Ateneo de Zamboanga University

School of Management and Accountancy

LG ELECTRONICS: GLOBAL STRATEGY IN EMERGING

MARKETS

A case study in Mgt220

Submitted to:

Sir Francis Arroyo

Submitted by:

Guevara, Romley Neil

Agias, Juville Brian

Alicaya, Marc Bryan

Dela Cruz, Arthur Erik

Legaspi, Kevin Clark

Mgt220-D

February 17, 2017

 I. Problem Statement
Should LG Electronics focus on these emerging markets (Africa, Middle East, and

Latin American countries) or should it focus on penetrating the developed markets

(US, European countries)? How or what should be its strategy?

II. Objectives

1. To decide on whether to focus on emerging markets (Africa, Middle East, and

Latin American countries) or developed markets (US, European countries)

2. If the decision is to focus on emerging markets then, to be able to promote brand

awareness to these emerging markets

3. If the decision is to focus on penetrating the developed markets then, to be able

to increase sales and formulate strategies to cater the needs of Japan, US and

European countries

III. Areas of Consideration

SWOT Analysis
STRENGTHS WEAKNESSES OPPORTUNITIES THREATS
 Global giant  Lack of brand  Emerging  Global, local
 Extensive identity in markets (Africa, and Korean
distribution developed Middle East, players
system markets and Latin  Emerging
 Huge product  Position and American markets have
line differentiation countries) not high cost rates
 CSR  Lack of fully exploited  Competition in
 Strong brand successful  Joint ventures the emerging
equity strategies in  Sponsoring markets is
 Cost efficient developed events and ads intensifying
production countries to promote
  Cultural
adaptation
 Risk takers
 Position in BRIC
 Good and
responsive
management
and strategies
IV. Alternative Courses of Action
Course of Action
If the focus is on further
exploiting emerging
markets then focus on
innovations in the
products, manufacturing
processes, etc. such as
designs catered to the
taste of local customers,
new designs to attract
younger buyers for
electronic devices and
portable gadgets and
sponsoring sports events,
advertisement and product
localization
If the focus is on
penetrating developed
markets then investment in
foreign ownership or joint
ventures with other well
established local brands
(Asus, Microsoft, etc.)
product line
Pros Cons
 Makes use of LG’s  The developed
strong points in markets will still be
adapting to the out of LG’s reach
needs of its target  Competition in the
market emerging markets is
 Further strengthen intense
LG’s hold on
emerging markets
 LG is an expert on
targeting developing
markets
 Work, capital, costs  The emerging
can be divided with markets will not be
the partners fully exploited
 More capital can be  Strong and
focused on specific established
programs like competitors
advertising due to
the splitting of costs
with the partner
V. Recommendation

Based from the given analyses, our group recommends that LG Electronics should

focus on exploiting the emerging markets in Africa, Middle East, and Latin American

countries, because LG has experience in targeting emerging markets and is very good

at it. The emerging markets also possess high population growth rates, and are very

fond of electronic products. Competition may be intense in emerging markets but there

are few large multinational companies that can compete with LG unlike in developed

markets. The main focus of LG should be innovation. By means of further stepping into

innovation, LG could shape up and take the lead in the industry through introducing new

products that are different or consistently better than the products of its major rivals. LG

focuses on research and development to establish its difference and stress its

innovativeness to attract more customers, increase sales and enhance its position in the

market. LG drives the industry to the new direction and attempts to make its rivals to

follow its lead in the industry. Thus, LG enhances its marketing position and attempts to

enter established markets and to take the lead in international market. Basically if LG

puts in the same effort and creativeness, stay one step ahead of the competition and

focus on innovation then it should be straight forward for it to cement its position and

dominance of the emerging markets.

VI. Potential Problem Analysis

If our recommendation is implemented, the potential problem is with the

development and implementation of the specific strategies for each emerging

market because each market will have its unique challenges. Not only that, some

of the emerging markets will also pose some unique problems or issues and

there may be some unexpected developments in some of the target areas.

The consequences of the potential problems, if they are not handled well

or noticed by LG can be devastating as LG’s reputation may be damaged or its

investment into targeting these specified markets, which will be large, if it fails it

may pull the company down financially.