These portfolios showcase some of our work in consulting for both global and domestic corporate clients. By our JDAM (Joint Direct Accuracy Module) consulting system, we have dramatically increased success rate of our clients’ business projects and investments. In pragmatic strategy and implementation, we mainly focus on helping our clients increase revenue growth. Especially we not only provide strategy and advice but also launch marketing campaign abroad on behalf of our corporate clients to increase their direct revenues. As a result, we speak by our portfolios.
Client Case & Opportunity
Hi-tech trade war: Japan vs. South Korea
In 2019, major global economic news was “the Trade War”. A major trade war occurred between the U.S and China. We don’t involve in the U.S and China’s trade war as we are a U.S based consulting firm. However, we were requested a solution for Japan and South Korea’s trade war from private corporations as a neutralized third party. In fact, On July 1 2019 Japanese government put high restrictions on its core export items to South Korea – semiconductors such as:
- Photoresist
- Fluorinated polyimides
- Hydrogen fluoride
In general, a Trade war is imposed by the buyer country with charging higher custom tariff rates. For example, the U.S is the buyer; and China is supplier. However, uniquely Although Japan is the supplier and South Korea is the buyer, Japan initiated the trade war against South Korea by restricting their export items and semiconductor supply. Some of high-tech corporate clients were in need of our support and solution. And our global trade consulting team launched strategic implementation for solutions.
JDAM Analysis & Approach
We analyzed that Hi-tech Trade war between South Korea and Japan is inevitable. Two high-tech countries with mastership in semiconductors production cannot co-exist in the world. This is more than simply a political conflict. It is predominantly an economic one. The main goal now is to dominate high-tech market in the world.
The statistics show global semiconductor industry sales from 1987 to 2020. In 2019 sales are expected to reach 412.09 billion U.S. dollars worldwide. Semiconductors are crucial components of electronics devices and the industry is highly competitive. The largest semiconductor-based chipmaker is Samsung Electronics. It generated 75.85 billion U.S. dollars revenue in 2018, which placed it among the largest companies in terms of semiconductor industry revenues. The third largest one is also a South Korean company (SK). Also, many Korean technology manuactures are based on semiconductors. While Japan lost 20 years because of the Plaza Agreement, South Korean and their hi-tech companies have skyrocketed globally. However, recently Japanese economy has been rising (so called ‘Abenomics’). According to the New York Times, Japan reported a surprising economic upswing this year, growning at an annualized rate of 2.1. At the same time South Korea economy has been falling down. Uniquely for those semiconductor categories and technology of Photoresist, Fluorinated polyimides, and Hydrogen fluoride etc, Jananese high tech corporations dominated global market with many novel price winners. No other countries can easily replace Japanese Science-technology So the Japanese corporations have been the core supplier to S Korean high tech corporate buyers and globally.
Thus, for Japan, it’s the timing to deter South Korea and their hi-tech companies. That is why the trade war is inevitable between those two countries. Nonetheless, there is Political theory analysis about super power vs. great power. In Political science, the United States is a “Super Power”. But Japan is a “Great Power” like U.K, France and Germany etc. For super power countries, the U.S can impose sanction on several different countries or third countries at the same time; for example, U.S sanction on Iran etc. However, for great power countries, Japan can initiate sanction on particular country by one on one. For great power countries, they cannot impose sanctions on several countries or third parties at the same time. That’s the limitation for Japan on high-tech Trade War.
Semiconductors’ Sales’ Revenue Globally
Recommendations & Implementations
To find solution and strategy on a trade war, we were searching for an answer from history. First of all, Japan blocked their export to only South Korea. In this case, if we aporoach those markets from the 3rd country, we can safely trade and mediate with both Japan and South Korea.
The solution is Overlord diversion strategy, which means we are going to purchase Japanese products from a politicaly safe 3rd country in the EU or Canada, and subequently we are going to resell them to South Korea. In this scenario, the implementation should be fully conducted through the EU countries and Canada.
There are historical examples. When France built the Maginot defense line against Germany during the WWII, Germany didn’t attack it directly; instead, they infiltrated through 3rd country, Belgium, to invade France. Additionally, when U.S alliance attacked Germany, they did not do it directly; but they landed in Normandy, France first.
