LG Electronics: Global Strategy in emerging markets Harvard Case Solution & Analysis

LG Electronics: Global Strategy inEmerging markets Case Solution 

Key Strengths of Korean electronic industry

Korean electronics is an equipment manufacturer similar to Samsung and Zenith. The company caters to diversified markets in different countries by providing customized products to different countries. Innovation and education policy encouraged more students for gaining technical education, as the Korean employees did not have much skills, as well as there was more access to effective technology and strong technological development in all countries.

Korean electronics companies can learn quickly from Europe, US, and Japan, as the government there allows joint venture with local firms such as LG-Hitachi, Samsung-Sanyo and so on. As the government's one of the main focus is on the electronic industry, therefore the government helps companies to expand and develop in the industry.

In order to develop the intermediate parts and components, the government supported foreign investment while prohibiting foreign investment in companies which produced finished goods. Export companies were exempted from indirect taxes and received tax depreciation and tariffs tax breaks from the government, which encouragedcompaniesto create local Research and Development departments.

With the development and investment of technology, some firms started production with their logo, not as original equipment manufacturers like LG and Samsung. This was possible because they were the original OEM of the global markets, therefore they already met the expectations of the consumers and global standards.

After the support of government, they already had manpower with skills, expertise and technical knowledge, since the government provided tax breaks for exporting companies. Moreover, the research and development department had the experience to provide best solutions for the company.

Strategic growth of LG Electronics

The strategic growth of LG Electronics and distinct pattern in the company's approach to emerging markets comprises of:

Brazil:

LG’s plan to make a long-term strategy, as well as to expand its brand name. The company had two factories in Brazil, one in Manaus and other in Taubate. This strategy made Brazil a regional manufacturing hub to serve South American and the US markets.

As it can be seen that Brazil is a passionate country about football, therefore Lg had one strategy to reach millions of fans by sponsoring football club in Sao Paulo and providing them jerseys printed with LG logo. Due to this initiative, LG got instant brand recognition and this create positive brand image of the company.

Russia:

In 1998, there was a severe economic crisis, and this was the time when LG implemented the strategy of long-term growth and loyal attitude towards people and government in tough situation. Furthermore, the company enhanced the image of the company by sponsoring these events. Thesestrategies createditsimage in local market, and in 2005 the government allowed using Narodnaya Market logo for its products due to which,LG was officially recognized as a national brand.

India:

LG followedtheglobal strategy to focus on rural areas, as there was a lot of competition in the local market due to which Lg created the&D department to customize its products to meet the local needs. It also focused on emphasizing good quality products with the best technology.

China:

In this market, LG's first reason to enter China was low-cost production, as it spent time on feasibility and understanding the market. The local subsidiary was formed in 1992 in Huizhou, and by that time LG was the major producer in Chinese domestic market because of its advantage of the technological process and marketability of its products.

China is a great country for operating a business with many advantages such as labor cost, low material cost, government regulations as same as Korean market. In 2006, LG setup a manufacturing network to serve Russia, whichwasa smart strategy by the company. In China, it used bi-polar strategy, which offered high value-added appliance to high-income earners and this was an effective strategy of the company as well....................

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