Background Of LG Electronics Inc
|✅ Paper Type: Free Essay||✅ Subject: Marketing|
|✅ Wordcount: 3354 words||✅ Published: 25th Apr 2017|
As the third largest conglomerate, or chaebol (Korean word for business conglomerates, Payer 2005) in South Korea, LG electronics company has employing more than 80,000 people working in over 115 operations around the world. With 2009 global sales of 55.5 trillion Korean Won (43.4 billion US Dollars), LG comprises of five business units – Home Entertainment, Mobile Communications, Home Appliance, Air Conditioning and Business Solutions (lg.com). Their asset consists of a total of 51 companies, with 9 in electronics, 8 in chemicals, and 34 in telecommunications with locations all around the world(oppapers.com).
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Before LG Electronics Inc., its original name was The Lucky Chemical Industrial Corporation, and was the first Korean company to enter the plastics industry in 1952. While expanding its plastics business, the company moved into electronics with a new brand name in 1958. In 1959, the company produced South Korea’s first radio. In 1995, however, its electronics arm was renamed something completely different in order to better compete in Western markets. Recently, the company has associated its marketing slogan which has become well known. In January 2009 they became one of only a handful of companies to own a two-lettered domain name on the internet. Many companies simply can’t use a two letter domain name because their company name isn’t as easy to abbreviate as others (oppapers.com). Today, their company is the world’s second largest producer of television sets and the third largest manufacturer of mobile phones. As reported by www.lg.com (2009), LG continues to pursue its 21st century vision of becoming a worldwide leader in digital that ensures customer satisfaction through innovative products and superior service as their vision.
Part II: The Product of LG Electronics Inc.
LG Electronics Inc. which is established in 1958 as a GoldStar, producing TVs, refrigerators, radios, washing machines, air conditioner, and so on. They have their own way to be an International Business company. With their products, they can become the third largest chaebol in South Korea. Here is the history how LG can become an International Business company from 1958 to 2010 (accessed:2011).
-Produces Korea’s first radio (A-501). Heralds beginning of electronics industry of Korea
-Produces Korea’s first telephone
-Produces Korea’s first refrigerator
-Produces Korea’s first black & white TV
-Establishes first overseas branch office (New York)
-Produces Korea’s first air conditioner
-Sales reach 100 billion won mark
-First in the electronics industry to reach export of US$100 million
-Establishes sales subsidiary in the U.S. (LG ElectronicsUS)
– Produced Korea’s first detachable air conditioner
-Establishes Korea’s first overseas production subsidiary (LG ElectronicsAI)
-Sales exceed 1 trillion won
-First in Korea to export over US $2 billion in home appliances
-Merges with GoldStar Components
-Merges with GoldStar Communications
-Company name changed from GoldStar to LG Electronics
-Acquires Zenith of the U.S.
-Declares Challenge 2005?Becomes the second date of company birth for LG Electronics.
-Develops world first reception IC for digital TV
-Strengthens restructuring efforts
-World’s first 60-inch PDP TV developed
-Develops and sells Korea’s first Korean-type digital TV
-Sells Korea’s first 40-inch PDP TV
-Attracts foreign investment for LG LCD
-Declares Digital LG Vision
-LG-Philips LCD, a joint venture with Philips, established
-Merges with LG Information & Communications
-LG.Philips Displays, a joint venture with Philips, is born
-Under the LG Holding Company system, the Company spun off to LG Electronics (LGE) and LG Electronics Investment (LGEI); the first home networking system commercialized in the global market
-World’s first synchronous-asynchronous IMT-2000 mobile phone developed; the world’s largest 76-inch PDP TV developed; CDMA mobile handsets took the largest share in the US CDMA market
-First LG ActionSport Championship is held in California
-LG Electronics MobileComm is number one CDMA manufacturer in US market
-LG Electronics MobileComm becomes number one CDMA handset maker worldwide
-Developed a receiver chip for 5th-generation DTV.
-Developed a receiver chip, which showed significant performance enhancement compared to existing receiver chips, and has been a huge influence on determining Korea’s digital TV transmission method.
-LG Electronics MobileComm becomes second largest mobile phone manufacturer in the US
-LG Electronics MobileComm leads the U.S. mobile handset industry in customer satisfaction
-LG Electronics MobileComm dominate CDMA sales
-Developed the 50-inch wireless HDTV.
-A 50-inch wireless HDTV that can transmit HD quality digital broadcasts to a PDP TV with the optional transmitting device was developed. The product received the Best Innovation –Award at the 2006 CES.