In conclusion: we utilize European Union countries and Canada as a gateway strategy, called Overlord diversion strategy.
Basically Canada and EU are neutralized 3rd party countries. Especially Canada has been always peacemaker as a neutralized country. And West Europe and Canada contain high-tech infrastructure to trade semiconductor technologies.
We also involved implementation on this project. We organized semi-conductor manufactures in both Europe and Canada. And we guided them to purchase and import from Japanese semiconductor component suppliers. Also, we advised them to resell and export to S Korean high tech corporate buyers. We optimized and pin-pointed both high-tech suppliers and buyers.
Importantly, all transactions were operated in EU and Canada through our Canadian and European team as 3rd neutralized parties. Even when we communicated with Japanese supplier manufactures, we worked with their German and European division directly in Europe. Everything was completely legal based on international business and trade law.
Results:
Our Overlord diversion strategy had been successful to solve the high-tech Trade War between Japan and South Korea. Our corporate clients of both S. Korea and Japan had been able to overcome crisis moment from political matters. As a result, our strategic advice greatly helped our corporate clients to solve and prepare the future from the political conflicts. In addition, our Overlord diversion strategy had been shared among the corporations and market as a solution in both South Korea and Japan. Therefore, Japanese government’s trade war by putting high restrictions on its semiconductors export to South Korea became meaningless and no longer worked. The case has been solved with our Overlord diversion strategy among private corporations globally.
Client Case & Opportunity: Export Consulting, Example 2.
Y Winery– VQA Icewine export
Y Winery is one of most popular national wine and spirits companies in Ontario, Canada. It is ranked as one of largest icewine producers in Canada and the world, and carries numerous award winning wines – gold, silver and bronze at national and international icewine competitions. Over the past few years the company has launched exports to Asia, Europe and USA. However, it was just a conventional supplier, operating without a detailed market analysis and a proper strategy. As a result, its export became very unstable due to factors like changing the buyers etc.
Therefore, Y Winery reached out to our consulting firms to expand their wine export without any risk or mistakes, and our consulting firm received the exclusive right to expand their export to oversea market in particular countries. Indeed, we’ve had a developed infrastructure and trade channels globally.
JDAM Analysis & Approach
According to our JDAM Analysis, the wine industry in one of G 20 countries’ market has increased dramatically during the last decade; and due to that growth, it is a highly competitive sector with approximately 400 wine import companies in the country. (As it’s confidential, we indicate the country as one of G 20)
Despite the high number of wine import companies on the market, over 80% of the wine market in the country is dominated by just a few major wine importers (top 10 companies).
- In fact, there were already 30 existing and major competitors in the country with the similar wines. The wine market was highly competitive as a second mover to enter the market.
- The wine market is dominated by mega-size corporations in this country.
- Many big corporations directly expanded their retail channels in core areas with budget and links.
- The success of wine importing business in South Korea depends more on the branding and channel partnerships rather than just product quality.
Therefore we concluded that this wine export case is highly dependent on marketing channels and branding.
Nonetheless, if we worked with major top 10 importers, we would achieve security and prosperity in this industry. We wouldn’t recommend working with small sized or individual importers in this country.
We stayed to focus on large import-export retailers with direct importing channels and system.
Recommendations & Implementations
We recommended our strategic planning services, and also provided the implementation of marketing services on behalf of our client.
First, we set up our system and de facto marketing, and then we analyzed and filtered a list of appropriate wine importing companies. Our approach was that the target market still does not have a strong presence of Canadian wine, thus our client should work one of the top ten importing companies in the country.
As a strategic solution, we jumped over all middle importers/channels in which they are usually make price bubble. Instead, we connected with direct retail channels with direct import system. This enabled to reduce export cost and eliminate all bubble cost without middle channels for the future customers in the market.
Importantly, we recommended to reduce price down dramatically; instead we recommended to focus on market occupancy initially rather than temporary than temporary revenue in order to win over all the competitors.
At that time, we provided additional strategic planning report, which was asymmetrical in tactics, to expand wine export in this country market through both buyers and suppliers, who were easy to understand the marketing implementation and had confidence in the product. Finally, the exporter sent product samples and our client received PO(Purchasing Order) from the top hyper retail corporations.
