difficult to m ech anize the t extile
indu stry becau se m any pr ocesses ar e done by people. DaDa in sist s upon
st andardized m anu als becau se of this . St andardization is the fir st st ep to
increase production and decrease the defect r ate.
M anu als giv e in struction s about s ample dispat ch to buyer s in 5 day s,
supplyin g goods within 5 day s fr om the or der date, 30 minut es tr aining
daily , equipm ent controlling at the production sit e, and also deliv ery . T he
company
h as
nearly
achiev ed
pr ocess
perfection , and
the
product s
m anufactur ed in Bangladesh an d Indonesia now ex ceed those in Korea.
[IP R S pro c e s s ]
R e aliz e d th e im port an c e o f int e lle c tu al prope rty from t h e
e arly s t ag e s
T hrough the y ear s, DaDa accumulated technology and know - how and
obt ained 127 item s of intellectu al pr operty related IPRS including pat ent s,
utility m odels and design s and tr adem ark s . Includin g patent s currently
under processing , the tot al is 230. DaDa m akes distinctiv e caps with
patent ed m aterials, function s , and design s .
When most producer s did not v alue the import ance of pat ent s in cap
produ ct s , DaDa applied for patent s in the U .S ., the m ost import ant m arket
for
cap
pr oduct s .
Am ong
those
pat ent s
ar e,
"FLEXSEAM "
and
"WINKBAND" product s, which en ables people to adju st the size of a cap
t o fit the head. "F LEXSEAM " r eceiv ed high pr aise from cu st omer s and
h as applied for PCT in 9 countries inclu ding the U .S . In addition , when
"FlEXSEAM " applied for a pat ent and became register ed, DaDa becam e
acqu aint ed with the gov ernm ent ' s
support
progr am
through
the
sm all and m edium - sized company
Korean
Int ellectu al
Property
Office ' s
br ochures , and quickly r eceiv ed the benefit s of r egistr ation fee ex emption .
A s a r esult , DaDa licen sed the ' WINKBAND ' patent t o the U.S . cap
m aker , P ar am ount , 2 year s ago, and r eceiv ed 560,000 dollar s for roy alty .
Since intellectu al pr operty is now con sider ed a key bu siness component ,
the company believ es th at IP w as the b asis to g o on e st ep further th an
other companies . Continu ou s dev elopm ent m ade it pos sible to m ake new
produ ct s ev en bett er th an 'F LEXSEAM ' and 'WINKBAND ' an d they are
n ow in the proces s of receiving patent s .
St artin g this year , DaDa ' s P7173 m ov em ent beg an . T his m ov ement
seek s to apply for a patent ev ery 7 day s and t o improv e 3 pat ent s
ev ery 7 day s .
[Com m e rc i aliz ation pro c e s s ]
S e llin g o v e rs e a s from o v e rs e a s pro du c tion c om ple x
DaDa thought of caps as a continuou sly con sum ed pr oduct . Competition
in th at field is not th at sev er e.
Now , DaDa ' s 13 pr oduction factories in Chin a, Bangladesh , Indonesia,
and Vietn am , with a tot al of 14,000 employ ees, pr oduce 200,000 caps a
day an d 60 million
a y ear . In the Kor ean head office, there are only cor e
departm ent s such as R&D, export sales , and logistics .
Becau se DaDa ' s caps are sold 100% ov er seas, Kor ean people can buy
them only at the import br and shops with imported item s .
DaDa does not u se the OEM production m ethod, which produces low
v alue added g oods, but follow s the ODM method which design s and
dev elops it s own pr oduct s . DaDa ' s labor allocation is 25% for R&D. Sales
m ade under the ODM method are 32%.
About 60 designer s m ake 100 cap samples a day , and buy er s pur ch ase
30- 40% of them . DaDa is plannin g to increase this r atio to 50%.
Cap design dev elopm ent of ev en domin ant companies like Nike and
Reebok is not th at activ e while they are v ery activ e in clothing design .
Becau se DaDa is continuou sly dev eloping cap design , giant companies in
the w orld h av e com e to recognize Dada ' s design ingenuity . DaDa is
curr ently supplying caps to Am erica ' s 4 m ajor sport s league, NBA , NHL,
MLB, an d NFL as w ell as to the w orld ' s leading sport s br ands like
Adidas, Nike, P olo, Reebok , an d Benneton .
DaDa is domin ating the w orld ' s sport s cap m arket . Since it s foundation
in
1974, DaDa pr oduced 6 billion caps in 30 y ear s . Last y ear , the
company recor ded ex port s of 135.5 billion w on , and took 45% of the
w orld ' s cap m arket . President P ark comm ent s, " 1 out of ev ery 10 people
in this w orld is w earing a cap with a Dada m ark ."
T he
sug gestion
sy stem
of
DaDa
Corpor ation
differ s
fr om
other
companies . M an ager s, and
team
leader s
of
ov er seas
factories
mu st
propose at least 1 dev elopm ent or impr ov ement idea. Designer s in Seoul ' s
head office dev elop 1 idea a day , and 1 hit product a w eek . Employees
with good propos als are aw arded in ev ery qu arter .
DaDa introduces it s own design t o buy er s and dev elops str at egic
produ ct s ev ery m onth . DaDa is proudly introducin g it self as a company
with no defection s , which en ables it t o get order s fr om Adidas . Fila,
Levis, etc. T he company hir es local people and dev elops their potential
and giv e m an agerial job s t o localize it s m anufacturing and sales b asis .
DaDa is also inv olv ed with local society support progr am . F or ex ample,
it support s local schools with scholar ships . T he import ant fact or for
differentiation
of DaDa is the R&D pow er
achiev ed
st andardization . Design , dev elopm ent , g ood
by
and delicat e embr oidery
patt ern , and
punching , which ar e done by st ate- of- the- art comput er sy stem s m eet and
often ex ceed buy er s ' needs .
DaDa check s and updates m anu als of all it s fact ories ov er seas ev ery
m onth . In addition , the company respect s local religion , cu stom s, an d
cultur es and tries to abolish violation s cau sed by Korean s to m ake a
str on ger relation ship with local labor w orker s . T h ank s to all of these
effort s, DaDa h as m aint ained a high gr owth pace an d becam e the larg est
cap m anufacturer in the w orld, holdin g 45% of the w orld sport s cap
m arket in 2002.
DaDa ' s for em ost current inter est s are digit alization and kn owledg eb ased m an agement . T he ambition is t o digit alize the know - how to en able
the short est supply tim e with speedy m an agement , and to strengthen it s
compatibility by securing it s int ellectu al properties,
as through pat ent s .
Last y ear , DaDa complet ed est ablishing the ERP sy st em as the fir st step
t ow ar ds these goals . Now , DaDa Corpor ation is r eady t o becom e a truly
glob al company with the w orld ' s best compatibility by m aking a digit al
environm ent
with
Supply
Ch ain
M an agem ent (SCM ),
Cu st om er
Relation ship M an agement (CRM ) and a Knowledge M an ag em ent Sy stem
(KM S ).
D e v e lop a n e w m ark e t
[Life g o o d s s e c t or : H w an g g i M o a]
With the increasing attention on health - r elat ed is sues , product s such as
air cleaner s and or g anic foods are becoming presently m ore popular .
Hw ang gi Moa (HM ) foun d it s niche m arket in the health indu stry m aking
clothes, umbrellas , bed sheet s, an d accessories b ased on it s pat ented
dying m ethods u sing n atur al m at erials like b amboo ch ar coal and yellow
earth .
It s pr oduct s w ere recognized for their superior solution s in allergy
prev ention and disinfect ant s and r eceiv ed the Korea- J apan W orld Cup
Aw ard as w ell as the A sian Gam e Aw ar d.
[In n o v ation pro c e s s ]
S e le c t ion o f a di s t in c tiv e it e m
T he founder of Hw an ggi Moa, President Ry e Sook is known as the
"w om an who spin s cloth from the life and en ergy of y ellow earth ." She
is recognized as the fir st per son who sy stemized the y ellow earth dying
m ethod. Her admir ation for y ellow earth stem s from her own ex perience
with it s success .
President Ryu suffered from medical complication s in her b ack and
knees fr om a car accident in 1980. She tried m any m edication s but
without s atisfact ory benefit . She fin ally turned t o h and acupunctur e an d
orient al m edicine.
In 1991, she st art ed to care for patient s as the President of the Kor ea
H and Acupuncture Academy , Soon Cheon Br anch . She also st art ed to
experim ent with yellow earth an d quickly discov ered it s superb effect s on
skin diseases and eczem a. When she w as thinkin g how t o cure skin
disorder s such as pimples , she read ex plan ation s about yellow earth ' s
effect in orient al m edicine book s such as E as tern M ed icine H andbook .
A s a result , she becam e a yellow earth fabric dy er in 1998. She thought
th at urb an resident s , who h av e a v ery limited exposur e to soil and
n ature, could benefit fr om yellow earth dy ed clothes and bed sheet s .
President Ryu est ablished a w ork shop in a deserted school near Seom - Jin
Riv er
in
Gu - Rae,
Jeon
Nam ,
an d
purch ased
y ellow
earth
from
Soon - Cheon .
Yellow earth is fin e soil composed of 0.02- 0.05mm particles . It s m ain
ingredient is silicon . Yellow soil h as been u sed since early hist ory for it s
ability to neutr alize poison and alleviate burn w oun ds .
Ev en the w at er ,
from which y ellow earth is sifted, is u sed t o cure v ariou s skin diseases .
It also pr oduces an abundant of infr ared w av es , an d is u sed in the
treatm ent of ov arian and br east cancer . T hough a tr em endou s sour ce of
n atur al ingredient s for good health , the difficulty in proces sing and u sing
y ellow earth as a dy e is ju st as gr eat .
In the beginnin g , clothes w ere repeatedly burned ; each failure m ade it
seem impos sible to reach her goal of m aking tr adition al Korean dres ses
with y ellow earth .
How ev er , ov er comin g these failur es allow ed Hw ang gi
Moa to becom e a company with unique ex pertise.
