In recent years, South Korea has suffered from economic turndown in the similar
way as many other countries. According to Bank of Korea (2013), in Q1/2010 the
GDP growth of South Korea, i.e. percentage change compared to previous year,
was more than 9 %. Last year, at the lowest quarter it was 1.5%, while this
year it has started to recover again: in Q3/2013 the GDP growth was 3.3 %.
The similar slope can be seen in the construction sector. According to Bank
of Korea (2013), the growth rate of construction sector, i.e. percentage change
compared to previous year, has gradually increased from being -9.4% in Q1/2011
to 1.1 % in Q1/2013 and 4.8 % in
Q3/2013.
However, when asked from the construction companies, they seem to think
that construction sector is not yet going to recover from turndown this year or
next year (Financial Times, 2013). In the FT article Daewoo Construction
representative commented:
“Orders in the sector for this
year are expected to be reduced by more than Won10tn ($9.4bn) compared with
last year’s Won101.5tn, and orders in the early part of next year are expected
to be similar to this year”
Key
takeaways for our project
When looking at this from our project’s point of view, it seems that the South
Korean construction sector is currently at halt - the number of construction
orders is limited and might be even further reduced in the future. This could
indicate that the competition from incumbent players in the “people flow”
industry might be quite fierce towards construction companies.
Thus in this kind of economic situation, the possible marketing plan from
us needs to be well analyzed and planned, in order to wisely select which
customers to target, and how to position our products compared to the competitors.
References
Financial Times. (25.10.13). “South Korea Construction groups strike
bearish tone”. http://www.ft.com/cms/s/0/99a95136-3d59-11e3-9928-00144feab7de.html#axzz2lUe432Ql (access 22.11.13)
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