Results:
Y Winery received the purchasing order (PO) of many containers volumes and a request from the national top retail corporation (mega-size Corporation). And the annual purchasing volumes have been increased dramatically so far. We estimate that future purchasing volumes will increase more and more.
Our buyer has a stable and dominant market position, and has developed multiple marketing channels in the country, such as: hyper (mega) shopping centers, luxury hotels, restaurants, wine shops etc. In addition, officially the buyer is considered and recognized as one of top retail corporations in the country.
Up to now we have supported both our client and buyer with our strategic planning in order to pre-dominate market. We aim that our client and buyer dominate the entire sweet wine market in South Korea currently.
As a result, our strategy and implementation have worked successfully. Within 4 years, most of other similar 30 competitors were disappeared from this country and market due to our heavy attack. And our client winery has dominated and become the monopoly as the top supplier in this market through our hyper retailer. And entire market has been reshaped in this country.
Y Winery is estimated to receive increasing revenue and POs in the coming years though our export consulting services. The long term revenue will grow more from the oversea export market and skyrocketing demands. Our client is happy with our performance and strategic implementation.
Client Case & Opportunity: Export Consulting, Example 3
Canola Oil Export-Import
Canola Oil refers to a particular and upgraded group of rapeseed verities. As biotechnology, Canada invented Canola oil which was originally a trade mark. In Canada, an official definition of Canola is codified in Canadian law. Canola oil is ranked the third of global vegetable oil market share after soybean oil and palm oil.
Based on well-being and healthy food trend, canola oil industry has been increased over two times for a decade. In addition, Canola oil production is in need of 40% more production globally by 2025.
With this market signal, we launched this Canola oil export-import project globally.
JDAM Analysis & Approach
According to our JDAM Analysis, in early 2000 the price between soybean oil and canola oil was similar. However, after 2009, canola oil was 23% higher price than soybean oil as premium oil. Global consumer trend with healthier fats and well being culture has boosted canola oil demand. Even though global canola oil demand increased with competitive demand, canola production line is limited. Thus, the stable supply-channel is crucial for successful canola oil in global trade.
There are some other counties that produce canola oil in the world such as Canada, EU, Eastern Europe, China, and India etc.
Nonetheless, not many countries export Canola oil except Canada. Canada shares 65% of global canola oil trade. In addition, Canada exports 90% of their domestic canola oil production to other countries aboard.
In addition, there are some canola oil productions in China and India. However, their domestic consumptions are too higher as their population is too high as 12 billion and 8 billion. Especially India is a vegetarian country. So their production cannot sustain their demand. Thus they want to import more Canola oil and China too.
And interesting point is that… although European Union has 21,102 (33%) large production, their export rate is only 8%. What it means is it’s all consuming in the domestic market by demand.
Nonetheless, Canada exports of 90% for their Canola oil abroad. One of reason is Canada has small population of 35 million people of small domestic demand in spite of huge land and farms. Therefore, at this moment, Canola oil is only available for sufficient quantity and price from Canada
Recommendations & Implementations
We concluded that the price is crucial factor for agricultural communities. As a result, we analyzed and communicated with various canola suppliers globally over 7 countries. We acquired fair market price and market value from different countries. And we found and work with the lowest canola oil farm and manufacture.
Basically we have already built our buying channels with top retailers from some countries. With each buyer we successfully managed and supported the lowest logistics cost and canola oil price as well.
Result
We work with the best canola oil supplier by lowest price. With the best supplier, we connected with our recent top retailers in some countries. For both suppliers and buyers, we supported market analysis, strategy, negotiation, and implementation etc just like one stop solution.
As a result, our buyers of top retailers offered purchasing order (PO) with many container volumes every month. The annual volume of PO is over 50~100 containers every year.
Client Case & Opportunity: Export Consulting, Example 3
J Maple Syrup Company
J Maple company is one of the top maple syrup companies in Ontario, Canada. The company has been in business since 1876, in Canada.
J Maple syrup is also recognized as the best tasting maple syrup in Canada by the National Post newspaper.
The company has developed an innovative R&D process for their product lines.
