Pest Analysis for South Korea free essay sample

This report focuses on the external factors that are likely to have an impact on the making of a Lobster hatchery in South Korea. In order to minimize possible market barriers, Political, Economic, Socio-cultural and Technological (PEST) analysis has been conducted on the country of interest. The analysis has supported to gain more information regarding the marketing environment of South Korea and the potentiality of the success of the Lobster hatchery. Matured Market size lobster Cooked Whole lobster Lobsters are a rare and authentic delicacy anywhere in the world. Due to the high world-wide market demand and shortage in supply, lobsters are priced highly. The mission of a lobster hatchery is to culture and stock lobsters under the method of land-based farming and commercialize it at a competitive price to the local seafood market. Lobster hatchery concentrates on a Business-2-Business approach in South Korea with the concept of aqua-culture. Due to the necessity of a high-budget construction cost as well as sophisticated technological prerequisite, lobster hatcheries are only a few in number all around the world. Orney Lobster Hatchery located in Orney Isles, Europe South Korea, in the contemporary world, symbolizes prosperity, success and industrialization. The country is regarded as one of the Asian Tigers that has flourished in terms of its economy. It is one of the highly developed and prosperous countries located in Southeast Asia excelling predominantly with its technological based product export. South Korea is bordered by China, Japan and North Korea along with the Sea of Japan and Yellow sea on both sides of it. The current population is estimated at 48. 46 million latest (The World Factbook, 2008) with most of the people living at the capital of Seoul, which is also identified as the second largest metropolitan city in the world. The country is also notified for their excellent transport services that inter-connect all across the country and additionally four different sea ports. With an endless list of accomplishment, South Korea today is an ideal model for every developing nation. Seoul: The second largest metropolitan city in the world. . 0 Political Analysis The South Korean political system is classified under the constitutional democracy governance which is divided into three major categories which are executive, judicial and legislative in the order of descending hierarchy. With the president being highest in the hierarchy, South Korea holds a public voting every five years time for the presidential election. While the legal system in Korea is a combination of Anglo-American law, civ il law system as well as Chinese classical thoughts (World Factbook, 2008) For a successful entry into the South Korean market, long term investment strategies are recommended. This includes matching and assembling the Lobster Hatchery requirements according to the local preferences, research and building long-term relationship with the potential local business holders. South Korea is also a member of the WTO as a result to which entering their market has been made much uncomplicated due to the removal of certain physical trade and non-tariff barriers. A number of industry giants have been known to have ventured into South Korea recently and the government of the country in turn appreciates foreign investments into the country especially in any business that relates IT and specialisation after the Asian financial crisis in 1997. A number of restrictions have been known to have become laissez-faire in South Korea regarding foreign investments venturing into the country. At the same time, South Korea is also members of bi-lateral and multilateral trade organisations such as WTO, APEC and OECD. However, some constraints regarding the market entry with Lobster hatchery might include the inconsistent food standards policies and law regulations. Organisations like Korean Food and Drug Regulations (KFDR) and National veterinary research and quarantine office (NVRQS) are required to get a clearance from before opening a lobster hatchery. 3. 0 Economic Analysis South Korea’s economy has boosted and have come a long way after the affect of the 1997 Asian financial crisis. Its GDP per capita (PPP) now stands at $24,800 (World Factbook, 2008) with a real growth rate of 5%. South Korea holds the fame for being one of the leading Technology based product exporting country in the world. Infact the country’s specialisation into science and technology has assisted in its rapid economic growth making it the thirteenth largest in the world. Amongst the list of sophisticated industries that South Korea concentrate include automobiles, construction, computers, electronics, robotics, semiconductors, shipbuilding and most importantly biotechnology, which is a major competitive advantage favouring the proposed lobster hatchery project. With moderate inflation and unemployment rates which stand at 2. 5% and 3. 3% respectively, venturing into their local seafood market is relatively risk free. The agricultural sector of South Korea contributes only 4% to the total GDP where only 7% of the total labour force is employed. This is largely due to the scarcity of arable lands and heavy industrialization. Consequently, seafood import into South Korea has exceeded to that of the export (Australian Trade Commission, 2008). Live and frozen lobsters are one of the major import section of the Korean market. Opening a lobster hatchery will help the local economy with the adequate supply of fresh lobsters at a competitive price while at the same time minimizing the heavy imports of lobsters from countries like Canada and Australia. Another important factor that contributes to the limited agriculture in the country is the lack of adequate labour force in the agricultural sector. This criterion could be worked out with the increasing number of foreign labour force who are prone to migrate to South Korea every year due to the positive prospects of the country. . 