[IP R S pro c e s s ]
P e rc e iv e th e im port an c e o f p at e nt in g
T he m ost difficult procedure in creating y ellow earth dy e m aint aining
the color it s n atur al yellow earth ch ar act er . Fir st , the best y ellow earth is
mu st be acquir ed. Nex t it is sifted nin e tim es with clean w at er . Lastly , it
is ferm ent ed t o keep the color fr om w ashing out of the cloth . After
dying , the cloth is dried un der the sun . In tot al, ther e ar e 63 tediou s and
m eticulou s procedures to produce good qu ality yellow earth cloth .
T her e is a limited production capacity due to the r ain season s . In fact ,
w orking day s are only about 4- 6 m onth s a y ear . Experim ent s with
artificial dryin g room s w er e carried out but ab andon ed becau se of low er
produ ct qu ality .
President Ry e applied for a pat ent solely on the recommendation of
other s for she did n ot r eally under st and the import ance of pat ent s . When
she saw similar pr oduct s cr eat ed by competition imm ediately following
y ellow earth ' s popularity , she realized the import an ce of her patent (No.
321991).
Dyin g cloth with yellow earth is not an easy proces s . But with each
procedure requiring m anu al labor , this indu stry is v alu able as a job
provides .
Hw ang gi Moa u ses
accessories .
y ellow
earth
for
bed
sheet s, underw ear
an d
It m akes patt ern s u sing b amboo ch ar coal, g ar denia seeds,
and other n atur al item s . It also m akes design s u sin g tr adition al patt ern s
and produces clothin g , cu shion s , sheet s, underw ear , pillow s and curt ain s .
HM is currently planning t o dev elope a n atur al dye with b amboo from
Dam - Yang . Curr ently , HM
own s
20 patent s
for
yellow
earth
dye
m ethods .
[Com m e rc i aliz ation pro c e s s ]
R e s pon d t o t re n d s
HM did not r eceiv e much attention in the beginning . How ev er , sales
increased dr am atically when it becam e known t o the public th at y ellow
earth is good for the prev ention and cure of skin disorder s and diseases .
S ales in creased st eadily along with the increase of n atur al produ ct s
con sumption . Sales now reach 3 billion w on . Recently , the company
opened it s int ernet shoppin g m all, and on - lin e sales ar e pr omisin g .
HM participat ed in ex hibition s such as the Distinguished Pr oduct s by
W om en Entr epreneur s . It u sed the ex hibition t o help dev elop sales r outes
and adv ertise it s lev el of technique. It w as also beneficial for m eetin g
other bu sines s people and learning about m an ag em ent . Direct order s
supplier selection s w ere dir ect result s .
T he m ajor bu siness factor for HM is produ ct prom otion . Ex hibition s
might seem t o lack m ajor , imm ediat e benefit s , but
exhibition s provide an
opportunity for future sales by introducing pr oduct s and the company
it self.
HM h as 2 ret ail shops on it s own , and 7 dealer s . HM ' s product s are
popular ov er seas, sellin g in 17 st at es in the U .S .
HM plan s to concentr at e on exporting this year . It also plan s to export
t o Germ any wher e prospect s ar e v ery good becau se of the tr em endou s
growth of interest in n atur al pr oduct s .
Re m ak e pat e nt t e chn iqu e t o fit th e dom e s t ic m ark et
[Offic e furniture s e c tor : Duo Bac k Kore a ]
Nokia domin at es the w orld cellular phone m arket ex cept in Korea. T his
is partly due to their failure to under st an d Korean culture and con sum er
dem and.
T hough an idea or technique m ay be superior in term s of innov ation
and qu ality , it m ay v ery w ell still require som e localization in or der t o fit
the trends and needs of the local m arket .
Duo Back Kor ea(DBK) is an ex ample of such a case in which the
origin al technique fr om
Germ any
w as localized to su cces sfully m eet
Korean t aste. Ev en though DBK pay s roy alty fees t o Germ any , it now
h as 6 pat ent s and 25 utility m odels of it s own . Duo Back h as ex ported
ch air s to E ast A sia and plan s to ex port t o Eur ope and U .S .A . this y ear .
[In n o v ation P ro c e s s ]
D e v e lop n e w pro du c t s t o o v e rc om e w e akn e s s o f e x i s tin g
pro du c t s
According t o m any fact or s, Kor ea m aint ain s the highest lev el of zeal
for children ' s education in the w orld. A great deal of tim e and m on ey is
spent for childhood education . With student s spen ding most of their tim e
in front of their desk s, sittin g in ch air s, correct postur e is m ost import ant
in or der t o pr ev ent spin al injury or chronic back pain .
DBK ' s president , Mr . Jung Hae- ch ang who dev eloped and sold the
function al du al b ackr est ch air and thereby opened a new m arket for
ch air s , h as dev oted 30 y ear s of resear ch in order t o m ake student s an d
elder s m ore comfort able.
In 1974, Mr . Jung st art ed his own bu sines s t o m anufactur e ch air s . In
the early 1980s , he pr oduced part s for desk s and ch air s including those
with curv ed plyw ood, at th at tim e a new m arket for the function al ch air .
A s soon as his bu sines s st abilized, he decided to focu s on the ch air
bu siness and beg an studying m arket tr ends . At th at tim e, ch air s w er e
con sider ed as a part of a set with desk s . High P ack ch air s, imported
from Protot o in Germ any , g ained public inter est .
Mr . Jun g planned t o m anufacture High P ack ch air s and sell them
dom estically , m aking ch air s suit ed to the av er ag e Korean ' s body sh ape
and posture. Also, by u sing Gr ahl ' s patent s, he pr oduced Duo Back
ch air s .
It t ook one y ear t o dev elop the product becau se DBK lacked proper
m anufacturin g t echniqu es . T he focu s w as to study the av er age Korean ' s
body sh ape and to dev elop pr oduct s m ost suit able for Korean s . As the
r esearch progressed, it w as apparent th at there w ere little r esearch
m aterial. Also, virtu ally no attempt h ad been m ade to secur e m obility of
the b ackr est in r egular ch air s . F in ally , the ch air w as dev eloped redu cing
about 20kg of seated pr essure.
Designed t o m eet er gonomic design st andards , the Duo Back ch air is a
special ch air in t erm s of corr ectin g postur e n atur ally . T he ch air w as
b ased on the theory of a not able phy sicist , Professor Bruinin g , who
pioneer ed the cor e t echnique, Duo Back T heory . T w o split b ackrest s an d
special functionin g rubber mov e three dimen sion ally t o react to the u ser s '
m ov em ent . T herefore, it actu ally m assages the back mu scles, especially
the lumber area. When a per son on the ch air m ov es or ch anges postur e,
t w o b ackr est s also m ov e thr ee dim en sion ally reacting t o the u ser ' s
m ov em ent . It support s the spine and the b ack mu scles to m aint ain
healthy postur e an d redu ce pres sure on the w aist .
User s said th at they felt less fatigue after sittin g in the Duo Back
ch air for a long tim e. It is the phy siological effect of reflex t o stimulu s .
Backr est s send a sign al t o activ at e ten sion in the mu scles by stimulating
n erv es . T his helps m aint ain correct postur e and r educes fatigue. In other
w or ds, m ent al fatigue brought on by trying to keep a g ood postur e is
r educed.
T he cu shion on the backrest enh ances pres sur e in a cros sing m anner
unlike other r egular ch air s . Pr ofes sor Schoberth pr esented condition s for
g ood b ackr est s, requiring enough stimulu s on the b ack and supportin g the
b ack . T he condition s ar e w ell m et thr ough Duo Back ch air ' s b ackrest s .
[IP R S pro c e s s ]
Con tin u ou s ly re adju s tin g p at e n t e d t e c h niqu e s
T he key r eason behind dev eloping Duo Back ch air s are health and
ergonomics . Duo
Back ' s
superiority
h as
been
r ecognized,
and
the
company now holds sev er al pat ent s , utility m odels and registr ation of
copyright s . T here h av e been 6 pat ent s and 25 utility models , and betw een
30 and 40 pat ent s and utility m odels are pending .
Duo Back inv est ed 8% of it s net pr ofit in r esearch and dev elopm ent .
Recently , the company and participating univ er sities dev eloped desk s and
ch air s called "Duo School" which
helps student s t o corr ect posture and
improv e efficiency when studying .
T he origin al t echnique for Duo Back belong s to Gr ahl, a Germ an ch air
m anufactur er . Mr . Jun g accidently s aw Duo Back ch air in a cat alogue
and w ent t o Germ any in order t o see the real m odel.
At th at tim e, Gr ahl con sidered Duo Back ch air as a m edical appliance.
T her efor e, the price w as high an d only a sm all qu antity w as produced.
After seeing the ch air , Mr . Jun g thought th at the Duo Back ch air is wh at
student s who sit for long periods n eed. He attempted to u se w ork within
the pat ent , but Gr ahl required him to pay a roy alty fee per pr oduct , for
an am ount dependin g on annu al GNP . How ev er , Mr . Jun g w ant ed t o
m ass produce and cut the price. He couldn ' t accept all of Gr ahl ' s
r equir em ent s . Aft er a long neg otiation , he contr act ed t o pay one million
dollar s in r oy alty fees for 15 y ear s . In addition , he also found a w ay to
export High P ack ch air s to Pr ot oto. At th at tim e, he br ou ght High P ack
ch air s m ade in Korea to Prot oto, show ed the superiority of the pr oduct ,
and explained his m arketing str ategy . He acquired approv al from Protot o
t o u se it s tr adem ark in Japan and E ast Asia and thu s att ained bu siness
connection s .
Localizin g su cces sful for eign product s , like High P ack and Duo Back
ch air s , to m eet
Korean s '
needs, Duo Back
Korea emph asized joint
v entur es . He m ade an unconv ention al decision t o allow 20 dom estic ch air
m anufactur er s t o u se his patent s becau se Mr . Jung kn ow s the import ance
of pat ent s and copyright s . It is ex pected to improv e cor e t echniqu es and
create new ones by combinin g other superior pat ented t echniques . Pr oduct
qu ality in gener al can also be enh anced in this fashion .
