EXECUTIVE SUMMARY

Since its inception in 1994, Naturvet has established itself as a pioneer in the high-end pet
nutrition industry, consistently delivering scientifically developed and innovative wellness
solutions for pets. Recognizing the growing demand for premium pet care products globally,
Naturvet is prepared to bring its scientifically developed goods to pet owners in Seoul, a city
renowned for its high discretionary income and pet-centric culture since they have a
demonstrated track record of innovation and a commitment to pet health.

South Korea, particularly Seoul, presents a lucrative opportunity for Naturvet due to its high
discretionary income and strong pet-centric culture. This trend is complemented by a rising
willingness to invest in premium pet products, creating a robust demand for Naturvet’s high-
quality offerings. By entering this market, Naturvet aims to cater to the sophisticated needs of
South Korean pet owners who prioritize the health and well-being of their pets.

The company’s extensive portfolio of scientifically formulated products meets the specific
health needs of pets, ensuring a comprehensive approach to pet nutrition and wellness. By
introducing these products to the South Korean market, Naturvet can tap into a new customer
base while fulfilling its commitment to advancing pet health on a global scale. A thorough
market study, a customized marketing strategy, and a solid operating plan to take advantage
of the special prospects this market offers all support the planned entry into South Korea.

Naturvet plans to implement a customized marketing strategy tailored to resonate with South
Korean pet owners, emphasizing the unique benefits and superior quality of its products.
Additionally, a robust operational plan will ensure efficient distribution and accessibility,
enabling Naturvet to swiftly establish its brand presence in Seoul and beyond.

With a proven track record of innovation and a steadfast commitment to pet health, Naturvet
is well-positioned to succeed in this new market. Through targeted marketing efforts,
effective distribution strategies, and a dedication to quality, Naturvet aims to become a
trusted name in pet wellness for South Korean pet owners, furthering its mission to provide
premium pet nutrition solutions globally.
 ORGANISATIONAL PROFILE

1. Company Overview:

Naturvet, founded in 1994 in California, USA, is a trailblazer in the high-end pet nutrition
industry. The company's mission is to enhance pets' lives through the provision of safe,
natural, and effective supplements. Over the past 28 years, Naturvet has cemented its position
as a leader in pet health solutions by continuously innovating and ensuring the highest quality
standards in its products.

2. Mission:

Naturvet was established with a clear goal to enhance pet health using safe, all-natural
supplements supported by rigorous scientific research. The company’s mission statement,
"To enhance pets' lives through natural, safe, and effective supplements," underscores its
commitment to pet wellness and its dedication to providing reliable and scientifically backed
products.

3. Product Portfolio:

Naturvet boasts a diverse range of more than 30 distinct, patent-pending supplements

designed to address various aspects of pet health. These products cater to a wide range of
needs, including digestive health, joint health, and overall vitality. By focusing on specific
health requirements, Naturvet ensures that pets receive targeted and effective care, improving
their quality of life. Key products with significant sales are as follows:

A. Hemp Quiet Moments Calming Aid

B. Quiet Moments Dog Calming Aid
C. All-in-one Soft Chews
D. Advanced Probiotics and Enzymes Soft Chews
4. Innovation and Recognition:

Naturvet's commitment to innovation and quality has not gone unnoticed. In 2023, the
company was honored with the Pet Innovation Award, a testament to its inventive approach
and industry-leading products. This award highlights Naturvet's dedication to staying at the
forefront of pet health solutions, continually developing new and improved supplements to
meet evolving market demands.
 5. Market Presence:

Currently, Naturvet enjoys a significant following in the USA, its primary market.
Additionally, the company has limited distribution in Europe and Canada, where its products
are gaining attraction among pet owners who seek premium health solutions for their pets.
Despite its limited international reach, Naturvet's reputation for quality and effectiveness has
begun to resonate in these markets.

6. Values and Commitment:

Naturvet’s core values include innovation, quality, and customer trust. These principles guide
the company’s operations and strategic decisions, ensuring that every product meets the
highest standards of safety and efficacy. By prioritizing these values, Naturvet has built a
loyal customer base that trusts the brand for its reliability and dedication to pet health.