-Developed the HD PDP Time Machine TV. Introduced the world’s first DVR embedded PDP TV that allowed recording, playback and real-time rewinding of digital broadcasts. 2006 -LG Chocolate, the first model in LG’s Black Label series of premium handsets, sells 7.5 million units worldwide -Develops the first single-scan 60″ HD PDP module and 100-inch LCD TV -Establishes strategic partnership with UL -Acquires the world’s first IPv6 Gold Ready logo -Developed the wall-mount projector (Received the 2006 World’s Top 3 Design Award).
-The product was designed to reflect customer demand for an easy-to-install projector. It was awarded the 2006 World’s Top 3 Design Award and received recognition for both technological and design competitiveness.
2007 -Launches the industry’s first dual-format, high-definition disc player and drive -Launches 120Hz Full HD LCD TV -Demonstrated the world-first MIMO 4G-Enabled technologies with 3G LTE -Won contract for GSMA’s 3G campaign -Developed the world’s first super multi-drive that simultaneously supports Blu-ray and HD DVD.
-The product can play Blu-ray disks, HD DVDs and regular DVDs. It received the Best Product Award at the CES. Developed a highly efficient PDP
-Developed the 50-inch HD PDP that combines high brightness, low energy consumption and high definition through the development of a highly efficient panel structure, gas and dielectric materials. 2008 -Introduces new global brand identity: “Stylish design and smart technology, in products that fit our consumer’s lives.” -Posted No.1 spot in US frontloading washers in 5 consecutive quarters -Unveiled the world’s first Bluetooth headset combined mobile phone -Unveiled the world’s first Blu-ray network storage -Developed the world’s first LTE mobile modem chip -Recorded over 100 million units of LG air conditioners in accumulated sales -Developed wireless HDTV. -Developed a TV and set-top box that transmits 1080P full HD content wirelessly in its original state without compression or loss of quality. -Developed broadband TV (North America).
-The TV is connected to a high speed Internet and content service so that the viewer can connect to the Internet and download the movie they want straight to the TV.
-Received the Innovation Award at the 2009 Consumer Electronics Show (CES). The product has significantly improved back-up features with the use of the Blu-ray drive.
-Became second-largest LCD TV provider worldwide
-Became third-largest supplier of mobile handsets market worldwide
-Became Global Partner and Technology Partner of Formula Oneâ„¢
-Developed Borderless LED TV
-The company’s Borderless LED TV embodies an entirely new design concept, eliminating the borderline between the TV screen and the frame.
-Developed the world’s first “Full LED 3D TV”
-For the first time in the world, a Full LED technology integrating LEDs across the whole area of the screen and a Trumotion 480Hz technology delivering crisp, motion blur-free images have been applied to create a rich 3D effect and minimize dizziness.
-Awarded the “Bes of CES 2010” for the network Blu-ray player
-With its NetCastTM technology, which dramatically enhances online content services, the network Blu-ray player from LG was the only one in Korea to receive the “Best of CES 2010”.
Part III: The Differences of LG Electronics From Accross Countries and Home Country
Part IV: Competitive Advantage and Strategy of LG Electronics Inc.
1. Competitive Advantage
As reported by Sanket, Guarav, Vinod, and Krishan (August 31, 2010), the competitive advantage of LG electronics in innovative marketing strategy local and efficient manufacturing to reduce the cost of R&D potential regional channel and wide distribution network. The competitive advantage product localization is the key strategy used by the LG came out with Hindi and regional language menus on its TVs. Introducced the low priced “Cineplus” and “sampoorna” for the rural market. LG was the first brand to introduce gaming in TVs LG introduce cricket game in TVs.
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The LG Atomium is distinctive for its ability to execute and fulfil the actions arising from a meeting with a retail dealer. This means that the products selected for order can be automatically dropped in to a pre-configured Microsoft Excel spreadsheet. Because the LG Atomium carries a view on the current LG dealer database the dealers’ data is automatically captured and used in any outputs from Atomium. In addition to capturing the sales information, Atomium allows for POS and brochure requests to be set up and emailed to the appropriate LG department or person whose job it is to fulfil these requests. If a dealer requests a visit from a trainer that also can be recorded and emailed out for follow up action (harksolution, accessed:2011).
According to South Korean LG’s own website, LG is in pursuit of becoming a Top 3 electronics and telecommunications company by the year 2010. They are doing using two growth strategies:
LG’s Global Relevance
LG is attempting to overcome its mediocre reputation
LG has put its faith in design and technology
At expense of advertising
Great brands deliver both rational and emotional appeal
LG is rationally appealing
Good product features and good value for money
LG is working on emotional appeal
Brand name lacks emotional appeal of competitors
Brands from Japan gained global acceptance, then Samsung from Korea did, LG thinks they’re next.
