Chaebols were the result of Korean government's emphasis on export-oriented economic policy. The new government in the 1960s under the leadership of President Park Chung Hee emphasized development and rapid growth of the South Korean economy. This policy encouraged the inflow of foreign capital to fund export oriented economic policy.

But as the global competition increased and barriers to entry for labor intensive products from the Third World heightened during the 1970s, the focus of the Korean economic policy was shifted towards heavy and chemical industries. This was the period when the Korean government intervened in the allocation of resources and channeled resources to specific industry sectors to boost the economic growth. This period also saw the birth of Korean chaebols.

As financial institutions (especially banks) were under quasi-government control, the government was able to have these banks loan huge amounts of money to these chaebols. Such a favorable government policy resulted in many businessmen starting industries which later morphed into conglomerates or chaebols.

A chaebol can be defined as a business group consisting of large companies which are owned and managed by family members or relatives, in many diversified business areas. A single family usually referred to as the founding family, controls the entire web of companies woven around the core company. It has been recorded that the founding family and the owner controls as much as 60 percent of the entire stake of these companies.

In the nineties the top five chaebols (Samsung, Hyundai, LG, Daewoo and SK) accounted for more than 50 percent of Korea's GDP and the top 30 chaebols for 75 percent of all economic activity in Korea. But this scenario has undergone a sea of change. The Asian financial crisis in the 1990s acted as a catalyst for the South Korean economic change. Following the crisis, the South Korean economy saw a rapid downsizing and reconstruction - not only of economic policies, but also the underlying philosophies of Korean chaebols.

Samsung and LG have become the pin-up companies of the post crisis South Korean economy. Both these companies carried out a massive down sizing, divested many business units that were not directly contributing to their core competence, invested heavily in research & development, and instilled a culture centered around building resonating brands. Also, the South Korean economy has allowed foreign direct investment in many industry sectors and thereby facilitated an open economy system that not only nurtures healthy competition but also fosters efficiency, productivity and profitability rather then mere size and sheer dominance on the economy by a handful of companies.

Finally, the immense pressure and stiff competition from China and India in many industries has further pushed the erstwhile Korean chaebols to become lean and mean. Many companies are following the Samsung-LG path. Building up enormous conglomerates with operations in literally every other related or unrelated industry is no more a preferred business option.

South Korean chaebols have indeed come a long way from being over sized companies with no clear business competence to being dominant players in many industries. It will not be a surprise if some of the South Korean companies even become brand leaders in some sectors.

In today's ultra competitive market place where customers are highly empowered, competitors are trying every trick in the book to lure away customers from other companies and collaborators have become highly technology savvy. The best way for any company to move forward is by adopting a customer centric philosophy.

As the term indicates, customer-centric philosophy or customer centricity is an ideology, a value system where in companies' activities are centered around the requirements of customers. As simple as it may sound, it is probably one of the toughest things for any company to incorporate into their corporate strategy and structure. Businesses till now have been following the dominant product centric philosophy (of product centricity).

Product centricity refers to an internal alignment with focus predominantly on operations, productions and internal controls. As such, the deciding factor on many decisions was the production efficiency. Further, a product focus results in a more transactional and short-term interaction with customers.

On the other hand, customer centricity refers to an external alignment with focus predominantly on the customer and the way in which customer wants and needs are satisfied whereby value can be created both to the customer being served and the organization that is serving the customer. Customer centricity is also in line with service-centered dominant logic for marketing in that customer centricity goes well beyond selling products to customers and entering a whole new world of providing comprehensive solutions. As such, customer centricity emphasizes building long term relationships with customers.

Do these two ideologies result in tangible systems for companies and ventures beyond definitional jugglery? The answer is an emphatic yes. Customer centricity offers companies certain key advantages hitherto not offered by product centricity. Further, it enables companies in building sustainable competitive advantage.

Product development and design will be more in tune with the needs of the customers rather than being just to reflect the technological prowess or superiority of the company.

Pricing would be more in line with the value perception of the customer and his/her willingness to pay rather being an exercise to cover the cost of manufacturing.

Innovative ways of reaching customer in order to provide them convenience will replace logistic oriented distribution where places where the product ends up at is decided by a number of other operational and financial factors with no emphasis given to customer convenience.

Communications, advertising and promotions will also be line with the receptivity of the customer rather than bombarding the customer as dictated by the demands of selling a prerequisite number of products.

Co-creating value along with customer becomes possible as a customer centric culture of an organization would establish systems that would enable a constant dialogue with customers.

Effectiveness of marketing can be shifted from the traditional market share and sales figures to more comprehensive measures such as the customer life time value, satisfaction scores, and strength of customer loyalty.