BUSINESS STRATEGY

1. Current Position and Business Model:

Naturvet has grown into a leading provider of high-end pet health supplements. Naturvet's
business model revolves around continuous innovation, maintaining high-quality standards,
and building strong customer trust. The company primarily operates in the USA, with limited
distribution in Europe and Canada. Naturvet’s annual revenue is approximately $50 million,
with a compound annual growth rate (CAGR) of 8% over the last five years.

2. Competitive Advantage:

Naturvet’s competitive advantage stems from its commitment to producing natural, safe, and
effective supplements backed by scientific research. The company’s dedication to quality and
innovation has earned it recognition, including the 2023 Pet Innovation Award. This focus on
excellence and reliability differentiates Naturvet from competitors and appeals to health-
conscious pet owners who prioritize their pets' well-being.

3. Organizational Growth Plan:

Naturvet’s growth plan encompasses several key objectives aimed at achieving sustainable
expansion and enhancing market presence:
 A. Sales Growth:
- Revenue Target: Increase annual revenue from $50 million to $75 million within the
next three years.
- Product Expansion: Launch five new products annually to address emerging health
trends and consumer demands.
- Geographic Expansion: Enter new international markets, starting with South Korea, to
drive revenue growth.
B. Market Diversification:
- New Market Penetration: Establish a presence in at least three new Asian markets
within the next five years, beginning with South Korea.
- Product Diversification: Develop region-specific products tailored to local consumer
preferences and regulatory requirements.
- Partnerships: Form strategic alliances with local distributors, veterinary clinics, and
retailers to facilitate market entry and expansion.
C. Improving Margins:
- Cost Optimization: Reduce production costs by 10% through process improvements
and economies of scale.
- Strategic Pricing: Implement dynamic pricing strategies to maximize profit margins
while remaining competitive.
- Supply Chain Efficiency: Enhance supply chain operations to minimize costs and
ensure timely product delivery.
D. Maximizing Cash Flow:
- Operational Efficiency: Improve operational processes to increase cash flow by 15%.
- Inventory Management: Optimize inventory levels to balance demand and supply
effectively, reducing holding costs.
- Investment: Allocate $5 million in R&D annually to drive innovation and product
development, ensuring a steady pipeline of new offerings.

TARGET MARKET AND ENVIRONMENTAL SCAN

The primary target market for Naturvet in South Korea is Seoul, the nation's capital and
largest metropolitan area. Seoul boasts a high concentration of pet owners and a culture that
places significant importance on pet health and wellness. The demographic focus is on
middle to high-income households, particularly those that view pets as family members and
are willing to invest in premium pet care products.

A. Market Size and Growth: Seoul, with a population of over 10 million, has a high pet
ownership rate, with approximately 1 in 5 households owning pets. The pet care
market in South Korea is valued at over $1.5 billion, with a CAGR of 10% expected
over the next five years.
B. Economic Environment: High GDP per capita ($32,000 as of 2023) and substantial
discretionary income is the reason to select Seoul as a target market. Consumers in
Seoul are inclined to spend on premium products, including high-quality pet
supplements.
C. Cultural Factors: Strong trend of pet humanization, with pets often treated as family
members lead to this target market decision. High regard for health and wellness
products, is creating a favorable market for Naturvet’s offerings.
D. Technological Advancements: Advanced e-commerce infrastructure and high internet
penetration of 96% and opportunities for digital marketing and online sales channels
in Seoul makes it a better option for expansion.
E. Ease of Access: Geographical proximity within Asia reduces logistical challenges and
pro-business environment and trade agreements facilitate easier market entry.

PESTLE ANALYSIS

A. Political Factors:

- Stable political environment with a democratic government supportive of business

operations.

- South Korea’s trade agreements (e.g., FTA with the USA) can facilitate import activities,
reducing tariffs and barriers.

B. Economic Factors:

- High GDP per capita and a robust economy.

- Significant growth in the pet care industry, with consumers willing to spend on premium
products.
C. Socio-Cultural Factors:

- Growing trend of pet humanization, treating pets as family members.

- Increasing preference for premium and health-focused pet products.

- Middle to high-income households prioritizing pet wellness.

