Lg Electronics – International Business
The multinational company that I will be examining is LG Electronics. LG Electronics is based out of Seoul, Korea and was established in 1958. It is a subsidiary of LG Group, which is one of the largest electronic conglomerates in the world. This company is a global manufacturer of consumer electronics, telecommunications systems, and home appliances. LG operates its business through four major divisions: home entertainment, mobile communications, home appliances, and air conditioning & energy solutions. They are the second largest manufacturer of flat screen televisions, and the third largest producer of mobile phones.
North America and Asia are its two largest markets, each contributing about 30% of sales. According to their website, LG Electronics has over 120 ventures around the world. They employ around 93,000 personnel. LG Electronics owns Zenith Electronics and controls a large portion of LG Display. Its home entertainment division produces cutting edge products, such as liquid crystal display (LCD) televisions, plasma televisions, 3 dimension (3D) televisions, home theater systems, projectors, and audio, video, and storage devices.
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The mobile communications branch provides a full line of communication devices, mobile communication terminals, and tablet personal computers (PCs). The home appliances division manufactures microwave ovens, refrigerators, washing machines and more. The air conditioning and energy solutions branch creates air conditioners, develops solar energy cells, and provides green lighting solutions. The consumer electronics industry is growing rapidly with numerous innovative products being invented due to recent advances in technology. This has driven increases in consumer demand.
LG Electronics is one of the leading competitors in this area. The global market is pretty equally divided between the United States, Asia, and Europe. The Americas region accounts for 38% of the global market, and is dominated by the US market. Additionally, the economic growth in substantial markets such as China and India has boosted the global consumer electronic market revenue. LG Electronics has many different international activities. This company has branches in almost every region of the world. For instance, LG has production plants in Mexico, Saudi Arabia, Turkey, England, Poland, and Brazil.
This corporation operates offices for marketing its products in every country imaginable, such as Jordan, Nigeria, Russia, Australia, Thailand and the United States. This is truly a company that is rapidly expanding its holdings around the world. This corporation is putting full effort into becoming one of the top three manufacturers of electronics and telecommunications systems on earth. They are doing so, by using two major strategies: fast innovation and fast growth. LG Electronics is putting a lot of time and money into research and development, in order to get ahead of its competitors.
LG is placing the majority of its effort into what they term “smart technology. ” Smart technology is LG’s development philosophy that embraces sensitive communication with customers in order to provide products that everybody wants to use, and easily can. This customer oriented principle has become the most important development philosophy for LG. The key areas that LG is focusing on are the mobile phone and digital television industries. They are also actively participating in pilot projects such as home networking to develop new products with various service providers.
LG Electronics is also developing new business opportunities by creating strategic alliances with other successful companies. It is LG Electronics’ goal to become number one in the world through these relationships. Businesses with different foundations are collaborating with LG to create a “Strategic alliance between corporations. ” This is crucial to creating a new industry and solidifying the current one. One of the companies that LG Electronics is working with is Skype. Through this partnership, LG is working to create television products with embedded Skype capabilities.
General Electric (GE) is another major corporation that LG is collaborating with. These two businesses have agreed to share patents on cooking appliances and refrigerators. Arguably the most important alliance that LG has formed is one with Microsoft. LG has already released a smartphone based on Microsoft’s Windows Mobile. In addition to that, the companies have been working together closely for personal computer, digital television, and mobile phone convergence. In December 2002, the managing director of Francis Kanoi Marketing Services, Francis Xavier stated “LG’s success is more related to marketing than technological superiority. I believe that spending money for great advertising is LG Electronics’ major international strategy. This is a technique that will work regardless of what region the consumer lives in. For example, in 2002 LG Electronics India launched advertising campaigns featuring cricketers. LG then released 22 commercials featuring world class cricketers to strengthen its association with cricket. Experts felt that LG would profit by aligning itself with this sport in a country such India where cricket has a huge following.
The company then spent approximately 500 million dollars on advertising during the cricket world cup. Due to its aggressive promotion plan, LG became the market leader in India for color televisions, washing machines, refrigerators, and microwaves. LG has since gone on to become one of the leading sponsors of cricket in India. This is a marketing plan that has worked well in other counties too. LG Electronics sponsors soccer teams in England and Costa Rica, where that sport has a large audience. In Australia and Argentina, they are the corporate sponsors of rugby teams.
LG also sponsors London Fashion week, as well as Formula One racing which has a giant following all over the world. In essence, LG Electronics is extremely smart in aligning its brand with popular sports and events. LG Electronics is a multinational firm that is striving to become the number one electronics conglomerate on earth. The company is working toward achieving this goal with more than one business strategy. First, they are putting time and effort into listening to the customer when it comes to research and development of new, better products.
Second, LG has formed many strategic alliances with other major companies, in order to expand its holdings. Lastly and most important, this corporation is spending money on great advertising and sponsorship of popular sports teams all over the world in order to promote its brand. References 1. http://en. wikipedia. org/wiki/LG_Electronics 2. http://www. lg. com/global/index. jsp 3. http://www. fibre2fashion. com/industry-article/11/1004/increasing-competition-creates-stress-on-marketing-managers4. asp 4. http://www. allbusiness. com/company-activities-management/company-strategy/16611527-1. html