[Com m e rc i aliz ation P ro c e s s ]
U s e v ariou s m ark e tin g c h an n e l s
Not
all
distributor s
willin gly
buy
product s
from
sm all
and
m edium - sized bu sines s th at h av e no br and v alue. Initially , distributor s
h ad n o inter est in Duo Back ch air s becau se it w as not a familiar product
at th at time. T her efor e, Duo Back Kor ea u sed telem arketing , cable T V
hom e shopping ch annels and adv ertising in subw ay tr ain s for dir ect
prom otion of it s produ ct s to con sum er s .
Ev en though Duo Back Korea w ent through som e difficulties t o sell
produ ct s for the fir st tim e, due to the IMF crises, Mr . Jun g ' s idea w as
right . After u sing
som e m arketing ch annels, such
as adv ertising in
subw ay tr ain s and T V hom e shoppin g , Duo Back grossed 7.9 billion w on
in s ales in 1999, compar ed t o a los s of 6.4 billion w on in 1998. T ot al
s ales w ere 16.9 billion w on in 2000, 25 billion w on in 2001, and 32 billion
w on in 2002. T his y ear ' s goal is 45 billion w on . A s Duo Back ch air s
g ained public fav or , som e furniture m anufactur er s st art ed to produce
similar ch air s .
Another Duo Back g oal for this y ear is ex port . It h as been difficult to
export Duo Back ch air s becau se of Gr ahl ' s restriction s on the origin al
t echnique. How ev er , the company tries to ex port applied goods for which
dom estic techniques
ar e u sed. It
h as
export ed a sm all qu antity
to
Southeast Asia last y ear . Du o Back Korea expect s t o export to Europe
and the U .S .A . aft er con sulting with Gr ahl.
Duo Back Kor ea focu ses on in creasing the v ariation s in product s an d
m aint aining a competitiv e edge through resear ch and dev elopm ent in
or der t o prepar e for ex porting . At present , it allocat es 8% of net profit t o
r esearch
and
dev elopm ent . DBK r ecently
opened
a new
factory
in
Gaj aw dong , Incheon th at is capable of m anufacturing 600,000 item s per
y ear . A labor atory for studyin g design , and plan s, as w ell as erg onomic
experim ent s is also located ther e. Duo Back expect s t o expand in both
secur e dom estic m arket s and ex port s .
Re t ain le aders h ip in th e fie ld
[Sports s upply s e c tor : HJC Co ., Ltd . ]
HJC holds
15% of the w orldwide m otorcycle helm et m arket .
In
dev eloping br an d v alue, HJC gr asped the competitiv e edg e with their
ex cellence in adv anced techniques and patent s .
M aint aining
Superior
qu ality
patented
alone
techniques
is
in sufficient
and
to
ex clu siv e
lead
the
dom estic
competition .
an d
foreign
copyright s are also needed to incr ease a company ' s m arket sh are.
Most inv ention s st art as solution s t o specific pr oblem s in people ' s liv es .
Like people of early hist ory , who rose to prosperity by simply claiming
the land fir st , ideas mu st be det ailed and pat ented in order for a company
t o utilize them for it s competitiv e pow er .
[In n o v at ion pro c e s s ]
T h e qu alit y o f h e lm e t w ith in th e u s e r 's lif e
T he president of HJC, Mr . Hong W an - gi believ ed th at "helm et s are the
m ost import ant s afety precaution for m otorcyclist s . Becau se w e are all
vulner able t o seriou s accident s , helm et s should n ot only be solid but also
light and comfort able. Design an d price alone do not lead t o success in
the helm et m arket ."
Vivid color s and sleek design s ar e ch ar acteristics of mot orcy cle helm et s
becau se they prom ote life in the fast lane. A s th at is a prim ary attr action
t o m otorcycles , con sumer s are fir st and forem ost concerned with the
design and appear ance of helmet s .
Mr . Hong sought to m anufacture
helm et s th at w ere solid, vivid and most import antly conforming t o this
im age.
w orld
He u sed prim ary color s to produce v ariou s helm et s th at m atched
m ajor
m otor cy cles
like
Yam ah a, Honda, Suzuki,
an d
Harley
Davidson .
F rom concept t o m anufacturing , ideas are g ather ed t o m eet con sum er
n eeds . In 2002, HJC r ev ealed their patented new helm et at the Best
P at ent ed Product Ex hibition .
It h ad a chin pr otector located in the front
which can mov e up and down thereby allowin g speaking , drinking , and
sm oking , without r em oving the helm et .
HJC also designed hy drom ech anical helm et s to count er the problem of
air resist ance and t o sh arpen the im age.
designing for
T he company also beg an
a wider field of vision to m aximize u ser
safety
and
v entilation .
F urthermor e, HJC studied the hum an skull size and sh ape and helm et s '
r eaction s t o them , in order to produce v ariou s helm et sh apes .
F rom the conception to m anufacturing , v ariou s ideas are g athered t o
m eet con sum er s ' needs and are con sider ed within pr oduct dev elopment .
HJC resear cher s repeat experim ent s thou sands of tim es to dev elop light er
and m ore solid m aterials .
[IP R S pro c e s s ]
S e c ure
c opy rig h t s
t hrou g h
c on tin u ou s ly
de v e lopin g
t e c h niqu e s
HJC currently holds 42 patent s w orldwide. HJC r ecognized th at m aking
a good qu ality product alone can not secur e competitiv e pow er . T hu s,
HJC
helm et s
pas sed
the
DOT
(Departm ent
of
T r an sport ation )
and
SNELL, helm et safety test s, and also acquired the indu strial st andard
appr ov als from authorities , such as the ECE (Economic Comission for
Eur ope), JIS (Japanese Indu strial St andard) and BSI (British St andard
In stitution ).
HJC inv est s 10% of t ot al s ales t o resear ch and dev elopm ent and applies
for m ore th an 10 pat ent s ev ery year . T hese copyrighted t echniques are
the foundation by which HJC produ ced the number one r anking helm et s
in the w orld.
Qu ality in spection is a v ery complicated procedure becau se hum an liv es
are at st ake. Accumulat ed through m anufacturing helm et s for 30 y ear s,
HJC ' s own techniques and know - how are a m ajor reason behind HJC ' s
competitiv e edg e.
[Com m e rc i aliz ation pro c e s s ]
U n de r s t an d c on s u m e rs ' de s ire s
T he HJC helmet is the number one br and am ong m otorcyclist s . In a
surv ey by Am erica ' s m otorcycle m ag azin e, M otorcy cle I ndus try 56% of
participant s n amed HJC as their fav orit e br and. Shoei following in secon d
with 13%. Br and loy alty for HJC h as st eadily increased from 45% in 1999
t o 53% in 2000, and 56% in 2001. In addition , m ore th an 50% of
con sum er s preferr ed to purch ase HJC br and off- road helm et s and sport s
bike helm et s .
HJC h as m ore th an a 50% sh are in the w orldwide helmet m arket .
HJC ' s superior qu ality is highly appr aised in comparison to the J apanese,
It alian , and Am erican br ands . Export s account for 80% of HJC ' s sales .
HJC leads in export profit s am ong Korean sm all an d m edium bu sines ses .
T his
success
did
not
com e
without
h ar dship . HJC
r eject ed
an
OEM (Origin al Equipm ent M anufacturing ) supplier in order to dev elop it s
own br and v alue.
Unlike Chinese companies th at depend on OEM , HJC
ev entu ally strengthened their br and v alue and w ent on t o supply a h alf
million dollar s of product s in 1985.
T he greatest ch allenge in intr oducing a new br an d into foreign m arket s
is finding distribution ch annels .
est ablish
and
adv ertise
st ores
Due t o the heavy capit al required t o
in
a
foreign
m arket ,
sm all
and
m edium - sized bu sinesses adv ertise u se "selling agent s ." Selling agent s,
who sell pr oduct s to wholesale bu sin ess and ret ail st or es in st ead of
m anufactur er s, w ork individu ally an d receiv e a 5 to 10% commis sion . T he
selling agent sy st em rem ov es the middle m en and thu s redu ces cost 20
t o 30%.
HJC ent ered the Am erican m arket u sing sellin g agent s . It quickly
domin ated 40% of the m arket and successfully launched it s br and n am e,
"HJC." HJC appointed 4 ag encies in North Am erica to st abilize price and
tr ade. HJC r esearches m arket trends by m eeting with buyer s ev ery tw o
m onth s and u ses th at an aly ses to dev elop new product s .
HJC celebr ated it s 30th anniv er sary in Nov ember of 2002, a m eaningful
ev ent since the company reached it s s ales t ar get set t en y ear s ago at 100
billion w on . T ot al HJC sales in export alone w as 72 million dollar s in
2002.
T heir
n ew
goal is 500 billion
w on
in
sales by
2010 with
fiv e
m ot or cy cle or r ace car helm et s r anked number one in the w orld. T o
accomplish this plan , there will be an inv estment of 100 billion w on for
10 y ear s int o resear ch an d dev elopm ent and tr aining .
S triv e for t e c hn o lo g y de v e lopm e n t w it h e n t re pre n e u ral
s pirit
[In form at ion t e c h n o lo g y in du s try s e c t or : A hn L ab .In c .]
T he g ener al per spectiv e on Korea ' s IT indu stry is v ery optimistic. It is
true th at the IT
indu stry h as
a high failure r ate, but
con sidering
inv estm ent efficiency , a high yield with little inv estm ent , n on e h av e m or e
potential th an IT . Ahn Lab Inc. believ es in this b asic principle of
inv estm ent : High Risk - High Return .
T he IT indu stry is view ed as Korea ' s gr owth engine, pr opellin g the
economy for the next 10 year s .
In the IT indu stry , Inform ation Security
is the most competitiv e sector , and AhnLab is t aking a firm st and as the
leading company in the Kor ean inform ation security m arket .
In 1988, AhnLab dev eloped W arp Engin e which can diagnose and cure
comput er viru ses . It secured a patent in 1998. F rom then on , V3 becam e
syn onym ou s with "Anti Viru s" in Korea. In June, 2003, AhnLab obt ained
the patent for "a n etw ork connection device with the function of Hacker
inv asion detection " which en ables a net w ork int erface t o detect inv asion s
without the host comput er ' s loading pr oblem .
A s a result , AhnLab obt ained intern ation ally authorized check m ark
which is giv en t o a company th at pr ovides 100% real tim e checkin g
service.
m arket .