J Maple wanted to expand exports to overseas market; and they had not yet launched export in South Korea. Therefore, they requested and retained our export consulting service, focusing on South Korean market.
JDAM Analysis & Approach
According to our JDAM Analysis, the market readiness for maple syrup has been dramatically increased and the response has been very positive in South Korea.
- In 2012, annual Canadian exports of agri-food and beverages to South Korea averaged to $45.5 million
- For the last five years, the demand and revenue of maple syrup have been increased in South Korea dramatically, from $1,697,885 to $5,249,253. It is the most remarkable record among export countries within 5 years
- Comparing to Western countries, the positioning of maple syrup in South Korea is quite different. In general, in Western countries the demand is higher due to the popularity of bread and breakfast culture. While the main meal in South Korea is still rice
- The price of maple syrup is still too high for customers in South Korea. Thus, it should be offered to middle class primarily
- The main demand for maple syrup is rather related to well-being and healthy nutrition in South Korea
In addition, we also detected that importing process and custom regulations are very easy for maple syrup product, from the legal standpoint. Thus it’s not necessary to get intermediary companies or retail channels involved, as they would cause extra cost for consumers.
Recommendations & Implementations
We concluded that middle importing companies and retailers are not necessary for maple syrup importing business; as a result, we directly contacted and approached some hyper (mega) retail channels, such as mega shopping centers etc. This helped to reduce the cost. Here are the details below: Integrated marketing approach:
- Direct connect with retail channels (hyper markets), without importing companies
- Online shopping mall approach
- Unlike exporting wine products, that require following a lot of liquor regulations and would need an importing company to be involved, maple syrup is a simple product that we can easily send overseas through direct retail channels
- What we conducted was: 1) Direct marketing to retail channels (hyper markets) or other mega shopping malls 2) Direct marketing to online shopping channels with a new logistics system
- For online shopping malls, we developed a “pre-buying but post-logistics system”, to ensure both export security for buyers and sellers
Results
Our client secured marketing channels in South Korea. One of the top three shopping centers was willing to send us a purchasing inquiry. As a result, our client sent product samples to the buyer for a taste and quality test, which went successfully. And currently the buyer is working on importing process with their affiliated logistic channels. Export will be speeded up with the FTA between Canada and South Korea. Nowadays is the right time for export clients to grow stable revenue based on FTA boost.
Client Case & Opportunity: Export Consulting, Example 4.
O Education Institution Client
O Education Institution Client is a reliable international high school, located in Toronto, Ontario. It provides high school education to international students and it’s recognized as one of the best education institutions to prepare for university enrollment in Canada.
The client didn’t have an established market presence in South Korea, although many South Korean students choose to study abroad. Therefore, the client requested our strategic planning advice in order to succeed and expand in South Korea.
JDAM Analysis & Approach
According to our JDAM Analysis, approximately 20,000 international students come to Canada from South Korea annually. The education market in South Korea is profitable and estimated at $707,402,000 which is almost 20% of total export value. The response to international education services in South Korea has been very positive.
- January 15, 2014 – Ottawa – Foreign Affairs, Trade and Development Canada announced the Global Market Action Plan
- The strategy seeks to double the number of international students choosing Canada by the year of 2022 without displacing Canadian students
- Attracting more than 450,000 international researchers and students to Canada by 2022
- This plan of international students would provide an annual boost to the Canadian economy of almost $10 billion
Most of schools focus on B2C student agency marketing. However, agency marketing takes a very generic approach with common marketing messaging and price offering.
Because this client provides a unique education system for selected target audience, generic marketing approach wouldn’t be suitable.
Recommendations
This type of education services is called “customized business segmentation”. However, most of student agency types are defined as generalized business segmentation. Therefore, if we connected those two different types of business marketing channels, it would not be a good match. We recommended the following clear market segmentation.
This school has three issues / risks:
1) High tuition fees 2) Customized but narrow services 3) Customer segmentation by overwhelmed proportion
In this case, if our client took a conventional marketing approach (through student agencies in South Korea), it would not be a successful project.
Therefore, we recommended the direct marketing branding strategy in South Korea market by strategic alliance.
