Overview

Indian consumer durables market used to be dominated by a few domestic players like Godrej,
Allwyn, Kelvinator, and Voltas. But post-liberalization many foreign companies have entered
into India, dethroning the Indian players and dominating the market. The major categories in the
market are CTVs, refrigerators, air-conditioners and washing machines. 

India being the second fastest growing economy with a huge consumer class has resulted in
consumer durables as one of the fastest growing industries in India. LG and Samsung, the two
Korean companies have been maintaining the lead in the industry with LG being the leader in
almost all the categories.

The rural market is growing faster than the urban markets, although the penetration level in rural
area is much lower. The CTV segment is expected to the largest contributing segment to the
overall growth of the industry. The rising income levels, double-income families and increasing
consumer awareness are the main growth drivers of this industry. 

This report highlights the significance this industry has for the Indian economy, throwing light
on the pre and post liberalization scenario. It discusses the important segments of this industry
and the growth patterns, trends and the demand drivers. The report also profiles the key players
of this industry, with a discussion of their business strategies.
INDUSTRY STRUCTURE

Introduction :

Before the liberalization of the Indian economy, only a few companies like Kelvinator, Godrej,
Allwyn, and Voltas were the major players in the consumer durables market, accounting for no
less than 90% of the market. Then, after the liberalization, foreign players like LG, Sony,
Samsung, Whirlpool, Daewoo, Aiwa came into the picture. Today, these players control the
major share of the consumer durables market.

Consumer durables market is expected to grow at 10-15% in 2010-11. It is growing very fast
because of rise in living standards, easy access to consumer finance, and wide range of choice, as
many foreign players are entering in the market.

On the flip side, the presence of a large number of players in the consumer durables market
sometimes results in excess supply.

SECTOR OUTLOOK

There has been strong competition between the major MNCs like Samsung, LG, and Sony.

LG Electronics India Ltd. Plans to spend US $83.3 million on R&D activities worldwide,
which includes developing a design and research facility at its Greater Noida unit in India. The
company is going to invest $250 million in India 2011 and is planning to establish a
manufacturing facility in Pune.

The Indian companies like Videocon Industries and Onida are also planning to expand.
Videocon has acquired Electrolux brand in India. Also, with the acquisition of Thomson
Displays by Videocon in Poland, China, and Mexico, the company is marking its international
presence.

According to isuppli Corporation (Applied Market Intelligence), country's fiscal policy has
encouraged Indian consumer electronic industry. The reduction on import duty in the year 2005-
06 has benefited many companies, such as Samsung, LG, and Sony. These companies import
their premium end products from manufacturing facilities that are located outside India.
Indian consumers are now replacing their existing appliances with frost-free refrigerators, split
air conditioners, fully automatic washing machines, and color televisions (CTVs), which are
boosting the sales in these categories.

Some companies like Samsung Electronics Co. Ltd. and LG Electronics India Ltd. are now
focusing on rural areas also. These companies are introducing gift schemes and providing easy
finance to capture the consumer base in rural areas.

Consumer Electronics

The CTV production was 15.10 million units in 2007-08 and is expected to grow by at least 25
per cent. At the disaggregated level, conventional CTV volumes have been falling while flat TVs
have grown strongly. Market sources indicate that most CTV majors have phased out
conventional TVs and have been instead focusing more on flat TVs. The flat segment of CTVs
now account for over60 per cent of the total domestic TV production and is likely to be around
65 per cent in 2007-08.High-end products such as liquid crystal display (LCD)and plasma
display CTV grew by 400 per cent and 150 per Cent respectively in 2009–10 following a sharp
decline in prices of these products and this trend is expected to continue. The audio/video player
market has seen significant growth rates in the domestic market as prices have dropped. This
trend is expected to continue through 2009- 2010, as competition is likely to intensify to scale
and capture the mass market.

The Indian Consumer Durables Industry can be segmented into 3 Key Groups

White Goods

• Refrigerators
• Washing Machines
• Air Conditioners
• Speakers and Audio Equipments

Kitchen Appliances/Brown Goods

• Mixers
• Grinders
• Microwave Ovens
• Iron
• Electric Fans
• Cooking Range
• Chimneys

Consumer Electronics

• Mobile Phones
• Televisions
• MP3 Players
• DVD Players
• VCD Players

SWOT ANALYSIS

Strengths
1. Presence of established distribution networks in both urban and rural areas
2. Presence of well-known brands

3. In recent years, organized sector has increased its share in the market vis a vis the unorganized
sector.

4. Government policies in favour of Industry includes infrastructure development, reduction in

excise duty and so on.

5. Advancement of technology which gives the companies ability to introduce new products and
new product features.

Weaknesses

1. Demand is seasonal and is high during festive season

2. Volatile performance of the agricultural sector have a negative impact on demand. The sectors
performance is highly dependent on monsoon and reforms, which has failed often.

