Table of ContentsIntroductionEconomic factorsLegal factorsEnvironmental factorsOther factorsConclusionReferencesIntroductionSince the concept of globalization has taken the business world by storm, the food industry has been one of the areas of expansion in - beyond borders the most sought after. As tempting as the idea of ​​global expansion may seem, one cannot simply jump into the deep waters of international expansion. Analyzing and forecasting cultural, national, environmental, legal and socio-economic factors is one of the first steps towards expansion. After looking more closely at these factors, South Korea appears to be a promising target to capture our share of the profits from this multi-billion dollar industry. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get the original essay. Economic Factors South Korea's economy is ranked 11th in the world and 4th in Asia. The South Korean economy experienced its slowest growth rate since 2009 due to a sharp contraction in the manufacturing and construction sectors (Trading Economics, 2019). However, the positive side of the picture shows 3.1% year-on-year growth in the last quarter of 2018, up from 2.0% growth in the previous quarter. Since 2017, this has been the fastest growth rate, mainly driven by the services, agriculture, fishing and forestry sectors (Trading Economics, 2019). In fiscal 2019, government spending provided a cushion to South Korea's GDP after a 0.4% reduction in the last quarter through June (Kim. S, 2019). Consumer spending has increased significantly in South Korea over the years. In the second quarter of 2019, it reached the highest amount of KRW 221,901.20 billion, compared to KRW 220,417.20 billion recorded in the previous quarter. Fitting into all these economic trends, South Koreans are inclined to favor low-cost restaurants. The fast food industry has seen increasing demand due to its competitive prices, set menus and continuous promotional offers throughout the year. South Koreans, given their busy work schedules and the convenience associated with ordering fast food through home delivery or online, prefer to spend money on this segment of dining. Legal Factors There are a number of rules and regulations that need to be considered before expanding. commercial wings in this territory. The Korea Commission for Corporate Partnerships (KCCP) limits expansion plans of multinational companies to specific geographic areas and a certain number of branches. KCCP plays an important role in the growth of local small and medium-sized businesses and therefore imposes regulations on international subsidiaries (Korea Franchising, 2019). A letter of authority must be obtained from the Korea Trade Investment Promotion Agency (KOTRA) before making an investment. Subsequently, a registration letter from the tax office is obtained. Audited annual financial statements must be submitted to local tax authorities along with tax returns. In August 2003, the South Korean government established a free trade zone to attract foreign investment to the region. Various tax incentives are also offered to foreign investors, as well as comfortable ways of transferring money to the parent company (Hayes. S, 2017). The legal structure of South Korea, with its advantages and itsdisadvantages, welcomes foreign investments in the country by offering simpler implementation procedures. Environmental Factors A ripple effect could be created on the revenue stream of the fast food industry due to South Korea's environmental factors. . Seoul has launched alarming measures to control the worsening air and water pollution in the region (McCurry. J, 2019). Keeping these circumstances in mind, our fast food chain should promote corporate social responsibility (CSR) actions to attract the target market. Many South Korean companies have taken steps to launch social programs for South Korean children and youth. In 2013, "The Happy Burger" campaign was launched by McDonald's Korea to provide 800 meals to child protection institutes in different cities. CSR will help create a strong emotional bond between the consumer and the brand. Additionally, the company must use energy resources efficiently to keep environmental damage to a minimum. Reusable packaging should be used as well as easy recycling options. Efficient ways of water consumption should be adopted to minimize water and soil pollution.Other FactorsA recent trend is observed in the South Korean population towards Western food products. Just recently, a tariff was lifted on the importation of processed foods, providing new opportunities for the fast food industry to consolidate its foothold in the region. South Korea, whose population is so far estimated at over 50 million in 2019 (Korean Bureau of Statistics 2019), is experiencing rapid growth in its restaurant market as socio-economic changes of the country continue to have an increased impact on restaurant spending. South Korea's overall restaurant industry revenue grew at a CAGR (compound annual growth rate) of 3.5% between 2014 and 2016, and it is expected to grow at a CAGR of 3.6% through 2021 , according to data published in 2017 by Global Data. This has encouraged a number of international food chains to establish themselves in the market. This includes giant international fast food chains, such as McDonalds, Pizza Hut, but also some medium-sized foreign restaurants, such as Shake Shake Burger, which is introduced from the United States and soon arrived in the South Korean food market with its average number. The number of customers was reportedly 3,000 per day during the first month of its opening. Along with the successful expansion of international restaurant chains in South Korea, people in the country also tend to dine out at an increasing rate. According to the Monthly Household Expenditure Survey, organized and conducted by the Korean National Statistics Service in 2017, Korean households' monthly per capita expenditure on restaurant meals continued to grow solidly for several consecutive years, reaching approximately 123 million dollars in 2017. Per capita, Korean households spent 47.6% of their dining out expenditures (or 13.3% of total consumer spending) on ​​dining out. Considering all the factors, it can be assumed that Korean consumers eagerly spend on dining out, seeking international tastes, and if it is an economical and convenient choice to follow, it can surely boost their tendency to dine out at the restaurant. Yang-What et al. (2001) found that Korean eating behavior is shifting toward more Westernized and convenient foods and that Koreans are becoming increasingly dependent on meals at home.restaurant. The 2001 Korean National Health and Nutrition Survey (KNHNS 2001) also shows that the number of people who eat out more than once a day increased from 20.5% in 1998 to 33.2% in 2001. Alongside the cultural trend observed among Korean citizens: eating out more. It's often the case that a recent change in food culture is worth examining. Very few people dine alone in South Korea, as it is common for all family members to eat meals together at home, and even children eat lunch with their classmates at school. However, as society becomes more competitive and individualism grows, it encourages more people to accept a rather novel idea of ​​dining alone. Therefore, if people have decent options to choose from, whether with their friends, family, or without anyone else, they would enjoy trying new dishes, especially those that need to be prepared quickly in places such as food courts, as well as those made with familiar ingredients like rice, commonly found in Mexican or Thai cuisine. South Korea and the United States implemented the Korea-US Free Trade Agreement in 2012, the agreement (FTA) led South Korea to activate more agreements with other major countries.nations, including South American countries – Chile, Colombia, Peru, etc. – as well as Asian countries like Singapore, India, etc., with other countries – Australia, Canada, New Zealand, EU, etc. A number of companies based in these countries have successfully launched into the South Korean market, including international food chains, with reduced tax rates when operating their Korean branches, as well as duties customs duties on raw materials imported from these countries. , Labor productivity in South Korea's services sector is only 56% of that in manufacturing, well below the OECD average of 93%, according to the United States International Trade Commission 2007, which can reduce the burden of labor cost when establishing and operating international markets. Themed food court restaurants in South Korea. Conclusion Considering all aspects, the catering market in South Korea seems to have great growth potential. South Korean citizens seem to have little emotional barrier when trying international dishes, as long as they remain an economical choice and are quickly cooked. Additionally, people are familiar with a new concept of dining out "alone", which is why it seems reasonable to establish internationally themed food courts, such as those in Mexico or Thailand, whose cuisine features dishes based on rice and hot spices, similar to that of Korean. Additionally, the tax rate is reduced for international companies whose main branches are located in countries with an FTA – so it seems appropriate to set up the restaurant as a wholly owned subsidiary, with all the necessary management skills to its structure. , workforce, products and customers. As the parent company can still exercise full control over newly opened businesses in South Korea, it can provide important guidance on the new business activity. Keep in mind: this is just a sample. Get a personalized document now from our expert writers. Get a Personalized Essay In conclusion, with all factors seriously considered, it should be profitable to open a new food chain – Mexican or Thai themed – in South Korea>