AhnLab is currently moving abroad aft er securing the Korean
[In n o v ation pro c e s s ]
V iru s in fe c t e d di s k e tt e c u re s de v e lope d
President Ahn Chul- su h as a v ery distinctiv e b ackground as a m edical
doctor . He dev eloped V3 15 y ear s ag o. When he w as completin g his
doctor ate degr ee at the Medical School of Seoul Nation al Univ er sity , his
diskett e w as infect ed with the viru s called" Br ain ". He wr ot e an Anti
Viru s progr am him self which pav ed the w ay for his career .
T his comput er v accine progr am , which at th at tim e could only cure the
Br ain viru s , w as repeatedly upgr aded and ev entu ally the n am e "V3" w as
known to the public in 1991. V3 pr ogres sed to V3Pro in 1995, and
V3Pro95 which support s Window s, and aft er m any upgr ades, it is now
called V3pro2002Delux e. Curr ently , there is a v ariety of v accine pr ogr am s
such as ACS, the tot al security soft w ar e, V3 Viru s w all, v accine for
serv er s, and My V3 for online. T he V3 product s ar e sold in foreign
countries as in Japan and Chin a by the n am e of V3 Viru s Block .
At fir st , V3 could block only one viru s, but now it h as dev eloped to
the lev el of detecting and curing t en s of thou sands of comput er viru ses
w orldwide. But viru ses do not lag behind ev en the w orld ' s leading
v accin e pr ogr am .
[IP R S pro c e s s ]
S u c c e e de d
in
g e t tin g
p at e n t
for
v ac c in e 's
c ore
t e c h n o lo g y
In 1998, AhnLab dev eloped W arp Engine which can det ect and cure
comput er viru ses . It r eceiv ed the pat ent for it after the company w as
est ablished in 1998. W arp Engine is the core technology of V3, and it
play ed a crucial r ole for V3 to becom e nomin ated as one of the best
produ ct s for the next g ener ation , select ed by the Korean Ministry of
Commerce, Indu stry and Ener gy in 2001.
In addition , AhnLab r eceiv ed a pat ent for "a Netw ork connection device
with the function of h acker inv asion detection " in June, this y ear . T his
en ables net w ork int erface to det ect viru ses without a host computer
loadin g problem .
AhnLab
h as
V3Pro2002Delux e
an
int ern ation al
obt ained
Check
certificat e,
M ark
r eceiv ed
which
is
In
the
F eb ,
2003.
int ern ation al
certificate for v accin es, an d in April, V3viru sblock also r eceiv ed a check
m ark for the J apanese m arket .
Check m ark is gr ant ed by W est coastLab in England, and it is giv en t o
progr am s which can detect 100% of all viru s in both r eal time and
m anu al testing . T he product with check m ark is advised to m aint ain the
lev el of qu ality through continuou s testing since the product can only u se
the check m ark logo while keeping the certificate.
T w o produ ct s successfully receiv ed the certificate on their fir st trial.
With the help of the intern ation al certificate which provides in st ant
r ecognition , AhnLab ' s penetr ation t o the ov er seas m arket is expect ed to
be facilit at ed.
[Com m e rc i aliz ation pro c e s s ]
U n de r s t an d
c u s t om e rs '
needs
an d
re s pon d
to
th e m
im m e di at e ly
According to the "2001 W orld Inform ation Security Contr ol M arket "
published by IDC, the glob al m arket search firm , the No.1 company in
the glob al v accine m arket is Sym antec, with 541million dollar s sales
and 32.4% m arket sh ar e, No. 2 is NA (Net w ork A ssociat es ) with 26.4% of
m arket sh ar e an d No. 3 is T r andmicro with 14.2% m arket sh ar e.
AhnLab w as r anked 9th with 19.5 million dollar sales, and 1.2% m arket
sh ar e. T he w orld ' s m arket stru cture is som ewh at differ ent fr om Korea ' s .
T he size of the Kor ean computer v accine m arket is about 40billion w on .
In the Korean m arket . AhnLab is no. 1 with 25billion w on sales and 60%
m arket sh are. T he No.1 company , Sym antec t akes only 7- 8% of the
Korean m arket . T he int ern ation al v accine is not domin ant in Korea
largely becau se of strong br and loy alty to AhnLab , a r are phen om en on in
this competitiv e field.
At the end of 1999, people w er e frighten ed by the possibility of a
Y2K viru s at the turn of the century . Most of the v accine companies
prom oted a v accine t o enjoy the special m arket dem and cau sed by the
Y2K situ ation .
How ev er , AhnLab publicized a report st atin g , "No m ajor pr oblem is
expect ed on
1st , J an . 2000." It w as a v ery dan gerou s decision for
AhnLab , with a heavy am ount of risk aim ed ag ain st them in the ev ent
there w as a problem , including cost of compen s ation and los s in s ales . It
w as President Ahn ' s decision , the reasoning being t o pur sue th at which
w ould benefit con sum er s , n ot only to m ake m oney .
He risked his own
n am e which h ad become a br an d n am e it self for the tru st of his
con sum er s .
President Ahn m ade V3 as a F reew ar e for m ost P C u ser s . T he V3
br and and President Ahn him self are now gen er ating v alue th at is not
possible t o be m easur ed by money alone.
T he import an ce the company giv es t o R&D is obviou s by the fact th at
R&D st aff is 50% of t ot al employ ees and 20% of the annu al turnov er is
inv ested in R&D.
Apart fr om CEO br and n am e and technology , ther e are other factor s
contributing t o the success of AhnLab . T hey ar e quick respon se to the
cu st omer s '
needs
an d
ex ception al
cu st omer
support
service.
Aft er
r eleasin g V3Pro 95 for Window s in 1995, the P C environm ent gr adu ally
ch ang ed to the Netw ork . AhnLab added Int ern et and net w ork supervisory
function s t o the v accin e for PCs .
In
1998, V3m an ager
w as
introduced
for
v accin es
for
companies .
V3m an ag er contr ols v accines of client PCs from the centr al serv er .
AhnLab also div er sified it s product s r ange t o pas sw ord solution , an d
firew all
and
still
m aint ain s
it s
leader ship
in
the
in du stry .
Quick
t echn ological support service for cu stom er s atisfaction also play ed an
import ant role to st ay ahead of intern ation al v accine companies in Kor ea.
AhnLab st arted as a company specialized in v accin e, an d is now reborn
as a t ot al security solution company . T he t arget is to becom e one of the
t op 10 security solution companies by 2005. T o keep up with m arket
ch ang es, expanding it s bu sin ess t o t ot al solution is on e of AhnLab ' s
str at egies .
AhnLab is now focu sing on the ov er seas m arket . It est ablished a local
br anch in Japan in F eb , 2002 and in Chin a, in M arch , 2003. T he sales
t ar get of this y ear for Chin a is 1.5 million dollar s , an d 4.5 million dollar s
for J apan .
A pply b a s ic te c h n olo g y
[Life g o o d s s e c t or : Ge w i s s K ore a]
"W ast e can be a g ood resource." T his phr ase w as pr ov ed by Gewiss
Korea (GK ) which
is
m anufacturing
Natur al cosm etics , fertilizer , and
m edicine fr om the r esidue of wine production .
potential
opportunity
can
be
the
success
GK ' s gr asp of this
point
of
it s
bu sines s .
GK holds a patent for the technology u sing wine r esidue. T his r esidue
underg oes sev er al ph ases such as ferm enting , PH contr ol ex tr action an d
st abilization , to produce biocosm etics, biofertilizer , and biom edicine for the
treatm ent of burn w ounds .
T his bu siness w as r ecognized as a new t echnology by the Kor ean
g ov ernm ent ' s Department of Indu stry an d Resource, and it also becam e a
m odel ex ample of an environm ent - friendly agriculture technology which is
it self a prim ary focu s of the Kor ean g ov ernm ent .
[In n o v at ion pro c e s s ]
B io fe rm e n t t e c hn o lo g y for w in e re s idu e
T he resources of GK ' s pat ent is b ased on the black gr ape residue like
gr ape seed and skin s . In alm ost cases, those residues ar e disposed of as
w ast e. GK ' s founder , Mr . Yang Jin - seok ' s m ajor w as mu sic. His life ' s
dir ection ch anged when he w as w orking for the "Gesm ond Research
Cent er ," the biochemical and drug
relat ed r esearch
cent er
based in
Switzerlan d. He st arted t o w ork for the research cent er as a part - tim er
t o support his univ er sity expen ses while he studied chemistry . T he
experience in the pr oduction site w ould prov e t o help him greatly in
y ear s t o com e.
At th at tim e, he learned th at much of the nutrition of gr apes is in the
gr ape seeds and skin s . He beg an t o think how to utilize the residue of
gr apes which ar e disposed of aft er wine production in Europe.
He
also
an aly zed
the
m assiv e
am ount
of
gr ape- r elat ed
dat a
accumulated in Europe. T h at an aly sis ev entu ally led t o his success in
m akin g black gr ape skin t oner G7, 100% Biofertilizer , and
100% "Bio
cure" for burn w ounds .
[IP R S pro c e s s ]
D iv e r s ify in g pro du c t s from on e s in g le re s ou rc e
T he r eason behin d the successful dev elopment of v ariou s pr oduct s from
this one technology w as the int en se effort in research and dev elopm ent
by the Gewiss Biochemistry Research Cent er in Vienn a. T his center is
the root of innov ation th at President Yang is alw ay s emph asizing . When
the Soviet Union collapsed in the 1990s , the center hir ed 8 biochemist s
from Ru s sia which spurred on the adv ancem ent of it s t echnology and
skill.
GK holds the followin g current pat ent s ;
P at ent No. 0385455, F ermented ex tr act m at erial m anufacturing technology
for burn w ounds
P at ent No. 0373319, Biofertilizer m anufacturing t echnology , utilizing 100%
gr ape r esidue extr act
P at ent No. 0341933, Biocosm etic m anufacturing m ethod (G7), utilizing
100% gr ape r esidue extr act .
Am ong it s patented product s , 100% n atur al black gr ape skin toner is
curr ently on the m arket . Unlike other skin care pr oduct s, it is alcohol free
and is, therefore, v ery safe with u se on sen sitiv e skin an d also highly
r ecomm ended for
soothin g
stressed skin . "BIOKRAF T ", a
100% bio
fertilizer , produced via a different process fr om other fertilizer s , h asten s
soil impr ov em ent and crop growth , and is pollution fr ee.