3. Poor government spending on infrastructure

4. Low purchasing power of consumers

Opportunities

1. In India, the penetration level of white goods is lower as compared to other developing
countries.
2. Unexploited rural market

3. Rapid urbanization

4. Increase in income levels, i.e. increase in purchasing power of consumers

5. Easy availability of finance

6.Diversification. Developing new products for new market.

Threats

1. Dozen companies operating in white goods segment. Price would continue to remain
depressed and margins will be under pressure.
2. Cheap imports from Singapore, China and other Asian countries.

MICHAEL PORTERS FIVE FORCE MODEL

Michael Porter’s Five Forces Model provides a robust and time-tested framework for
analysing any industry, reflected in the strength of the five forces (industry competitors,
potential entrants, threat of substitutes, power of buyers and power of suppliers). The
collective strength of the five forces determines the ultimate profit potential in an
industry, Where profit is measured in terms of long-term returns on capital invested. The
elements of each of the above forces and the extent and /or effect of each element in the
context of the television industry have been analysed and enumerated below. The Porter’s
Five Forces tool is a simple but powerful tool for understanding where power lies in a
business situation. This is useful, because it helps you understand both the strength of
your current competitive position, and the strength of a position you’re looking to move
into. With a clear understanding of where power lies, you can take fair advantage of a
situation of strength, improve a situation of weakness, and avoid taking wrong steps. This
makes it an important part of your planning toolkit. Conventionally, the tool is used to
identify whether new products, services or businesses have the potential to be profitable.
However it can be very illuminating when used to understand the balance of power in
other situations.

Degree of Rivalry

Degree of rivalry denotes the intensity of competition within the industry. Videocon, LG,
samsung, Sony, Onida, are the big competitors in television industry. Although Videocon,
another major player has managed to hold its own in the midst of the onslaught from the
Korean majors, though profits have suffered. Other large Indian companies in the top of
the list are Mirc Electronics. While Mirc Electronics is managing to hold its share by
adopting value for money strategy, BPL is facing tough time, experiencing drastic decline
in market share. Sony, Philips, Akai, Sansui, Aiwa, Toshiba and Hyundai are the other
foreign brands in the market. The industry is based on numbers game and companies will
have to maintain a fine balance between catering to lifestyle requirements and meeting the
needs of average consumer.

Competitor Analysis
A detailed analysis of some of the major players is done below:

LG ELECTRONICS

LG Electronics rightly understood the consumer motivations to create magnetic products,

price them strategically, position them sharply and keep making the magnetism more
potent. Having understood the finer differences in consumer motivations, it opted for
sharp- arrow ‘reasons-to-buy’differentiation over the ‘blanket-all approach’ taken by most
of the other players. It is an aggressive marketer. It focuses on low and medium price
products.

SAMSUNG

Initially the strategy of Samsung in India was to create premium image by emphasising
global brand. After facing stiff competition from another Korean major- LG, Samsung also
started playing price game. In 2004 it reverted back to its premium positioning, although it
resulted in some loss of market share. In line with the Global Digital Initiative of the
Parent Company, Samsung India is seeking to acquire digital leadership in India by
introducing its digital ready televisions like the 40" LCD Projection TV, 43" Projection
TV and the Plano series of Flat Colour televisions.

ONIDA

Its popular devil ad although had engendered a strong emotional pull towards the brand,
technologically it represented no advancement. The company plugged the gap by touting
its digital technology. Like Videocon, it has also been able to hold its market share. The
world-class quality of Onida has enabled the company to make a breakthrough on the
export front. It has technical tie- up with the Japan Victor Company, better known as JVC.
So focused is Onida on positioning itself on the

premium, high- tech plank that it is even planning to push its own envelope on
obsolescence, much. The strategy is aimed at further broad basing the product offering of
the company, which has largely dominated the top-end of the television market, across
multiple market segments.

VIDEOCON

Videocon has always been a price player and has an image of a low price brand. This
entails providing more features at a given price vis-à-vis competitors. It has taken over
multinational brands to cater to unserved segments, like Sansui- to flank the flagship
brand Videocon in the low to mid priced segment, essentially to fight against brands like
BPL, Philips, Onida and taken over Akai- tail end brand for brands like Aiwa. Videocon is
one of the largest manufacturers of television and its components in India and thus has
advantages of economies of scale and low cost due to indigenisation. It has the widest
distribution network in India with more than 5000 dealers in the major cities. It also has a
strong base in the semi-urban and rural markets. Due to its multi-brand strategy, it has at
present multiple brands at the same price point. This has led to a state of diffused
positioning for its brands. It has also led to a cannibalisation of sales among these brands.
The flagship brand Videocon has lost market share due to the presence of Sansui in the
same segment. Because of reduction in import duties on CPT the cost advantage of
Videocon is also on the decline. Hence it is facing rough weather and also trying to boost
exports.

