JeongKwanJang’s Entry into China: A Case Study Based on the OLI Paradigm

This study applies the traditional OLI (Ownership-Location-Internalization) paradigm, which has been primarily centered on multinational corporations, to the case of JeongKwanJang—a leading Korean health functional food brand—in its expansion into the Chinese market. First, Ownership-Specific Advantages include brand assets, cultural value, brand story, quality control, and research and development capabilities. Second, Location Specific Advantages are categorized into factors such as an aging population, market size and diversity, local partnerships, and distribution networks. Lastly, internalization-specific advantages consist of the operation of local production facilities and the establishment of customer loyalty. This analysis offers important implications for understanding how companies respond to change through continuous innovation in today’s rapidly evolving global market environment. It is academically significant in that it provides a detailed analysis of how ownership advantages (such as brand equity and R&D capabilities), location advantages, and internalization strategies operate in an integrated manner in real-world business settings. Unlike previous studies that have focused mainly on representative large-scale manufacturing industries, this research expands the scope of the OLI paradigm by examining the unique characteristics of the health-functional food industry and the institutional and cultural specificities of the Chinese market. By systematically analyzing JeongKwanJang’s successful market entry strategy in China based on the OLI framework, the study offers practical implications for Korean health functional food companies and other consumer goods firms seeking to enter overseas markets. Specifically, the research presents actionable strategies, including product development tailored to local consumer preferences, strategic alliances, establishing direct distribution networks, and maintaining a premium brand image. These insights serve as a practical guide for domestic and international firms on how to leverage each component of the OLI paradigm in their global expansion efforts, particularly in markets like China.