External Analysis Of KIPCO DAMACO

December 2017 H. Arda Sutaşır, Levi Ginneberge, Sofie Vichtir, Simon Lievens, Marta Aranda, Djafar Ismailov, Sofie Ortner, Brent Van Ostaeyen Howest Brugge External analysis Project Export Marketing   Table of contents Table of contents 2 1 INTRODUCTION 5 1.1 About 5 1.2 Exporting 5 1.3 South Korea 5 1.4 Goals of export 5 1.5 Framework 6 The meaning of the weights: 6 The meaning of the scores: 7 2 Market analysis 8 2.1 Introduction 8 2.2 Market segmentation in Asia 8 2.2.1 Introduction 8 General division 8 Relative low import 9 2.3 Market potential and demand 10 2.3.1 Competition and demand 10 2.4 Macro-economic factors 11 Social factors 11 Technological factors 11 Economic factors 11 Political factors 12 2.5 Market analysis conclusion 13 3 Risk analysis 14 3.1 Introduction 14 3.2 Commercial risks 14 3.2.1 Foreign product 14 B2B 14 Foreign language 14 3.3 Financial risks 15 3.3.1 Transportation costs 15 Travel expanses 15 Increasing import taxes 15 3.4 Political risks 16 3.5 Political corruption 16 3.6 Documentation risks 16 3.7 War risk between USA and North Korea 17 3.8 Conclusion 18 3.9 Scores 18 4 Trading relations 19 4.1 Introduction: 19 4.2 South Korea 19 4.2.1 Export 19 4.3 Import 20 4.3.1 All import in South Korea in 2016 amounts to 406,1 billion Dollars. 20 4.4 Belgium 22 4.4.1 Export 22 All export in Belgium in 2016 amounts to 398 billion Dollars. 22 4.5 Import 23 4.6 Conclusion: 24 5 Import restrictions 25 5.1 Introduction 25 5.2 Duty/ custom 25 5.3 Import licences 25 5.4 Tariff 25 5.5 Taxes 25 5.6 South Korea 25 5.7 Conclusion 25 6 Export requirements 26 6.1 Introduction 26 6.2 South Korea 26 Packaging 26 Documentation 26 COMMERCIAL INVOICE 26 CERTIFICATE OF ORIGIN 26 PACKING LISTS 26 BILL OF LADING 26 MARITIME INSURANCE IT is an agreement between two or more parties who are in transaction. Under the Incoterms (shipping terms) agreed to by the parties in a transaction. If the exporter is responsible for insurance, a marine insurance policy or insurance certificate is required. 27 SANITARY/PHYTOSANITARY CERTIFICATES 27 WHOLESOMENESS CERTIFICATES: 27 6.3 7.3. Conclusion 27 7 Distribution analysis 28 7.1 Introduction 28 7.2 Location of South Korea 28 7.3 Suppliers 29 7.4 Providers 29 7.5 Conclusion 31 7.6 Scores 31 8 Competitors in South-Korea 32 8.1 How to distinguish from competitors? 35 8.2 Conclusion 35 8.3 Scores 35 9 SWOT analysis 36 9.1 Strengths 36 9.1.1 Belgian quality 36 Already in China 37 Own logistic network 37 9.2 Weakness 38 9.3 Opportunities 40 9.3.1 International trade agreement 40 International cooking 40 Local kitchen appliances: 40 9.4 Threats 41 9.4.1 International competition: 41 Demand is not stable 41 Local Food is more popular 42 10 Conclusion 43 11 Sources 44  INTRODUCTION About The following work is an external analysis on the export of the Belgian brand Kipco Damaco. The previous internal analysis was paying attention to the brand itself. This external analysis builds the second part of the project and focuses on the outer aspects as in where to export to and the accompanied circumstances. The present paper includes a market analysis and a risk analysis. Ongoing it deals with the trading relations. The next part is a distribution analysis and is followed by import restrictions. Finally, a competitive analysis and export requirements are met. The last part sums up the whole external analysis and draws an end conclusion. Exporting Most European producers of food are logically focused on the European market. Kipco Damaco Company chose to base only part of its production on the European market as well as they are originally a Belgian company. As the growth of the brand went on the company started exporting French fries to Asia. At the moment there is a tendency of copying European trends in Asia. That is the reason why there is a rather high demand of French fries. This offers a large addition to just the European market for brands like Kipco Damaco. So far the Belgian brand has entered foreign markets in Asia and South America. Nevertheless, the company does not have a clear strategy in market access. After analysing exporting to several Asian countries like Japan, Thailand, Malaysia, Indonesia, Taiwan, The Philippines, South Korea, China, Singapore and Myanmar, the most attractive one seems to be South Korea. South Korea Due to this South Korea has been chosen for this marketing plan. The aim of this external analysis is to determine what strengths and weaknesses are on exporting to this country. This export plan will evaluate the market segmentation in Asia. Goals of export There are several goals that can be met when exporting. The following paragraphs will give a short overview. At first exporting, of course, increases sales. A company should consider exporting when it wants to enlarge its revenues but all opportunities in its domestic country are exhausted. Entering a new market may be a solution. Due to a larger presence when exporting to additional countries the number of possible customers rises. If the newly accessed market leads to a raise in demand too, the higher number of customers means more sales logically. Another plus of exporting is the growth coming within the latter. Brands that want to enlarge themselves quickly can maximise this way. Furthermore, increasing profits might also be a reason to go globally. It has to be said that these two do not go hand in hand concerning every product. Selling innovative products in a foreign market might raise a company’s profits faster and more intensive than offering a product that has many substitutes by nature. Selling these products might not cause as much profits as competition might be harsh. Due to this, offering products below the price of the domestic country has to be considered. This might damage the aim of increasing profits. Being active on several markets reduces risk as a whole. This is a main goal of every company to make sure the enterprise persists. Risk is reduced as the company is not dependent on only one market whether it is the domestic one or another. Different markets may experience other growth rates which comes in handy at this point. The survival of the company does not only build upon a small range of customer’s behaviour. This balances the growth of the organisation in a great way. Exporting is a perfect method to increase economies of scale and become more efficient than possible competitors. Products that do not have to be adapted a lot are more suitable. A further advantage that speaks for exporting is that the lifecycle of the product might be increased. While a certain product’s sales might already decline in a company’s domestic market it is possible to raise them on another market and gain new profits. It is a given fact that companies, and with them their offered products, that expand to further markets than only their domestic market have better chances to innovate and improve their performance as a whole. Being confronted by new competitors, markets and customers might demand new ideas and improve strategies. As the company gains new insights on their market it will become a better competitor. The development of the own market or current trends might be learned and possible new contacts earned. Exporting might increase credibility as well. The company seems to be more open and is not only focused on its own market. Due to this performance in the domestic market might also be improved. Framework There will be a framework used after each chapter to screen their importance. It consists of weights and scores. Weights are reaching from 1 to 5 and scores extending from 1 to 10 as also shown underneath. By multiplying each weight and each score a weighted score will be evaluated. The maximum will be put next to it to make comparison possible. Below, there is a list of the criteria included. The meaning of the weights: 1: Not important at all. 2: Minor importance 3: Important 4: Very important 5: Decisive The meaning of the scores: 1: very poor, the worse 2 3 4 5: neutral, middle 6 7 8 9 10: very good, the best  Market analysis Introduction When planning on exporting a product to a foreign market it is very important to understand in depth where to bring the product to. What is the local market about and what is the demand in said market are questions that should be answered in the very beginning. Therefore, several points of interest for the market that is aimed for will be touched in the ongoing chapter. In short, the following sections will be covered: market segmentation in Asia, market potential respectively demand, and the macro -, meso- and micro- economics. Finally, a general conclusion of the findings and results will be given. Market segmentation in Asia Introduction It is important to have a general idea of how the market is divided in the region that one is planning to enter. That is why it is correct to take a look at the statistics of the segmentation at first. In the following section a comprehensive analysis of all the information providable of the market founded in North Korea. Most of the information has been hard to detect. That is why a lot of the information that has been found is not highly detailed but more in general lines. Although the information being limited, it is curtain that the information will be valuable. General division First, a closer look at what products South-Korea imports as a country will be taken. Doing this will allow a better understanding of what product group is more important than the other. This has been divided in four main groups: Agricultural products, manufactured goods, fuels and mining products and others. It is important to point out that these figures come from the year 2015. Although, they are suspected to change, it can safely be assumed that the market will have stayed around the same level. As seen in this graph the top imported products seem to be the manufactured goods. This of course is not the best news. Looking at percentages solely is not wise because this says nothing about the factual numbers. This is, why taking a look at the top imported products and their figures is of an important value. The information given by this graph evidently describes the import of prepared food. This includes, but is of course not limited to, the frozen fries. No