Besides understanding the strategy adopted by different players, several other factors
industry growth, concentration and balance, corporate stakes, fixed cost, and product
differences need to be analysed to determine the extent of rivalry between the existing
Players.

The threat of potential new entrants (low)

High capital required entering into television industry, which needed large investment on
technology, distribution, service outlets and plant. Difficulty for customers in switching
cost, when they are satisfied with their current product as well as difficultly for new
entrants to have product differentiation because customers had already familiar with those
established consumer electronics companies, therefore new entrants have to spend a lot on
branding and customer knowledge. It is difficult to obtain a license; successful applicant
has to undergo through a form of competitive evaluation, such as a comparative evaluation
process. Threat of entry is determined by the entry barriers, which act to prevent new
firms from entering the industry. A lower entry barrier makes it difficult for the existing
producers to remain profitable for long. When profits increase, additional firms will enter
the market to take advantage of the high profit levels and over time drive down profits of
all firms in the industry. When profits decrease, some firms will exit the market, thus
restoring the market equilibrium. Barriers to entry arise from several sources.

Access to Distribution Channels

A strong distribution network is absolutely essential to compete in this industry. Not only
does it guarantee a country wide reach for a company’s products but is also necessary for
providing good after sales service. Videocon has implemented ERP system, which helps in
integrating the

manufacturing, marketing, procurement and distribution services with the corporate office
LG Electronics sells in 1800 towns and cities with a population of 1,00,000 and above.
Samsung also has a widespread service network, which includes 123 exclusive service
centres and 200 distributors in any town with more than 1 lakh population. All BPL
dealers are linked via VSAT nodes, ensuring online availability of information on
inventory status and sales movement. Distribution hence is difficult and costly as
established firms dominate distribution. Large incentives are required to gain entry into
the distribution channels and further gain recommendation to retailers from the dealers.

Brand Salience

With little product differentiation and parity products, it is imperative that distinct images
are created in the minds of consumers through positioning and brand building. MNCs have
been able to compress the cost of brand building by amortising the cost of sponsoring
international events across a larger footprint straddling multiple countries.

Capital Investment and Economies of Scale

Television industry is capital intensive and players have made huge investments in putting
up state of the art manufacturing facilities. Videocon has seven manufacturing site in India
Sony India had a production capacity of 300,000 CTV sets with capacity utilisation of
66%. Samsung is investing $4 mn to expand its CTV manufacturing capacity at Noida to
800,000 units per year. The existing capacity of the plant is around 600,000 units. Other
players like Mirc Electronics, LG have also set up manufacturing facilities in India. The
market players need sales volume to achieve economies of scale, which is difficult
because of large number of competitors. Apart from investments in manufacturing the
industry requires huge working capital to manage inventories. Supply chain mgmt. and
inventory management thus becoming crucial to determining profitability. With regard to
sourcing funds, MNCs are better placed Than their Indian counterparts as they manage to
get funds from their parent Companies at low rates of interest. Huge capital requirement
thus can act as barrierto entry.

Threat of Substitutes goods (low )

In Porter’s model, substitute products refer to products in other industries.there is few
substitutes from other industry if any. Most of them seem to be obsolete or have one foot
out of door. Internet though emerging as an infotainment medium is very low in
penetration. Moreover the industry has responded to the future threat by introducing a TV
that can provide functions of the Internet along with regular features, e.g., BPL digital that
includes Internet and cellular facilities.

Bargaining power of Buyer (high)

The power of buyers is the impact that consumers can have on a producing industry. Buyer
power influences the prices that a firm can charge. Buyer power is influenced by various
factors as follows:

Buyer Concentration

The industry is akin to consumer durables whose end users are fragmented. Hence buyers
do not have any specific influence on producers.

Buyer Switching Cost

The cost incurred by consumer in switching from one television brand to another is
practically zero. Brand loyalty is low. Hence the companies cannot rest on their laurels
and have to be on their tenterhooks to retain the customers.

Price Sensitivity

Market is highly price conscious and promotion driven. With the onslaught of
VIDEOCON’s major price cuts and promotional schemes, this market has now become a
promotion driven one. To successfully compete in this industry, even premium players
like Sony, LG have had to come up with schemes. LG and Philips have Been the most
aggressive amongst industry leaders as far as pricing is

Concerned and hence their realisation shave been lower than industry average. Industry
leaders like LG focus on low- medium priced CTV, while Samsung has Moved gradually
towards higher priced CTVs. The domestic high-end CTV prices will follow the global
price trend of declining prices. However, the Prices of domestic products would be higher
than those of global products due To negligible demand in the domestic market and hence
most likely to be met Through imports. market is highly price sensitive as the Demand has
increased with fall in prices.
Bargaining power of supplier (low)