We looked at Psy’s Gangnam Style marketing as a successful example. The main reason of Gangnam style success was the right choice of marketing channels and strong branding, as well as collaboration between YG entertainment (Psy’s management firm) and Scooter Braun (Justin Bieber’s manager). It was about having a winning business strategy rather than just artist’s talent.
As a result, we introduced and recommended one of the most well-known educational marketing and branding corporations in South Korea, called Y-Corporation. Y-Com has strong networks and expertise in major media in South Korea and has a reliable portfolio.
Our recommendation was to initiate a direct hyper b2b marketing campaign by running public relations events and seminars to focus on the segments which would easily expand the market presence to upper social classes in South Korea.
With this direct hyper b2b marketing strategy, the client was able to establish a successful market presence.
Results
This client only requested our strategic planning advice, not the implementation. However, they recognized that our strategic plan has been working very well for reaching their marketing goals. Customer segmentation and marketing strategy we suggested were perfectly right for their target market.
Domestic Business Consulting Clients
Client Case & Opportunity: Domestic Consulting Case, Example 1
UP Photo Art Inc. www.upphotoart.com
One of our clients used to operate a graphic design business, called “AD Art International”, providing graphic design services through offline marketing channels. The company owner recognized that they should upgrade and expand their business and decided to retain our services.
Our consulting firm conducted a detailed market analysis and implementation, and the company got a new branding and market positioning as a digital photography company, and was renamed to “UP PhotoArt Inc.”.
JDAM Analysis & Approach
According to our JDAM Analysis, digital photography sector will be getting a strong and positive market response in the coming years, beyond graphic design sector.
- Digital photography and printing services are estimated to increase dramatically with efficiency over the next years. POD (Print on Demand) and W2P (Web to Print) are the most significant innovative services
- There is rapid growth of the photography industry and the rise of mobile photography According to IBIS World research, with revenues analyzed to top $8 billion by the end of 2011, there will be a steady growth to $10.1 billion by 2016 for photography market. The commercial photography industry will continue to grow as more and more companies turn to the industry to promote their businesses
- In particular, Photo Book sector is estimated as the most growing business sector in the next years. With PMA 2010 (US based International Photo Show) reports, United States is a leading photo printing market in the world and PMA analyzed photo book industry to be valued over $5.5 billion dollars in 2009. In addition, photo book market has grown by approximately 500% since 2007.
In spite of positive market conditions for the photography business in Canada, there are no companies with a dominant market share in Canada so far. Therefore this company must enter and conquer this business sector as quickly as possible with the De Facto marketing strategy.
Recommendations & Implementation
We recommended merging and upgrading the core services, since offering it as a graphic design service only would be difficult for thriving on the market. As a result, this company is now providing the following services: photography, photo retouching/editing, and photobook / press album creation.
We also concluded that conventional offline marketing is getting outdated, and we recommended the client to modify their business model to offer online services only and to market through online marketing channels only.
In order to develop online marketing channels, we modified their business model into a simplified and generalized system which would allow customers to easily utilize the offered services online.
The company became a one stop solutions provider of digital photography, digital photo retouching, and photobook services. Top three components provide the best mix of services to reshape and conquer the entire digital photography industry.
We also recommended and provided seven years of strategic planning to expand in all English speaking countries as quickly as possible through online marketing channels, focusing on Canada, USA, UK, Australia, etc. In addition, by adding a multi-language system in the coming years, the company will be able to offer its services to European and Asian markets as well.
We implemented most of the recommendations on behalf of our client.
Results
As a good sign, the company received two positive responses from a designated venture capital investment firm and from an angel capital investment firm, thanks to the well designed institutional investor case.
In addition, this company found and received funding from an individual investor. The investor with $200,000 budget has already signed contract to invest into this company business expansion.
The company is now upgrading service system, and many photographers and retouching customers have already shown interest in using it.
Client Case & Opportunity: Domestic Consulting Case, Example 2
English Education Institutional Client
This client is a professional ESL (English as a Second Language) school, located in Downtown Toronto.
When the client retained our business consulting services, they had an ambiguous business module. However, their internal assets and infrastructure were quite well developed.
Our team provided only strategic planning services, without an implementation, in accordance with client’s request.
