External Environmental

AnalysisLG- Televisions

PEST Analysis

Political

The factors that affect LG include taxation policies, foreign trade regulations, and trade policies.

LG must follow the compliances given by the government like the Environmental Protection Agency.

By following these policies in South Korea, the Korean government has made it possible for LG to grow into one of the major players in the industry.

Economic LG biggest economic factor is price

wars in the saturated market. LG has used competitive strategies

like localization. They have begun to adapt to different markets.

Making it easier to grab consumers attention with products that are easier for their everyday living.

In India, LG opened an manufacturing facility that begun with the R&D looking at what competitors have already brought to the market and made their product unique and geared towards the consumers needs.

PEST Analysis

Social LG works with UN World Food

Program, providing meals and teaching facilities for 24,000 people

LG has opened school called LG Hope

The have equipped 15,000 households in 12 LG Hope Villages in Ethiopia

Provide aid to survivors of National Disasters

Provides relief funds to people affected by the Haitian Earthquake, Pakistani flood, and the Russian wildfires.

Technological This is LG most important

factor Has always been a leader in

innovation from the 1980s LG is expanding in 3G

Network technology In India, Reliance in

corporation with LG has 3G plans made for smartphones

LG introduced it LG Optimus 3D to the market in India

Porter’s 5 Forces Analysis

Threats of New Entrants (Low) Expensive high fixed cost Well known existing

competitors in the market Constant evolving

technology

Threats of Substitutes (Low)

Products are constantly developing

Increase in switching costs Technology advancement

results in the decline of substitutes

Bargaining Power of Suppliers (Low)

Product is standardized Uses components supplied

by various suppliers

Bargaining Power of Buyers (Moderate)

Many competitors Uses differentiation to make

products more technologically advanced

Quality of products stand out in the market

Competitive Rivalry (High)

Many companies competing for the consumer’s dollar

LG is one of the top 3 competitors in the telecommunications industry

Competitive Rivalry

Competitive Rivalry

SWOT Analysis

Strengths LG’s products are all over

the world and well recognized.

LG’s products have good quality and have good design

LG focus on developing new products and satisfy their loyal customers

Weaknesses LG’s products have some

electronic issues Most of LG’s products are

designed by people from other countries and LG does not have their own training system to cultivate new people

SWOT Analysis

Opportunities

Improve the quality of their products

Keep invest on the technology and training’s development in order to satisfy its customers

Start meeting the low-income customers group

Threats LG’s products are short of

innovation Price is not attractive to

people LG does not have enough

talented people to develop their products

Two Implications that the Environmental Variable could

have on Sales Volume

Political

Any change in policies or foreign trade regulations will have a very negative impact on sales volumes. It will cause consumers to pay more for productsThere is a possibility that the change of government can have an effect from the support of LG’s Research and Development.

Economic

Things that my affect sales volume from a economic stand point is a sudden change in consumers income. If there was a recession, LG would have to look into how they can make products more affordable for consumers, especially if there may not be a change.Any new competitors entering the market will make a difference also.

Two Implications that the Environmental Variable could

have on Sales Volume

SocialLG 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. Bringing products that shaped their market.They also built manufacturing plants, which increased employment and gave back to their society.

TechnologicalLG is a leader in it industry. In both electronics and telecommunications all over the world. Using 3G networks as a stepping stool in countries that have not been exposed to the world of Smartphones. They are now working on the speed of technology transfer. Using modems in Hope Villages and allowing countries that do not have this technology the way to explore.

To Enhance Sales Volume

Politcial LG can build

manufacturing companies in areas where they have noticed their profits are steady. By doing this they will not have to ship their products to countries that are far, therefore avoiding certain trade barriers.

EconomicLG can construct a cost competitive advantage. By doing this they can be a low-cost competitor in an industry while keeping their profit margins satisfactory, in order to keep their sales volumes from dropping.

To Enhance Sales Volume

Social Within the social factor,

LG has been able to achieve a higher sales volume in foreign countries such as India. In order to enhance their volume to a higher potential they should continue the same pattern across the globe.

Technological LG should continue being

a leader in the electronics and telecommunications industry. By constantly upgrading their technology and being the first to enter the market with it, they are able to maximize their sales volume.

1 – Electronic industries(A)LG Electronics(B) LG Display(C) LG Innotek(D) LG Micron(E) LG Hiplaza 2 – Chemical industries(A)LG Chem(B)LG DOW Polycarbonate(C)LG Household & Health Care 3- Telecommunications and services(A)LG Telecom(B) LG Leader(C) LG Dacom(D) LG Powercom

Company Market Segments

LG plays a price card in the television industry with its competitors like Philips and Samsung. The price war doesn’t seem like a good strategy for a company to win their customers. We think LG should focus on new technology’s development and pay attention to its customers’ feeling base on its products. Internet TV is a good example to explain that why developing the technology is so important, it will significantly increase the sales.

LG’s Competitive Strategy

LG Display Team. (2009, September 28). Retrieved October 26, 2011, from Blog Spot: http://lgdisplayteam1.blogspot.com/2009/09/business-strategy.html

Kaplan, J. A. (2009, January 09). Live from CES: Ecotech on Display at the LG Booth. Retrieved October 25, 2011, from Good Clean Tech: http://goodcleantech.pcmag.com/ces/279942-live-from-ces-ecotech-on-display-at-the-lg-booth#fbid=dUi6Elkwten

LG . (2009). Environment. Retrieved October 21, 2011, from LG (Life's Good): http://www.lg.com/global/sustainability/environment/index.jsp

Guru, G. (2011, October 10). LG and Reliance Launches 3G Plans Around Optimus 3D. Retrieved October 29, 2011, from One India Living: http://living.oneindia.in/gadgets/mobile/lg-and-reliance-launches-3g-plans-101011.html

References