Lg Brown Goods

Project on LG Contents Mission3 Mission Statement3 slew3 Core think ofs3 How the fork over strategies argon within the mission, mint and core rate3 Present system3 Market epitome3 Segmentation3 Targeting4 Positioning4 Needs4 PESTLE Analysis4 Political means4 Economical factor4 Socio-cultural factors5 scientific factors5 Legal factors5 Environmental factors5 sedulousness/ Competitive Analysis6 intentness in which LG Competes6 Industry accomplishment for coda 5 days and projections for next 3 years6Market give way do of go crosswise 5 players by segments7 Market sh are of organized and nonunionised for last year and projection for next three years8 Industrys 5 competitive forces9 corroboratory Competitors of LG Electronics (Brown Goods) 9 Top Direct Competitors of LG Electronics in INDIA 9 Competitive advantages of Samsung Electronics 10 Competitive returnss of Sony Electronics 10 Competitive utility of Videocon 10 SWOT Analysis of LG Electronics 10 instruction e xecution Review11Past performance of the proceeds and elements of the foodstuffing mix11 Objective of the telephoner13 Mission Mission Statement To bring into being a descentease innovational electronics partnership in the being. It takes pride in its company and employees and believes that this is what volition tell on it into one of the most innovative companies of the 21st century. Vision LGs vision is to deliver innovative digital returns and function that settle our customers lives better, easier and happier through incr chasteness functionality and fun. Core ValuesGlobal, Tomorrow, Energy, Humanity and Technology are the pillars that this kitty is founded on with the capital letters L and G frameed inside a circle to centre our ideals above all else, humanity. The symbol mark stands for our fade away to establish a lasting relationship with, and to achieve the highest satisfaction for our customers. How the present strategies are within the mission, vision and core appraises By adopting the gamy sea Strategy LG provide be competent to sustain its leadership localization.BOS bids a systematic way of identifying and creating high evolution opportunities. LG is looking not provided to maintain its leadership position in India, but to cross to grow, and to transition from a caboodle bell ringer to a premium one. through and through the adoption of this policy, LG plans to prepare point of intersections or services which take a crap or minuteantly increment its grocery place grants and profit by hug druging severalise values in view of customers. The move to adopt Blue Ocean Strategy is seen as an ambitious drive to resurrect LG globally.The scheme aims at invention in order to exploit opportunities, so far untapped both within the present segments of LG or outside, where there is zero or negligible competition. Present Strategy * Local and efficient manufacturing to reduce cost * harvest-time mend LG came out with regional language menus on its TV * inlet of low priced products for the unpolished securities industry especially in the TV segment * LG has adopted the regional statistical distribution model in India * Offering cheap products at a lower margin cutting on record book to ring in revenues * LG is adopting the Blue Ocean Strategy (BOS) in India as part of its global strategy * BOS gives a frame plump for breaking away from the competition to achieve high customer value and profitability simultaneously * Blue Ocean Products are products and services which create a differential value for the customer, thus opening up vast, immature markets to drastically improve profitability and market share * Blue Ocean Business Model is one that focuses the efforts of the company on providing differentiated value to customers. Market AnalysisSegmentation Demographic Higher income group Occupation Geographic class 1 and Tier 2 cities Psychographic Loyalty status switcher leal because pr oduct of different need are taken from different deformity considering superiority Usage rate high in terms of function user life stage marriages and other life stage are when brown good and eletronics are bought benefts for consumer who seek benefits derived with tech occassion bought mostly on festive season so provided with various schemes. Behavioural LG look for Value and life mien which people believe they correspond to. TargetingLG has targeted its market on the ass of the product that they are offering to the consumer. upper-lower and higher segments people more than mention to health benefits, life style and whole step products LCD and Plasma TV for premium segment trying to shift to mid class and mass market of product selective specialization Positioning Differentiate product on technology which appeal to consumer on basis of health benefits uniform health wave system for oven, golden eye for TV its tagline describes to make people life better convenient and h ealthier they try to position as young vibrant and premium brand NeedsNeeds met by the LG brown n electronics product ease of use, higher efficiency PESTLE Analysis Political factor Taxation policies, foreign backing regulations, trade policies are the important political factors. LG must follow the compliances given by the presidency a handle the Environmental Protection Agency. Sales volume gets negatively bear on due to any change in the policies or foreign trade regulations. It will cause consumer to pay more for products. on that point is a conjecture that the change in government can pull in an effect from the avow of LGs Research and Development. These political factors areHigh import tariff Export promotion scheme of Indian government like EPCG(Export publicity Capital Good Scheme), EOU(Export Oriented Units) status Plants in Tax inducing areas like Pune, Greater Noida. Economical factor Price wars is the biggest economic factor for LG. LG has used competitive str ategies like localization and adapting it to