other information could be found on the division of these “other food preparations”. Nevertheless, with this segment being in the top five of the imported agricultural products. As a further bonus, it is only topped by the import of meat and corn. Meaning that processed food has a better market than fresh food, besides the corn. Relative low import The next paragraphs concentrate on import rates of food as they are rather low. Since the European Union has a trade agreement with South-Korea, it should not be a great deal to import anything to this country. As a matter of fact, it turns out that there is an enormous roadblock for importing to South Korea. The following information Is taken from the site of the European Commission for trade. “The EU exporters face difficulties entering the Korean market due to long approval procedures. Korea has import procedures in place for both animal products and plant products. These are the so-called 8- step procedures. The procedure as such is transparent, but excessively long for getting access to the Korean market.” Although the article touches on the difficulties with plants and animals, the site does confirm that it has an effect on general food distributions and regulations as well. In general, this means for Kipco Damaco as follows. It certainly is possible for them to export their fries into the country, but it has the drawback of taking a long time. This means of course that quick response is going to be a hurdle. This together with the great distance makes is almost impossible for a quick and instantaneous delivery. Of course, there are many other strong points they can focus on. When taking Treacy and Wiersema in consideration it is important to always be the best in one of their three aspects. Focus Going further down the path of Treacy and Wiersema, making a proper statement on what to focus and what aspect one should try to shine in. Generally, when looking at this model Customer intimacy, Product leadership and operational excellence can be seen. Customer intimacy compels a company to make sure their customers get the best service, the fastest response and the friendliest smile. Being so far away from their customers, seems as an almost impossible task to be the market leader in that aspect. Seen with the previously touched aspect of the distance and import restrictions. Operational excellence implies that a company is the most efficient one on their business. Business whom may seem lean and green are often chosen as the market leader for this aspect. Hallas this might be so but as no further information is known about the competition a safe assumption cannot be made on this. The most obvious choice to strive for perfection is of course product leadership. Within the limits of the possible, Belgian fries are indeed renown for their taste and cultural heritage. The reputation alone makes it a great competitor without even being eaten once. When thinking about the possibilities that a marketer can accomplish with the reputation alone of those fries makes market penetration a whole lot easier. This brings up a whole new segment. Market potential and demand Competition and demand When coming across a new market it is always important to make sure that one completely understands previously said market. When contemplating on the demands and current offer within a region or country, it might be appropriate to take in consideration the five forces of Porter. These forces have been proven time and time again to be accurate and useful to determine the worth and potential of a market. Besides the initial entry of the new and foreign market, it also gives an idea on how stable it is and how long one can persist within its existence. Porters five forces Within this section the importance of these forces will be discussed and weighed. Please, bear in mind that the information available is limited so that not every aspect bespoken is accurate. Starting off with the threat of new entrants. Kipco Damaco being one itself gives an amazing example of the risks and decisions required to enter a new market. As a distributor of Belgian fries, there is an advantage here evidently. Not every new entering company has this. Of course, there might be new competitors coming over from the European region and even Belgium. This is, nevertheless, not a bad thing. Creating more competition for Belgium fries increases their popularity. As for competition, there might be a small clash but when being one of the first to enter this market, a curtain layer of confidence can be laid when thinking of newcomers. The bargaining power of the buyer might offer one of the biggest issues. Although frequently touched upon the renown for Belgium fries, this is no certainty that there will be an instantaneous demand for them. Although the Asian market has been known to be ecstatic about foreign foods, this does not guaranty instantaneous demand. Though it might not be hard to sell the fries, one has reason to believe that before the fries are full on marketed as Belgian. The decision to make the presentation a bit more Asiatic in nature, might proof valuable in the early stages of sales. Fries are, and always will be, a course to be added with another dish. In Belgium they are often eaten only with a slice of meat, a snack or sometimes solely the fries. In many other countries this is not the case and they are being eaten as a side dish. Meaning there is reason to believe there might be substitutes enough for this product. For example, there are pommes duchesse, croquettes and other potato based side dishes. Even considering those, not only potato based products can be a substituted but things like halloumi, rice or even a simple slice of bread. This can be a big impact on the market and the competition as well. Besides the power that a consumer has, the supplier of Kipco Damaco has a big role to play in the story as well. Not only do they not produce it themselves, they are a B2B – company. This meaning that they are only a gateway, an intermediary between a producer and a B2C seller. This brings great disadvantages along with it. They are wholly dependent on the timeliness of their supplier, whether their prices will stay the same or fluctuate. If said supplier decides to just sell its product directly to the customer, this jeopardizes the entire company. This is of course an important factor. Earlier on in this paper, it was narrowly explained that making relations with other businesses is so extremely important, this is a great example of this. Finally, as a most major part of the forces, to the current competition within the market. Big companies like Mccain, Hyfun foods and others are already present this is indeed a hard be felt defeat. A hurdle that needs to be overcome if the company will enter the market. Even with the advantage of being Belgian quality fries, it is hard to beat competition to who can offer low prices due to being multinational. Considering that multinationals often have monopolies on such occasions, it is hard to know whether if it is possible to defeat such competition. Macro-economic factors Establishing a great view of the chances of market communication gives a general idea of how big the chances of success are. It is always a good idea to have a look at the national economy of the target market. This has many reasons but the most obvious one is that if one knows how well a country is doing, the assumption of economic growth for a company looking to locate itself there may be made. Social factors Following the Korean war, the nation has been building itself up ever since its ending. Although greatly being helped by the United states of America in this matter, there has been a great divide between the rich and the poor. The country is still in a post-industrial phase of its lifecycle and this deeply reflects on the social standards within the country. As the article mentions, many troubles surface when looking at South Korea. One of them being the misguided social welfare system and the declining ornamental state. This all halts a rise in economic growth and although the country on its own seems to do well on a GDP point, its citizens may not be as wealthy as it might seem at first. Although being greatly helped by both the United States and China. The people of South Korea have an immense sense of self-pride and do feel very patriotic. After all they have fought a war to keep their independence in the recent history of the world. These social factors all contribute to valuable information towards marketing products in this market. Technological factors Although being a developing country, just like China, South Korea has been developing greatly in terms of IT - based companies and technological advancements. This of course has no big contribution on whether or not Kipco Damaco is able to sell their products in South Korea but it does impact the general economic growth of the company. Indirectly making it a case of great importance. As said before they are developing so this means there are still chances of growth and welfare within the limits of the foreseeable future. This of course marks a course set for a destination of global welfare. Economic factors Some direct numbers about South Korea will follow. With a GDP of $ 1.8 trillion with a 2,6 percent growth rate. Making it 11th on the list of global GDP. This is an immense achievement seeing its current status. Falling right under Canada and just above Russia. Belgium is on that aspect a lot lower on the 25th place. Interestingly enough, they have an unemployment rate of 3,7 percent, calculating this on their total papules of 50,6 million inhabitants. This means that about 1 875 000 people are unemployed. This is half the amount that is in Belgium. For a country that is in such a state, this is a great achievement and surely noteworthy. China follows suit on this and has a 3,95 percent unemployment rate. Besides the unemployment rate, their trade freedom has been increasingly wealthy in the regards that they have opened a trade route with the EU making for easier trades. Also with the People’s republic of China agreements have been made. Within their region they are on one of the more healthier places to be. A ranking and additional information can be found on the site linked to this paragraph. Political factors When talking about a countries economic growth it is of course easy to look at numbers and figures and make quick assumptions. This alone cannot be the only decisive factors used to make an image of a country’s future. The case of South Korea shows that capitalism is an impressive factor within their country’s history. Ever since the Korean war and the assistance of the USA in this conflict made a great impact on their culture. As with their dictatorial brother North Korea and their imperialist/ communist cousin, China, the development of the country has seen its fair share of troubles. The tight bonds with the USA however, has greatly aided them in the development in these several past decades. Globally the world has had a recent peaceful time, with growing trade relations all across the globe. Sadly, and this is a major factor in every decision to be made in the coming years, the threatening presence of North Korea makes an important and heavy block in economic growth. A lot of the country’s resources have to go towards its military and protection of their country. This limits them in many economic factors. Being so close to this country has indeed a strong impact on their global position. As media attention recently has gone towards that region of the words with the threats that North Korea has been sending towards the United states.  