LG Electronics: Global Strategy in Emerging Markets

LG Electronics: Global Strategy in Emerging Markets Description

This is a Thunderbird Case Study.The case discusses two important themes of contemporary interest in global strategy and international business; (1) the impact of location-specific advantage and the role of government policy in helping firms compete, and (2) leveraging home-grown competitive advantages in evolving into full-fledged MNEs (Multinational Enterprises). Emerging market multinationals have become a compelling force to contend with in the global economy, and this case illustrates the unique advantages that these firms bring. The case focuses on the specific issues relating to Korea and LG Electronics, one of the leading consumer electronics manufacturers in the world. It follows the fortunes of LG Electronics, a company that started as a contract manufacturer supplying OEM contracts to a variety of Japanese and U.S. appliance makers. It entered the U.S. market under its Goldstar label fairly early, and quickly realized that it needed to hone important skills of product differentiation, brand positioning, design, and innovation in order to succeed. Given the huge obstacle that this steep learning curve represented, LGE turned to emerging markets as a means of building credibility outside Korea. It charted a systematic strategy that encompassed a range of elements such as locally adapted designs, localized manufacturing, rural distribution, and cultural marketing that resonated very well with emerging market consumers. It had soon built a formidable position across all the BRIC countries (Brazil, Russia, India, and China). Turning its sights once again to the developed countries, it contemplated how it could take some of the lessons it had learned in the developing world to kickstart its developed country strategy into high gear. The case describes the challenges facing companies seeking to enter emerging markets and the important credentials that they can build in the process of understanding these settings

Case Description LG Electronics: Global Strategy in Emerging Markets

Strategic Managment Tools Used in Case Study Analysis of LG Electronics: Global Strategy in Emerging Markets

STEP 1. Problem Identification in LG Electronics: Global Strategy in Emerging Markets case study

STEP 2. External Environment Analysis - PESTEL / PEST / STEP Analysis of LG Electronics: Global Strategy in Emerging Markets case study

STEP 3. Industry Specific / Porter Five Forces Analysis of LG Electronics: Global Strategy in Emerging Markets case study

STEP 4. Evaluating Alternatives / SWOT Analysis of LG Electronics: Global Strategy in Emerging Markets case study

STEP 5. Porter Value Chain Analysis / VRIO / VRIN Analysis LG Electronics: Global Strategy in Emerging Markets case study

STEP 6. Recommendations LG Electronics: Global Strategy in Emerging Markets case study

STEP 7. Basis of Recommendations for LG Electronics: Global Strategy in Emerging Markets case study

Case Analysis of LG Electronics: Global Strategy in Emerging Markets

LG Electronics: Global Strategy in Emerging Markets is a Harvard Business (HBR) Case Study on Strategy & Execution , Texas Business School provides HBR case study assignment help for just $9. Texas Business School(TBS) case study solution is based on HBR Case Study Method framework, TBS expertise & global insights. LG Electronics: Global Strategy in Emerging Markets is designed and drafted in a manner to allow the HBR case study reader to analyze a real-world problem by putting reader into the position of the decision maker. LG Electronics: Global Strategy in Emerging Markets case study will help professionals, MBA, EMBA, and leaders to develop a broad and clear understanding of casecategory challenges. LG Electronics: Global Strategy in Emerging Markets will also provide insight into areas such as – wordlist , strategy, leadership, sales and marketing, and negotiations.

Case Study Solutions Background Work

LG Electronics: Global Strategy in Emerging Markets case study solution is focused on solving the strategic and operational challenges the protagonist of the case is facing. The challenges involve – evaluation of strategic options, key role of Strategy & Execution, leadership qualities of the protagonist, and dynamics of the external environment. The challenge in front of the protagonist, of LG Electronics: Global Strategy in Emerging Markets, is to not only build a competitive position of the organization but also to sustain it over a period of time.

Strategic Management Tools Used in Case Study Solution

The LG Electronics: Global Strategy in Emerging Markets case study solution requires the MBA, EMBA, executive, professional to have a deep understanding of various strategic management tools such as SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.

Texas Business School Approach to Strategy & Execution Solutions

In the Texas Business School, LG Electronics: Global Strategy in Emerging Markets case study solution – following strategic tools are used - SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.

We have additionally used the concept of supply chain management and leadership framework to build a comprehensive case study solution for the case – LG Electronics: Global Strategy in Emerging Markets

Step 1 – Problem Identification of LG Electronics: Global Strategy in Emerging Markets - Harvard Business School Case Study

The first step to solve HBR LG Electronics: Global Strategy in Emerging Markets case study solution is to identify the problem present in the case. The problem statement of the case is provided in the beginning of the case where the protagonist is contemplating various options in the face of numerous challenges that Lg Electronics is facing right now. Even though the problem statement is essentially – “Strategy & Execution” challenge but it has impacted by others factors such as communication in the organization, uncertainty in the external environment, leadership in Lg Electronics, style of leadership and organization structure, marketing and sales, organizational behavior, strategy, internal politics, stakeholders priorities and more.

Step 2 – External Environment Analysis

Texas Business School approach of case study analysis – Conclusion, Reasons, Evidences - provides a framework to analyze every HBR case study. It requires conducting robust external environmental analysis to decipher evidences for the reasons presented in the LG Electronics: Global Strategy in Emerging Markets.

The external environment analysis of LG Electronics: Global Strategy in Emerging Markets will ensure that we are keeping a tab on the macro-environment factors that are directly and indirectly impacting the business of the firm.

