해외시장 진출을 통한 저비용 전략에서 차별화 전략으로의 전환 -이랜드 중국 진출 사례 중심으로-

Abstract

Foreign direct investment is being increased and the reason for thatmay be an wage growth and the strengthening of trade barriers indeveloped countries. So many Korean companies have entered theChinese market for low labor costs and huge market size. Howevermany of them have failed in the market. In addition, these companieshave even withdrawn after lots of investment in China. It has anattractive market, with a population of 1.3 billion, but this does notguarantee any success in China. By all means, competitive advantagestrategy must be also extended to the Chinese market. This studyexamines E-Land Group in China to explain its success from thestrategy conversion point of view. A survey for this paper was done, targeting mainly 20∼30 year oldChinese consumers residing in the Hunan province of China. They wereasked to analyze their basic consumption trends, awareness on/ofKorean clothing brands, preferences, purchasing experience, and thereasons for their choices of Korean clothing brand. Through the review of the literature and the results of a survey, theauthors find that E-land Group successfully entered the Chinese marketby thorough investigation prior to entering and it also collected andanalyzed accurate information at the beginning of its initial investmentin China. The results of empirical analysis show that Korean clothing brands inChina has enjoyed a lot of popularity from the Chinese consumers. 78.7% of surveyed consumers had experience of buying Korean clothingbrands. 35.5% of consumers choose Korean clothing brands because oftheir excellent design. In addition, a survey listing 10 Korean clothingbrands identifies that E-land is the best with 65.1% recognition. Theconsumers think that E-land has high-quality brand image. It can beconcluded that E-land Group’s strategic change, from a low-coststrategy in the Korean market to a differentiation strategy in the Chinesemarket, proved to be successful. The results of this study show thatKorean companies must tailor their competitive advantages when theyexpand to the overseas. A company which has trouble employing adifferentiation strategy, because of their domestic institutional environmentconstraints, should consider this initiative of differentiation by enteringoverseas markets. The limitation of this study and future researchdirections are presented at the end of paper.