Market analysis conclusion With a wide assessment of the market and weighing the risks against the chances, believable it is to say that the market is in a steadily increasing line. The economy is sure stable enough even with the threat that North Korea poses. Nevertheless, being a strong economic country does not make an automatic great customer. The biggest thing that can be taken away from the analysis is obviously the quality that the company delivers. This paper has focused on this several times for a reason. It is after all the biggest selling point for a company that tries to sell a foreign product on a market that is incredibly proud of its own culture and heritage. As Xenophile as Asian culture might be perceived, self-pride is one of the strongest and patriotic feelings a community can have. There has been an increase in cooking shows on Korean television. In one way or another this will lead to the more exotic foods, which for them might as well be French fries. Believing to have a strong case on the Korean market and the chances of Kipco Damaco to enter this market it might be time to look at the risk assessment for this market and the entire operation of entering this foreign market. Market analysis Weight: 3 Score: 6  Risk analysis Introduction Previously, the Korean market and its decisive factors that might or might not allow to enter the market have been touched on. In this segment a more expanded view on what this means risk-wise and what are things to be cautious about can be found. Several subjects that matter towards a reasonable conclusion are included. The most compelling risks that will pop up are the commercial-, financial-, political- and war risks. After an expansive exposition about each risk, a conclusion will be drawn on what are to be the most important risks to keep an eye on. Commercial risks Already some aspects have been previously mentioned in the market analysis but nevertheless, a short summary will be given at first. Foreign product Selling a foreign product is not always as easy as one would think. Being exotic does not automatically make a product attractable, let alone make it sell itself. This could influence sales on a major scale. The marketing on this has to be done very diligently, if not there will be giant consequences on the long term. B2B Being a product that has to be sold to another company, fries bring great risks with them. This means that for the sales to the end consumer the marketing is completely dependable on the customer. This means that if the company selling to does not do a great marketing campaign the customer will not buy from Kipco Damaco anymore. This of course might be the fault for the fries not being perfectly delicious. These things happen often and a lot in the food industry and Kipco Damaco would not be the first one to fall victim to bad advertisement because another company does not know how to advertise properly. Foreign language Living in a society where business is very important, and many languages meet, misunderstandings often occur. One can say that indeed the English language is a universal business language but not everyone does speak it. That being said, not only verbal communication is different but also body language does play a big role in this. When talking to someone from such a different culture, misunderstandings can quickly happen. One does not have the time to notice it. For example, one can think of the head nodding in India being so different to the rest of the world.  Financial risks Catering to a country so far away also brings great costs along. But what exactly are the risks on this. Obviously, the huge amount of transportation costs will play a big role. This will be the primary focus of the risks in the financial territory. Transportation costs With an interview with one of the employees of Kipco Damaco it had come to the attention that with their relations in China there have been troubles before. Customers whom last minute called of a shipment, shipments already on their way towards their destination et cetera. At that very moment a solution must be found instantaneously or a big loss in money might occur. If a situation like this happens one is losing both the transportation time and costs, which for a destination that far might be quite humongous. If then one is not able to find another person to buy these products, they will become bad. Such is the case of food, it expires, even the frozen one. Travel expanses When making commerce with a foreign country, people will have to travel to meet with contacts, make meetings and arrangements and try to bargain deals. Even in a day and age where the internet is prominently present in the business world, face-to-face conversations are preferred often, especially in Asian countries. These travels must be purchased. Costs of this include flights, hotels, local transportation, food, et cetera. If some deals are not made or the salesman fails to close a deal, all the money that went into that trip has been for naught. This would be a costly pity for the company. Increasing import taxes Momentarily there is a trade agreement going on between the European Union and South Korea, this of course lightens the troubles for intercultural trade. There is, however no safeguard that this trade agreement will last. Nowadays trade is always more beneficial to war, but one can only think that in certain circumstances, trade deals might be canceled because of political friction. These changes in agreements or laws could and most certainly would increase the cost of export towards the countries now presented with this new challenge. Higher taxes would be asked, import taxes and border security costs. These costs would heighten the export cost so much, it would almost be impossible to exchange in beneficial trade.  Political risks Credendo Group provides data that illustrates the export risks with a credit period of more than two years. The risks include foreign exchange shortages, wars, revolutions, natural disasters and arbitrary government actions. With a scale from 1 – being low – to 7 – being high – South-Korea has a score of 1 for the year 2016. Which means that it scores good. This gets a weighted score of 10. By interpreting this data, we can safely say that in South Korea the risk involved in politics is very small. Political corruption According to the Corruption Perception Index of 2016 made by the anti-corruption organization Transparency International, South Korea has a score of 53 in being "clean" from corruption. The scale goes from 0 - highly corrupt - to 100 - very clean. The global average score is 43. This concludes that South Korea has a moderate corruption. This endemic corruption might or might not have an impact on the export transactions with South Korea due to the intervention of the country’s political regulations. Documentation risks It is common sense that communication is very crucial, one miscommunication or misunderstanding can have drastic impact on the exportation. Kipco Damaco needs to be on the field to screen the market and needs to do a high amount of research before the company exports to South Korea. It is very important to understand that the Korean way of doing business is very different from the Belgian one because both parties give different meanings to their business relations. To give an example, the Koreans see a deal as a guideline. This can lead to misunderstandings in the documentation because Belgian businessmen see a guideline as a guideline and not as a deal. Such different views can cause crucial mistakes in exporting.  