JDAM Analysis & Recommendations
English education market has always been a strong and growing industry segment. In general, the factors of success are: well designed content, management system, and marketing channels / pricing. We provided a strategic business consulting report, and here is the summary.
Business Segmentation – Previously this school offered one-on-one classes in some programs. We recommended to clarify their business segmentation. Although one-on-one classes look attractive, they are considered rather as customized services. In this case, tuition fee should be increased to sustain this program. Generally group classes are considered as generalized or mass market services with lower price. Based on the business segment, price, content, and marketing channels would be totally different.
Award and Star marketing branding – This school has high quality educational contents, developed by renowned professors and teachers. We recommended leveraging this through reputation marketing, star marketing and award winning branding. This upper level brand marketing efforts are more effective with added credibility to acquire new customers on the market.
Simplified and core programs – Previously they had quite a complex program, and customers would get confused by the selection of those unknown and unique programs. Thus, we recommended simplifying the program structure and program names and focusing on core programs for higher margin target audience sectors.
Diversifying customer segmentation – Previously this school had many students from only a few countries. At the early stage this was feasible; however, in order to expand as a global school, their system had to be upgraded by diversifying student segmentation. Therefore, we recommended diversifying customer (student) segmentation by preparing a promotional plan and discount system for new markets, such as Europe and South America, and establishing an oversea satellite division.
Strategic Alliance – We recommended forming a strategic alliance to expand and collaborate with stronger partners in Toronto and worldwide. We developed a target list for a potential strategic alliance.
Neutralization Strategy – We recommended the neutralization strategy for an internal management system and external marketing system.
Substance and Illusion strategy – For business growth, we also recommended utilizing substance and illusion strategy in order to obtain a competitive market position.
Risk Management – We also recommended a risk management scenario to be prepared and shaped for the future.
Results
Currently, this school is a well renowned institution with the following programs offered: powerful presentation, fluent speaking, integrated writing. It is an award winning education institution located in Downtown Toronto.
The school has been growing dramatically by increasing student entollment and its strong reputation. They have expanded and upgraded as a medium-size corporation, from being a small size school.
Client Case & Opportunity: Domestic Consulting Case, Example 3
S Retail Company
This client operated a local retail shop in a residential area of Toronto. Their business was struggling and they requested our business consulting services.
Their cash flow was fairly good; however, they decided to upgrade and find better ways of operating their business. Thus, they requested our business consulting services, strategic planning in particular.
JDAM Analysis & Approach
According to our JDAM Analysis, most of conventional retail shops were struggling with maintaining their offline channels and logistic costs.
- In 2009, 1 out of 10 retail shops in Canada got closed. Most of the closures occurred in Quebec, Ontario and the Atlantic provinces.
- Nonetheless, the retail shops market has been collapsed by mega-size chain grocery stores.
- Retail shops generally depend on real estate, logistics, supply chains and other costs.
- Retail shop marketing is heavily based on offline tactics.
- In general, each retail shop serves a local community; average of 1400 residents.
- Retail shop business must take more creative approach to improve the positioning in the industry.
- In a conventional retail logistic chain system, it’s hard for stores to survive as market is being oversupplied.
- Targeting a Prosumer is one of solutions
Nonetheless, we detected three major problems in our client’s business model. Firstly, their logistic channels; secondly, competition in the area; third, marketing implementation.
Recommendations
Logistics problem. Their major suppliers converted many different steps with middle channels to deliver products to our client. This definitely increased blind logistic costs that become burden for the end consumers. Thus, we recommended connecting and finding direct suppliers for some core and high margin products/items. Middle retail channels were not necessary. This would benefit the end consumers by lower prices. As a result, competitive advantage would be possible to achieve. Secondly, competition in the area. Basically most of retail shops serve the average of 1400 customers in the residential location. However, this retail shop and the real estate were located in a very disadvantageous area – at a corner of a village, and they were blocked by high-way and an elementary school. In addition, in the central intersection, there was a medium size retail shop, a competitor. In this case, this business means they already lost 50% of market share and combat capability. One of the solutions was running an aggressive marketing campaign. We recommended initiating the campaign and to continue operating from the same location. Or they could also change the location and upgrade their business model in the future.
