Overseas R&D subsidiaries contribute to the cross -border knowledge sourcing of MNC headquarter by providing tacit and context specific knowledge and reducing the searching cost of the headquarter

In early 2015, L’Oréal’s luxury cosmetics brand LANCÔME launched a product called Miracle Cushion™, a sponge soaked in liquid foundation. By integrating a cosmetic formula with a sponge in a compact case, it distinguished itself from other conventional makeup products, e.g., liquid foundation in a glass bottle or pressed powder in a portable compact. On Lancôme’s website, Miracle Cushion™ is described as follows: “a foundation revolution has arrived – liquid makeup in a cushion.” LANCÔME’s “revolution” actually originated from AMOREPACIFIC, Korea’s number one beauty group which had a sales revenue of KRW 4.7 trillion (USD 3.9 billion) in 2014. By launching Air Cushion® in March 2008, AMOREPACIFIC created a new makeup product category called “cushion.” By July 2015, the total cumulative number of AMOREPACIFIC’s cushion products sold in 13 countries was 63 million units. In 2014 alone, more than 26 million units were sold – one every 1.2 seconds. The sales revenue was KRW 641 billion (USD 542 million), which accounted for more than 13% of AMOREPACIFIC’s total revenue. AMOREPACIFIC launched Air Cushion® under IOPE, one of its premium brands. The company initially positioned Air Cushion® as sunscreen. Equipped with mass production facilities, AMOREPACIFIC sold 517,000 units of cushions in 2010, which accounted for KRW 14.5 billion (USD 12.2 million). Furthermore, the company started to automate the entire manufacturing process for cushions. With this automation, the sales revenue of Air Cushion® in 2011 reached KRW 33.6 billion (USD 28.4 million) - more than doubled compared to 2010. Obviously, it was a huge success for sunscreens under a single brand. From 2012, AMOREPACIFIC began to expand cushions for other in-house brands besides IOPE. Simultaneously, AMOREPACIFIC started to reposition cushion as makeup “foundation,” not “sunscreen.” HERA, AMOREPACIFIC’s luxury brand with a strong heritage in color makeup, took the initiative in repositioning cushion. This was also a strategic decision to diversify distribution channels: the main distribution channels of premium brands such as IOPE were Sephora-like specialty stores and discount stores whereas the primary distribution channels of luxury brands such as HERA were department stores and door-to-door networks. With HERA focused on domestic market expansion, LANEIGE, the most globalized brand of all in AMOREPACIFIC, pioneered the global market for cushions. Starting from its entry into Hong Kong and China in 2002, LANEIGE had already expanded its presence in more than 10 countries including Singapore, Malaysia, and Vietnam. Specifically, LANEIGE was perceived in most Asian countries as a cosmetics brand spearheading “K-Beauty” trends, part of the “Korean Wave” phenomenon. Thus, LANEIGE capitalized on its brand reputation accumulated over the years in the Asian market to expand cushions. LANEIGE designed a brand concept for its cushion as BB Cushion to make the most of the popularity of BB creams across Asia. In 2012, LANEIGE BB cushion was first launched in Singapore in January, followed by Malaysia, Thailand, and Vietnam in March, and finally Taiwan in April, all prior to its release in Korea in May. Initially, it emphasized the brightening function to fulfill the demand for whitening products already popular throughout Asia. From 2013, LANEIGE started to offer a variety of product lines customized to different consumer needs from each country. For example, LANEIGE launched BB Cushion Pore Control for consumers in hot, humid areas of Southeast Asia and BB Cushion Anti-aging for consumers in extremely cold and dry areas of China. Starting with HERA and LANEIGE in 2012, AMOREPACIFIC continue to release cushions under other brands by stages - SULWHASOO, ETUDE HOUSE in 2013, and INNISFREE, MAMONDE in 2014, etc. Every cushion product launched under different brands was named “cushion.” For example, HERA UV Mist Cushion, LANEIGE BB Cushion, SULWHASOO Perfecting Cushion, ETUDE HOUSE Precious Mineral Any Cushion, INNISFREE Water Glow Cushion, MOMONDE Cover Powder Cushion, etc. With the consistent labeling, AMOREPACIFIC succeeded in categorical differentiation. Stimulated by the widespread popularity of AMOREPACIFIC’s cushion foundations, competitors followed. Among local companies, LG Household and Healthcare was the first to enter into the cushion market in August 2012. Among the foreign brands, it was Lancôme. This paper is trying to understand how to achieve breakthrough innovation and create a new product category in the mature market such as cosmetics by analyzing the case of AMOREPACIFIC’s cushion.

본 연구는 기업성과에 영향을 미치는 두 가지 요인으로 제휴 포트폴리오 내의 자원(resources)과 교섭력 (bargaining power)을 지목하고, 이들이 각각, 그리고 동시에 기업성과에 미치는 영향을 분석하였다. 포트폴리 오 내의 자원을 통한 가치창출(value creation) 효과와 교섭력을 통한 가치전유(value appropriation) 효과를 구분한 선행 연구들을 확장하여, 본 연구는 두 가지 효과가 함께 시너지를 낼 수 있다는 상호보완적 관점에서 자 원과 교섭력을 함께 고려하여야 한다는 논의를 제시하였다. 글로벌 소프트웨어 산업의 196개 기업의 제휴 포트 폴리오를 분석한 결과, 제휴 포트폴리오 내의 자원만을 고려하거나 교섭력만을 고려한 경우 기업성과에 미치는 영향을 발견하지 못하거나 부분적으로만 발견할 수 있었다. 한편, 자원과 교섭력을 함께 고려한 경우 기업성과에 주는 긍정적인 영향을 확인할 수 있었다. 이를 통해 기업은 제휴 포트폴리오의 자원과 교섭력을 모두 고려할 수 있는 통합적인 관점을 가져야 하며, 한 가지 요소가 충족되더라도 다른 한 가지 요소가 충족되지 않을 경우 제휴 전략을 재고할 필요가 있다는 점을 제언하였다.