War risk between USA and North Korea South Korea is an ally and a business partner of the USA but with the recent clashes between them and North Korea this can have an impact on the export risks if there is a potential war between them. This is relevant in terms of exporting to South Korea because the biggest competitor in exporting French fries to South Korea are the USA. If there are possible tensions between the USA and North Korea, South Korea will get involved. In the following the likeliness of a war will be discussed. In short: It is quite small, but it is more complicated. The problem with president Donald Trump is not only that he never backs down, but he also doubles down. Everything is a double down with Donald Trump. You will never know when he is bluffing because half the time he is bluffing and half the time he is not. But you have a pretty good indication that he is bluffing sometimes. So, there is always an opened glaring gap between the reality in South Korea and Trump’s warlike rhetoric. Many of the necessary military assets are in South Korea and the people would be the victim of any Northern retaliatory actions. Still Trump did not use the opportunity to lobby for war or even a limited airstrike. Instead, he promoted the decades-old U.S. effort to contain, deter, isolate and sanction the North. If Trump is not bothering to sell an attack to the South, then the likelihood, no matter what he says on Twitter, is that he will not strike. For many years, the USA were playing the same game with Russia, China and Pakistan having nuclear weapons. There was only one time that there was a real close call with Russia namely the famous “Cuban Missile Crisis” being a proxy war during the cold war in 1962 by almost blocking the Russian nuclear expansion with military force. It shook up the world and the USA themselves so that it never repeated this exercise again. China developed nuclear missiles in the 1960s and 1970s but the USA did not interfere, even though China was going through the tumult of the cultural revolution. Similarly, when Pakistan nuclearized in the 1990s, the U.S. did not intervene, even though Pakistan still had problematic Islamic fundamentalism. In every case the U.S. officials found the risks of action outweighed by the risks of trying to manage the new state of affairs and right in time Washington adapted. It can be concluded, that today there is no empirical indication that North Korea creates this doom weapons for offensive purposes. The Kim Jun Un regime is mainly interested in self-preservation, it is a stable regime, they do not care if they repress their own people for decades. All they care about is maintaining their power and that means that the last thing they would do is launching a nuclear weapon to the USA. The idea to strike the USA with a nuclear weapon would lead to rapid destruction of North Korea itself. The country is not having suicidal thoughts and it appears that they want to survive.  Conclusion After taking all the risks in to consideration it is obvious that certain risks are far more decisive than others. Experience in exporting shows us that documentation thus political risks is very important when exporting, so it is obvious that it is the most important factor to keep an eye on. One small risk in the documentation can make the whole deal or shipping worthless. The second most important risk when exporting to a country outside the EU are the financial risks. After all a company must make profit to stay alive, so keeping the financial risks into consideration is very important to survive. All the small expenses that are adding up through the years can make a company crash if they don’t follow they expenses very precisely and carefully. The commercial risks should not be forgotten but it is less important than the documentation risks that are in fact political risks. Making sure that the marketing toward the B2B companies is on point has to be one of the critical factors of the commercial approach. After all not having a good commercial strategy can be detrimental to the company. The least important risk is the war risk. Of course can a war be the end of a company’s exportation but in this case we can know for a fact that this is not the case. We know that a possible war is not possible at least in this current era. Scores Risk assessment 4 7  Trading relations Introduction: This part will go a little more in depth about trading relations in South Korea and Belgium. The focus will be on the products both countries are importing and exporting. Next to that, what is imported from and exported the most to these countries will be analysed. All the following information is data from the year 2016. South Korea Export All export in South Korea in 2016 amounted to 495,5 billion Dollars. These are the top five products South Korea exported the most: 1) Electrical machinery and equipment: $134.3 billion 2) Vehicles: $62.7 billion 3) Machinery including computers: $58.3 billion 4) Ships and boats: $33.2 billion 5) Plastics and plastic articles: $27.7 billion These numbers can show a proper image of what the country should have in over abundance. Meaning that a market for import is there. As seen in the graph below there are no present exporting majorities in the food factors. This indicates a lot of chance for exporting food towards that country. A general rule of tump is when a country does not majorly export something it most likely has no abundance and might import it. Graph depicted with numbers found on source material. After this, a closer look at the countries South Korea exports to the most will be taken. The top five countries South Korea exports to are the following:  1) China: $124 billion 2) The United States: $66.7 billion 3) Hong Kong: $32.8 billion 4) Vietnam: $32.6 billion 5) Japan: $24.4 billion Graph depicted with numbers found on source material Import All import in South Korea in 2016 amounts to 406,1 billion Dollars. These are the top five products South Korea imports the most: 1) Mineral fuels including oil: $81.7 billion 2) Electrical machinery and equipment: $75.1 billion 3) Machinery including computers: $46 billion 4) Optical, technical, medical apparatus: $17.5 billion 5) Vehicles: $15.2 billion Graph depicted with numbers found on source material These are the 5 countries South Korea imports from most: 1) China: $93.7 billion 2) Japan: $46.2 billion 3) United States $42.3 billion 4) Germany $19.3 billion 5) Singapore $14.5 billion Graph depicted with numbers found on source material  Belgium Export All export in Belgium in 2016 amounts to 398 billion Dollars. These are the top five products Belgium exports the most: 1) Vehicles: $45 billion 2) Pharmaceuticals: $41.8 billion 3) Organic chemicals: $29.4 billion 4) Machinery including computers: $28.9 billion 5) Mineral fuels including oil: $27.3 billion Graph depicted with numbers found on source material The top five countries Belgium exports to are: 1) Germany: $66.4 billion 2) France: $61.3 billion 3) The Netherlands: $44.7 billion 4) The United Kingdom: $35.4 billion 5) The United States: $23 billion Graph depicted with numbers found on source material Import These are the top five products Belgium imports from the most: 1) Vehicles: $46.3 billion 2) Mineral fuels including oil: $37.4 billion 3) Pharmaceuticals: $34.5 billion 4) Machinery including computers: $30.4 billion 5) Organic chemicals: $30.1 billion Graph depicted with numbers found on source material These are the five countries Belgium imports from the most: 1) The Netherlands: $45.9 billion 2) Germany: $45.8 billion 3) France: $33.2 billion 4) The United States: $32.1 billion 5) Ireland: $16.2 billion Graph depicted with numbers found on source material Conclusion: The previous paragraphs give a great insight on the South Korean and Belgian trading relations. After this, it is known how much these countries import, respectively export. Furthermore, to what countries they import, respectively export and what products the most. This information is necessary to know before exporting to another country. It is important to research in advance and to get to know and take it into account. Trading Relations 5 8  Import restrictions Introduction In this fifth part, one will find the import restriction to trade with South Korea. There is not any restriction. Still, different types of import restrictions are available. Duty/ custom First, one has the duty/ custom. Duty is a tax paid to the government, especially on things that one brings into a country. Custom is the support given to a business, especially a shop, by the people who buy things or services from it. Import licences To be able to bring goods into a country you need an import licence, which is an official document form by government. Tariff Tariff is a duty that needs to be paid when importing or exporting goods. Taxes An amount that needs to be paid to the government as a contribution to the state revenue. South Korea In South Korea people have the Korea Custom Service (KCS), which has been operating a web-biased clearance system named UNI-PASS. It is prohibited to import birds, chicken meat, ham and sausages from countries that have had the avian influenza outbreaks. They are restrictions on agricultural, livestock and food products, these must be declared and may require an import permission. Seen that, there are restrictions on food items in South Korea, one needs a permission to be able to import food products. Therefore, it is interesting to take a look at the agriculture export guide of Korea. Conclusion If one wants to export food to South Korea, it is important to know whether it is possible or not. So to export fries there, one needs an import permission of the South Korean Ministry of Food and Drugs Safty. Export requirements Introduction As finally part, you can see here the export requirements. The following analysis will be about documentations needed to export products to South Korea and about their necessary package. South Korea Packaging Concerning the packaging of the deep-frozen fries, Kipco Damaco should be careful while packaging the fries. It should be in the style of South Korea. People like cartoons. So that is why they will put cartoons at the package. The language is very important. The description should be mentioned in their languages. That will be easier for them to understand. Documentation Documentation is the most important export requirements. If there will be a little mistake, they might reject the deal. In the past Kipco Damaco as already made this mistake while trading with Syria. Because of a change in the export requirements of Syria, Kipco Damaco had to pay a fee. That one was so high that they had to stop the agreement between them. In South Korea, they have their own export requirements or needed documentations. Those can be found in the following: COMMERCIAL INVOICE The original invoice should be presented. But that is not all. Also two copies of the original one should be included with the shipping papers of the products of Kipco Damaco. CERTIFICATE OF ORIGIN Secondly, a duplicate of the certificate of origin are required. This encouraged the exporters. PACKING LISTS Beside the original documents, two copies of it are required to be included. BILL OF LADING This bill is a type of receipt on which you can identify the name of the sender and receiver, the place of destination, a list of prices, et cetera. This bill is not required to clear customers. As bills of lading are for ocean and overland cargos, the airway bill of lading replaces the bill of lading for air cargo shipments. MARITIME INSURANCE IT is an agreement between two or more parties who are in transaction. Under the Incoterms (shipping terms) agreed to by the parties in a transaction. If the exporter is responsible for insurance, a marine insurance policy or insurance certificate is required. SANITARY/PHYTOSANITARY CERTIFICATES This certificate is not needed because Kipco Damaco does not want to sell animals that are still alive. WHOLESOMENESS CERTIFICATES: This one is the most important one for Kipco Damaco if they want to trade in meat in the future. Now, they only want to sell fries to South Korea. 