In television industry, there is low bargaing power of Supplier’s because big global supply
chain management.there is direct negotation with supplier in order to encourge reliable
supply, faster delivery and lower price. Bargaining power influences the cost and quality
of input material. Higher supplier power raises the input cost, thereby reducing the
industry profitability. The most critical component in manufacturing television is the
picture tube. It constitutes around 50% of the cost of television. While Black and White
picture tubes are made in India, many manufacturers still need to import colour picture
tubes. The other important components include electronic circuit boards, tuners, high-
tension transformers and moulded plastic casings. The demand For colour picture tubes
(CPT) has been rising steadily. But at the same time owing To customs and import
liberalisation, they had to face competition from imports During1993-1997. A sharp
reduction in import duty from 85% to 40% between 1994-96 and further down to 20% by
2004 was announced to gear the manufacturers

of picture tubes to face competition from foreign players. As a result of spurt in Demand
in 1990s, the CPT manufacturers expanded capacities, which resulted in Excess capacity
in the domestic market. Samtel Colour, LG Hotline and JCT Electronics are the major
domestic CPT manufacturers The picture tube industry is both technology and capital-
intensive industry. At the same time bulk orders in raw material procurement fetch more
discounts, which gives the larger players an advantage over their smaller counterparts. The
CPT, the most critical component in a CTV has no alternate use and therefore, the CPT
industry is solely dependent on CTV players, mainly domestic and partly exports. Hence
larger players like LG, Samsung and Mirc etc. are able to negotiate better deals unlike
other players.

POLICIES

The consumer durable market in rural India will witness an annual growth of 40 per cent in the
next fiscal 2011-12, as against the current growth rate of 30 per cent owing to the change in
lifestyle and higher disposable income of rural India which has fascinated the consumer durable
market according to a study “Rise of Consumer Durables in Rural India” undertaken by the
Associated Chambers of Commerce and Industry of India (ASSOCHAM).

“Around 35 per cent of the total sales of consumer durable items come from rural and semi-
urban markets, which will grow by 40 to 45 per cent in the near future. The consumer durable
industry is growing at a fast pace and sees a strong demand in the coming period with the
growing affordability of products as well as general buoyancy in the economy”, said Mr. Dilip
Modi, President of ASSOCHAM.

The market for consumer durables is estimated at Rs. 300 billion and is expected to reach Rs.
500 billion by 2015. The urban consumer durables market is growing at an annual rate of nine to
12 per cent, the rural durables market is growing at 30 per cent annually. Some high-growth
categories within this segment include mobile phones, TVs (LEDs) and music systems (IPODs).

He said the rural market in is growing faster than the urban market and the urban market has now
largely become a product replacement market. The consumer durables industry in rural and semi-
urban areas has witnessed a considerable change during the last few years. The consumer
durables sector is characterized by the emergence of MNCs, exchange offers, discounts and stiff
competition in the market to attract the growing middle class of .

With being the second fastest growing economy with a rate of more than 9 per cent, with a huge
consumer class nearly 70 per cent in rural areas, consumer durables have emerged as one of the
fastest growing industries in especially in rural . Now the consumer durable industry is paying
more attention to attract rural community by promoting their products and services in their local
languages.

The consumer durable sector which contributes around 8 per cent in the Index of Industrial
Production (IIP) and which provides jobs to professionals, skilled, semi skilled and unskilled
workers, particularly women in the rural and semi-urban areas every year.

The segment improves the quality of life of people by providing entertainment / information /
education / comfort and also helps to reduce daily chores. But the importance of the sector in
national economy remains unnoticed.

 
The Chamber chief further said the penetration level of consumer durables is about 5 to 7 per
cent in as compared to other countries. ASSOCHAM suggests that for deeper penetration in the
rural sector, the industry need to create proper channels and inform the community about the
products through local language advertising as well as other tools such as local exhibitions and
mobile vans to tap the rural consumers. On the other side government has to focus on rural
economy with greater fiscal incentives and generate more rural employment schemes.

According to ASSOCHAM Research Bureau, the Indian consumer durables segment can be
segregated into consumer electronics (LCDs, home theater systems, laptops & PCs etc.) and
consumer appliances (white goods) like refrigerators, washing machines, air conditioners,
microwave ovens, dishwashers and small home appliances. Television, Refrigerator and Air-
conditioner have penetration of around 25 per cent, 17 per cent & 4 per cent respectively in the
rural .

Rising disposable income and declining prices of durables have, resulted in increased volumes.
An increase in disposable income is aided by an increase in the number of both double-income
and nuclear families in .

The government is focusing on roll out of GST by 2011, this is an important consideration that is
discussed including whether GST will increase or decrease the proximity of rural markets from
mainline distribution routes. It also surfaced that the excitement that rural is causing in Indian
manufacturers and marketers represents an opportunity for domestic players to develop their
infrastructure in the rural sector.