different markets. Making it easier to appropriate consumers attention with products that are easier for their everyday living. In India, LG opened manufacturing facilities that begun with the R&D looking at what rivalrys have already brought to the arket and made their product unique and geared towards the consumers needs. Things that whitethorn affect gross gross revenue volume from a economic stand point is a sudden change in consumers income. So LG would have to look in to how they can make products more affordable for consumers in recession. In India GDP is rising. Per Capita Income is increasing, so pass power of consumer is increasing. Socio-cultural factors LG went into the market in India with all the right tools. They adapted to the market and immediately began to be the innovators of that market.They have given back to the society by providing them with employment opportunities by building manufacturing plants. They are man ufacturing eco-fri land uply products and increasing the life style of the people. Within the social factor, LG has been able to achieve a higher sales volume in India. Technological factors LG has always been a leader in innovation from the 1980s so technology is the important factor for them. LG is expanding in 3G Ne bothrk technology. In India, Reliance incorporation with LG has 3G plans made for smart phones. LG introduced its LG Optimus 3D to the market in India.Improvement in technology made the product cheaper and property of product has been increased. Legal factors Legal factors like employment law and consumer security system law can too affect the start-up of a company. Employment laws, like how numerous people a business employs the hail of employees in individually location, the minimum number of employees specified in the employment law etcetera Consumer protection law protects consumers from fraudulent or unethical business practices, jerry-built advertisement s, and defective products. So, these are some of the laws that businesses must abide before starting time a venture.Environmental factors LG must follow the compliances given by the government bodies like the Environmental Protection Agency which also monitors the implementation. The company was penalised for failing to equalize its commitment to make products free of polyvinyl chloride (PVC) plastic and brominated flame retardants (BFRs) by the end of 2010. All of LGs mobile phones are now free from PVC and BFRs temporary hookup other products such as TVs and notebooks contain PVC/BFR free move LG aims to phase these substances out from TVs monitors and PCs by 2012 and household appliances by 2014.In the Guide the company scored badly on the Energy criteria, cosmos criticized for setting a half-hearted target for the reduction of greenhouse gas emissions and not making re saucyable energy part of its low carbon strategy. LG scored most points in the sustainable Operations cat egory with the company providing take-back for obsolescent phones in 52 countries and being in the process of addressing the issue of conflict minerals. LG is now follo extension service a green product strategy. The objective of LG Electronics green product strategy is to pick at the environmental impact on the whole value chain eon enriching lives.The strategy consists of three components energy, human and resources. The strategy is based on a model that takes into consideration high energy efficiency, a reduction in raw material usage, and human welfare. Industry/ Competitive Analysis Industry in which LG Competes LG Competes in Consumer Durables pains. Theconsumer durables industryemerged in the ordinal century and has now become a global industry worth(predicate) billions of dollars. * LG specializes in the manufacturing of consumer durables The scope of our report covers LGs brown Goods which include * Television * Audio-Video Systems Computers * Electronic Accessories Industry performance for last 5 years and projections for next 3 years * We believe that the Indian consumer durables industry will post unanimous double digit issue of 15% over the next 3 years. * We believe that the industry will prolong to grow led by lower penetration, increasing disposable income, clear credit availability coupled with declining prices. Increasing country-style demand would be the name feature of the industry proceeds going ahead. * However, increase in raw material prices and intense competition among players, are keystone challenges for the industry. In a scenario of shorter product life cycles and increasing competition, we believe that the companies with heavy RD, vast of the mark distribution net tempt, strong brand would benefit most from the strong industry growth. * We believe that the consumer durables industrys growth has been two pronged (a) driven by lower penetration in rural markets and (b) new innovations and replacement demand in urba n markets. opening intro search ,CEAMA, GEPL, Capital Research Market share of Top 5 players by segments blood line Display search ,CEAMA, GEPL, Capital Research Source Display search ,CEAMA, GEPL, Capital ResearchMarket share of organized and unorganized for last year and projection for next three years Present Scenario At present around 97 per cent of the more than 5 zillion retail premises of all types in India are slighter than 50 sq mtrs. So organized retail forms only 3% of the organic retail sector in consumer durables industry. Prediction for the future The urban and rural markets in India are growing at an annual rate of 7 to 10 per cent and 25 per cent respectively. One of the key enablers of this growth has been the increasing penetration of coordinate retail.While there are established distribution networks in both rural and urban India, the presence of intimately-known brands and organised sector is increasing. This situation is, however, transforming. Shoppin g malls are becoming increasingly vernacular in Indian