7.3. Conclusion For documentation Kipco Damaco does not need to watch a lot of regulations. Most of them are related to meat. And Kipco Damaco will not export meat, poultry. But these ones could be useful for the future.  Distribution analysis Introduction In the following, the supply chain that is considered most appropriate to export Kipco Damaco’s frozen potatoes will be discussed. It will also be dealt with the current suppliers of the company. After this, the possible suppliers of services such as the product’s distribution or its promotion will be analysed. Finally, the most important aspects will be emphasised. Location of South Korea As every country is located elsewhere it is obvious that the landscape varies too. As the landscape can differ a lot, it is important to have a closer look on the topography of any country one might consider exporting to. One of the most outstanding facts about South Korea peninsula is that it has an immense coastline of 1,499 miles. That is about 2413 kilometres converted. This large access to the sea gives the country a great opportunity to have corporations concerning exporting and importing with or to other countries. Only 30 percentage of the whole country’s landscape is lowland and even this part cannot be considered as being utterly flat. The remaining 30 percent are either mountain range or upland territory. This gives a drawback to road transportation and an increased cost towards gasoline. Most people live in the lowlands regions which are either by the coast or close to any waterway. Meaning that aquatic logistics are very easily viable. The most important river in South Korea is the Nakdong which is also the longest one. Followed by the Han River which goes through Seoul, South Korea’s Capital. One risk about this is that in summer, South Korea often falls victim to large rainstorms. This is due to the season being known for its Asian Monsoon. The river then might easily overflow and bring large damage to the country. This might be a big economic block. In conclusion, the usage of the waterways available can be exploited in a grand way towards the transportation within the country. As in an un-level country like South Korea ships are one of the more cost-efficient ways of transportation.  Suppliers Kipco Damaco has a good relationship to its suppliers. The company Bergia and the company Agristo are its two main suppliers. They provide Kipco Damaco with their goods, which are mainly potatoes. Kipco Damaco is in charge of the fries packaging itself. When the whole process of packaging is finished, the company sends the final outcome to distribution chains. It is their job to transport the cargo to the different export countries. Bergia Frites began processing and producing the first potato boxes in the mid-sixties already, leaving behind their egg production in the early 1970s. In the mid-eighties production of frozen potato chips started to complement the pre-fried potato chips and to increase overall output. The second supplier, Agristo, works with potatoes of almost the entire West-European potato cluster. The company also collaborates with potato growers. Since 1986 the company has developed into a world player for the development of frozen potato products. The confidence and stability that both companies give to Kipco Damaco make them the best option as potato suppliers. Kipco Damaco offers three types of packaging within frozen potato chips. Bags of 2,5 kilograms, 1 kilograms and 450 grams. Providers After analysing the websites and further sources of the possible main distributors, it has been determined that Lotte, the Shinsegae Group, and Hyundai Green Food are three of the best companies which Kipco Damaco could count on for the distribution of their product to South Korea. A necessary data to continue the distribution analysis is the following: One Korean “Won” is 0,000775806275 Euro. Lotte Food Company was founded in 2007. Company net sales amounted to about 2.521.747.634 million KRW in 2016 (which corresponds 1.374.675.120,54 Euro). Lotte foods has made substantial growth over the last years and produced the best food products. In addition to building the solid foundation for their business portfolio, the company merged with Lotte Ham in 2013. This strengthened their position as the nation’s leading food manufacturer quite a lot. Shinsegae Company was founded in 1930. Shinsegae net sales of 2016 could not be found for this analysis. On the other hand, the aspects on which the company focuses on can be perceived via its website. This company has achieved top quality and competitiveness in food industry in terms of domestic purchasing. The company has partners outside Asia. That fact allows them to introduce a variety of international products. In addition, both import and export high quality and affordable products and brands based on its rich global network. They do online sales for all their products additionally. The Hyundai Green Food Company is engaged in the distribution of food products in South Korea. The company also provides product promotion channels to make the product demand grow. The company has 3,000 business places in Korea itself. It manages the biggest business branch in the Middle East for oversea businesses. Furthermore, it has many different business areas as restaurants, retail business, overseas business and more. Hyundai also takes over the promotion of the products. So Kipco Damaco would not have to take charge of the product promotion or hire another company. The company was founded in 1973. Its headquarter is located in Yongin, South Korea. Net sale of the company has been about the amount of 1.762.407 million KRW last year (which is 1.966.962.660,49 Euro). Conclusion There are already well-structured channels in South Korea. They are difficult to elude so it appears the easiest to access a market by associating with any company that is already part of the chain. In many cases the chosen connected organization will also be in charge when it comes to promoting the product. There are many different waves of demand in South Korea. It is not a stable demand as in many other countries as well. Due to this, their experience, and their longevity in the Korean market are very important. That is why the suppliers Shinsegae, Lotte and Hyundai Green Food companies can be chosen as three of the best providers regarding the transportation and service as a whole in South Korea for Kipco Damaco’s products. Scores Distribution 5 8  Competitors in South-Korea To start this section some statistics of the potatoes and potato products - such as French fries - of 2015/ 2016 will be provided. In 2015 the export to Korea of prepared potato products was 38 percent higher (in value) compared to 2012. There are different explanations for this: KORUS FTA Decreasing production of potatoes in Korea and decreasing self-sufficiency rate over the years The KORUS FTA, Korean-United States Free Trade Agreement, resulted in an 24 percentage increase of export from the United States to Korea in the sector of potatoes and potato products in 2015 (compared with 2012). The KORUS FTA became active on March 15th, 2015.The tables below state the effect of the free trade agreement on the export rates of the United States. The first year after the FTA the import of prepared potato products from the United States to Korea has risen with 16,129 million Dollar (which is good for 12 477 metric tons of extra imported products). Three years later (2015) the import in Dollars has reached 107,131 million which equals to 81 821 metric tons. In 2013 the production in Korea reached such a peak that the prices forced farmers to decrease the plantings of potatoes in 2014. Since that state the self-sufficiency rate (in %) keeps decreasing. This means that the import of potatoes and potato products rises faster than the domestic production. For countries that export those products to Korea this means that they can gain a larger market share. This is due the potato consumption in Korea being stable as it is shown in the following table. In 2013 the consumption reached a peak because of the lowered price of potatoes and potato products. The domestic overproduction causes this. In this second part, more info about the biggest competitors on the French fries’ market in South Korea will be given. This section will not be as extensive because it is really hard to find actual information about the exporters and manufacturers of French fries in this area. The two tables below show the biggest exporters to Korea of prepared potato products. They are in numbers and visually presented. This gives a first impression of where the competition on the French fries’ market is coming from. It is clear, that the United States are number one if it comes to exporting potato products to South Korea. The exported value is almost eleven times bigger than the second biggest exporter, which is Canada. Belgium is presented as number four. As stated in the table it comes in on third place for the year 2015 with a value of 5,139 million Dollar. In the second table the dominance of the United States is once again shown as they control over 80 percent of the export of potato products to the Korean market. The tables give a good indicator of where the competition is mainly coming from, namely from the United States, Canada and China. After a rather long research the following competing companies appear: McCain Foodingfactory Argentrade International B.V. (Kühne+Heitz) McCain is a Canadian company which exports French fries, snacks, meals and vegetables for the retails and foodservice industry. The company was founded in 1957. Meanwhile, they operate across six continents with 53 sites. They work with farmers from all around the world and use over 6,5 million tons of potatoes every year. Those are exported to more than 160 countries, including Korea. To quote the company: “One in every three French fries in the world is a McCain fry” which really sums up how big they are in this industry. Foodingfactory is a Korean company which sells a large selection of French fries next to other kinds of food. However, it is not very clear if the company sells B2C or B2B since the website is only available in Korean. Factors such as the shopping cart under their products let it seem being a B2C company but the article “The ´Fooding´ factory is certified by IRT for compliance with FSSC 22000” indicates that they produce their own products. This makes it more likely that they sell B2B. The company is well-known in Korea thus it was the answer of a Korean student on the question “Which company supplies other companies with French fries?”