Based on a Case Study: LG's Global Strategy in the Modern day Emerging Market. An Analysis.

1. Team members:
Suraj Subhash Patil
Mitali Bhuyan
Tabrez Khan
Anand Chettri
Anupol Bordoloi
LG electronics: Global
Strategy in Emerging
Markets

2. Company: LG
Industry: consumer electronic
Industry Analysis: Michael potters five forces
model
New
entrant
Supplier
bargaining
power
Industry
rivalry
Buyers
bargainin
g power
Substitutes

3. Korean Electronic Industry:
Characteristics:
Ahead in quality, innovative consumer products
Government encouragement
Industry promotion councils
Universities were encouraged to built elite groups of
experts in science and technology
Outcomes:
Innovated first dual system DVD player with Blue-
ray and HD-DVD compatibility
First to built vacuum tube radio, electric fan, b/w
TV, washing machine, automated telephone switching
system
R&D jobs multiplied five folds

4. Localization strategy:
Brazil:
Started operation in 1990, with Tv and VCR manufacturing
Govt. offered tax incentives and subsidized land for investors
Challenges:
High import tariffs
Grey market
Very low brand awareness
In 1999 local currency became unstable
Strategy:
Despite exchange losses , decided to expand
Due to dropping value of local currency exporting became
advantageous
Became largest exporter and govt. saw it as preferred partner in
national growth

5. Marketing strategy:
Sports events sponsorship
Sponsored football club Sao-Paulo
Backed products with 3 year warranty
Instantaneous service in case of product
failure
Agreements with local distributors
Enormous focus on relationship development

6. Localization in India:
In 1993, set up joint venture
Customizing parts to address local needs
cricket television set with inbuilt cricket video game
golden-eye technology
A/C for metropolitan cities
Tapped lower rungs of economic pyramid
compact size TV
TV sets with menu in local language
Challenges:
Geographical diversity
Inadequate infrastructure
Linguistic diversity
Majority of population in lower rungs of the economic
pyramid

7. Strategy:
Brick and mortar strategy
Online channel- LGEZBUY.COM
Walking-after-sale services
Brand building:
Sponsoring cricket in India
Signed on Indian leading film stars
Addressed health care needs of the employees
Subsidized school education and books
Built village school
Localization in administration and managerial
functions
Major finance decisions in the hands of head office
in Korea

8. Russia:
Challenges:
Communist heritage
State sponsored business enterprises
Challenging economic environment
Russia faced a debt moratorium
Economic crises
Investment of $150million haulted
Strategy:
Despite crises it invested heavily
Govt. allowed to use Narodnaya marka logo
Marketing:
LG brand shops
Dedicated retail chains to carry LG brand portfolio
Culture marketing events- LG festivals and cooking events
Innovative A/C for all seasons
Karaoke with folk music

9. China:
Advantages:
Geographic proximity
Labor cost advantage
Strategy:
Same as adopted for India and Brazil
Built plants across the country to serve Russia and US
98% of the all LG personnel in china were local Chinese
LG village to showcase state-of-the-art technologies
SARS crises