It em s r eady for production in the near future such as a 100% n atur al
w oun d treatm ent and a 100% n atur al anim al food additiv e ar e in the
process of application for pat ent s .
T hese patent s like all other s att ained
by GK ar e pr omptly registered and m arketed to incr ease sales .
[Com m e rc i aliz ation pro c e s s ]
N atu ral
c o s m e t ic s
im ag e
e s t ab li s h m e n t - - "e dib le
c o s m e tic s "
GK penetr at ed the m arket
when
it
initiated it s
u se of
a hom e
shopping ch ann el in Au g , 2001. When the produ ct , after test m arketin g
for 3 m onth s , w as fir st t elevised n ationwide, 300 million w on w orth of
RODEM cosm etics w as sold in one hour . F or a cosmetics with no br and
n am e v alue, it w as a not able ev ent , and w as also a g ood ch ance for a
sm all to m edium - sized company like GK to utilize this distribution
ch ann el t o g ain recognition from
con sum er s .
On the fir st show , the host ess opened the bottle and sw allow ed the
skin t oner , shocking the audience pr oving th at the product w as m ade of
100% n atur al in gredient s with no t oxicity , and it does not h arm t o the
hum an body . Since th at introduction via a hom e shopping
RODEM
cosm etics h as t aken 40% of the hom e shopping
ch annel,
ch annel ' s
cosm etics sales . It also set a hom e shoppin g hist ory s ales r ecord of "1
billion w on a day ."
A s a r esult of it s popularity , GK h as found altern ativ e w ay s of
m arketin g : door t o door sales, sample distribution and cr eating an on - line
con sum er community n am ed "RoSaMo". ROSaMo a n am e th at m ean s "the
community th at lov es RODEM " h as enlist ed 3,500 m ember s sin ce it s
opening in M arch , 2003.
T he forum cont ain s ov er 100,000 posting s ; the
w ebsite boast s an av er age 7,000 visit s per day .
GK also receiv ed Korea Int ernet Hit Produ ct Aw ard in 2002 in the
on - line distribution sector , the hom e shopping or internet shopping m all,
which w as spon sor ed by the new spaper s D aily E conom y and Chung - A ng
D aily .
President Yang Jin - Seok est ablished GK in Vienn a, Au stria in 1988
when Korea w as suffering from the IMF crisis . He co- founded 'P anis
Ang ellicu s ' in P aris in 1994. GK h as been m anufacturing Biofertilizer an d
also importin g RODEM cosm etics . RODEM is m anufactur ed by P anis
Ang elicu s .
While m ost bu siness founder s fir st est ablish their bu siness in their
hom e country
an d ex pand to the ov er seas m arket , pr esident
Yang
est ablished his bu siness ov er seas fr om the st art and later br ou ght it int o
his hom e country . Currently , the Gewiss group affiliat es are Gewiss
Korea, P anis Angelicu s , and Gewiss Vienn a.
Gewiss Vienn a is in ch ar ge of Biot echnology R&D and Eur opean
m arketin g P anis Anglicu s, b ased in F r ance, carries out cosm etics R&D
and produ ction , and Gewis s Korea is in ch ar ge of the m arketing for
cosm etics to the A sian m arket as w ell as Biofertilizer pr oduction .
Biofertilizer h as becom e the corner stone for GK . GK complet ed the
Gewiss Land pr oject
S a- cheon
city . T he
in
cooper ation
project
in cludes
with
Gy eongNam
m anufacturing
Pr ovin ce and
and
distributing
or g anic pr oduce by u sing Biofertilizer fr om a 300,000 py eong farm . GK
aim s at producing high qu ality agricultur al produce and strengthening
agricultur al br ands by
t echn ology .
heightening the lev el of Korean
agriculture ' s
It is hoped th at Biofertilizer will rev olutionize Kor ea ' s health
food indu stry .
B u ild c u s t om e r tru s t w it h bran d re c og n it ion
[Lif e g o o d s s e c t or : In t ar s i a]
Int ar sia is a recognized w orldwide br and for qu ality sock s . A s a sm allsized
company , Int ar sia found it s
r oad to
su cces s
by
continuou sly
inv esting in R&D t o build the v alue of it s br and n am e.
In strengthenin g a br and n ame, a company mu st concentr at e on all it s
aspect s : product r eliability , design , m arketing , con sumer protection , and
other s .
Int ar sia focu sed on buiding br an d n am e v alue from it s inception ,
inv esting
12 billion
w on
for
R&D. Not
t o lag
behind
other
sock
m anufactur er s, the Pr esident him self w ent t o It aly to buy new m achinery .
[In n o v ation pro c e s s ]
D on 't s av e m on e y on R &D
After completing his colleg e degree in 1981, President Kim expan ded
the
sm all
company
he
m anufacturin g company .
inherit ed
fr om
his
parent s
int o
a
sock
At fir st Int ar sia supplied product s to Am erican
and European companies under an OEM sy stem , but while Pr esident Kim
frequently visit ed m any sock m anufactur er s in the w orld, he quickly
r ealized the import ance of h aving his own br and.
When he visited Milan , It aly , he saw Ben ett on ' s sophisticat ed produ ct s
and Blingt on ' s three dim en sion al sock s . President Kim tried to fin d an
embr oidery loom m anufacturer , and visit ed one
in Br esia, It aly in 1983.
He learned t o oper at e loom s for 3 m onth s , and spent 700 million w on
t o purch ase 24 loom s under the condition th at the loom m anufacturer
w ould not sell the sam e loom t o an other Kor ean company for the next 5
y ear s . How ev er , becau se Korean - m ade y arn w as not suit able for the
loom s, President Kim h ad t o r eturn to It aly t o adju st the loom s t o the
y arn .
Int ar sia tried t o m aint ain the highest lev el of technology ev en though it
w as m anufacturin g under an OEM contr act . Based on this technology , the
n ew br an d, Int ar sia set sail in 1995. Int ar sia m ean s "delicacy " in It alian .
President Kim decided on this n ame becau se he w anted t o alw ay s remind
him self of his ex perience with the loom and y arn which t aught him the
import ance of m aint aining high qu ality . After deciding on the br an d n am e,
he r eplaced all the old loom s .
Until now , Int ar sia is the only Korean
company which h as n ew It alian loom s for three dim en sion al embroidery .
[IP R S pro c e s s ]
P at e n t a s an a s s e t
Int ar sia br ou ght the skills of creating three dimen sion al socks to Korea
by importin g It alian loom s . It est ablished it s own design cent er and
inv ested mor e th an 4 million w on . How ev er , difficult it w as for the
company ,
inv estm ent
into
r esearch
w as
nev er
spared.
F or
the
dev elopm ent of In s Bio, 12 billion w on w as inv est ed for 6 y ear s . After it s
est ablishment , 10% of sales w as inv ested into research .
Int ar sia ' s resear ch center dev eloped the "w orld ' s fir st infr a r ed emitt er
In s Bio". Conv ention al infr a r ed pr oduct s ar e u su ally a pow der type
which is activ at ed at high temper atur es . How ev er , In s Bio is a liquid
produ ct with 90 % activ ation at norm al hum an body temper atures, 35- 37
degree C. If this m aterial is applied t o t ex tiles, met abolism is increased
due to the emission of infr a r ed, antibiotic ag ent s ar e activ ated, and odor
is rem ov ed.
It also reflect s infr ared and st atic light . Recently , the
function t o r em ov e mit es in hou ses w as added.
Int ar sia applies In s Bio tecnology t o sock s, under w ear , and golf r elated
produ ct s and introduced a deodor ant , "In s Bio free." Currently , 80% of the
deodor ant m arket in Kor ea is domin at ed by the Japanese F ebr eeze.
How ev er , while F ebr eeze can only st op the odor for only 3- 4 hour s , In s
Bio F ree can dissolv e 94% of the cau se of the sm ell. Int ar sia is confident
of soon t aking control of the m arket .
With the pas sion for dev eloping a new product and ent ering new
m arket s, the fashion able underw ear "Bash " w as introduced in Dec. 2000.
Bash is increasing it s m arket sh are with sophisticated m at erials and a
simple
design
con cept .
In
M arch
2001, low
priced
socks , "Ev er
Int ar sia,"w ere introduced and "Int ar sia golf" in June.
President Kim ' s policy is to pur sue a proper m argin by inv estm ent and
as a result , he now h as m or e th an 200 utility m odels and pat ent s . Most
sm all companies s ay they cannot inv est heavily in R&D, but Int ar sia
succeeded b ased on the dev elopm ent of it s technology .
President Kim
s ay s if he could turn b ack tim e, he w ould inv est ev en m ore in R&D.
In s Bio, the high efficiency new m aterial Int ar sia dev eloped for 6 y ear s,
r eceiv ed
a
pat ent
for
it s
inv ention
due t o it s
wide
application s
adv ant age.
[Com m e rc i aliz ation pro c e s s ]
T e c h n o lo g y it s e lf c an n ot prom ot e b ran d
Int ar sia introdu ced it self to the m arket in Sept . 1995. At th at tim e, the
Korean sock s m arket w as under fierce competition fr om other Kor ean
br ands such as MDC, KJC, an d foreign br an ds like Pierre Car din , and
P aulo Gucci. T he color s of the produ ct s con sist ed of m onotones black,
whit e and gr ey . Int ar sia jumped into the m arket under the slog an "Sock s
are fashion ."
Int ar sia beg an u sin g v ariou s distribution ch annels such as s ales st ands
in front of departm ent st ores and pr omotion al gift s for Childr en ' s Day in
or der t o m arket their br and. Now , Int ar sia h as about 200 dealer s n ation
wide. Export am ount s t o U.S ., Sw eden , J apan , and Chin a are increasing
daily .
With 200 dealer netw orks including 70 stores, Int ar sia is t arg eting
t o achiev e 100 billion w on in sales this year . It is an 80% incr ease from
last y ear ' s 51.2billion w on .
T echnology it self can not prom ote a br and. Int ar sia is fam ou s for it s
inv estm ent in prom otion . T hey aired 7 T V comm er cials and signed a
contr act with a fam ou s pop group for 1 y ear and hired actr esses and
sport s st ar s t o launch "Bash ."