. This last element was decisive to add the company to this list of competitors. Argentrade International B.V. is a Dutch company specialised in frozen products such as meat, poultry, fish, vegetables, and French fries. The company is active on every continent except Australia. They are active on the Asian market but not yet on the Korean market concerning French fries. Although they are planning to expand to Korea with French fries, due to one of their employees when on the phone. Kühne+Heitz is an international trading company in frozen products such as poultry, meat, French fries, and further. They are very similar to Kipco Damaco.  Kühne+Heitz is active on the South-Korean market but they do not sell French fries there.  The target group of Kühne+Heitz are direct importers and wholesalers who buy on their own account. It is strictly B2B, they do not supply middlemen, commission agencies and such. As they do not sell their French fries on the Korean market, they cannot be counted as real competitors. However, they are active there with other products, which means they can become competitors when Kipco Damaco wants to expand their range of products being sold in Korea. They also might become interesting when Kühne+Heitz decides to sell their French fries in Korea as well.  How to distinguish from competitors? The market is currently dominated by American companies. This is due to them working together. This contrast to the European companies. Their approach is more individualistic although there is a European trading agreement with South Korea. Kipco Damaco must establish a strong business relationship with their neighboring countries to compete with the American conjuration. It is also important to recognize the big players that are already dominating the market with French fries which have already established tight relationships with the biggest Korean companies. By setting up a strategy that is focused on the smaller companies in South Korea with a very strong business relationship that can be a very good strategy to distinguish from the competitors in South Korea. The main property and focus of the strategy must be working on the relationship with the customers with great flexibility, by giving the customer the freedom to fluctuate in demand. That must be complemented with strong communication to prevent any further misunderstandings in the documentations. As mentioned in this plan: the Korean way of doing business is different from the Western approach therefore communication with their native language is essential to build a familiar and a trustworthy relationship. Conclusion When exporting to a foreign country it is very important to take the competitors into consideration. Especially when the biggest competitor has already established his dominance in exporting and has the biggest market share. This part states that South Korea is importing more potatoes than it produces this a clear opportunity for Kipco Damaco. Scores Competitors 4 7 SWOT analysis When confronting with a new market, it is important to look at every aspect and truly think if it is a wise decision to either enter it or not. Therefore, a SWOT analysis has to be made. It emphasizes on the points that seem important to keep in mind when going to a foreign market, in this case, the South Korean one. A SWOT analysis consists of the following four aspects: Strengths and weaknesses; these are positive - strengths - and negative - weaknesses - issues that come from inside the company. These aspects have proven to be of most importance throughout the anterior analysis. Whilst these two focus on aspects coming from within the country, the next two points concentrate on outside forces. Still, opportunities - positive - and the threats – negative - are also important to keep in mind. Although these are not influenceable from within the company itself, they have to be taken care of and worked upon if one is to succeed in a certain market. After this short introduction the aim of this analysis should be outlined clearly. It should point out the intended achievement through this extra bit of information. Strengths Belgian quality One of the most major factors that should always be kept in mind is that the Belgian fries are one of the best quality. In general, European fries are already known for their amazing taste throughout the world. But the ones from Belgium, although they are named French fries, are extremely popular. This is obviously an outstanding selling point that must be taken into account. It is clear, that likings do differentiate quite a lot from region to region. This is, why the origin of the fries should be pointed out. This intends that people will still think they are good. Of course, it is not said that they will adore fries as an initial reaction just because of this. Furthermore, there is an international growth on demand for Belgian potatoes and potato-based products. This can be found in the article of Pers.vlam. in 2015. There has been a plus of 5,3 percent above the average of that sector. That is a gigantic number. The annual rise has been above 167 billion Euros. This can be translated roughly to an increase of 44,7 percent. This is a great sign for Kipco Damaco. Although these numbers are already of the year 2015, they are recent enough to make assumptions. The future looks bright for international trade in frozen potato goodness.. A product life cycle can only last for such a period. The life cycle of food is entirely different to other life cycles like electronics or clothing and haberdashery’s. Nevertheless, it is known that if one is not ahead of the curve, one can quickly fall behind. Still, one should not depict only black. Believing in great possibilities for market penetration and establishing a place within the market itself is a great opportunity. As it can be seen within the market segmentation, there is still room for more players on the board. Altogether, Kipco Damaco fits in this description quite well.  Already in China When talking about conquering a new market, many questions arise. Questions like how the company will embark on this adventure. Further, whether it is even possible to enter the market or how the new customers should be convinced. These are questions for companies that have never done export before. Fortunately, Kipco Damaco has already gained some experience on this field. They have exported to several countries before. For instance, one of them is China. Having entered the market of such a large country already, is an important factor in this matter. This means they have already established a base operation in the Asian market. In the following these issues will be assigned to further business strengths. Many country’s populations differ a lot in their way of thinking. Still, it can be said that the food industry is generally the same in taste and likings no matter the country. An example to underline this is the European cuisine. It can be noticed that every country has its own dishes, but one thing is very popular throughout the whole continent. It is the potato. For instance, in Asia fish meals prove more popular. From experience it is known that the Asian market has been taking a liking into the European potatoes too. That is why they have been incorporated into their dishes as well. This is very well suited for South-Korean market penetration. Without receiving any figures on this it seems impossible to analyze in a correct way. There are some numbers of other companies available for public. It is difficult to trust those as they might be misinterpreted or misguiding. As Kipco Damaco has a foothold in China, it has a great opportunity to imagine what to expect of the Korean market. Own logistic network As a company, Kipco Damaci has its own logistic network. This consists of trucks. As mentioned before, in the previous topographical view, we know that trucks are not the most viable mote of transportation. Furthermore, South-Korea is rather far away of the company’s origin. This means, transportation has to be conducted via ship or via aircraft. For cost efficient reasons the second option can be perceived as the best choice in terms of transportation. Still, the company’s logistic network might prove handy on this. In case that an airport in Poland or Germany, just to give some examples, proves being cheaper or better, this network might help to bring the fries there for further transportation. If the future might show that the waterway is the more profitable option, the change of means of transportation is still possible. The opportunity to bring the fries wherever it is necessary, will always remain available. Due to the continuing growth of the company, it is quite plausible that it will reconsider other means of transportation. Maybe it turns out best to form a coalition with a transport company that offers ships or aircrafts. This would reduce costs and maintenance greatly. In the end bonds and networking are almost most important. Implying that a company does not participate in such activities would be to state that a company’s existence most probably will end in a couple of years. Companies that set up connections and alliances with other businesses will improve their strength and position within a market. This is of course due to reduced costs that these transactions implicate. By default, a company