The study revealed that in the coming five years it would be a new era for rural , by 2015 it is
expected that every village will be connected by an all weather road, every village will get the
internet connectivity and almost every home will have electricity and possess a mobile phone.
This significant improvement in rural infrastructure coupled with agriculture reforms already
under way. By this the industry expects rural market to reach at inflexion point. This built up will
lead to an explosion in demand the way it happened in the urban markets in the mid 90s.

Intellectual Property Rights

Protection of Intellectual property rights (IPR) is a prime requisite for development of R&D and
innovation in the consumer electronics sector. The Government of India has developed a robust
IP act to facilitate innovation, growth and development. Several amendments to the Copyright
Act, creation of a new Trademark Act, a new Designs Act and amendments to the Patents Act
show India’s continued effort to protect IPR.

The country has already made several changes in its IP acts over the years.. Several amendments
to the Copyright Act, creation of a new Trademark Act, a new Designs Act and amendments to
the Patents Act show India’s desire to change and adapt. New acts have also been enacted to
cover semiconductors and layout designs which will be of considerable importance to the
electronic industry. In the current WTO regime, India is a party to the “Trade Related Aspects of
the Intellectual Properties (TRIPs) Agreement” and has accordingly, amended most of its IPR
Acts and Rules to conform to the said Agreement. The Indian Copyright Act 1957 was amended
in 1999; the patent Act 1970 was amended in 1999 & 2003 and Trademarks and Merchandise
Marks Act 1959 was overtaken by a new Trademark Act 1999. The Industrial Design Act 1911
was effectively replaced by The Design Act 2000, and the Layout Design of Semiconductor
integrated Circuit Act 2000 was enacted. Corporate Catalyst India A report on Indian Consumer
Durables Industry The agreement on TRIPs takes care of the intellectual property rights by
enforcing the patent rights, copy rights and related rights, and the protection of industrial
designs, trade marks, geographical indications, layout designs of integrated circuits and
undisclosed information. Accordingly, the member nations are asked to modify their existing
laws. Once these laws come into force, unauthorised use of the patented innovations, trade
marks, etc. becomes difficult. Enforcement of the TRIPs agreement makes the production of any
product possible either through internal innovation or through formal transfer of technologies.
The consumer electronics and durables sector is expected to continue to benefit from supportive
policies and become globally competitive.

Regulations

Free Trade Agreement

WTO regime which came in force in 2005, results in zero customs duty on imports of all telecom
equipment. 217 IT/electronic items were covered under the Information Technology Agreement
(ITA) of the WTO for complete customs tariff elimination by 2005. Out of these 217 items,
several items were already at NIL customs duty. In fact, IT/electronics was the first sector in
India to face complete customs tariff elimination. The ITA-1 would result in intensifying
competition as more imported products will be easily available at lower prices.

Foreign Investment Policy: FDI

Foreign investment up to 100 per cent is allowed in Indian electronics industry set up exclusively
for exports. The units set up under these programmes are bonded factories ligible to import, free
of duty, their entire requirements of capital goods, raw materials and components, spares and
consumables, office equipment etc. Deemed export benefits are available to suppliers of these
goods from the Domestic Tariff Area (DTA). A part of the production from such units is
permitted to be sold in the DTA depending upon the level of the value addition achieved. The
FDI approval for electrical equipment (including computer software and electronics) from
January 1991 to March 2004 was US$ 7.29 billion, which was 9.94 per cent of the total foreign
direct investment (FDI) approved. During the same period the FDI inflow for electrical
equipment (including computer software and electronics) was US$ 3.32 billion.

Procedure for approval

Once the investment in equity has been approved, the import of capital goods, components and
raw materials or the engagement of foreign technicians for short duration does not require any
additional approvals. Corporate Catalyst India A report on Indian Consumer Durables Industry
Approval of Ministry of Home Affairs is not needed for hiring foreign nationals holding valid
employment visa. Approval for setting up units in Export Processing Zones (EPZs) is given by
the Board of Approvals in the Ministry of Commerce. Approval for setting up export-oriented
units (EOUs) outside the zones is given by the Ministry of Industry. Approvals for setting up
Electronic Hardware Technology Park (EHTP) and Software Technology Park (STP) units are
cleared by the Inter Ministerial Standing Committee (IMSC) set-up under the Chairmanship of
the Secretary, Department of Information Technology. Proposals involving foreign direct
investment not covered under the automatic route are considered by the Foreign Investment
Promotion Board (FIPB).