D. Technological Factors:

- High internet penetration and sophisticated e-commerce sector.

- Opportunities for digital marketing, social media engagement, and online sales platforms.

E. Environmental Factors:

- Government initiatives promoting sustainability, influencing packaging and distribution

choices.

- Consumer preference for eco-friendly and sustainable products.

F. Legal Factors:

- Strict regulatory standards for pet food and supplements.

- Compliance with local labeling, ingredient, and safety regulations is essential.

Market Segments and Consumer Needs:

1. Market Segments:

A. Pet Owners:

- Middle to high-income households, typically urban residents.

- Age group: 25-55 years.

- Characteristics: Willing to invest in premium pet health products, prioritize pet wellness,
and value scientific backing of supplements.

B. Veterinary Clinics and Pet Stores:

- Local veterinary clinics and specialty pet stores that can recommend and sell premium
supplements.
 - Characteristics: Looking for reliable, scientifically backed products to offer their
customers.

2. Consumer Needs and Wants:

A. Pet Owners:

- High-quality, natural, and safe supplements.

- Products that address specific health concerns like digestive health, joint health, and
overall vitality.

- Transparent and scientifically supported product information.

- Eco-friendly and sustainable packaging.

B. Veterinary Clinics and Pet Stores:

- Reliable supply chain and consistent product quality.

- Competitive pricing and attractive margins.

- Marketing support and educational materials for product promotion.

Sales Forecast:

1. Initial Year Sales:

- Targeting 10,000 households in Seoul with an average annual spending of $200 per
household on supplements.

- Estimated sales: 10,000 households * $200 = $2 million.

2. Three-Year Sales Target:

- Aim to reach 50,000 households within three years.

- Estimated sales: 50,000 households * $200 = $10 million.

 MARKET ENTRY AND MARKETING STARTEGIES

Naturvet’s market entry strategy into South Korea will involve a multi-phased approach:

Phase 1: Establish Online Presence

A. Localized E-Commerce Platform:

- Initial Investment: $500,000
- Development Costs: $300,000 for website and app localization, $100,000 for digital
marketing, and $100,000 for initial inventory.
- Objectives: Build brand awareness, test the market, and gather consumer feedback.
- Features: Korean language support, local payment gateways, and region-specific
product recommendations.
B. Online Marketing Campaign:
- Budget: $1 million for the first year
- Channels: Social media advertising, search engine marketing, and influencer
partnerships.
- Goals: Drive traffic to the e-commerce platform, generate initial sales, and build a
customer base.

Phase 2: Develop Physical Distribution Network

A. Joint Ventures with Local Distributors:

- Initial Investment: $1.5 million
- Partnership Costs: $500,000 for establishing partnerships and $1 million for setting up
inventory and logistics.
- Objectives: Expand market reach, ensure product availability, and build relationships
with local retailers and veterinary clinics.
B. Distribution Strategy:
- Retail Locations: Target 50 pet stores and 30 veterinary clinics within the first year.
- Logistics: Set up warehousing and distribution centers in key locations to streamline
supply chain operations.

Phase 3: Establish Legal Entity

A. Legal and Compliance Costs:

 - Initial Investment: $500,000
- Components: Legal fees for company registration, regulatory compliance, and
intellectual property protection.
- Objectives: Navigate regulatory requirements, ensure compliance with local laws, and
facilitate smooth business operations.

The propose market entry strategy is best for Naturvet in following ways:

a. Reduced Risk: The phased approach minimizes risk by initially testing the market
online before committing to physical distribution.
b. Leverage Local Knowledge: Joint ventures with local distributors mitigate challenges
related to market entry and cultural differences.
c. Scalability: The strategy allows for scalable growth, with the option to expand
physical distribution based on online sales performance and market demand.

SWOT Analysis:

Strengths:

 Strong brand reputation and scientifically backed products.

 Successful track record in other markets.

 Initial online presence allows for market testing and brand awareness.

Weaknesses:

 Limited brand recognition in South Korea.

 High initial investment required for market entry.

 Regulatory challenges and cultural adaptation.

Opportunities:

 High demand for premium pet supplements.

 Growing pet ownership rates in Seoul.

