ANN/THE KOREA HERALD – Korean food giant CJ CheilJedang’s success in globalising its K-food portfolio has been recently chosen as a subject for a case study at a Harvard Business School lecture in the United States (US).
This is the first time a Korean food brand to be featured in such a capacity at the HBS, according to CJ CheilJedang.
Titled “CJ Foods: The Path to Global Food Leadership”, the research delves into the company’s management strategy, achievements, and the secrets behind its success in pioneering overseas markets, with a focus on Bibigo brand’s global strategic products.
Coauthored by the HBS’ professors Forrest L Reinhardt and Sophus A Reinert, along with Shu Lin, HBS’ senior researcher, the case study was officially introduced on January 10, at its business management programme, which was attended by some 180 corporate CEOs and managers from around the world.
The programme began by delving into CJ CheilJedang’s acquisition process of the US family-owned food firm Schwan’s Company in 2019.
The discussion revolved around practical debates on whether to prioritise mergers and acquisitions or go for direct investments in new businesses, along with finding the right balance for localisation strategy, while maintaining the brand’s overall identity.
As for the case study’s research, CJ CheilJedang’s Chief Growth Officer Lee Sun-ho, the eldest son of CJ Group Chairman Lee Jae-hyun, with his team members, supported providing relevant records of business status and CJ’s own growth knowhows.
The study specifically underscored the significance of CJ’s instant cooked rice product, Hetbahn, in reflecting the chairman’s management philosophy, known as the “Only One” spirit. It clarified the progression of CJ CheilJedang’s business, products, and services, united under this philosophy, striving to be the pioneer, the best and uniquely differentiated.
Within the case study, Lee conveyed optimism regarding the growing global interest in Korean culture, foreseeing its positive impact on expediting CJ CheilJedang’s global business expansion.
CJ’s foray into cultural marketing was also highlighted as a notable business expansion strategy, exemplified by its participation in KCON – the world’s largest K-pop and K-culture festival organized by CJ ENM, the entertainment arm of CJ Group – along with its annual sponsorship of the PGA Tour “The CJ Cup” since 2017, and CJ Cheiljedang’s global partnership with the NBA’s LA Lakers from 2021.
The case study’s introductory page referred to such blending of cultural dynamism and CJ Foods’ products as “encapsulating the essence of the K-wave’s expansive influence”.
As a specific outcome, the company’s flagship product, Bibigo mandu achieved over KRW1 trillion in global annual sales in 2020, and secured the top position in the US dumpling market through localisation strategies by 2021.
Furthermore, the company’s acquisition of Schwan’s Company contributed to sales growth from USD2.3 billion in 2019 to USD3 billion in 2022.
In particular, Schwan’s Company’s flagship product, Red Baron Pizza, gained prominence by increasing its US frozen pizza market share from 14 per cent in 2019 to 21 per cent last year.
The company’s global business expansion was further elucidated, involving acquisitions of local food manufacturing companies in Vietnam and collaborations with European restaurant chains to introduce K-food.
Factors such as population, income level, Asian food market size, the number of Korean restaurants, and cold chain infrastructure were emphasised in the strategic selection of new K-food territories.
The case study currently awaits official online publication, with expectations that it will become instructional material not only at HBS but also at business schools worldwide, a CJ CheilJedang’s official said.