Adv ertizing and careful timing w ere m ajor asset s when Int ar sia faced
risk . When the s ales dr am atically decreased in 1997 du e to the IMF
crisis, they pr om ot ed with the slog an , "Kor ean br and paying no roy alty
fees ." Anim ation adv ertisem ent s w ere u sed to appeal to the y oung er
g ener ation . President Kim w as on the adv ertisement and said, "I am
confident [Int ar sia} will rem ov e this sm ell."
President Kim st ates th at , " the m ost import ant v alue in a br and is
hum an ."
E ach and ev ery it em is pr oduced t o m ake hum an liv es healthier
and m ore comfort able. Int ar sia is n ow claiming th at their t arget is to
m ake Int ar sia the w orld ' s
leading
br and, contributing
it self t o the
environm ent , improv em ent of hum an health , and creation of new cultures .
U t iliz e an d s u c c e e d t e c h n olog ie s in a t radit ion al
in du s t ry
[Lif e g o o d s s e c t or : T h re e S e v e n ]
Although ther e are countless import s, w e all u se Korean - m ade n ail
clipper s .
T his
w as m ade pos sible by the t echnological dev elopment and
n ew ideas of Kor ean
companies . T hr ee Sev en ' s confidence in their
t echn ology lies in their effort and ability t o att ain skills while w orking
with designer s fr om m any countries .
Am ong the companies t o which the gov ernment provided the top
qu ality pr oduct aw ards, m any w ere leader s in their indu stry competing to
m arket
their
conv ention al item s
via inn ov ativ e
dev elopm ent s . T hr ee
Sev en , which holds 50% of the w orld ' s n ail clipper m arket is one of the
cases in which conv ention al item s prov ed successful in a w orld where
people believ ed only high - end it em s could be su cces sful w orldwide.
[In n o v at ion pro c e s s ]
S e le c t it e m s w ith c om pe tit iv e po w e r
T hree Sev en w as est ablished in 1975 an d h as been dev elopin g n ail
clipper s for 29 y ear s . T he company ' s mission
is t o "bring beauty and
health t o the w orld by pr oducing good qu ality produ ct s ."
T hree Sev en is m anufacturing n ail clipper s , opener s, and m anicure set s
and now it s annu al turn ov er is 30 billion w on .
It is ex porting to 90
countries throughout the w orld and is actu ally m ore popular in foreign
countries th an in Korea.
T hree Sev en ' s succes s h as been lar gely due to the continuou s effort t o
r esearch and dev elop high qu ality product s and adv anced design s . T he
m ost import ant part in the n ail clipper is the blade of the clipper and
T hree Sev en is confident th at there heat m an agement an d gilt t echn ology
for the blade is one of the best in the w orld . T hr ee Sev en h as been
heavily inv esting into ev ery one of it s pr oduct and h as dev eloped g ood
qu ality product s with creativ e design s .
President Kim Hyeon g - gyu st art ed to dev elop n ail clipper s when he
r ealized th at all the people in the w orld, r eg ardless of n ation ality or
ethnicity , u se n ail clipper s . T o m atch this div er se m arket ,
expand the design s of n ail clipper s .
he sought to
A s a r esult , he m ade n ail clipper s
with hour glass sh apes an d ev en lotu s flow er sh apes, quite a shock
compared t o the h alf m oon
cu st omer s w ere accu stom ed.
sh aped
blade with
a lev er , to which
In addition , T hree Sev en introduced a set
of clipper s am on g which u ser s can choose m any different sizes and
design s according t o their own n ail sh ape. It also intr oduced v ariou s
design s of n ail clipper s t o the m arket t o ch ange people ' s con cept about
n ail clipper s . Of cour se, a high qu ality st an dar d w as som ething th at the
company h ad t o achiev e.
T hree Sev en also dev eloped about 10 differ ent beauty tools such as
ear - pick s, and t w eezer s and put them into a cylin der sh aped kit . By
doing this, the company contributed t o ch anging people ' s concept of
beauty and per son al care t ools . T his beauty kit prev ent s the loss of the
sm all beauty t ools, and it s pleasing design m ade it possible t o be
displayed along with decor ativ e cosm etics .
T he tr an sform ation of the
kit ' s sh ape from hourglas s or box t o a lotu s or crucifix caught the
att ention of the m arket an d quickly placed the kit at 50% of t ot al s ales .
[IP R S pro c e s s ]
S t re s s th e trade m ark
"Korean David defeated Am erican Goliath ."
T he media u sed this
phr ase when T hree Sev en w on the tr adem ark dispute with the American
company , Boeing ov er tr adem ark "777" in 1998.
In 1995, Boeing t ook a firm st and . Boeing ' s argum ent w as th at they
r egist ered the tr adem ark in the U .S . prior to T hr ee Sev en , so they w ould
allow T hr ee Sev en u se of the tr adem ark , but T hree Sev en h ad to pay
r oy alty fee. How ev er , T hr ee Sev en actu ally u sed the tr adem ark from the
1980 ' s within Korea as w ell as ov er seas .
At th at tim e, m any people
show ed their support for T hree Sev en for they thought the dispute w as
like "throwing eg g s ont o a rock ."
When Boeing dem anded a roy alty , T hree Sev en imm ediately filed a
law suit with the U .S . patent office to cancel Boeing ' s tr adem ark "777."
When Boeing r ealized T hree Sev en w ould not yield, Boeing withdrew it s
position
and
both
parties
agr eed
to
u se
the
"777" tr adem ark . T o
compromise with Boein g , T hr ee Sev en agr eed to alt er it s tr adem ark by
dr awing an ov al sh ape around the "777" m ark and writ e "T hr ee Sev en "
under it t o differentiate it from Boeing ' s tr adem ark .
T hese ev ent s
illu str at e th at T hree Sev en ev en though only a sm all company can wield
significant pow er .
Since T hr ee Sev en settled the 3 year dispute with Boeing in 1998, it
h as
1500
times
m ore
annu al
turnov er
and
400
mor e
employ ees .
Curr ently , T hree Sev en holds 120 intellectu al properties such as pat ent s
and utility m odels . In M arch , T hree Sev en sign ed a contr act t o allow u se
of it s tr adem ark by a Hon g - Kong b ased distribution company , Han ay aka.
With this contr act , Han ay aka could u se the "777" an d "T OUCH - Q"
tr adem ark s, agreeing to pay 8% of m anufacturing cost t o T hr ee Sev en
for 5 y ear s .
[Com m e rc i aliz at ion pro c e s s ]
E x p an din g m ark e t by div e r s ify in g pro du c t ran g e
T hree Sev en ' s annu al turn ov er is now m ore th an 30 billion w on and is
the leader in the w orld n ail clipper s m arket . Recently , T hree Sev en h as
been div er sifying it s pr oduct s t o m et al t ools and beauty tools while
keeping it s No. 1 clipper m arket sh are. It ' s str at egy is to ex pand it s
m arket t o low end it em s by dev eloping them with it s high technology .
T hree Sev en dev eloped met al tool m anufactur er s and contr acted with
them under OEM for met al t ools , kit chen kniv es and army kniv es, as
w ell as for beauty t ool product s .
With this m arketing str ategy , T hree
Sev en h as been able to height en their high qu ality br an d im age.
T hree Sev en ' s greatest asset s are con sum er s tru st and "777" br an d
n am e
loy alty . T hese
tw o
factor s
discour age
other
companies
from
ch allenging ' T hr ee Sev en ' . T o m ake a n ail clipper produ ction line, 40
different proces ses and st ation s and 4 billion w on of initial inv estm ent are
r equir ed.
Labor int en siv e st eps are necess ary , which also discour ag e
companies in dev eloped countries and those in dev eloping countries from
entering this bu sines s .
Based on a solid infr astructure and t echnological adv ancem ent , T hr ee
Sev en is n ow r ecognized as the w orld ' s leading br and. T hr ee Sev en is
proving th at sm all and m edium sized companies with low - end it em s can
compet e with under dev eloped countries like Chin a and their low labor
cost s , if they ar e equipped with adv anced technology and att ain br and
n am e loy alty .
Cu ltiv at e a n e w fie ld w ith an inv e n tio n
[Lif e c are e le c tric appli an c e s s e c t or :G - IN T E K ]
"T he CoClean Rhinitis cur e supplem ent ary m achine"; :Sev en Liner for
beautiful leg s"; "Ey ecurl for curly ey elashes ."
T hese ar e som e of the
produ ct s G- INT EK creat ed in order t o succeed in a field wher e m edicine
leav es off.
T hrough con st ant research and an aly sis of con sum er needs , G- INT EK
dev elops life care electric appliances th at suit people ' s beauty and health
n eeds .
Due to higher life style st andards an d longer life expect an cy , people are
inv esting m or e an d m or e m oney into health
and beauty . G- INT EK
comm er cialized new idea per son al car e product s and su cceeded.
[In n o v at ion pro c e s s ]
P at e n t w a s obt ain e d w h e n prob le m w a s addre s s e d
G- INT EK ' s
departm ent
of
pr esident
a
Seo
Jeon g - ju
civil- en gineerin g
w as
company .
w orking
His
in
friend,
the
import
who
importing pr oduct s for w om en , asked him t o help his bu siness .
thereafter , he
became
inter est ed
cry st allized his fir st idea.
in
dev elopin g
a
n ew
w as
Soon
pr oduct , he
M any w om en felt uncomfort able with ey elash
curler s becau se they w ere cold and ey elashes w er e easily pulled out .
In finding a solution to this problem , he inv ented "Ey ecurl" which
perm s the ey elashes with heat . With no other competition in the m arket
ex cept low qu ality , m anu al curler s, President Seo pu shed forw ard to
introduce the it em to the m arket .
T he initial entry into the m arket in 1996, w as m et with neg ativ e
feedback .
Som e w om en burned their ey es while curling their ey elashes .
T he company w as forced to recall and discard 100,000 product for 300
million w on in losses .
Nev ertheles s, Pr esident Seo w as determined to perfect his pr oduct .
After m any trials and error s , he dev eloped a design by which the heated
part could
not cont act the skin .