FDI/ Foreign Technology Collaboration Agreement

The government facilitates FDI and investment from Non- Resident Indians (NRIs) including
Overseas Corporate Bodies (OCBs), predominantly owned by them, to complement and
supplement domestic investment. Foreign technology induction is encouraged through FDI and
foreign technology collaboration agreements. FDI and foreign technology collaborations are
approved through automatic route by the Reserve Bank of India

OPPORTUNITIES AND CHALLENGES

The Challenges
Heavy taxation in the country is one of the challenges for the players. At its present structure the
total tax incidence in India even now stands at around 25-30 per cent, whereas the corresponding
tariffs in other Asian countries are between 7 and 17 per cent. About 65 per cent of Indian
population that lives in its villages still remains relevant for some consumer durables companies.
This India, at least a large proportion of its constituents, still buys black and white TVs and
doesn't know what flat screens are. Also, foraying into these rural markets has a considerable
cost component attached to it. Companies not only have to set up the basic infrastructure in terms
of office space, manpower, but also spend on transportation for moving inventory. Even LG and
Samsung, which are touted as having the largest distribution network in the country, have a
direct presence only in 15,000 to 18,000 of the around 40,000 retail outlets (for consumer
durables) in the country. Poor infrastructure is another reason that seems to have held back the
industry. Regular power supply is imperative for any consumer electronics product. But that
remains a major hiccup in India.

Opportunities

The rising rate of growth of GDP, rising purchasing power of people with higher propensity to
consume with preference for sophisticated brands would provide constant impetus to growth of
white goods industry segment. Penetration of consumer durables would be deeper in rural India
if banks and financial institutions come out with liberal incentive schemes for the white goods
industry segment, growth in disposable income, improving lifestyles, power availability, low
running cost, and rise in temperatures. While the consumer durables market is facing a slowdown
due to saturation in the urban market, rural consumers should be provided with easily payable
consumer finance schemes and basic services, after sales services to suit the infrastructure and
the existing amenities like electricity, voltage etc. Currently, rural consumers purchase their
durables from the nearest towns, leading to increased expenses due to transportation. Purchase
necessarily done only during the harvest, festive and wedding seasons — April to June and
October to November in North India and October to February in the South, believed to be
months `good for buying’, should be converted to routine regular feature from the seasonal
character. Corporate Catalyst India A report on Indian Consumer Durables Industry Rural India

Companies Overview
OVERVIEW of Videocon Company

Videocon Industries Ltd. was one of the initials company that

made it to the World. Videocon Electricals captured the initial
Indian Electrical market and topped the charts for its products
such as Refrigerators, television etc. before other players such as
Samsung, Whirlpool etc .entered Indian market. Videocon was
one of the first Electronic Company to Collaborate with
Japanese Toshiba Ltd as early as 1985.

Background
 Founded : 1987
 Founders : Nandlal Madhavlal Dhoot
 Headquarters : Aurangabad ( Maharastra )
 Area served : Consumer Electronics
Home Appliance
Components
Office Automation
Internet
Petroleum
Power
 Industry : Consumer Durables, Oil and Gas etc.
 Share Type : Ordinary
 Revenue : US$4.1 billion (2008)
 Net Income : US$276 million (2008)
 Web site : www.videoconworld.com
History of Videocon
Videocon Leasing & Industrial Finance Limited, was incorporated on 4th September, 1986 as Adhigam
Trading Private Limited. In terms of the necessary resolutions passed under Sec. 21 of the Companies
Act, 1956, the name of the Company was changed to Videocon Leasing & Industrial Finance Limited on
14th February, 1991. The Company received a fresh certificate of incorporation from the Registrar of
Companies, Gujarat at Ahmedabad on 14th February, 1991.

Adhigam Trading Pvt. Ltd. (ATPL) was promoted by M Indrakant T. Parikh and Naishad I. Parikh in
September 1986 as a private limited company and was initially engaged in the business of trading in
paper tubes. In September, 1988 the Company decided to diversify in the business of lease financing,
hire purchase and investment activities.

The Management of the Company underwent a change in the year 1990-91 by way of transfer of equity
shares to the Videocon Group. 1,00,000 Equity Shares of Rs. 10/- each of Adhigam Trading Private
Limited were purchased by the Videocon Group at a premium of Rs. 3/- per share in April, 1991. The
total consideration of Rs. 13 Lakhs was paid bycheques.

Corporate Profile

The Videocon group emerges as a USD 2.5 Billion global conglomerate

continuing to set trends in every sphere of its activities from a conference room
sized assembly line in 1979. It started life in 1984 as a branded manufacturer of
consumer durables. In 1995, it ventured in to contract manufacturing and then oil.
The consumer electronics and oil businesses were separate entities with separate
balance sheets. Things changed in 2005 when Videocon merged its oil subsidiary,
petrocon, in to the flagship VIL (Videocon Industries Limited). Now it has a
balance sheet that has the combined number both consumer electronics as well as
oil. It is clear that this was primarily done to use oil revenues to shore up the
sagging consumer electronics business. Nevertheless, it is unusual. This move has
raised questions about whether Videocon is trying out too many things. An
indication of market sentiment can be got from the fact that its market cap of Rs
9,855 crores is less than even its estimated sales (put out by domestic brokerages)
of Rs 11,444 crores in FY06 (it has an October-September financial calendar). One
of the world’s largest and most acknowledged CPT manufacturer in the world, the
group is forging ahead with production and development of latest technologies like
Super True Flat CPT, Slim CPT, Extra Slim CPT and HD 16:9 format CPT.