0 Socio-cultural Analysis The age structure of the South Korean population reveals the greater presence of the younger generation that is between 15-65 years with a median age of 36. 7 years (The World Factbook, 2008). This establishes the fact that the average Korean population are mostly younger generation who falls under the working class category. Typically, this class of people seek for differences in their tastes and lifestyles and are tend to be more liberal and westernized. Although, lobsters are available in many regions around the globe but traditionally the cooking and flavouring style of this particular seafood has been very westernized with the usage of a number of sauce and gravies. Thus the cuisine of lobster attracts more specifically to the younger generation. In addition, the urbanized working class of the people would be able to afford purchasing the lobsters which will be priced with respect to the world demand and supply. With the rapid economic growth of the country, the Korean people have simultaneously become more permissive regarding the religion issue (Korean culture and Information service, 2008). Unlike most of the other countries, there is an absence of a dominant religion rather the Korean culture is a mix of a variety of religions. Consequently, the constitution in South Korea provides the freedom of religion for everyone and the increasing number of immigrants into the country every year has also contributed to such beliefs. The central language spoken all over South Korea is Korean. The plus point is the same standard form of Korean is spoken by everyone around the country regardless of the presence of number different dialects. However English language is widely used and taught in the primary and secondary education levels. The dominant category of the population that is the younger generation can both read and write English fluently. However, Korean language is advised to be used in business communications and dealings. Additionally, with a literacy rate of 97. 9% it will be easier for hiring skilled personnel’s for the proposed lobster hatchery. A Typical South Korean Seafood Market 5. 0 Technological Analysis South Korea’s integration into high-tech innovations has primarily lead to the success of being one of the major economic powers in Asia. The country is the world leader in the fabrication of several high end consumer products that ranges from information technology, automobiles, robotics and semi-conductors. Its immense success in the technological industry has lead its entry into the G20 group and has at the same time attracted many of the foreign industry giants to venture into South Korea e. g. Nokia and Microsoft corporations. Building of a lobster hatchery requires high-tech heating supply, inflow fresh sea-water supply and an advanced RD. South Korea’s contemporary infrastructure is another one of the competitive advantages that will favour the construction of the proposed project. The South Korean government is lenient towards Research and Development (RD) in order to improve the skills of their booming technological industries. Both the private and public sector RD has been increased and the investment in RD towards the end of 2006 has been estimated at $28. billion. Additionally, the government of Korea is also enthusiastic about the penetration or invention of new technologies into their market. Consequently, as mentioned earlier, lobster hatchery is a technological based project with a primary interest in aquaculture. Bio-technology is also coherently related with the artificial culturing of lobsters. South Korea has rapidly progressing with their latest inve ntions with the aid of bio-technology. In addition to that, a thriving bio-industry is most likely to capture the Korean commerce in the following years. Hence, bio-technology is yet another competitive advantage that supports lobster hatchery construction. Advanced Female Andriod, Manufactured by Korea University of Science and Technology, 2006 National Lobster Hatchery, Padstow, Cornwall, UK 6. 0 Conclusion Lobsters are a main category of the worldwide seafood export. Every year a significant portion of the seafood import to South Korea consists of lobsters, mainly imported from Canada, United States and Australia. Subsequently, the urbanized Korean population are found to be fond of seafood culinary. Hence, the import of seafood has been escalating to that of export in South Korea since 2004. Lobster Hatchery is relatively a new concept that will aid the re-stocking of the decreasing population of the lobsters. It will also help sustain adequate supply and minimize the import of high-priced lobsters in South Korea. Since South Korea is a leading science and technology savvy country with a presence of a world-class infrastructure and abundant RD and bio-technology scope, we can make use of it in order to develop a leading lobster hatchery. Apart from that we can also venture into their seafood market with the use of their sophisticated communication technology and transportation system to build up a strong supply chain management and logistics for the longevity of the lobster hatchery. Hence, South Korea satisfies all the key pre-requisites that are necessary for the construction and development of a successful lobster hatchery.