More specifically, "Customers have a distinct set of needs; they will pay a premium of the firm that best satisfies them; the niche has size, profit, and growth potential; it Is unlikely to attract many competitors; and the firm can use specialization to gain economies within the niche" (2012, p 110). This demonstrates why so many companies strive to create, maintain, and secure a niche market. The following article, Leveraging Corporate Success via R&D and Niche Market Strategies: The Case of Shin Rayon Born Global in Korea, depicts how Among Shim Co.
Ltd became the worlds leading instant noodle company in the globe through research and development alongside niche marketing strategies. Article Thesis The thesis of the article focuses on Among Shim Co. Ltd. 's rise to success. The tutor regards the success attributable to R and global marketing strategy. It's marketing strategy infamously known as, "one Korean flavor' for the entire global market" (Oh, 2011, p 107).
The thesis is also concentrated on unraveling the mechanisms of innovation within this organization, in addition to knowledge management. Furthermore, the article attempt to analyze this niche marketing strategy through dissecting the process of developing a strategy such as this while 1 OFF The thesis of this examination bleeds into it's purpose. The author is attempting to grasp the story behind this company's success so that other companies and searchers may know about this growing marketing strategy.
Oh demonstrates that, "The instant noodle industry has traditionally been either in the competitive or competitive monopoly market with an increasing demand for processed or packaged foods due to rapid arbitration in many developing and even developed countries" (2011, p 108). So how does exactly such a company go from almost bankruptcy to becoming an industry leader? Oh asked himself that very same question. Presented Facts Among Shim is now a leader in global expansion for it is marketing it's products in 70 different countries (15% of the global share) (Oh, 2011, p 108).
Competition has become stiff in this market, with low entry and exit barriers, while the demand for instant noodles increases. Meaning, the number of manufactures and distributors are also increasing. Moreover, "The value chain of this industry therefore awards the largest profit margin to the processors of the wheat flour, producers of frying oil (either animal fat or vegetable oil), logistics companies of the flour, oil and the finished noodles and the restaurants that cook and serve instant noodles locally' (Oh, 2011, p 108).
Because of the stiff competition, the margins for manufacturers and distributors has been rather low. Given such an industry structure, it is only wise to say that R&D is essential in determining product and taste differentiation and product diversification. Oh continues to suggest the significance of R&D in stating, "the key to taste sophistication and standardization is R&D, and it goes without saying that Among Shim is one of the few packaged food companies in the world that succeeded in R&D for instant noodles" (2011, p 108).
The core competencies of this company, "lie in the unique innovative technologies for creating differentiated products and maintaining the kind of brand power that boosted Shin Ramona, the pick hot instant noodles, and Se Www Gang, the shrimp crackers, to the number one position in the Korean market" (Oh, 2011, p 109). What has helped this company secure these positions is investing in high-standard automation production systems, R&D, extensive sales networks, and lastly, highly sophisticated and efficient logistics infrastructures.
In terms of specialization, Among Shim focuses on flavor selection and maintain. Their pride and Joy is spicy tastes. Relation to Other Readings, Article Critique, & Conclusion It is a common strategy for companies to focus on niche strategies in terms of utilizing R&D and innovation. The purpose of every organization is to be the best. Managerial principles are the same throughout every industry. It's about keeping up with the Joneses, staying one step ahead of the competition, and a continuous focus on innovation.
Innovation is key to long term success and the future of any organization. Oh demonstrates this key concept of innovation in stating, "Among Shim has continuously improved products and production processes by innovation in technologies to stay ahead of competition in the industry' (2011, p 114). Among Shim presents farming and the belied that revolves around farming, you reap as you sow,' which is why Among Shim is what it is today.