The ‘War’ between Manufacturers and Retailers and D2C strategy of AmorePacific

Retailers and manufacturers aim for price leadership to maximize profits. This aggressive pricing process resembles war. As retailers and manufacturers compete in the consumer products industry, manufacturers' positions are weakened, and AmorePacific faces similar challenges. The paper examines AmorePacific's crisis amid structural changes and the merits and drawbacks of the Direct-to-Consumer (D2C) approach used to overcome it. First, this paper examines the influence of the competition between manufacturers and retailers on the consumer products business and the rise of the D2C model as an alternative. It described AmorePacific's D2C model introduction and its definition and characteristics. There are advantages, such as reducing intermediate distribution fees, securing customer data, and delivering brand value through other companies' D2C cases. Still, risks and limitations exist, such as increased costs, supply chain management burden, and relatively low traffic. The strategic D2C model created from the literature study and case analysis will help AmorePacific and other consumer products companies adapt to market changes and implement D2C strategies. This paper thoroughly examines the pros and cons of the D2C model and advises AmorePacific to make strategic decisions to overcome the crisis in a challenging business environment. It also advises spreading the D2C model to other industries and researching its complementary relationship with the traditional distribution strategy. The consumer products business struggles to determine who should win the 'war ' between manufacturers and retailers to maximize profits.