LG’s Cell Phone Success
The Wall Street Journal quoted analyst Harrison Cho, as “its (LG) strategy shift into premium and designer phones has not only lifted its global branding power but also transformed its shares into a ‘value’ stock”
Mr. Cho continued, “With the high-end Chocolate model, LG became a supplier of premium handsets to all three major wireless carriers in Europe.”
LG’s Emphasis on Displays Causes Shift in Operations
Rapid industry and market changes left LG’s display behind competition
General Manager Li Kanglai for LG Electronics marketing depart hopes “to quicken the speed of decision making of the display business by independent operation”
Li Kanglai wishes to put more time in to communicating with distributors creating a better supply chain
(internationalbusiness.wikia.com, accessed 2011)
Part V: The Culture of LG Electronics Inc.
1. Country Culture
South Korea’s Industrialization had nothing to do with new inventions or any new ingenious ideas. It was all about good business. They took technologies and economic ideas from the already developed countries and employed them in their own country. Geert Hofstede provides insight into cultures and explains how South Korea’s society is perfect for taking what other countries have made and making it better. The two of Hofstede’s dimensions discussed here are Uncertainty Avoidance and Individualism versus Collectivism.
A country with high “uncertainty avoidance” is good for making incremental changes (innovation, not invention). This simply makes sense, as inventing new things takes a lot of risk. According to Geert-Hofstede.com, South Korea’s Uncertainty Avoidance is 85 (out of 100). They are not good at inventing new products because they tend to work in groups where far out ideas are discouraged by the rest of the group. South Korea is an extremely collectivistic society, with an individualism rating of only 18.
2. Corporate Culture
As reported by lg.com (2010) about the corporate culture of LG electronics Inc., though a company may implement perfect management strategies and boast about its outstanding and talented employees, it should adopt an appropiate corporate culture in order to unleash the power of these capabilities. There are three issues about the corporate culture of LG electronics Inc. to gain business success.
1. No Excuses
People leadership refers to talented people, who perform extremely well by internalizing and executing innovations.
2. ‘We’ not ‘I’
They pursue a corporate culture that encourages all employees to work together and form a strong team.
3. Fun Workplace
They create a workplace where individual’s creativity and freedom are respected and work is made fun.
Part VI: Political, Economical, Social, Technology, Environmental, and Legal (PESTEL) Analysis of LG Electronics Inc.
Political analysis provides an accessible introduction to the analysis of political structures, institutions, ideas and behaviours and, above all, to the political processes through which they are constantly made and remade (amazon.co.uk). In the LG electronics Inc. political analysis include: high import duty, plants in tax incentive areas like greater noida and pune, export promotion schemes of the Indian Government like EPCG (Export Promotion Capital Goods scheme) and EOU (Export Oriented Unit) status (Raj Kumar Singh, 2008).
Economic analysis is a process whereby strengths and weaknesses of an economy are analyzed. Economic analysis is important in order to understand exact condition of an economy. It can cover a number of important economic issues that keep cropping up within a particular economy, which is being analyzed (economywatch.com). In LG electronics Inc. the economical analysis include: incearse in per capita income, growing GDP high disposable income, and increase in spending power (Raj Kumar Singh, 2008).
Social analysis is factors that include the cultural aspects and include population growth rate, career attitudes and emphasis on safety. The company may also change various management strategies to adapt these social trends (accessed:2011). The social analysis in LG electronics company include: manufacturing eco-friendly product and increasing life style.
LG electronics focuses on acquiring advanced technologies to drive you forward. The improvement in technology they made the electronic product cheaper (Raj Kumar Singh, 2008). The company’s vigorous commitment to R&D always embraces challenge, as demonstrated by our creation of the world’s first blue-ray disc and the next-generation flat panel display. As reported by lg.com (2011), LG electronics goal is to lead global electronics and information technology worldwide. LG electronics is increasing its focus on “Smart Technology”-technology that adds convenience and joy to customers’ lives.
Reported by lg.com (2011), as a proud long-time ENERGY STAR partner, LG electronics is committed to the program’s mission of achieving superior energy efficiency and greenhouse gas emissions. LG is working hard to develop the most innovative products that provide consumers with significant savings through energy efficiency. There are two projects which have been done by LG electronics Inc. are LG and Tony Awards Go Greener and LG and Greensburg Greentown.
 Fast growth is the result of strategies designed to expand the market share and earnings quickly, while improving the growth rate in terms of monetary value rather than quantity.(lg.com, 2009)
2 Fast innovation involves setting extremely high innovation goals and securing a competitive edge, aiming for a target of 30% more than what our competitors can achieve. Fast innovation also means 30% more sales and improvement in our market share, new product development and unveiling such products 30% faster, developing technology and establishing corporate value three years ahead of our competitors.(lg.com, 2009)
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