Business Strategy - Lg Case Study, 500 Words

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1. The key strengths were the presence of chaebols and the government’s industrial policy. Korean government subsidized chaebols. They supported FDI enabling to create joint ventures with leading foreign electronics companies through which they wanted to secure technology growth. Government encouraged firms to invest in local R&D by providing initiatives. They created research infrastructure, industry promotion councils and cooperative institutions to ensure technology access to all companies in Korea. Government enacted the national education policy to increase the number of students and experts in the technology field. Korean companies used OEM to tap developed markets. Companies learned from their joint venture partners about these markets before they entered with their own labels. Korean market was also known for its low labour costs, value-added products to be accessed to produce more innovative products to enter new developed markets later on. 2. LG started under OEM mode, later introduced the products under its own brand which wasn’t successful in developed-country market (in US). They remade its strategy by building brand awareness and built success on R&D and technology investments in developing markets. LG’s strategy was long-term focused. In Brazil and Russia LG decided to stay despite the unfavorable economic situation and oppositely expanded their presence. LG progressively built its own distribution channels and customer service links to be more easily approachable to customers by expanding to more rural and remote areas. LG raised brand awareness by sponsoring social events. In Brazil sponsored football club, in India cricket, in Russia culture marketing and cooking events. LG emphasized social welfare; in China provided free sanitary masks, in India set up medical clinics and subsidized school education. LG’s strategy in BRIC was long-term with emphasis on local market. LG leveraged on finding the voids in each market and focused...
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