Vision & Mission

Videocon’s mission: a reflection of continuity and change

Videocon’s mission expression has been crafted to envelope both extant and emerging
realities:
“To delight and deliver beyond expectation through ingenious strategy, intrepid
entrepreneurship, improved technology, innovative products, insightful marketing and inspired
thinking about the future.”

A breakdown of the statement above reveals a ‘means and end’ approach, where the end is
articulated at the beginning with the means linked to it.

“To delight and deliver beyond expectation…”: the end

This segment not only underlines the importance of the ultimate goal - customer satisfaction
(‘delight’) and ultimate target - the customer, but also of intermediate processes and principals,
which have contributed to building a robust, dependable Videocon value chain (‘deliver’). As a
result of its focus on developing loyal customers and reliable associates, Videocon is able to
exceed expectations.

“…through ingenious strategy…”: the means

In the cutthroat world of today, it is only by taking recourse to advance planning and strategy
that a business can hope to survive. Although textbook strategy has its uses, reproducing it in
verbatim for the real world would be foolish because of the absence of textbook conditions.
Thus, there is a need for a bounded rationality, a spontaneity and improvisation that is flexible
enough for scenarios both imaginable and unimaginable. Videocon’s ingenious manoeuvres
are actually flexi-strategy that abstracts from shifting ground conditions and decides game-
plans, or sometimes changes the rules of the game.

“…intrepid entrepreneurship…”: the means

An enterprise with the odds stacked against it makes great business sense. This is because
higher the obstacles, lower the number of players likely to be active in that field - thus, fetching
extraordinary returns. The only requirement is a bold and confident attitude willing to brave the
odds. Videocon’s foray into oil and gas is a bold and intrepid endeavour that arises from
immense faith on the surefooted competence of the company’s in-house managerial talent.

“…improved technology…”: the means

Technology is no more a premium input; it has become the bare minimum in recent years.
Rapid advances have only fuelled this phenomenon. Videocon is extremely vigilant in shunting
out dated technology and replacing it with the best-in-class offers of the times.

“…innovative products…”: the means

Product development, innovation and customisation are the tools Videocon uses to stay ahead
of the competition. This is because a continuous stream of innovative products excites the
market and enhances brand recall. A strategy that Videocon banks on a lot, especially on the
domestic front.

“…insightful marketing…”: the means

The market share battle scene has long shifted from technology and processes to the psyche
of the customer. This means that those with deeper insights into the elusive mind of the buyer
are likely to dominate. Videocon is reinforcing marketing strengths to read better the pulse of
the market and help create products that map perfectly into customer preferences.

“…inspired thinking about the future.”: the means

The future is unpredictable, but not doing anything about it is fraught with grave risk. Videocon
extrapolates future trends on the basis of current changes in technology and preferences as
well as sheer gut feel. Fine-tuned business instincts are worth their weight in gold, lots of it.
The company has perfected its practice almost into an art form with some calculated gambles
like oil and gas proving to be absolute money-spinners.
Values & Philosophy

Shri Nandlal Madhavlal Dhoot, the founder of the Videocon Group, completed his education in
Ahmednagar and Pune. He was a successful sugarcane and cotton cultivator. As a next logical step to
vertical integration, he boldly took upon an entrepreneurial venture by importing machinery from Europe
to set up the Gangapur Sakhar Karkhana (Sugar Mill) in 1955. Those were the times when the village did
not even have electricity. Thus was unleashed an Industrial Revolution.

The die was cast. Over the years, Nandlalji's path-breaking attitude found expression in a myriad ways,
earning him the well-deserved reputation of the pioneer of industrial activity in Marathwada India.

In early 80's Nandlalji initiated his three sons - Venugopal, Rajkumar and Pradeep into business. Through
a technical tie up with Toshiba Corporation of Japan, he launched India's first world-class color
Television: Videocon. Today, Videocon is household name across the nation- India's No. 1 brand of
Consumer Electronics & Home Appliances, trusted by over 50 million people to improve their quality of
life.
Customer, Corporate and Videocon

Corporate Overview

The Videocon Group is committed to create a better quality of life for

people and furthering the interests of society, by being a responsible
corporate citizen.

Creating Happiness

We will bring happiness into every home, offering high quality

consumer durables at affordable prices, spreading the culture of
convenience, entertainment and comfort, far and wide.

Achieving Progress

We will pursue innovative technologies in the fields of Electronics

and Energy, create products and services that will improve the quality
of life, realize the goals of the world community and protect the
environment.