cities, and based on plans announced by key developers, a proliferation of new malls is expected over the next three years. Although many of the new malls would be much smaller than their western counterparts , Indian consumers will have a far larger number of attractive, comfortable, brand-conscious outlets in which to shop.As a result, the organized retail industry is expected to cover a market share of 15 to 18 per cent by the end of 2010, from just 3 per cent at present. This will have a plus impact on the consumer durables industry, as organized retailing would not only streamline the supply chain, but also facilitate increased demand, especially for high-end and branded products Industrys 5 competitive forces Indirect Competitors of LG Electronics (Brown Goods) The validatory competitors of LG electronics brown goods such as television, audio systems and photographic cameras are the manufacturers of red-brick compute rs and laptops such as Lenovo, H.P and Dell. Modern laptops offer a variety of two-dimensional features to the consumers who use them. For instance they can be used as a television, as a video and audio music player or even as a camera as it hosts all these capabilities in itself. Thus it provides indirect competition to firms which produce the exclusive gadgets offering these services on a single unit basis. Another form of indirect competition is posed by the major mobile phone manufacturers of the orbit such as Apple, Nokia, Samsung and H. T. C.Modern mobile phones have become very ripe and encompass a variety of multimedia features such as gaming, videos, music, camera and the internet. Thus it is acting as a one for all catch today and thereby poses indirect threat to dedicated players offering peculiar(a) service gadgets such as T. V, Music systems or D. V. D players. besides LG faces indirect competition from cheap imitations and imports especially from chinaware and S ingapore. These products though scummy in terms of quality are very economical and consequently cater to a wide roll up of rural consumers who are passing price conscious.They can easily purchase these cheap electronic goods at low prices. Thus, they are eating away a possible market share of LG electronics and thereby acting as an indirect competitor to it. Top Direct Competitors of LG Electronics in INDIA 1. Samsung Electronics 2. Sony Electronics 3. Videocon Competitive advantages of Samsung Electronics Samsung electronics gains competitive advantage by innovations in the process of product manufacturing, design and development. It has a very strong research and development unit that is working continuously to offer new and innovative product designs.Its speed of execution is perhaps its biggest strength. The time gap amid product visualization and its actual delivery is very short which assistances it offer the latest in technology trends to its customers in a short sc otch of time. It maintains a very talented pool of creative people who help in driving its technological innovations. It has also been able to feel the urge of the customers over the years and has been successful in offering product features which were passing desired by the customers at acceptable prices.Competitive Advantages of Sony Electronics The biggest advantage possessed by Sony Electronics is its strong brand image which it has been able to build over a period of time. Its core competence includes the miniaturization of products which involves making products and its components of very small sizes without compromising on its quality. It has a great research and development wing that helps it come out with cutting edge breakthroughs in technology and innovation. Thus, it has been able to offer products with high quality.It has been successful in creating a pool of trustworthy customers from urban and semi urban areas who seek travel high quality products without being t oo concerned about the price factor. Competitive Advantage of Videocon Videocon has gained competitive advantage in the electronics industry by offering technologically advanced good quality products at relatively low prices. It strives to provide the best possible service at the lowest possible prices. This has enabled them to become a hot favourite among the price sensitive Indian consumers especially those belonging to rural areas having low purchasing power.It uses strategic planning and trafficker management to achieve operational efficiency. It has been able to penetrate a wide market area due to its efficient distribution systems. It has the largest distributed manufacturing base in India having twelve facilities across the country. Thus it has been able to manage a multiform supply chain effectively. SWOT Analysis of LG Electronics Strengths 1. LG electronics is one of the market leaders in home appliances segment in India and so enjoys a position of strength in the ele ctronics industry. 2.Most of the LG products are of simple design and very ease to use which helps it in satisfying its customers and building trust. 3. It has alliances and partnerships with major technology companies of the world such as G. E, Siemens and Microsoft etc. 4. It has a very wide range of product categories to tap consumers of various segments. 5. It has one of the widest distribution networks in the industry with more than 47 branches and 175 area offices. 6. It has a strong RD division which helps it to come out with technologically advanced products. Weaknesses 1.The after sales service of LG is not perceived to be up to the mark as customers are not highly satisfied with it. 2. It has homogeneous product categories and features as compared to its fill up competitors. 3. It has not been able to create a powerful brand image for itself in the market. 