that has a good trade relationship with another will have beneficial advantages over other companies. Due to the nature of these transactions both companies come out in a healthier way than without the transaction. In case, transportation becomes an issue, choosing another partner might be a wise decision. It will strengthen the company’s position and make its own transportation network an even bigger strength then it already is these days. Weakness The weaknesses of Kipco Damaco are: No native language Small on world scale Ill-prepared for giant growth spikes The native language in South Korea is Korean. At the moment Kipco Damaco has no employee to speak this language. This means that they either can only contact English-speaking companies or have to hire a translator for Dutch to Korean or English to Korean. Both possibilities have two sides, meaning advantages and disadvantages. Using English only sounds like a good plan, as it is one of the most commonly spoken languages throughout the world. As plus, it is the most used language in business. Still, this might be an obstacle for some. Firstly, not everyone speaks English. Some countries are proud of their mother tongue and culture which results in very few numbers of people learning to speak another language. In Europe Italy or France can be taken as general examples on this. This pride has to be overcome when doing business with such a country. Otherwise one might end up losing potential clients if only offering English instead of the equivalent local language. If people speak English however, one might think that the problem is solved. But in fact, it is not. The number of non-native English speakers will reach about three billion people in the next decade. This results in the native English speakers becoming outnumbered at a ratio of four to one. English not being one’s mother tongue might cause a basic but significant difference to native speakers as they might use English differently. These contrasts cause a gap between the two groups that might lead to misunderstandings between negotiators. Another option is to hire a translator to assist in business deals. The biggest counterparts here are the costs for this. Furthermore, the created gap between the negotiating parties might also be negative. The translator makes the different parties understand each other but also might cause the feeling that communication is not going well. This might be the impression as the translation process might be complicated. Even though the translator speaks both languages fluently, there is always a little rest of insecurity as an inappropriate rewording might appear. Kipco Damaco is a small player in the industry of French fries. 60 000 tons is the number of products that Kipco Damaco sells, French fries being only a small fraction of this number. This is nothing if one compares this to numbers of McCain, to give an example. It sells about 6,5 million tons of potato products every year and claims that one out of three French fries is a McCain fry. If you have to compete with giants like this one, then the challenge will be to differentiate Kipco Damaco from them in a positive and creative way. Because Kipco Damaco has a smaller marketing budget and less market share in industry. Both are quite important when entering a new market. The higher the marketing budget the more publicity one can make and the bigger the product can be on the new market. This is as generally nobody buys a product one does not know. Players like McCain can use their market share in negotiations to get where they want to be. If one out of three fries is a McCain one, then they seem to be a really good and reliable brand. A potential customer will not have any doubts about them and buys their products. Kipco Damaco can also use their relations and previous successes but it might influence them less than when big competitors like McCain do this. As mentioned above, Kipco Damaco is a quite small company which is growing very fast now. This might seem like a strength, but it can also be seen as a weakness as one has to keep an eye on further factors too. These are: Finances Cash Flow Employees Customer service Scaling technology In smaller businesses it is easier to keep track of expenses. This becomes harder as the company is growing. It is important to not lose count of all the expenses stacking up. Otherwise, the danger of having more expenses than sales might appear. A further important factor is the company’s cashflow. Reason why the cashflow might be less than one is thinking might be an overly-optimistic growth projection or the failure to understand the difference between profit - the amount of money one keeps after expenses are deducted from the whole income - and actual cash on hand. When one makes an optimistic growth projection and bases expenses on this it might happen that the actual growth is lower than expected and the sales cannot cover the already made expenses anymore. Also, the profit the company makes, is not necessarily money that can be spent right away. When delivering certain products for a million Euros and making a profit of 100 000 Euros, this transaction then does not mean one can instantly pay all expenses with that profit. For instance, delays, like the client paying three months later, might be possible. Furthermore, taking care of one’s employees is rather important too. It is not that just because the company is growing fast that one has to hire anyone. Searching for capable employees even when urgently needed is important as their mistakes might cost a lot of money. When sales and the number of clients are growing, the customer service does too. This is due to an increase in clients means a higher demand for customer service on the other hand. An excellent reputation can easily be destroyed because of a lack in customer service. Having the right technologies on one’s hands is crucial for a rapidly growing business. The right tools need to ensure all systems are running efficiently and effectively. The technological requirements of a business vary greatly based on size, goals, and structure of the company. A clear vision of what your business needs before scaling it forward, is necessary. If the needs of the scaling business are not in place, then your business might not be able to supply the demand and further.  Opportunities International trade agreement July 1st in 2011 there was the first free trade agreement established with the European Union and South Korea which is a great contribution to the growth of the economy for both parties. This agreement is the most ambitious agreement that is ever made by the European Union. This agreement is a great opportunity for Kipco Damaco’s export to South Korea because there is an abolition of the trade barriers and all the import duties are abolished between the two economies. Therefore, the export costs are dropped significantly. The agreement is also very beneficial because the export and import of agricultural products, French fries for instance, is royalty free. The demand for the European agricultural products and processed foods, so French Fries is very big in South Korea. The average annual export is more than one billion Euros - 240 million pork, 176 million whisky and 99 million dairy products. This creates a very big benefit and opportunity in exporting French fries to South Korea. In addition to that, the suspension of the custom duties leads to new market opportunities for products that are not exported or exported in small amounts by European farmers, distributors or manufactures. Without this agreement there would be a very difficult competition with the other countries that are already established in Korea with a trade agreement, concerning the French fries industry. International cooking In this current era, it noticeable that the globalization and open communication between different nations is increasing very rapidly. That is why the interest for different cuisines is also booming. Without a doubt the world is becoming a more and more global uniformity, it has its pros and cons. But the side effect of it is that different nations are more and more exposed to each other’s cultures and this gives many opportunities to do business abroad. Thanks to the internet Korean people have a quick and easy access to recipes from all over the world. This opens a lot of opportunities for the export of Kipco Damaco. This can be seen all over YouTube and other online platforms where there are a lot of different cooking channels available. The South Korean people are very attached to their culture and tradition but because of the political ties with the West and in particular with the USA South Korean people are definitely interested in the Western diet. That is also the reason why the demand for American potatoes and, which involves French fries, is rather high. Local kitchen appliances: The local kitchen appliances in South Korea are a huge exporting opportunity for Kipco Damaco. Tehe company can make great use of these local appliances to keep up with the latest trends in the food industry in South Korea plus be innovative with their products. When the company implies these local tools, they can gain an advantage over other competitors who do not pay attention to this or do not use the tools. This will really support them to differentiate from their direct competitors in South Korea.  