 Ability to leverage online sales channels and local partnerships.

Threats:
  Intense competition from local and international brands.

 Regulatory changes and compliance issues.

 Cultural differences that may affect product acceptance.

Target Customers:

A. Pet Owners
B. Veterinary Clinics and Pet Stores

Connecting with Target Customers:

A. Digital Marketing: Utilize targeted social media ads, search engine optimization
(SEO), and influencer partnerships to reach pet owners.
B. Educational Content: Provide valuable content about pet health and supplement
benefits through blogs, videos, and social media.
C. Local Partnerships: Collaborate with veterinary clinics and pet stores for product
recommendations and cross-promotions.

Marketing Strategies:

1. Online Sales:
- Platform: Localized e-commerce website and app.
- Pricing Strategy: Premium pricing aligned with market expectations, approximately
$50-$100 per product, based on product type and formulation.
2. Physical Distribution:
- Retail Locations: Distribution through 50 pet stores and 30 veterinary clinics.
- Pricing Strategy: Consistent with online pricing, with potential for local promotions
and discounts.
3. Logistics:
- Warehousing: Establish warehouses in key locations to ensure efficient inventory
management and timely delivery.
- Delivery: Partner with local logistics providers for reliable and cost-effective
distribution.
 4. Forecast and Goals:
- First-Year Online Sales Target: $2 million from e-commerce platform.
- Three-Year Sales Target: $10 million, including online and physical distribution.
5. Market Share Goal:
- Capture 5% of the premium pet supplement market in Seoul within three years.

By leveraging a combination of online and physical distribution channels, partnering with

local experts, and focusing on a phased market entry, Naturvet aims to establish a strong
foothold in South Korea and build a sustainable, profitable presence in this promising market.

OPERATIONAL PLAN OUTLINE

Facility and Equipment Requirements:

1. Warehouse Facility:
- Location: Seoul, strategically positioned to ensure efficient distribution.
- Size: 20,000 square feet to accommodate inventory and operational needs.
- Lease Costs: $300,000 per year.
- Facility Features:
 Climate-controlled environment for safe storage of supplements
 Loading docks for easy shipment and receipt of goods.
 Security systems to protect inventory.

2. Equipment:
- Warehouse Racking Systems: $50,000 for efficient storage.
- Forklifts and Material Handling Equipment: $30,000.
- Inventory Management System: $100,000 for software and hardware.
- Packaging and Labeling Machines: $70,000 to ensure compliance with local
regulations.

Production Processes:

1. Inventory Management:
 - Advanced Inventory Management System: $100,000.
- Tracks inventory levels in real-time.
- Automates reordering processes to maintain optimal stock levels.
- Integrates with CRM and ERP systems for seamless operations.

2. Order Processing:
- Order Fulfillment Process:
 Orders received via the e-commerce platform are processed in real-time.
 Pick, pack, and ship operations managed through the warehouse.
 Partner with local logistics firms for last-mile delivery.

3. Quality Control:
- Quality Assurance Team: Annual salary costs of $200,000 for a team of 5 QA
specialists.
- Regularly inspect incoming shipments for quality and compliance.
- Conduct random sampling of products to ensure consistency and safety.
- QA Software: $50,000 for implementation and annual maintenance.

Management Information Systems and IT Requirements:

1. Enterprise Resource Planning (ERP) System:

- Implementation Costs: $500,000.
- Integrates inventory management, order processing, customer service, and
financials.
- Real-time data access for better decision-making.

2. Customer Relationship Management (CRM) System:

- Implementation Costs: $200,000.
- Manages customer interactions, sales data, and service issues.
- Provides insights into customer preferences and behaviors.

3. IT Infrastructure:
 - Hardware and Networking: $150,000 for servers, computers, and networking
equipment.
- Software Licenses: $100,000 for necessary applications.
- IT Support Team: Annual salary costs of $300,000 for a team of 6 IT professionals.

E-Business Strategy:

1. Website Development:
- Initial Development Costs: $300,000.
- Localized e-commerce platform tailored to South Korean market.
- Features include product catalog, customer reviews, and secure payment options.

