Harvard University lectures on K-food success stories
Dumpling – insisting on the name ‘dumpling’ instead of gyoza… Targeting the market with ingredients tailored to local tastes
‘Hetbahn’ and ‘Bibigo Dumplings’ are cited as success stories… Director Lee Seon-ho gives a lecture and introduces himself.
‘Mandu instead of dumpling’.
Bibigo dumplings were first introduced in 2013. Bibigo dumplings, which has greater overseas sales than domestic sales, surpassed 1 trillion won in global annual sales as a single item in 2020 thanks to its popularity overseas. In 2021, it rose to No. 1 in U.S. dumpling market share. In order to differentiate it from existing Chinese dumplings or Japanese gyoza, it was effective to use the Korean name ‘mandu’ as the product name. The ‘localization strategy’ of filling the product with Asian spices such as cilantro and chicken also captured the hearts of consumers.
Success stories of the globalization of ‘K-food’ such as Hetbahn and bibigo dumplings have been used as teaching materials at Harvard Business School in the United States. Although Samsung Electronics’ semiconductors and TVs and Hive’s BTS global strategy have been covered as research cases, this is the first time that a Korean food company has been the subject.
On the 14th, CJ CheilJedang announced that the expansion efforts and achievements of its global food business were used as a case study in a lecture at Harvard University Business School on the 10th (local time). The research collection will also be published in Harvard Business Review (HBR), the world’s top management magazine.
The title of the article is ‘CJ Foods: The Path to Global Food Leadership’. The researchers developed a ‘first, best, and differentiated’ management strategy focusing on seven global strategic products (GSP), including △processed rice (hetbahn, etc.) △dumplings △chicken △K sauce (red pepper paste, etc.) △kimchi △seaweed △rolls. dealt with.
‘Hetbahn’ was introduced as a representative example of the first and best strategy. The researchers explain, “Hetban came out in 1996 when the domestic instant rice market was not yet established and dominated the domestic market. Since then, it has maintained its top position by steadily increasing its product line, including mixed grains, pot meals, and cup meals.” Hetbahn is also in line with CJ Group Chairman Lee Jae-hyun’s management philosophy ‘OnlyOne spirit,’ which means ‘to create a product that is only one in the world.’
Bibigo dumplings were chosen as a representative example of differentiation strategy. The researchers praised the fact that they developed a customized strategy that took into account overseas consumer preferences. CJ CheilJedang also reinterpreted K sauces such as red pepper paste hot sauce in the form of a dipping sauce to suit the foreign food culture of ‘dipping’ like ketchup or chili sauce.
Market expansion strategies for each country, such as acquiring overseas companies, also received attention.
A representative example is the acquisition of Schwans, an American frozen food company, in 2019. First of all, Schwan’s increased its own sales from $2.3 billion (approximately 3 trillion won) that year to $3 billion in 2022. In addition, Bibigo’s distribution channels in the United States, which had been limited to about 3,000, mainly Costco, were integrated with Schwan’s and were able to expand to more than 30,000 stores across the United States, including Walmart and Kroger. A similar strategy was used in Vietnam to become number one in the kimchi and frozen simple cooking industry through the acquisition of local food companies such as Kim & Kim. In Europe, the product was also introduced in collaboration with a local restaurant chain.
Harvard University Business School is part of CJ CheilJedang’s culture, including participation in the Korean Wave comprehensive festival ‘KCON’, hosting the PGA Tour ‘The CJ Cup’, and collaborating with the National Basketball Association (NBA) LA Lakers team. ·Attention was also paid to sports marketing.
This casebook was co-authored by Professors Forest Reinhart and Sophers Reinhart of Harvard Business School. At the Harvard University lecture on the 10th, Chairman Lee’s eldest son, Lee Seon-ho (34), head of CJ CheilJedang’s Food Growth Promotion Department, attended as a group representative and directly introduced the growth strategy.
Director Lee said, “We first released the casebook at an executive education program attended by about 180 company CEOs and managers from around the world,” adding, “We will further globalize the enjoyment of K-food so that it becomes a culture beyond a temporary fad.” “It will accelerate,” he said.
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.