Thirdly, in spite of their sufficient cash flow, the client has never run a marketing campaign before. Thus, we recommended an integrated marketing strategy and an aggressive marketing tactics plan, such as: minimum pricing / bottom line margin marketing, trade off-pricing, cost down pricing, trap down pricing marketing etc. In addition, we recommended building a CRM system to monitor and analyze their business operation.
Results
Based on our strategic planning, our client directly applied our strategy to their business operation.
Initially, our client initiated an aggressive marketing campaign in their community and operation area. As a result, their revenue has been increasing steadily.
In addition, our client got confidence in their business operation and competitive advantages., along with “Can Do” spirit.
Later after the revenue increased, our client successfully sold their current business with over a 50% additional profit margin. And they returned to us for business consulting for their new upgraded business which we analyzed and presented as well.
Client Case & Opportunity: Domestic Consulting, Case Example 4
L Cosmetics Company
One of Canadian financial companies imported popular beauty and cosmetic products from Taiwan to Canada. They had a solid budget and recruited some staff. The company was in the middle of business operation update.
They had sales and marketing team; however, they didn’t have a business development and strategy team. Therefore, they retained our business consulting services for strategic planning and precise analysis.
JDAM Analysis & Approach
According to our JDAM Analysis, the cosmetic and beauty industry market response was very good; however, the positive market response was also a sign that everyone could easily enter the market, which would mean too much competition. Thus, they needed a strategic solution and a diversity of tactics. Here is the summary of JDAM Analysis:
- The beauty and cosmetic industry has become the fourth consumption zone hit after real estate, cars and tourism industries in Canada, as Canadians seek a higher standard of living.
- Canadians spend an estimated $5.3 billion per year on cosmetics.
- Health products industry grew from $1.24B in 2000 to $2.5B nowadays in Canada.
Positive news but not necessarily for an investment review
- Our competitors also know and invade the same market at the same time.
- It only means bloody combats (too much competitions) against heavy fire competitors.
- Conventional competition with fragile infrastructure is tough.
- Stock investment and product investment are different.
- In fact, there are approximately 3,700 cosmetics companies in Canada, most of which are small and medium-sized ones.
- Producing more than 20,000 kinds of cosmetic products.
- The number of beauty parlors has increased to 1.54 million.
- This also means extra competition in the same market.
Brand recognition effects on marketing for cosmetic & health care products
- For well known companies: customers purchase health care products online. But if there’s no brand recognition, costumers will not buy online.
- Scientific testimonial and evidence proof are very important for expressing health association
- Nonetheless, European Union (EU) countries are different and much easier.
- Country reputation effects & economic power theory.
- EU countries have much higher recognitions because EU has much stricter regulations than Asian countries.
- Swiss, Germany, France etc. are easy to get higher reputation due to their cultures and regulations.
If our client had imported cosmetic and health product from Western European countries, it would have been able to work easily in North America. However, cosmetic products from Asian countries are very tough to settle on North American Market. Thus it was a wrong direction from the beginning.
In addition, their logistics system should be amended and simplified channels should be used.
Recommendations:
Fist of all, the importing system should reduce logistic channels for cost efficiency. They had several middle men with higher prices. Under this circumstance, they should re-arrange logistics channels and costs. Thus, we recommended reducing logistic channels and directly contacting supplier from manufacturers; in addition the manufacturer must reduce the price comparing to retail prices. In this case, they can be competitive against other popular brands on North American market.
According to our technology analysis, most of cosmetic components are similar in R&D technology; however, the differentiation is based on marketing and branding. This also means that budget and marketing channels matter.
We recommended three options: 1) investing into mass marketing and branding with samples distribution and viral marketing strategy; or 2) just to connect and operate multi-level marketing channels if they don’t want to invest a large budget; or 3) exit (withdraw) immediately at that moment in the middle of processing without losing any investments.
Results
Shortly our client detected strategic and investment points in this cosmetic import business; and they successfully exited from their importing business without losing the budget.
In conclusion, the wise way is to operate a business is only when it has a feasible and profitable scenario/strategy. Sometime, for the meaning success in business that, not losing money is more important than making money. This is a fundamental investment viewpoint. We successfully defended our client business and their budget.