2. Software Requirements:
- E-Commerce Platform: Integrated with CRM and ERP systems.
- Security Software: $50,000 for initial setup and $20,000 annually for updates.
- Ensures data encryption, secure transactions, and protection against cyber threats.
- Local Payment Gateway Integration: $30,000 to support local payment methods like
Kakao Pay and Naver Pay.

3. Online Security:
- Security Measures:
 SSL certificates for secure transactions.
 Regular security audits and penetration testing.
 Data encryption for sensitive customer information.
- Compliance: Adherence to local data protection laws and regulations.

By implementing this comprehensive operational plan, Naturvet will be well-equipped to

manage its entry into the South Korean market efficiently, ensuring high standards of quality,
customer satisfaction, and seamless integration of its operations.

SOCIAL RESPONSIBILITY STRATEGY

1. Environmental Policies and Initiatives

A. Sustainable packaging:
 All products sold in South Korea will be packaged in entirely recyclable or
biodegradable materials.
 Use plant-based or recycled materials for packaging to reduce carbon impact.
B. Eco-Friendly Production:
 Source ingredients locally to reduce transportation emissions.
 Implement energy-efficient production methods and minimize water consumption.
 Follow ISO 14001 environmental management standards to ensure compliance
with international environmental requirements.

C. Green Supply Chain:

 Collaborate with suppliers who prioritize environmental responsibility.
 Reduce emissions by optimizing logistics and distribution routes.

D. Carbon Neutral Goals:

 Partner with local environmental organizations to offset carbon emissions through
reforestation and renewable energy investments.
 Participate in carbon offset schemes designed exclusively for Asia.

2. Community Contribution Initiatives

A. Pet Wellness Programs:
 Organize free health check-up camps in partnership with local veterinarian clinics.
 Provide informative lectures to pet owners on proper pet diet and care.

B. Local Partnerships and Employment:

 Partner with South Korean pet welfare organizations to promote rescue and
adoption.
 Hire locals for the Seoul office to create jobs and boost the local economy.

C. Corporate Sponsorships:
 Sponsor local pet events and parks to increase community engagement.
 Donate a portion of the revenues to South Korean animal shelters and welfare
organizations.

D. Volunteer Programs:
 Encourage staff to volunteer at local animal shelters and take part in community
service programs.
 Provide paid volunteer time off to employees as part of your company social
responsibility policy.

3. Relevant Certifications
A. Fair Trade Certification:
 Fair Trade Certification ensures fair salaries and ethical supplier treatment for all
sourced ingredients.
 To certify product lines, work with organizations like Fair Trade USA or Fairtrade
International.

B. Organic Certification:
 To ensure ingredient integrity, obtain organic certification from recognized
agencies such as USDA Organic or Korea Organic.
  Ensure that the Korean organic agricultural criteria are met.

C. Non-GMO Verification:
 To ensure non-GMO products, seek Non-GMO Project Verification.
 To preserve non-GMO standards, put in place stringent quality control measures.

D. ISO 9001 Certification:

 ISO 9001 certification ensures high-quality management practices.
 To keep certification, do periodical audits and upgrades.

FINANCIAL PLANS AND FORECASTS

1. Proforma Financial Statements

A. Income Statement for NaturVet:

Year Revenue COGS Gross Profit Operating Expenses Net Profit

Year 1 $5,000,000 $2,000,000 $3,000,000 $2,500,000 $500,000
Year 2 $7,500,000 $3,000,000 $4,500,000 $3,000,000 $1,500,000
Year 3 $10,000,000 $4,000,000 $6,000,000 $3,500,000 $2,500,000

B. Cash Flow Statement for NaturVet:

Year Operating Investing Financing Net Cash Flow

Year 1 $1,000,000 ($1,500,000) $2,000,000 $1,500,000
Year 2 $2,000,000 ($500,000) $0 $1,500,000
Year 3 $3,000,000 ($500,000) ($500,000) $2,000,000

C. Balance Sheet for NaturVet:

Year Assets Liabilities Equity

Year 1 $4,000,000 $2,500,000 $1,500,000
Year 2 $6,000,000 $2,500,000 $3,500,000
Year 3 $8,500,000 $3,000,000 $5,500,000

2. Foreign Exchange and Capital Requirements

A. Foreign Exchange/ Currency Risks:

 Currency fluctuations:
NaturVet needs to keep a careful eye on the exchange rate because the South Korean
won (KRW) is subject to swings in relation to the US dollar (USD). Unexpected
KRW depreciation could raise the price of imported raw materials and have an effect
on earnings.
  Hedging Strategies: To lower the risk of unfavourable currency movements, use
currency hedging strategies like forward contracts to lock in exchange rates for
upcoming transactions.

