International Business: Market Value of Australian Beef in Korean Markets

Running Head: INTERNATIONAL BUSINESS
International Business
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INTERNATIONAL BUSINESS
Introduction
The past few decades have witnessed the meticulous growth of Korea as a massive
market for Australian beef, an outcome of trade liberalization, resulting to KAFTA. As of 2016,
Korea is one of the best performing markets for Australian beef although it has a tough
competition with the US. The essay examines the aspects that have made Korea the third most
valued market (Ryan and Cheetham 2017) for beef export for Australia and the largest per capita
consumer of beef in the East. The paper follows the analysis of PEST and SWOT to determine
the market value of Australian beef in Korean arkets and the reasons that make Korea a valuable
marketplace for Australian beef export. Pest analysis:
Based on the trade agreements between Korea and Australia, a PEST analysis was
conducted for determining the market value of Australian beef in Korea. The findings are as
follows:
Political factors: The business climate of South Korea is quite favorable, ranking the
country in the fifth position out of 180 economies of the ease of World Bank in business gauge.
The Australian exporters have acquired unprecedented liberties for accessing the international
markets due to the increasing demand for Australian beef and the free trade agreement signings
which is highly favorable for beef exporters. The FTA, which is functioning in full flow between
South Korea and Australia, has opened up further opportunities for agronomic exports to Asian
countries, the most profitable of which is beef (Hunt et al 2015). The reduction in tariff on the
beef market of South Korea for Australian exporters is a benefit that lowers investment and
maximizes profit (MacLeod 2015). Australia is therefore in a politically privileged position when

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INTERNATIONAL BUSINESS
it comes to exporting beef to Korea. The laws of the country (Korea) is lenient about trade with
Australia.
Economic factors: Korea has emerged as the fourth largest in Asia and the fifteenth
largest in the world following a significant economic growth over the past four decades.
Growing GDP of Korea has liberalized market which has contributed to a hike in meat
consumption since the late 90s. With the evolution of population and economy, meat
consumption has also increased (Murphy et al 2015). The growth in beef consumption is
accommodated both by imports and bigger domestic production (Lee et al 2013). It must also be
asserted that the Korean consumer base had a pre-existing preference for meat (beef in
particular) and the trade agreements between the nations further shifted the preference pattern of
beef towards Australian exports. The brand image of Australia is comparatively stronger than
that of any other country since their campaigns appeal to Korean consumers more (Allen et al
2014). Further, the quality of product offered at the prices by Australian exporters make them
more desirable for the crowd of developing Korea.
Social factors- The increasing GDP in Korea has leveraged meat consumption, especially
that of red meat. Moreover, Korea has perennially been an omnivorous culture, very few of their
dishes exclude meat. The superior quality and comparatively cheap Australian beef is high in
demand for the Korean consumers (Miranda et al 2014). Unlike many countries that are
developing in terms of environmental and ethical consciousness, Korea’s culture is a far cry from
vegetarianism and the meaty platters the people prefer is a boon to the Australian exporters as
this is one country that is least likely to ban beef or any meat for that matter. The culture and
society of Korea makes it a highly profitable market for beef (Wiedemann et al 2016).