[IP R S pro c e s s ]
Obt ain e d tru s t o f th e pro du c t
After
' eyecurl ' ,
supplem ent ary
G- INT EK
m achine
st art ed
to
dev elop
CoClean ". He under stood
th at
rhinitis
m any
cure
people
suffer ed from rhinitis but the disease could n ot be easily cured.
With the succes s of their fir st product , "Ey ecurl", which w as export ed
with a 10 million dollar profit t o Japan , Chin a and the U .S . and r eceiv ed
patent s from 18 countries .
G_INT EK g ain ed br and n am e recognition and
w as able t o easily penetr at e the m arket with "CoClean ."
T he rhinitis
supplem ent ary cure sold 210,000 unit s (about 8 billion w on ) in 3 m onth s .
G- INT EK st arted to focu s on life car e electric appliances aft er the
success of those t w o item s .
In the span of a few y ear s, G- INT EK h as
att ained 120 life care electric appliance- r elated patent s in Korea, with 70
of them as ov er seas pat ent s . T his is an incr edible achiev em ent in Kor ea
where life car e electric appliances m arket w as so undev eloped.
[Com m e rc i aliz ation pro c e s s ]
R e fle c t th e u s e r 's opin ion
G- INT EK dev eloped the w orld ' s fir st sm all life car e electric applian ce.
T he pr oduct s of G- INT EK are the eyelash curler "Eyecurl", the rhinitis
supplem ent ary cure m achine "CoClean ," and the leg slimm er "Sev enliner
slim ."
Leg slimm er ' Sev enliner slim ' h as been v ery popular am ong w om en ,
and sold mor e th an 100,000 unit s through a hom e shopping ch ann el.
G- INT EK ' s fir st pr oduct , ey elash curler Ey ecurl hit a record no. 1 s ales
am ong beauty product s in Sony Plaza, Japan . In addition , Coclean rhinitis
cure m achine for hou sehold u se receiv ed the W orld ' s Best Pr oduct Aw ard
by the Korean Ministry of Comm erce, Indu stry and Energy . CoClean is
the only existing treatm ent m achine for rhinitis .
T he secret of G- INT EK ' s success lies in under st anding cu st om er s '
hidden n eeds an d ex pect ation s and fulfilling them .
Con sum er s w ant a
cheap price, good qu ality and good design . G- INT EK is focu sing on the
produ ct s which ar e closest t o wh at con sum er s w ant .
When a company produces the w orld ' s fir st product , it is v ery difficult
t o estim ate m arket dem and.
President Seo needed t o m ake a bold
decision r eg arding the qu antity produced.
T hu s , G- INT EK m et with a
"con sum er appr ais al gr oup" m ade up only of w omen an d listen ed t o their
opinion s in order to r educe it s m argin of err or .
In Oct ., 2001, G- INT EK intr oduced t o the m arket Sev enliner which is
the pr edecessor of Sev enliner Slim . T he n am e w as m ade for this leg
slimm er becau se the leg s ar e the m ost beautiful when their angle is 7
degrees .
R&D.
More th an 5 billion w on w as inv ested for adv ertisem ent an d
How ev er , the produ ct s sold only 2,000 unit s, an d it seem ed the
company w as at gr av e risk .
At th at tim e, the con sum er appr aisal gr oup advised t o r em ov e the sole
pattin g fun ction an d the ankle rot ating function as w ell as decreasing the
produ ct ' s w eight and redu cing the price by h alf. T heir reason : w om en
v alue the beauty of leg s not the health function s . As a result , Sev enlin er
Slim w as produced and the s ales h av e been v ery successful.
G- INT EK entered the Japanese m arket last year . CoClean passed the
t est of Japan ' s Ministry of Health early this y ear , and w as acknowledg ed
as the fir st imported Korean hou sehold m edical care m achinery . In
addition , Sev enliner Slim beg an selling through a J apan ese home shoppin g
ch ann el from the end of last year .
G- INT EK ' s success cr eat ed confidence th at life car e electric applian ces
can be a v alue added futur e bu siness m odel. President Seo st ated, " T he
life care electric appliances m arket is a field in which y ou can h av e
endless new ideas .
I am alw ay s dev eloping product s, ju st as when I
fir st st arted this bu sin ess ."
L o ok de eply int o cu s to m e rs ' t a s t e
[D i s trib ut ion S e c t or : HE S E D T e c hn o lo g y Corp .]
Under
incr eased
cu st omer s, and
surviv e.
competition ,
production
pr oduct s
sy st em s
mu st
mu st
m eet
m eet
the
m arket
needs
of
dem ands
to
Ability to quickly adapt their product s and produ ction sy stem s
t o ch anging dem ands is a key adv ant ag e of sm all companies .
F r anchise bu sin esses h av e a high failure r ate, report edly 99%.
T he
under st anding is th at 90% of the fr anchises are strug glin g t o m eet labor
cost and 10% of it is at break ev en , and only 1% is successful.
Korea ' s Hesed gr ew quickly into a fr anchise company .
How ev er ,
Hesed su cceeded becau se it turned the bu siness ev ery on e know s int o the
bu siness nobody can copy .
[In n o v at ion pro c e s s ]
A c c u m u lat e k n o w - h o w ab out th e fran c hi s e
President Gang Seong - m o fir st w orked for a fr anchise bu siness when
he w as 27. He st art ed in a noodle fr anchise company which did n ot seem
v ery special. How ev er , sev er al people joined the company an d bought the
fr anchises within a m onth . Money came in so easily th at Mr . Gang w as
cert ain this w as wh at he h ad been looking for .
F r anchise bu sines s w as not v ery activ e at th at tim e. President Gang
w ant ed t o place his hopes in this bu sines s . He imm ediately w ent to a big
book st or e, and researched fr anchise bu sinesses . T here, the only book on
fr anchisin g w ould rebuild his bu siness plan : T he hist ory of M cD onalds
F or the nex t 10 y ear s he g ained ex perience in all sort s of fr anchises .
He w orked as a m an ager of a n oodle fr anchise, a b akery , a br ew ery , an d
food distribution companies . He w as building the knowledge th at fr anchise
company owner s should know , such as shop an d m enu dev elopm ent ,
m akin g production m anu als an d increasing fr anchise shops .
[IP R S pro c e s s ]
R e g i s t e r e v e n m in or ide a s f or in t e lle c t u al prope rty rig ht s
T he core of Hesed ' s success lies in inn ov ativ e ideas .
mu st turn into action in order to succeed.
How ev er , ideas
President Gan g ex perienced
different types of fr anchises for 10 y ear s an d continuou sly kept m em os
about cu stom er s ' respon ses . His m em os w ere about pur ch ase reason s,
tim e fr ames, cu stom er s ' h abit , and other point s .
A s a result , he learned
th at cu stom er s ' beh avior s ar e differ ent fr om fr anchise to fr an chise. Using
this an aly sis, Pr esident Gang created the Col- Pop - Chicken cont ain er .
Mr . Gan g w as int erested in cont ainer s while he w as running a chicken
fr anchise, BHC. He w ould think "w ouldn ' t it be nice if the sn ack and
bev er ag e could be put in one cont ainer ". And th at idea dev eloped int o
Col- P op - Chicken cont ainer s .
J apan and Chin a.
It is n ow r egist ered as a utility m odel in
Although m ost of the bev er ag e product line is not ex ception al, fruit
So- ju cockt ail is regist ered as a patent .
Snov a, artifical snow , cost him
2 billion w on , and is now regist ered as a utility m odel.
r oom
Hesed built a
with artificial snow in side the coffee fr anchise, Whoev er , and
applied for pat ent s in 8 countries . Apart from this, he h as applied for
m ore th an 40 patent s for v ariou s ideas .
[Com m e rc i aliz ation pro c e s s ]
T rig g e r c on s u m e r s ' int e re s t s w it h fre s h ide a s
Hesed ' s
fir st
cont ainer s .
br and, BHC
ow ed
it s
success
to
Col- Pop - Chicken
BHC now oper ates 600 fr anchise stor es aft er ju st 4 year s
since it s est ablishm ent .
BHC ' s
decision
to
u se
only
children
for
their
m arketing
w as
distinctiv e. Col- Pop chicken with which childr en can carry a sn ack and
bev er ag e tog ether on their w ay home after school w as an in st ant hit .
Empow ered by Col- Pop - Chicken , BHC inv ent ed the double str aw which
allow s t w o people to drink simult aneou sly . T his idea in stilled in children
the im ag e th at BHC w as a "funny fast food."
Recently , Hesed opened a beer fr anchise QZ t av ern (hof) t ar geting
w om en which w as an in st ant succes s . QZ which m ean s "Queen ' s Zone,"
dev eloped it s m arketing concept "Beef fr an chise th at w omen lov e" by
focu sing
on
fem ale
univ er sity
student s
and
bu sin ess
w omen ,
an d
providing a comfort able envir onment for them t o enjoy and h av e m eals .
If w omen like the place, m en will h av e to like the place as they ar e
accompanying their frien ds . T h at is the str at egy of Hesed .
T he interior w as m ade like a cafe, with blue an d green color s . T ables ,
beer cups , and accessories are v ery feminine.
In addition , in the ceiling
corner wher e hundreds of differ ent kinds of beer s ar e st acked, there is a
"snow m achin e" where people can see snowy scenes an d touch the snow .
Becau se artificial snow is alw ay s falling from the ceiling , beer s ar e kept
cool all the tim e and people can t ake beer s buried under the snow .
To
dev elop this "Snow Bar ", Hesed inv ested 2 billion w on .
T he differ entiation fact or s of QZ ar e m enu s for cu st om er s who enjoy
an interesting and pleasur able environm ent , r ather th an only drinkin g
beer . T here are low calorie side dish set s, "multi cups " for cu st om er s t o
t ake out beer and side dishes together , an d ev en extr a set m enu s th at
serv e 285cc of beer which is an am ount people feel s afe drinkin g without
becoming intox icat ed.
Creativ e m enu h as contributed a lot to QZ ' s popularity .
Fruit Soju
which is a cockt ail m ade with Soju in a fruit w as register ed as a pat ent .
Creativity and ex clu sivity w er e obt ained.
Int ern et br oadcast within QZ t av ern s h as been tried.