Given the emphasis on relationship building in a customer centric culture, it allows companies to don a more long-term perspective rather than a short-term perspective with focus purely on quarterly results.

The customer centric philosophy will increasingly be adapted by businesses in their quest to master the new requirements and role of marketing - customer loyalty.

Uniqlo, a name formed by the fusion of two words Unique and Clothing, is usually referred to as Japanese version of Gap. Founded in 1995 by Tadashi Yanai, Uniqlo has become the number one brand among the Japanese retailers with more than 700 stores and a revenue totaling US$3.5 billion in 2005. In its bid to become one of the global giants in apparel, the company started to expand globally. In 2001 it entered the UK market and in late 2005 entered the US market.

The Uniqlo story is different and interesting at the same time because of its underlying philosophy of people before brand. What does it mean and what are its implications for the brand?

Literally every sector of the industry is proliferated with brands - regional, national and international - and the apparel industry is no exception. The US apparel industry is probably one of the most competitive apparel markets in the world. This ultra competition makes it a perfect place for brands to thrive.

One of the main reasons for the tremendous success of branding and also the presence of a great many number of brands in the apparel industry is because apparels are very self-expressive products. People use clothing as a major avenue to express their sense of self to the world. Coincidentally, one of the main functions of a successful brand is to provide a channel for the consumer to express himself. As such, branding becomes more important in the apparel sector than in many other sectors as the symbolic value is very high.

If Uniqlo's brand philosophy is analyzed in this background, it makes for a really intriguing case. When the brand entered the US market in late 2005, it did that by opening three stores in a New Jersey mall. The brand created the initial awareness in the market place by using news paper inserts that displayed its variety of clothes and the low price. But to create a distinctive position the brand follows a position where it puts the customer before the brand. The CEO of Uniqlo USA Nobuo Domae says: "We are selling jeans, not style, we don't want to push our brand logo, and you can combine our clothing with other brands". This is very different from what one hears in the industry. By not emphasizing the brand image and identity aspects, Uniqlo might be making a mistake.

Playing in a sector where self expression, fashion, symbolic value and self-expression are sky high, brands and strong brand identities provide a channel for consumers to achieve all of the above parameters. Uniqlo, by emphasizing low price and high quality is hoping to win the race. Time will tell whether this strategy will be successful and can sustain pressure from new brands and tough competition.

China, with its huge customer base and an ever growing economy is attracting companies from across the globe to set up shop. Many well known Western brands have entered China and many others are making a beginning. One thing that has emerged as a common factor from the experiences of all these companies is that China is a tough place for Western companies to do business in.

Many factors make the going tough in China but the most important one is the difficulty in understanding the local culture and preference of local customers. Being a quintessentially collectivistic society, China is completely different from the Western world and this creates some obvious challenges. In order to overcome this seemingly easy challenge, many companies opt for either joint venture or strategic alliance route to establishing their business in China. Costa Coffee, the British coffee brand is the latest addition to the list of such companies.

Costa Coffee is part of the British leisure group Whitbread. With around 500 coffee stores in the UK and another 150 around Europe and the Middle East, Costa Coffee has been a brand to reckon with in that region. But compared to the global market leader Starbucks that entered China in 1998 and already has around 180 outlets in China, Costa Coffee entered the Chinese market in December 2006. Unlike Starbucks, Costa Coffee entered into a joint venture with the Yueda Group based in Jiangsu Province. The logic for such a partnership is quite simple - the Costa Coffee brand being a new entrant to the Chinese market would take a long time if it went alone but a partnership with a local company would allow Costa Coffee to leverage the partner's knowledge of the local market and customers. As attractive as it may sound, such partnerships do come with a price.

Costa's future in China will depend heavily on its partner. Currently, it is the Yueda group that will drive Costa's business. With its Italian image in Europe, Costa aspires to capture that very Italian aura in the Chinese market as well. But such a strategy raises a very crucial question about brand experience. One of the reasons that customers pay a premium to consume coffee at a cafe is for the experience. Chinese customers, especially in affluent cities such as Shanghai would aspire to identify with a global brand portraying a global image. Starbucks has been fairly successful in exploiting such a customer need.

Costa Coffee, with its Chinese partner, could face the risk of customizing the brand a bit too much. Such a step would jeopardize Costa's market aspirations. Even though the joint venture could allow Costa Coffee to understand the market faster, it would have to tread its path carefully.

It would be interesting to watch Costa's future path, given that Starbucks plans to expand in China very aggressively in the coming years and open thousands of new stores yearly. Who wins in the war between a global brand and a joint venture between a European brand and a Chinese company is ultimately for the Chinese customer to decide. But as long as Costa Coffee ensures that its brand essence and experience is not compromised, Starbucks can expect some competition.