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I am a strong advocate for Korean global business. I see tremendous opportunities and am passionate about helping Korean brands succeed overseas and enabling international brands to thrive in the Korean market.
As I have shared, Korean and global companies must recognize the considerable upfront support and investment required to enter markets outside their home countries.
I want to share what I see as best practices for 2025.
Step 1: Do your homework
Invest time and resources in discovering the local market. Seek an expert knowledgeable about the local market and business sector to conduct an objective, detailed competitive analysis. The report should identify the strengths and weaknesses of the competition within the market, strategies that will give you a distinct advantage, the barriers that may hinder your entry into the market, and vulnerabilities in the competition that can be exploited.
Too often, I see a company scratch the surface of its market discovery. Sometimes, this controls initial investment costs by assigning in-house teams to work remotely and conducting research via a Google search.
In other cases, the headquarters staff dispatches a team to do “field work,” attend trade shows and perhaps arrange to visit a few potential partners.
These fall short of a legitimate competitive analysis.
Step 2: Get in front of the right people
For highly recognized U.S. or global brands, setting up meetings is less of a barrier because product or service name recognition does open doors. This recognition at least generates enough interest for a potential partner to want to learn more.
Korean brands entering an overseas market need significant effort to establish credibility upfront.
Arranging solid introductions involves an upfront cost and can be very time-consuming for both international and Korean market entry.
Furthermore, anyone with the skills, savvy, and reputation to facilitate introductions, especially with decision-makers, should not be expected to do so as a favor.
Step 3: Present the brand, product, and service as if it were a first date.
Although this was best done in person in the past, I recognize that introductions and first contacts today are often “virtual.” Any content presented at this stage should be high-quality and well-localized.
I often see repurposed PDF and PPT presentations — not unique, custom-tailored content.
Then, double-check the grammar, spelling, and punctuation of a native speaker and ensure the pages are free of format glitches.
At the very least, interested parties will Google a company—and often you personally—before any meeting, so it’s advisable to have a professional website. Even better are postings by third parties, such as press releases and media articles, that showcase the company as a legitimate business.
Step 4: Share the Vision
During their screening and selection process, global companies will select a top candidate among potential partners based on criteria, the foremost of which is the partner’s solid vision and business plan in the market. They will ask if the local partner has performed a detailed competitive analysis (see Step 1) and then ask for a comprehensive Go-to-Market Business Plan. As a best practice, the Business Plan needs to be detailed, not a three—or four-page company overview.
Like the PDFs or PPTs shared during introductions, the Plan must be free of glitches, poor grammar, and spelling errors. The documents should present an appealing and solid business opportunity.
By the way, a Company PDF highlighting your brand is fantastic, but most potential partners are primarily interested in a solid business and go-to-market plan.
These four steps are best practices that can lead to a successful Letter of Understanding, clarifying in writing the terms that may have been discussed via email and in conversation.
These steps require time, resources, and commitment — there are upfront costs, unlike past and current practices in Korea that traditionally required less investment or were absorbed by the company.
Experts like BCW, with a proven track record, rarely work on a contingency basis. They seek a retainer to cover their time and expenses, with a bonus when a deal is signed or a development fee transaction occurs.
Regarding local market legal support, navigating the cultural and legal nuances of contract negotiations and drafting, and regulatory frameworks, “A little money carefully spent at the front end of market analysis, and during initial negotiations will always save a lot more money later in the process.” — as a trusted legal colleague has noted.
Frankly, global business presents challenges and risks. The effort requires embracing a new model and taking bold actions by committing resources to a project that leads them into uncharted waters, even when a more practical approach seems to involve tackling each stage as it unfolds.
I am open to talking with you about any questions.
I’m also happy to steer you in the right direction.
Plus, we can provide the support and resources needed for your market entry.
I note in the recent NIKKEI ASIA article Trump tariffs shake Asian carmakers’ Mexico production strategies: Policy could backfire on GM and Ford while also harming Nissan, Mazda, and Kia.
South Korea’s Kia, an affiliate of HyundaiMotor Group, said during its earnings call that if the tariffs go ahead, the company would have to consider a new destination for the 120,000 K4 sedans it planned to make in 2025 at its Mexican factory then ship to the U.S.
Don Southerton, a consultant to Hyundai, Samsung, and other South Korean companies operating in the U.S., said his clients and their suppliers have been growing increasingly concerned about the potential impact of 25% tariffs on imports from Mexico.
He added that although the additional costs will burden Kia, they noted that “the tariff policy is not at a level that would undermine Kia’s system.”