 Local Currency Funding: To reduce currency risk, fund operations as much as

feasible in local currency (KRW).

B. Funding Required for the Project:

 Initial Investment: The expenditures of entering the market, including setup,
promotion, and first inventory, will come to about $2 million.

 Working Capital: An extra $1.5 million spread out over the first two years to meet
cash flow needs and operational costs.

 Funding for Expansion: $5,000 000 for Attempts to Expand and Scale

3. External Funding and Repayment Plans

A. External Funding Sources:

 Bank Loans: To cover a portion of the start-up and running expenditures, obtain a
loan from a South Korean bank.

 Venture Capital: Reach out to venture capital companies that are considering
investing in the pet care industry to provide equity financing for the expansion.

 Government Grants: Make an application for any grants or incentives offered by the
South Korean government to international businesses looking to enter the market.

B. Repayment Plans:
 Bank loans: Repay loans with a fixed interest rate over a five-year term, using
operating cash flows to fund payback.

 Equity Financing: Provide venture capitalists with a minority equity share in

exchange for a profit-sharing plan and potential buyback options.

 Reinvestment of Profits: To lessen dependency on external debt and finance

additional expansion, use retained earnings.

RISK ASSESSMENT AND EXIT STRATEGY

Risks Associated:
 Regulatory Compliance: Danger of failing to comply with South Korean regulations
regarding dietary supplements for pets.

 Market Competition: Well-known domestic and foreign brands present fierce

competition.
  Supply Chain disruptions: Possible disruptions in the supply chain could have an
impact on the availability of products.

 Cultural misalignment: The danger of failing to adapt to the customs and preferences
of local customers.

 Currency fluctuations: Unfavourable effects of fluctuating exchange rates on revenue.

 Economic Downturns: The possibility of unstable economic conditions impacting

consumer expenditure on luxuries such as pet supplements.

Risk Mitigation:
 Hire knowledgeable legal and regulatory professionals in the area to handle
compliance and create solid processes for ongoing adherence.

 Make a difference with better product quality, regionalized marketing plans, and solid
connections with regional distributors and retailers.

 Maintain safety stock levels, diversify your sources, and create backup plans for
alternate sourcing.

 To inform product adaption and marketing strategies, carry out in-depth market
research and engage with local specialists.

 To reduce vulnerability, make use of hedging techniques and match financing with
local currency.

 Concentrate on building a solid customer base for your brand and expanding your
product line to accommodate different market niches.

Exit Strategy:
A. Exit Strategy Outline:
 Timeline for Implementation: If market conditions are unfavourable or strategic
objectives are not attained, plan for a possible exit within 5 to 7 years.

 Clauses that Trigger, if:

-Annual sales growth is less than 5% for two years in a row, implement departure.
-Modifications to regulations place heavy restrictions on operations.
-When competition or market circumstances get too intense to handle.

B. Exit Methods:
 Selling Your Business: Look for a local or foreign pet care company to buy your
business. Speak with brokers or investment banks to find possible purchasers and
work out the conditions of the transaction.
 Divestment: Sell off assets and give local partner the customer relationships in order
to gradually divest the South Korean enterprises. Sell off assets and inventory, and
work out transition agreements with nearby companies.

 Repatriation of Funds: Assure that funds and profits are returned to the US parent firm
by following local repatriation rules and implementing a disciplined financial
planning strategy.

C. Financial Recovery Plan:

 Employee Severance: In accordance with South Korean labour regulations, give
employees just compensation packages.

 Debt Settlement: Give paying off any unpaid municipal bills or financial
commitments top priority.

 Asset Liquidation: To recoup invested funds, sell off non-essential assets.