What is PESTEL Analysis? Briefly Explained

PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in LG Electronics: Global Strategy in Emerging Markets case study. PESTEL analysis of " LG Electronics: Global Strategy in Emerging Markets" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.

How to do PESTEL / PEST / STEP Analysis? What are the components of PESTEL Analysis?

As mentioned above PESTEL Analysis has six elements – political, economic, social, technological, environmental, and legal. All the six elements are explained in context with LG Electronics: Global Strategy in Emerging Markets macro-environment and how it impacts the businesses of the firm.

How to do PESTEL Analysis for LG Electronics: Global Strategy in Emerging Markets

To do comprehensive PESTEL analysis of case study – LG Electronics: Global Strategy in Emerging Markets , we have researched numerous components under the six factors of PESTEL analysis.

Political Factors that Impact LG Electronics: Global Strategy in Emerging Markets

Political factors impact seven key decision making areas – economic environment, socio-cultural environment, rate of innovation & investment in research & development, environmental laws, legal requirements, and acceptance of new technologies.

Policy Making Impact on LG Electronics: Global Strategy in Emerging Markets

Government policies have significant impact on the business environment of any country. The firm in “ LG Electronics: Global Strategy in Emerging Markets ” needs to navigate these policy decisions to create either an edge for itself or reduce the negative impact of the policy as far as possible.

Data safety laws – The countries in which Lg Electronics is operating, firms are required to store customer data within the premises of the country. Lg Electronics needs to restructure its IT policies to accommodate these changes. In the EU countries, firms are required to make special provision for privacy issues and other laws.

Competition Regulations – Numerous countries have strong competition laws both regarding the monopoly conditions and day to day fair business practices. LG Electronics: Global Strategy in Emerging Markets has numerous instances where the competition regulations aspects can be scrutinized.

Import restrictions on products – Before entering the new market, Lg Electronics in case study LG Electronics: Global Strategy in Emerging Markets" should look into the import restrictions that may be present in the prospective market.

Export restrictions on products – Apart from direct product export restrictions in field of technology and agriculture, a number of countries also have capital controls. Lg Electronics in case study “ LG Electronics: Global Strategy in Emerging Markets ” should look into these export restrictions policies.

Foreign Direct Investment Policies – Government policies favors local companies over international policies, Lg Electronics in case study “ LG Electronics: Global Strategy in Emerging Markets ” should understand in minute details regarding the Foreign Direct Investment policies of the prospective market.

Taxation & Regulation Impact on LG Electronics: Global Strategy in Emerging Markets

Corporate Taxes – The rate of taxes is often used by governments to lure foreign direct investments or increase domestic investment in a certain sector. Corporate taxation can be divided into two categories – taxes on profits and taxes on operations. Taxes on profits number is important for companies that already have a sustainable business model, while taxes on operations is far more significant for companies that are looking to set up new plants or operations.

Tariffs – Chekout how much tariffs the firm needs to pay in the “ LG Electronics: Global Strategy in Emerging Markets ” case study. The level of tariffs will determine the viability of the business model that the firm is contemplating. If the tariffs are high then it will be extremely difficult to compete with the local competitors. But if the tariffs are between 5-10% then Lg Electronics can compete against other competitors.

Government Scheme & Subsidies Impact on LG Electronics: Global Strategy in Emerging Markets

Research and Development Subsidies and Policies – Governments often provide tax breaks and other incentives for companies to innovate in various sectors of priority. Managers at LG Electronics: Global Strategy in Emerging Markets case study have to assess whether their business can benefit from such government assistance and subsidies.

Consumer protection – Different countries have different consumer protection laws. Managers need to clarify not only the consumer protection laws in advance but also legal implications if the firm fails to meet any of them.

Political System & Stability, and its Impact on LG Electronics: Global Strategy in Emerging Markets

Political System and Its Implications – Different political systems have different approach to free market and entrepreneurship. Managers need to assess these factors even before entering the market.

Freedom of Press is critical for fair trade and transparency. Countries where freedom of press is not prevalent there are high chances of both political and commercial corruption.

Corruption level – Lg Electronics needs to assess the level of corruptions both at the official level and at the market level, even before entering a new market. To tackle the menace of corruption – a firm should have a clear SOP that provides managers at each level what to do when they encounter instances of either systematic corruption or bureaucrats looking to take bribes from the firm.

Independence of judiciary – It is critical for fair business practices. If a country doesn’t have independent judiciary then there is no point entry into such a country for business.

Government attitude towards trade unions – Different political systems and government have different attitude towards trade unions and collective bargaining. The firm needs to assess – its comfort dealing with the unions and regulations regarding unions in a given market or industry. If both are on the same page then it makes sense to enter, otherwise it doesn’t.

Economic Factors that Impact LG Electronics: Global Strategy in Emerging Markets

Social Factors that Impact LG Electronics: Global Strategy in Emerging Markets

Technological Factors that Impact LG Electronics: Global Strategy in Emerging Markets

Environmental Factors that Impact LG Electronics: Global Strategy in Emerging Markets

Legal Factors that Impact LG Electronics: Global Strategy in Emerging Markets

Step 3 – Industry Specific Analysis

What is Porter Five Forces Analysis

PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in LG Electronics: Global Strategy in Emerging Markets case study. PESTEL analysis of " LG Electronics: Global Strategy in Emerging Markets" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.

Step 4 – SWOT Analysis / Internal Environment Analysis

Step 5 – Porter Value Chain / VRIO / VRIN Analysis

Step 6 – Evaluating Alternatives & Recommendations

Step 7 – Basis for Recommendations

References :: LG Electronics: Global Strategy in Emerging Markets case study solution