We’ll see… Feb. 1, 2025, is just around the corner.
By the way…
I’d add that when most OEMs entered the Mexican market under the North American Free Trade Agreement (replaced by the United States-Mexico-Canada Agreement (USMCA) in 2020), it opened the doors for the flow of goods tariff-free between Canada, Mexico, and the U.S.
That said, before the treaties, substantial goods were produced by Maquiladoras, factories in Mexico that assemble, manufacture, or package products for export to the United States or other countries.
Interestingly, today’s Hyundai Translead was one of the 1st Maquiladoras.
Hyundai Will Build Container Plant in Tijuana : Maquiladoras: South Korean company is the second heavy-industry firm to announce plans in Baja in the wake of relaxed Mexican guidelines.
By the way, cost savings and lower labor costs have not been the sole drivers of carmakers building plants in Mexico.
Mexican government regulations force car companies to assemble cars in Mexico using local and imported components. Thus, all the major car brands have plants in Mexico. I
In other words, for an OEM like the Hyundai Motor Group and KIA to sell cars in Mexico, it needs to also manufacture cars in Mexico.
Do you have a Korea-facing question, business opportunity, or challenge? Let’s talk.
Christmas is a popular holiday in South Korea. I am incredibly impressed by the decorations in popular locations across Seoul city, such as Yeouido, Myeongdong, and Cheonggyecheon.
That said, it is also a distinctly Christian holiday.
As the holiday approaches, you may wish to greet Korean colleagues with a common greeting. Sae hae bok man i ba deu say yo!
Hint: When speaking, break the greeting into: sae hae bok—mahne—bah deu say yo.
Sae hae bok man i ba deu say yo! works well both in person, in a card, text, IM, or an email.
It is the best seasonal greeting for New Year’s, too.
Given the time differences, vacations, and work schedules, plan to wish Korea-based friends and colleagues a holiday greeting on Thursday, December 19 (USA/ EU time), Friday KST.
Another option is next week on Monday, December 23, USA/ EU, which coincides with Christmas Eve Day AM in Korea.
Questions on the holidays in Korea? Urgent business issues?
This is my annual update and insights on the Korean corporate shuffle.
Year-end promotions, restructuring, and new team assignments are part of Korean corporate culture, both past and present.
Changes occur from top to bottom within Korean companies between early December and early January. Changes to senior leadership are announced first, and team-level changes are usually made known the week before or during the period between Christmas and New Year’s Day.
For example, Samsung Electronics is the first mover this year, having made its annual high-level leadership changes last week. It carried out its year-end executive reshuffle, emphasizing a generational shift.
We can expect others to follow, so stay tuned. By the way, even if public announcements have yet to surface within the groups, these changes are in play internally.
Similarly, with Hyundai Motor Group, we have already seen top leadership changes, with José Munoz promoted to incoming CEO of Hyundai Motor Company and Michael Cole of Hyundai Motor Europe stepping away. We expect their organization-wide changes to be announced soon.
2025
Teams will report back to work after the Christmas and New Year holidays. Some assume new roles frequently in departments with little experience, requiring employees to acquire new skills—sink or swim. Hence, it’s called the “Shuffle.”
In the following days, those who have shuffled brief their replacements, while staff remaining in their jobs update new management teams on the status of projects and issues.
Meanwhile, others will be enroute to assignments in overseas operations, which can be stressful for local overseas operations and challenging for those working outside Korea for the first time.
The Disconnect
In particular, it is common for those newly assigned to be unfamiliar with or have minimal experience with the nuances of localized foreign business and their new roles and responsibilities. Not to mention, working outside Korea itself can be a learning curve that can take months or even years.
What works in Korea rarely transfers to managing overseas teams. Most still try to adapt to local norms and language. In fact, over the years, I have worked extensively to facilitate smooth transitions in many of the newly assigned overseas teams, and they will need support. I strongly recommend that Western and Korean leadership take countermeasures to mitigate transitional gaps.
So, what to look for…
The top Chaebol will begin to announce key promotions, which can provide some insight into future trends.
The Chaebol usually also comments on whether this year’s promotion number is more or less than in the past and the reasons “why.”
Top Chaebol will soon announce restructuring plans, ranging from granting business units more independence to consolidating control.
For example, some years, we see less change and stability than drastic changes in the face of economic uncertainty, as it may carry out in a modest year-end leadership reshuffle across affiliates.
