It has been a new era in the IT sector for several years since the smartphone was introduced in the world in mid to late 2000s. Emergence of those devices such as smartphones and tablets has absolutely brought a new lucrative business category of mobile application, and it has affected on many areas which have existed in web platforms such as social network service, e-commerce, banking, games and so on. In order to lead or follow the trend, looking at the potentials and opportunities, a lot of mobile application start-ups have sprung up. Many app start-ups were born in South Korea as well over the period, and Korea was ranked as one of the countries with the highest smartphone penetration rate, which was 73% in 1Q of 2013. The significant number of 73% implied great potential in local market, and it became one of the drivers for many Korean entrepreneurs to start their business in app field. For the reason, the term of ‘start-up’ in Korea has been often identified with ‘mobile application developer’. This research will basically conduct a case study on diversification strategy of Korean mobile instant messenger startup, Kakao Corp. Including expert’s interview, analyses with several models, such as five forces framework, SWOT analysis, BCG matrix and GE/McKinsey matrix are applied to figure out the company’s current position and future direction. Especially, BCG matrix and GE/McKinsey matrix take a key role to evaluate company’s product portfolio strategy and to provide suggestion and guideline for future diversification. The company Kakao Corp. (Daum Kakao as a consolidated company) recently has been planning new initiatives such as mobile payment service and call taxi service. By investigating company’s motives for diversification and core competencies, the research tried to figure out if company’s current diversification strategy is going the right track, what future implications are, and what recommendations this research can provide.

It has been a new era in the IT sector for several years since the smartphone was introduced in the world in mid to late 2000s. Emergence of those devices such as smartphones and tablets has absolutely brought a new lucrative business category of mobile application, and it has affected on many areas which have existed in web platforms such as social network service, e-commerce, banking, games and so on. In order to lead or follow the trend, looking at the potentials and opportunities, a lot of mobile application start-ups have sprung up. Many app start-ups were born in South Korea as well over the period, and Korea was ranked as one of the countries with the highest smartphone penetration rate, which was 73% in 1Q of 2013. The significant number of 73% implied great potential in local market, and it became one of the drivers for many Korean entrepreneurs to start their business in app field. For the reason, the term of ‘start-up’ in Korea has been often identified with ‘mobile application developer’. This research will basically conduct a case study on diversification strategy of Korean mobile instant messenger startup, Kakao Corp. Including expert’s interview, analyses with several models, such as five forces framework, SWOT analysis, BCG matrix and GE/McKinsey matrix are applied to figure out the company’s current position and future direction. Especially, BCG matrix and GE/McKinsey matrix take a key role to evaluate company’s product portfolio strategy and to provide suggestion and guideline for future diversification. The company Kakao Corp. (Daum Kakao as a consolidated company) recently has been planning new initiatives such as mobile payment service and call taxi service. By investigating company’s motives for diversification and core competencies, the research tried to figure out if company’s current diversification strategy is going the right track, what future implications are, and what recommendations this research can provide.

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Websites:
Appasia, (2014) “Korean Mobile App Market and Marketing” Appasia Monthly Report, http://www.slideshare.net/appsasia/korean-mobile-app-market-and-marketing-by-appsasia-august
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