Threats International competition: One of the biggest threats for Kipco Damaco when exporting to South Korea is the international competition. There are a lot of international companies that are already exporting French fries and other potato products to South Korea. This is why Kipco Damaco has to stand out from the crowd to be able to succeed. The five countries that South Korea imports most potato products from are the United States, Canada, China, Belgium and the Netherlands. These are the countries where most of Kipco Damaco’s competitors are located. The best solution for the company for this threat is to differentiate enough from their competitors with their quality products and their promotions. This way South Korean companies can be convinced and will choose them over other companies. Demand is not stable Annual sales of the French fries market in South Korea are increasing due to the spread of fast food culture in people’s daily life. This increase can also be linked to the growing population and the pace of population growth, but South Korea has a statistic that has fallen since the 1960s. So, it is not an increase that can be attributed to population growth. According to one of Kipco Damaco’s indirect competitor Bonilla A La Vista, which is exporting potato chips to South Korea, French fries demand is not stable like growth and increase of fast food and French fries market in South Korea. There are many waves of demand in South Korea. There are times when fries demand is very high and others where it is low. South Korea produced 546.000 tons of potatoes in 2015. This is significantly less than in the three preceding years. Potatoes in South Korea are grown in different seasons and locations. Spring, autumn and highland can be distinguished. The spring crop accounts for about two thirds of the production, followed by the highland crop, accounting for 24 percent of the production in 2015. The per capita consumption of potatoes in Korea has been unstably declining since its peak in 2006. In the said year, per capita consumption of french fries were 14,4 kilograms, in 2007 13 kilograms, in 2008 13,2 kilograms, in 2009 13,6 kilograms, and in 2010 13,4 kilograms. It is very difficult to predict the demand in general or how often it is rather low. Cooking shows have overtaken on a television channel in South Korea in November 2016. Korean TV is obsessed by food now by loyal female viewers with the shows' famous chef-hosts. People posted their homemade dishes on social media and the recipes got popular. Nobody would know that this television program would be so famous and that the demand for fried potatoes would increase. There is a fried potato market in Korea, but it is not clear when the demand will come. Also, supply has increased due to the application of more efficient production methods and, in Kipco Damaco’s case, new entrants to the market. Demand is relatively price inelastic, hence revenue falls following the price reduction.  Local Food is more popular Speaking of South Korean dishes, they have a cuisine that goes back thousands of years. Korean cuisine has evolved over time because of cultural changes, but it remains a major aspect of the national identity. Korean cuisine is based largely on rice, vegetables and meat. In their daily life, consumption of fried dishes does not take up a great deal of space compared to the United States of America. With the work of the people, the incomes in the country are quite high and there is a substantial amount of discretionary income that can be used to eat out. When they eat out, we can also find out that they tend to consume rather local food. The South Korean people are quite proud of their nationality and this is displayed when they state they are Korean. This pride is also reflected in their food choice. In recent years South Korea has become better known for its technology than its food. However, thanks to delicacies like ‘’kimchi’’, which has become a global sensation.  Conclusion With all facts in place it is time to make a conclusion. Taking together all the scores gathered into this document we’ll be able to weight all the important parts of this paper and what has to be focused on. As explained into the beginning of the paper, we’ll grade the part on the importance of its aspects and then it will be graded on how well they are doing on this aspect. Section Weight Score Weighted score Max score Weighted MS Market analysis 3 6 18 10 30 Risk assessment 4 7 28 10 40 Trading relations 5 8 40 10 50 Distribution 5 8 40 10 50 Competitors 4 7 28 10 40 Total     154   210   End Score (WS/WMS) 73% The average number is very close to four, this means that in general most aspects are very important. Seeing that the market analysis weights the least it’s not as bad that it only scores a 6 on the score. Both trading relations and distributions have the heaviest weight of 5 but both they have an 8 in score. What this specifically means for the company is that it has a great chance of success within the market. A great point that has surfaced, is within the distributors. The one that has come out on top is the Hyundai one. This one seems to take care of its customers and makes for a great trade relationship. Not only that but looking at the other distributors, errors might occur when making trade with them.  Sources East-West Center | www.eastwestcenter.org. (2017). Economic and Social Issues in South Korea. [online] Available at: https://www.eastwestcenter.org/research/visiting-fellow-programs/posco-visiting-fellowship-program/economic-and-social-aspects-of-korea-related-issues [Accessed 15 Nov. 2017]. Termpaperwarehouse.com. (2017). Social Factors Affecting Business in South Korea - Term Paper. [online] Available at: https://www.termpaperwarehouse.com/essay-on/Social-Factors-Affecting-Business-In-South/239407 [Accessed 15 Nov. 2017]. Heritage.org. (2017). South Korea Economy: Population, GDP, Inflation, Business, Trade, FDI, Corruption. [online] Available at: http://www.heritage.org/index/country/southkorea [Accessed 16 Nov. 2017]. TheGlobalEconomy.com. (2017). South Korea Political risk, long-term - data, chart | TheGlobalEconomy.com. [online] Available at: http://www.theglobaleconomy.com/South-Korea/political_risk_long_term/ [Accessed 23 Nov. 2017]. e.V., T. (2017). Corruption Perceptions Index 2016. [online] www.transparency.org. Available at: https://www.transparency.org/news/feature/corruption_perceptions_index_2016 [Accessed 23 Nov. 2017]. Trade, F. (2017). Zakendoen in Zuid-Korea | Flanders Trade. [online] Flandersinvestmentandtrade.com. Available at: https://www.flandersinvestmentandtrade.com/export/landen/zuid-korea/zakendoen-zuid-korea [Accessed 23 Nov. 2017]. Oxfordresearchgroup.org.uk. (2017). Cite a Website - Cite This For Me. [online] Available at: http://www.oxfordresearchgroup.org.uk/sites/default/files/ORGapril17 PR.pdf [Accessed 26 Nov. 2017]. Newsweek. (2017). World War III won’t be between a nuclear North Korea and the United States | Opinion. [online] Available at: http://www.newsweek.com/world-war-3-nuclear-north-korea-trump-threats-724880 [Accessed 26 Nov. 2017]. Workman, D. (2017). South Korea’s Top 10 Exports. [online] World's Top Exports. Available at: http://www.worldstopexports.com/south-koreas-top-10-exports/ [Accessed 27 Nov. 2017]. Atlas.media.mit.edu. (2017). OEC - South Korea (KOR) Exports, Imports, and Trade Partners. [online] Available at: https://atlas.media.mit.edu/en/profile/country/kor/#Exports [Accessed 27 Nov. 2017]. Workman, D. (2017). South Korea’s Top 10 Imports. [online] World's Top Exports. Available at: http://www.worldstopexports.com/south-koreas-top-10-imports/ [Accessed 20 Nov. 2017]. Atlas.media.mit.edu. (2017). OEC - South Korea (KOR) Exports, Imports, and Trade Partners. [online] Available at: https://atlas.media.mit.edu/en/profile/country/kor/ [Accessed 22 Nov. 2017]. Workman, D. (2017). Belgium’s Top 10 Exports. [online] World's Top Exports. Available at: http://www.worldstopexports.com/belgiums-top-exports/ [Accessed 22 Nov. 2017]. Workman, D. (2017). Belgium’s Top 10 Imports. [online] World's Top Exports. Available at: http://www.worldstopexports.com/belgiums-top-10-imports/ [Accessed 24 Nov. 2017]. Atlas.media.mit.edu. (2017). OEC - Belgium (BEL) Exports, Imports, and Trade Partners. [online] Available at: https://atlas.media.mit.edu/en/profile/country/bel/ [Accessed 17 Nov. 2017]. Export Start Guide. (2017). Why export? - Export Start Guide. [online] Available at: http://exportstartguide.com/why-export/ [Accessed 18 Nov. 2017]. Es.portal.santandertrade.com. (2017). Distribuir un producto en Corea del Sur - Distribuir un producto - Santandertrade.com. [online] Available at: https://es.portal.santandertrade.com/analizar-mercados/corea-del-sur/distribuir-un-producto [Accessed 28 Nov. 2017]. Siicex.gob.pe. (2017). Cite a Website - Cite This For Me. [online] Available at: http://www.siicex.gob.pe/siicex/documentosportal/28108564rad9F9F8.pdf [Accessed 27 Nov. 2017]. Lotte.com. (2017). [식품관] 즉석/가공식품 - 사는 게 즐겁다! 롯데닷컴. [online] Available at: http://www.lotte.com/display/viewDispShop.lotte?disp_no=1481413&tracking=GCB_ITEMS_09_03 [Accessed 30 Nov. 2017]. English.shinsegae.com. (2017). SHINSEGAE CORPORATION. [online] Available at: http://english.shinsegae.com/english/about/about_main.asp [Accessed 31 Nov. 2017]. Lotteintl.co.kr. (2017). Lotte International. [online] Available at: http://www.lotteintl.co.kr/eng/company/contact_business.asp [Accessed 31 Nov. 2017]. Hyundaigreenfood.com. (2017). HYUNDAI GREEN FOOD. [online] Available at: http://www.hyundaigreenfood.com/en/ci/hgf/CIHGF01C.hgc [Accessed 3 Dec. 2017]. Es.portal.santandertrade.com. (2017). Trámites aduaneros en Corea del Sur - Santandertrade.com. [online] Available at: https://es.portal.santandertrade.com/gestionar-embarques/corea-del-sur/tramites-aduaneros-importacion [Accessed 3 Dec. 2017]. 2016 Potato Update_Seoul_Korea - Republic of_7-22-2016.pdf. (2016). [ebook] Seoul: USDA Foreign Agricultural Service, pp.2-6. Available at: https://gain.fas.usda.gov/Recent%20GAIN%20Publications/2016%20Potato%20Update_Seoul_Korea%20-%20Republic%20of_7-22-2016.pdf [Accessed 17 Nov. 2017]. Kühne + Heitz. (2017). Worldwide food supplier | Kühne + Heitz. [online] Available at: http://www.kuhneheitz.com/ [Accessed 17 Nov. 2017]. PotatoPro. (2017). McCain Foods Asia. [online] Available at: https://www.potatopro.com/companies/mccain-foods-asia [Accessed 17 Nov. 2017]. Mccain.com. (2017). About McCain Foods - Global Family Owned Food Business. [online] Available at: http://www.mccain.com/about-us [Accessed 17 Nov. 2017]. intelligens Rem Temptationis. (2017). The "Fooding" factory is certified by IRT for compliance with FSSC 22000 - Intelligens Rem Temptationis. [online] Available at: https://intelligenstemptationis.com/fooding-factory-certified-irt-compliance-fssc-22000/ [Accessed 7 Dec. 2017]. 더나음, 주. (2017). [통합]일반상품 - 감자튀김. [online] 푸딩팩토리. Available at: http://foodingfactory.com/product/list.html?cate_no=180#none [Accessed 17 Nov. 2017]. Trade.ec.europa.eu. (2017). Cite a Website - Cite This For Me. [online] Available at: http://trade.ec.europa.eu/doclib/docs/2011/october/tradoc_148318.pdf [Accessed 6 Dec. 2017].