New Year’s Message
That said, as in the past, with the new year, we can expect leadership to share their 2025 plans in an annual New Year’s company announcement, too. I monitor these closely and, as they are in Korean, will share them when appropriate and upon request. These New Year’s messages can be very insightful as they pose marching orders for the new year.
As a final note, for Western global teams, I suggest congratulating those who are promoted but also being sensitive to Korean team members who were passed over… or possibly moved to what may be seen as a less strategic assignment.
In this week’s Newsletter and YouTube, I look at Korean Business and ”Similar but Different Norms.”
Global business requires colleagues of different cultures to work together daily.
How we see each other culturally is often based on differences, like language, and similarities, such as shared values like family.
I like to focus on the latter, as differences can pull us apart, and similarities bring us together.
Particularly for Western teams engaged in all ways with Korean operations, I believe in the importance of deep learning about the workplace in Korea — the 2024 norms, practices, and day-to-day life.
They do change, and most often, we can fixate on what could have been tainted by hearsay or an altogether lack of understanding.
The same learning goes for Korean global teams assigned to support overseas operations. They must become savvy learners in the wide range of local overseas practices. Expecting global teams to bend to Korean business norms rarely works, too. It just leads to delays and stalled projects.
As I noted above, recognizing similarities is one of the most potent cross-cultural bridges.
In other words, how can you relate to the nuances in communications and day-to-day life? This requires identifying the local beliefs, values, expectations, traditions, and culture. These insights allow us better to understand our mutual teams’ thoughts and expectations.
Outcomes
Although there is bound to be friction between home and host country cultural values, a successful model accomplishes:
1. Awareness and appreciation of both the home and host country with the ability to gain an insight into one’s own personal traits, strengths, weaknesses, attitudes, and interests.
2. Realization of shared values, along with an awareness of and respect for cultural differences.
Call to Action
So, how do you see this applying to you and your experiences working with teams from another culture?
This brings me to recall a recent C-level meeting where I chatted with the local subsidiary’s Korean CEO. He asked if I’d shared with his team how the company in Korea and the U.S. differed from the Group’s many sister firms—many Westerners wrongly assumed high conformity across the Group.
I assured him that “yes,” and, in mentoring, I shared that I, too, had experienced each company’s unique culture within the group.
Not only did sister companies differ, but in some cases, the Koreans recruited and worked in different ways at companies within the group.
On parting, the CEO pointed out another key point to be shared: Over time, Koreans dispatched to support the division’s overseas operation came to see things differently than domestic Korea-based teams.
He ended having come to “See things differently, too.”
Participants will gain deep insights into Korean business, whether new hires, on a team assigned to Korea-related projects, or those of you who have been engaged for a long time.
This is a well-recognized program for anyone who works with Korean or Korean teams.
The virtual classes will be solution-oriented and highly interactive, including Q&A and timely topics.
It’s common for a Korean company’s leadership to decide on direction and major issues. These can range from a shift to Smart Manufacturing to greater SWP (software-based production) or a new business line. In turn, they can request a TFT (task force) and local teams to gather and prepare needed information.
Then, if approved, the dedicated staff will report back to HQ on implementation and progress.
In cases where overseas leadership and teams hope to offer an idea, new service, or program, local Korean and Western management’s role is to prepare—gathering supporting information, the reasoning behind, and ROI, then sharing it with the appropriate senior team members, who are often in Korea.
The local opinion is valued, but review and final approval may come from Korea.
My suggestion…
When conducting a meeting where a decision must be made, please know that your local Korean team(s) will have a significant say in the outcome. This may include both the operations and finance teams. Their primary concern will be risk.. so do your best to mitigate.
Since the topic and subject matter may be new to your Korean team, I recommend you share the needed background documents (best provided in PPT format) before any meetings.
In addition, have an informal pre-meeting Q&A with the Korean team leader to brief and update them on any specifics. Note: they may need a day to review proposals and agreements, so timing is critical.
Even in the best cases, expect that the Korean team may want to postpone any decision until they can carefully review and perhaps confer with Korea. I suggest all documents and meeting PPTs be immediately forwarded to the Korean team. I’d create a sense of urgency with a timeline for execution and implementation.
Regardless, expect some delays and be patient. Over the years, I’ve found that Korean teams appreciate when their overseas co-workers recognize that the internal approval process takes time and be ready to offer as-needed supportive data or documents.
In our next edition, we will examine the 2024 Approvals. So stay tuned and follow our Newsletter and YouTube videos.
Are you engaged in high-priority projects or business proposals?
I can give you some perspective to make sure it works well. Let’s talk.
