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Introduction
H. Stern (www.hstern.net), a Brazilian jeweler with a global presence, has revolutionized the jewelry market in its use of Brazilian gems and, thereafter, by investing in design and innovation. Founded in 1945, the company opened its first store in 1949, focussing on selling jewelry to tourists in South America. In 2011, in the context of uncertainties in the European and American markets, the expansion of business to emerging markets appeared to be an attractive option. By mid-2013, H. Stern was seriously considering the expansion of its business into Asian countries.
With extensive experience in the analysis of international markets, Christian Hallot, H. Stern brand ambassador and the company's spokesperson, who had been with the company for more than 35 years, analyzed lots of data in order to help H. Stern board take a difficult decision: initiate operations in the Chinese and Korean markets in 2012. These two countries represented a rather new venture for H. Stern, in terms of differences in culture and in business practices. In comparison with other options of new countries for expansion, China and South Korea encompassed significantly greater potential and also greater uncertainty.
Having already opened two stores in China (in 2012 and 2013) and one in South Korea (in 2012), the company was still pondering the attractiveness and risks of operating in these countries, and reflecting upon suitable modes of entry and operation. In mid-2013 these doubts are consuming much time of H. Stern executives, who must decide if and how the company should continue to expand in Asia.
History of H. Stern
Founded by Hans Stern in 1945, and targeting the high-end luxury segment, mainly foreign tourists passing through Brazil, H. Stern opened its first point of sale in 1949, in Praça Mauá, where cruise ships landed in the port of Rio de Janeiro. Soon after, the company went on to open additional stores in hotels and airports in the city.
The quality of Brazilian gems was very high, but lapidaries lacked professional craftsmanship. For this reason, H. Stern began a process of vertical integration in the 1950s, aimed at forging a presence in all stages of the production chain. The company hired goldsmiths and lapidaries to set up workshops within the company and increase the production...