4. It is often directly compared to its biggest competitor Samsung and its supremacy over other brands is overlooke d. 5. It has not been able to attract the top talent in the form of highly skilled employees to its fold. Opportunities 1. The rural market in India is growing as the economic condition of the areas is improving at a fast rate.This has opened a huge potential for sales in these areas for LG. 2. The consumer electronics industry in India is also poised for further growth thereby giving ample probability to LG to expand its scope. 3. There will be great opportunities to launch new products in the future as technology is advancing and consumers are always on the lookout for something new. 4. LG has the opportunity to become the leader in white goods market as well by leveraging its supremacy in the other electronics fields. Threats 1. The biggest threat to LG electronics is from its biggest competitorSamsung which is also from South Korea and is a dominant force in the Indian Electronics market. 2. There is a threat of entering into a price competition with its close competitors tha t could lower its profit margins. 3. The short product life cycle of electronic products is also a threat to the company as they become obsolete very quickly. 4. The changing government regulations on health, safety and environment issues may also pose a threat to the operations of LG. 5. Cheap imitations and imports from China also pose a small degree of threat to its sales. Performance ReviewPast performance of the product and elements of the marketing mix LG Electronics is doing everything it can to retain its number one position in the Indian brown goods consumer durables market, estimated at Rs 35,000 crore. With more than 30 per cent share of this market, it now expects its India operations to pass on its Korea sales in the next three to four years. LG Electronics India is targeting revenue of Rs 20,000 crore (the take care currently is Rs 16,000 crore) through rapid expansion and new product launches. It is investing Rs 800 crore to expand production capacity, and the adve rtising budget is Rs 700 crore for this year.LG is focusing on key innovations including 3D TV, mobile digital television, and new solar cell business. The performance highlights Sales have been shown according to product and place. The following chart shows the pct contribution made by different product categories in total sales of LG Company. The chart shows that major part of LG revenue comes from brown goods (Home fun and Mobiles). The chart below shows the breakup of sales region wise Source 1. Business Standard article June, 2012. 2. Annual Report-LG, 2011 Product Product localisation is a key strategy used by LG. LG came out with Hindu and regional language menus on its TV. Introduced the low-priced Cineplus and Sampoorna range for the rural markets. LG was the showtime brand to introduce gaming in CTVs. In continuation of its railroad tie with cricket, LG introduced the cricket game in CTVs. Price To overcome high import duties, LG manufactures PC monitors and refriger ators in India at its manufacturing facility at Noida, Delhi. LGEIL had already equip contract manufacturing at Mohali, Kolkata and Bhopal for CTVs. This has helped LGEI to reduce costs.LGEIL is implementing a digital manufacturing system (DMS) as a cost-cutting innovation. This system is a follow-up to the Six Sigma exercise LGEIL had initiated earlier. wander (Distribution) LG has adopted the regional distribution model in India. All the distributors work directly with the company. This has resulted in quicker rotation of stocks, and better penetration into the B, C, and D class markets. LG also follows the strategy of stock rotation, rather than dumping stocks on channel partners. LG has over 46 branch offices and another 110 areaoffices across the country.LG had set a target of developing 2,000 dealers, in addition to the subsisting 3,000 dealers all over India Promotion To make itself a known brand in the consumer electronics sector, LG has taken innovative marketing and pro motional initiatives Launch of new technologies in consumer electronics and home appliances. LG was the first brand to enter cricket in a big way, by sponsoring the 1999 World Cup, and followed it up in 2003 as well. LG brought in four captains of the Indian cricket team to endorse its products. LG invested more than USS 8 million on advertising and marketing in this sport. LG has differentiated its products using technology and health benefits. The CTV range has Golden Eye technology, air-conditioners have the Health Air System and microwave ovens have the Health swan System. Objective of the company LG Electronics India aims Rs 16,000 crore sales turnover in 2012. The Indian unit of South Koreas LG Electronics expects to double its revenue to $9 billion by 2015, a top executive said, as rising incomes and growing urban households expand the consumer durables market in Asias third largest economy. LG Electronics Inc, the worlds No. TV brand, said on Sunday it aimed to increase its global market share in LCD TVs to 15 share this year from 11 percent last year by boosting unit sales by 54 percent. LG Electronics is aiming at a 50% market share in the 3D TV market this year, as against 40% last year with the launch of its latest series of Cinema 3D Smart TVs priced in the range of Rs 55,000 to Rs 7,00,000, boasting of worlds slimmest bezel TVs. Soon Kwon, MD, LGEIL says, We are targeting business worth Rs 1000 crore from 3D TVs and aim to consolidate our position in the Flat Panel TV segment with 30% market share.We have an aggressive marketing strategy with target investment of Rs 100 crore. The new range is also tended to(p) by new Cinema 3D glasses for 2012. Adds Kwon, 3D recreation is set to explode in India at a steady growth of 500%. We are anticipating the size to go up to 5 hundred thousand units this year, as against 1 lakh units last year. LGs aim is to increase export from India to about 40%. LGs estimated sales(in million) of year ending dec 12 is 47 and dec13 is also 47.