All the t av ern s
w ere connected in r eal tim e and pr ovided online ev ent s for cu st om er s .
Quiz ev ent s, and birthday and lov er s ' m es sag es ar e on the big screen .
T he intention w as t o m ake an environm ent where family or lov er s can
come t og ether t o h av e fun . Also, QZ in st alled a cooling pipe bar in front
of the shop which show s the brewing in progress .
Hesed w as est ablished in 1999, and expanded it s m arket t o Japan in
2000, and U.S . an d Chin a in 2001. Curr ently , Hesed ex panded to 9
countries with 25 shops . Yoon Se- y oung , M arketin g M an ag er of Hesed
Korea Corp, st ated, "T he number of ov er seas t av ern s are the gr eat est
am ong Korean fr anchise companies ."
Hesed pr ovides m arket an aly sis and teaches st aff recipes by sending
out at least 2 tim es tr ain er s from headqu art er s t o the newly opened
shops .
are
Ov er seas m ain menu s are the sam e as in Korea, but side m enu s
adapted t o local t aste, which
cu st omer s .
h as
receiv ed r av e review s
from
Without localization of ch ain shops, the cu stom er b ase is
limited to the Kor ean cu stom er s in the country . If the company in sist s on
h aving the sam e form at as Kor ean m arket , the m arket is sub st antially
decreased.
F or a fr anchise company t o surviv e, 4 condition s should be met :
P opularity , Creativity , Continuity and Ex clu sivity . Hesed believ es th at
m eeting these requir em ent s h as m ade it the successful company .
Curr ently , Hesed ' s fr anchises in clude it s chicken fr an chise BHC, 600,
Coffee fr anchise, Whoev er , and Hesed is t argeting t o h av e 400 QZ
fr anchises in 2 y ear s .
It
is
tim e con suming
for
Hesed t o introduce new
product s
and
fr anchises . T his is becau se Hesed nev er copies other company ' s ideas .
Ev erything from
a shop ' s interior
and m enu s to prom otion
ev ent s,
accessories, an d product dev elopm ent are the result of the company ' s
own creation . Bu siness people fr om the sam e field can visit shops Hesed
is introdu cing t o the m arket t o learn fr om them .
Hesed open s the shops
t o ev ery one becau se they are confident nobody can copy it .
A chicken , coffee an d beer fr an chise leader , Hesed, h as indeed t aken
the bu sines s ev ery one know s and h as m ade it the bu sin ess th at nobody
can copy - - th at is the competitiv e edge of Hesed .
Com pe t e w ith f ore ig n bran d s w ith h ig h
qu ality
[H om e appli an c e s s e c t or : JOA S E le c tric ]
Not m any sm all and medium - sized companies can reach cu st omer s
with a finished product with their own br and or label. Incr easing br and
im age by m ean s of high qu ality an d setting up a distribution ch annel are
v ery dem anding ev en for lar ge companies . How ev er , JOA S Electric is on e
sm all company th at is building up it s n am e v alue in the finished- hom e
appliance field.
T hough it only seem s t o provide a simple solution t o a simple problem ,
the prices of g ood sh av er s can reach m ore th an 300,000w on with added
v alue som etim es bett er th an m ajor electrical appliances like T V ' s .
Mor e th an 50% of the Kor ean sh av er m arket is t aken by for eign
br ands , such as Philips and Br aun . JOA S h as su cces sfully competed with
st and them with reason able prices , t op qu ality , and A/ S net w ork equ al to
those large companies, a tr em endou s feat
since other
th an J apan ' s
Nation al, no local br and sh av er h as ev er surviv ed the competition with
int ern ation al sh av er companies .
[In n o v at ion pro c e s s ]
Co s t c ut tin g b y lo c alizin g c ore p art s
In m any respect s , the most import ant part s of a sh av er ar e the blade
and the net .
T he blade should cut h air as thin as 0.07 mm . T he net
should be v ery pr ecise. If one hole am ong 15,000 net hole is blocked, the
h air is pulled out without being cut . T her efor e, the defect r at e should be
zer o.
In addition , the net t ouches the skin directly , so it should feel sm ooth
as w ell as thin and str ong . T hough sh av er s m ay look r ather simple, they
h av e t o s atisfy all fiv e sen ses of a m an .
Oh T ae- jun , the President of JOA S, fir st beg an w orking with sh av er s
when fir st employ ed at a company following high school.
at
th at
tim e
import ed
toy s
and
electrical
goods
T he company
fr om
Japan
and
Hon g - Kong and assembled them for export to the U.S .
He w as inv olv ed in the dev elopm ent , m anufacturing , and assembling
processes of electrical goods . He w as especially attr act ed to electric
sh av er s becau se they r equir ed a higher lev el of technology th an other
electrical goods ; they are a product not ev ery one can m ake.
Becau se Korea did not h av e highly adv anced technology and precision
t o meet all the necessities for an electric sh av er pr oduction , President Oh
h ad t o r esearch and dev elop the skills him self.
A s a r esult , he dev eloped the idea th at there w as pot ential in the
m arket if a company produced v ariou s produ ct s in sm all qu antities ,
whereas
intern ation al
companies
w ould
m ass
pr oduce
them .
JOAS
electr onics decided t o replace foreign t echnology with it s own and st arted
t o focu s on research and dev elopm ent .
President Oh continu ed t o study and dev elop t echnology for JOA S . He
r eceiv ed
as sist ance
from
w orld
inform ation about the core technology .
prestigiou s
companies,
att aining
Aft er 10 y ear s, the t echnology he
dev eloped w as r eady t o compen s at e him for his effort .
[IP R S pro c e s s ]
Core t e c h n o lo g y w a s in de pe n de n t ly de v e lope d
JOA S electrics believ ed th at t echn ology is the key t o win in the
competition with intern ation al companies . As a result of this effort , it
dev eloped a sh av er with LCD, and introdu ced the w at er proof sh av er
with 3 blade heads . In conjunction with Nation al Co.(Japan ), it cr eat ed the
t echn ology by which "high precision plat e grin ding technology " is applied
t o sh av er s .
Last y ear , JOA S carried out the project called "the dev elopm ent of a
combined w et an d dry electric sh av er an d trimm er " t ogether with
T echnology Qu ality A ssociation .
Korea
Currently , JOA S h as 85 pat ent s an d
utility models , 54 design s and tr adem ark s, an d 6 intern ation al right s .
In
addition , it obt ained European CE S afety St andard, UL St andards for
S afety , VDE from Germ any , and ISO 9001 for the fir st time in Korea as
a sh av er m anufacturer .
[Com m e rc i aliz ation pro c e s s ]
Captu re c u s t om e rs w ith a hig h qu alit y pro du c t
President Oh say s he feels pity when Korean pr oduct s r ecognized in
foreign countries are n ot accepted by som e Korean s ju st becau se they ar e
Korean pr oduct s .
F or in st an ce, som e Korean con sumer s blam e Korean
sh av er s for pull out h air s , but blam e them selv es when u sing a for eign
br and sh av er .
A s a Kor ean n ation al m anufacturer , ov ercoming such
con sum er prejudice w as m ore difficult th an dev eloping new t echn ology .
President Oh believ ed th at the m ain w ay to abolish con sum er s ' neg ativ e
concept about a Kor ean produ ct w as t o m aint ain high qu ality .
JOA S ent ered the foreign m arket before they penetr ated the Korean
m arket becau se prefer ences for foreign sh av er s w ere t oo high in Korea at
th at tim e. JOA S ' str ategy w as to est ablish n am e v alue b ased on qu ality
as an OEM supplier an d then beg an entering the Kor ean m arket .
JOAS
supplied component s t o a w ell known br and, Babyliss , and ther eby
r eceiv ed
intern ation al recognition for it s technology .
JOA S is supplying h air cutt er s t o Babyliss and Con Air , un der OEM
contr act s and the pr oduct s are sold at similar prices t o Philips and
Brown product s . T he qu antity supplied surpasses for eign company unit s .
Curr ently , JOAS is supplying m ore th an 1.5Million unit s to Babyliss of
F r ance, Con Air of the U .S . and Doggy M an of Japan , and also exporting
t o 40 countries including U.S, Europe, an d South east Asia with it s own
n am e under OEM contr act s .
While for eign electric sh av er companies w ere focu sin g on the sales of
expen siv e pr oduct s and on their n am e v alue, JOA S str at egy w as t o g ain
m arket sh ar e with low and medium - priced m odels .
JOA S produced the middle- price r ang e br and JOA S, and the low - price
r ang e br and IF REND for differ entiation and supplied new produ ct s t o the
m arket t o compete with Chin a ' s low price pr oduct s . Recently , to compete
with
w ell known
expen siv e foreign br an ds like Phillips , Br aun
and
Nation al, JOA S intr oduced a higher qu ality br and, HEREX.
Last y ear , JOA S achiev ed 20 billion w on turn ov er while competing with
int ern ation al br ands in the Kor ean sh av er m arket , an d t ook 30% of th at
m arket sh ar e.
JOA S est ablished a n ationwide A/ S net w ork and h as successfully built
con sum er tru st , which is v ery r ar e and difficult for a sm all an d m edium sized company .
Now , there ar e 8 A/ S center s in Korea ' s 8 lar ge cities ,
and plan s to incr ease 2- 3 A/ S center per year are under w ay .
JOA S ' A/ S respon se period is 4 day s in the region s out side Seoul and
it s satellit e cities , and 1- 2 day s in the Seoul m etro area.
identical to lar ge companies ' A/ S period.
It is n early
Since intern ation al companies
contr act A/ S t o local companies or dealer s, JOA S ' own er ship of it s own
A/ S net w ork is a significant competitiv e edge.
In 2001, JOAS felt the limit of it s growth with only one it em , an d
quickly div er sified it s product r ange t o sm all hom e appliances inclu ding
h air dry er s , fan s, v acuum cleaner s , coffee m aker s , air purifier s, and other
produ ct s . It also entered the pet m arket .
In addition , JOA S w ork s with cosmetics distribut or Cosline and h as
thu s a div er sified sales net w ork as w ell as increased sales of sh av er s for
w om en and h air dry er s . JOAS still believ es th at the life of the company
depends on the con st ant adv ancem ent in technology and inv est s 15% of
profit s into resear ch and dev elopment .