Lg Electronics: Global Strategy In Emerging Markets 5e4n26

 LG

Electronics: Global Strategy In Emerging Markets Prepared ByAnupam kumar

LG Electronics is Korean based company was primarily known for its low- cost appliances had more than 72000 employees working in about 77subsidiaries and marketing unit across the world. LG embraced the philosophy of “great company, great people” and followed two growth strategies which involved “fast innovation and fast growth” to secure global competitiveness

LG Products-

a

Electronics Fan Blades Telephone casings Founded as a Cosmetics Product maker

Plastic Caps

Electronics Equipments and Telecom

Combs, Toothbrushes Soaps boxes

Insurance

Oil Refining Shipping

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The impact of location-specific advantage and the role of government policy in helping firms compete, and

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Leveraging home-grown competitive advantages in evolving into full-fledged MNEs

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It has high quality, innovative consumer based product

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More focus on R & D

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LG, SAMSUNG , Chips & media etc..are the major players

In 2007, LG showcased first dual-system DVD player

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Last two decades the market value of LG compounded at the rate of 22% and Samsung, and others also grown the same

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Success of Korean industry bcz a product of foresight, careful strategic thinking and leveraging in Govt. policies

 Brazil

(1990)– Challenges faced by LG  Very high import tariffs  Significant competition  Low brand awareness  Increasing the level of uncertainty in exchange rate

Strategies used by LG  LG decided to stay in brazil and targeted local as well as US and south American market  They utilized the govt. policies and benefits  Starts branding campaign on sports events sponsorship  Focused on quality and after sales services  Signed agreements with local distribution chains to gain quick excess to the market. 

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Russia (1990)– challenges Market risk given the communist heritage and challenging economic environment State – sponsored business Russians consumers yet not familiar with the brand 1998, Russian economic crisis

Strategies used Introduced LG brand organized events to promotes the brand Heavily invested in market and focused local customization of its product range Used local talent for its Global R & D mission

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India (1993)– challenges faced

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Govt. policies Geographical diversity and inadequacy of infrastructure Local players were dominating the market Low brand awareness

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Strategies used

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Entered with t venture and then utilized the govt. policies negotiations Established their self own subsidiaries and focused on new technology and design Through sports sponsorship they created familiar brand image

China (1991)- challenges faced  Geographical diversity  Unique nature of govt. regulations  SARS crisis in china  Strategies used  Local consumption vs. export  Build strong manufacturing presence with 12 production subsidiaries  Focused on to hire local employees and workers  LG set up modern R & D facilities in Beijing  Initiated an “ I love china campaign” and local event sponsor ship 

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LG’s experience within its domestic market (South Korea) influenced how it expanded into the BRIC emerging economies

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The domestic Korean market was highly competitive,

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The Korean Government placed strong emphasis on R&D with LG‟s in home economy, which had a double-effect on it

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It built on its experience of working with governments, which it then displayed most effectively in Brazil

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The Korean Government encouraged foreign direct investment which saw LG partner with Hitachi of Japan,

 Compare

and contrast how LG developed its presence in the Brazilian and Indian markets

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In both countries LG appears to be combining a „taking brands from local to global‟ strategy, by „turning local engineering excellence into innovation on a global scale It utilized the incentives governments offered and government policy Sports sponsorships Localization of product and services provides a cornerstone of LG‟s strategies in both India and Brazil

 Looking

to the future, explain the challenges ahead LG faces

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The emerging economies, where it had worked hard to establish itself, competition is increasing rapidly from both new entrants and existing players

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Second major challenge that LG needs to address is its position in the developed economies

LG Utilized the opportunities to established their brand in emerging BRIC market, but due to increase in competition in this market , the company facing the problems to maintain their position in the market. The needs and wants of the customers are continuously changing in this industry so company has need to change their strategy according to the situations.

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Be a 1st mover with latest technology

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More focus should be R&D

 There

are still large areas of Africa, the Middle East and Latin America that remain to be fully exploited by the LG machine

The experience and expertise LG has developed in the BRIC countries may find a more „natural‟ outlet in these emerging, or yet-to-emerge economies.

Thank You