1

Lundbeck Koreas initial entry strategy was to enter into a sales alliance with Whanin a local
Korean firm and by making it a separate business unit so that Whanin can focus on their other
products that doesnt involve Lundbeck (p. 9). Moreover they wanted to create specialized
control systems to reach as fast as they can to external threats/opportunities (p. 4). Their new
strategy in 2000s was to separate Whanins business unit and their core competency from
Lundbecks business unit (p. 13). Also, they would lean the organization to respond to a straight
reporting line that is more direct to market (p. 13). The pros to the new strategy is that it allows
them to listen to the customer demands directly, discuss the options immediately and from their
make quicker decisions. They also will be able to avoid any potential conflict with Whanin in
terms of how a certain project should be done (p. 13). On the contrary, the initial strategy was
acting more reactively since their system didnt have the same direct access to the market as the
new and relied on competitor reactions to the demands of patients. They are able to split their
resources with Whanins to alleviate potential losses and risk (p. 9). The cons to the new strategy
is that they are adding another layer in the supply chain to work on a product, although each
organization is focusing on their competency there can be mishaps in terms of communication or
flow since they dont work as one team. The cons to the 90s strategy is Whanin is not involved
with any other products outside of Cipram. By having a specialized control system they are
reacting to external threats rather than seeking out opportunities by communicating with the local
environment. Lundbeck decided to change its mode of entry to compete effectively in the Korean
market. The problem with having one regional manager be in charge of different countries is that
he/she will overlook developing new and unique strategies to increase competitive advantage (p.
8, 14). Therefore that is why Lundbeck changed its mode of entry.
4.
Lundbeck Asia was not handling issues in the best interest of Korea (p. 11).
International business ethics is the morals and business conduct that Lundbeck holds in their
relationship with their host countries such as Lundbeck Asia and in particular (for this question)
Lundbeck Korea (Dereseky, 41). Similar to Taiwan the concept of face place a huge role when it
comes to the society. In particular to the case, Jun initially requested a modest vehicle that wasnt
too high-end and not too low-end and Rajar reacted weirdly to the request but granted it (p. 12).

Over time when the car had to be renewed Jun wanted to show that the company was growing so
he wanted to level-up with his vehicle but Rajar reluctant to support his decision and insisted on
choosing a new car of similar status as his previous one (p. 12). This is something clearly Rajar
would not understand since he is not from Korea but for Jun it is a tough position since he would
hear discouraging comments from his opinion leaders about his car (p. 12). Sounds eerie to
someone that is outside of the region but it is a reality in that country. Therefore, as a solution
Lundbeck Asia needs to put more effort in trying to better understand the cultural norms and
values or they can separate Lundbeck Korea from the Asian affiliates so that they have more
autonomy and can report their concerns directly in Copenhagen.

Biblio

Deresky, H. (2008). International management: Managing across borders and cultures (6th ed.).
Upper Saddle River, NJ: Prentice Hall.