Sustaining Growth

We will be a source of pride to our business associates by ensuring

mutual prosperity and growth through the implementation of forward-
looking corporate strategies, aimed at identifying opportunities and
responding intelligently to the dynamics of change.

Pursuing Excellence

We will provide a conducive environment for enabling our employees

to develop their potential and make a significant contribution to the
Group's success. In 1985, through a technical tie-up with Toshiba
Corporation of Japan, Videocon International Limited launched
India's first world class Color
Television. Today, Videocon International Ltd., the flagship company
of the Videocon Group, is India's leading manufacturer of Consumer
Electronic products. Fired by a passion for innovation, Videocon has
kept pace with the changing face of technology, constantly upgrading
its manufacturing facilities to incorporate advanced technology and
high standards of quality into its product range, right across the
spectrum.
AMBITIONS and TECHNOLOGIES

Technology with a Heart

Committed to giving the consumer the best the world has to offer,
Videocon has developed near zero wastage technology which helps
reduce manufacturing costs by optimizing material
inputs. Coupled with quality-consciousness at every stage, the
consumer benefits enormously by getting premium products at
affordable prices. The company currently manufactures Colour TVs,
Black & White TVs and Audio products. At its modern plant at
Chitegaon and Aurangabad, the Company has also undertaken
complete backward integration to manufacture all critical and
important components of its products, such as Electronic Tuners,
FBTs, ATDMs and Deflection Yokes, thereby reducing costs,
ensuring quality control and becoming vertically integrated. It has set
up a unit at Gandhinagar in Gujarat for manufacturing Black & White
TV picture Tubes.

The Sound of Excellence

Videocon produces a sophisticated range of Home Audio Systems,
Stereo Radio, Recorders and Personal Stereos, as well as the
contemporary international range of Kenwood Digital Hi Fi Systems.
First with the Best

Continuous upgradation and indigenous manufacturing has been and

continues to be an integral part of the company's philosophy.
Perceived as an innovator in its field, Videocon has notched up many
exciting firsts, by exploring the world's most advanced technologies.
In Colour TVs, Videocon was the first Indian Company to introduce
Picture-In- Picture, Turbo Sound, Surround Sound, Larger Screen
Sizes, the Full Flat Square Tube, Bazooka technology and the
Freedom series : affordable high quality range of Colour TVs for the
price-conscious consumer.

Global Ambition

Looking beyond India, Videocon is now a global player,

acknowledged by the world. It is the first Indian company to win the
prestigious CE approval for exporting its Colour TV to Europe.
Videocon is now entering world market with its operations in the
Middle East, Europe, Indonesia and South Africa. Videocon Narmada
Glass (VNG): a division of Videocon International Ltd., has the
distinction of having set up India's first plant for the manufacture of
Glass Shells for Color Television Picture Tubes, in technical
collaboration with Techneglas Inc., USA (formerly known as OINEG
TV Products Inc., USA), world leader in Glass Shell Technology. The
projects in 1990, when the then Prime Minister of India, the late Shri
Rajiv Gandhi, laid the foundation stone for the project. The Videocon
Group, with the objective of backward integration, joined hands with
Gujarat Narmada Valley Fertilizers Co. Ltd., (GNFC) for the
implementation of this 100% import substitution project, the largest
investment (Rs. 450 crores) in electronic component industry in the
country. The plant, with an installed annual capacity of 1.7 million
Glass Shells for Color Picture Tubes and 0.25 million glass Bulbs for
Black & white Picture Tubes and Monochrome Monitor Tubes, is
located at Village Chavai, District Bharuch, Gujarat.
SUCCESS STORIES

The Heights of Success

VNG has some remarkable achievements to its credit, starting with the
successful absorption of sophisticated technology from Techneglas
Inc., USA. The CTV Glass Shells manufactured by VNG are at par
with international standards and the Color Picture Tubes made with
VNG glass have already received VDE approval. The facilities
include a state-of-the-art Tool Room and Mould Shop to manufacture
and maintain its mould requirements. Having initially successfully
established its 20V, 19V and 13V CTV glass parts, VNG has now
developed the 20V 2R the latest models.

A Picture Perfect Future

Till 1994, Indian manufacturers of CTV Picture Tubes were importing

Glass Shells. VNG's production has replaced these imports, thereby
saving almost Rs.200 crores of precious foreign exchange every year.
VNG has now surpassed the norms of performance guaranteed by the
collaborator, Techneglas Inc., U.S.A. and is operating the plant with
150% capacity utilization - with efficiencies exceeding international
standards. Where fields of sugarcane grow tall and proud. Where
bushes of cotton bud blooms. Where tourists flock to the world-
famous caves of Ajanta and Ellora. Where India's NO.1 Consumer
Electronics and Home Appliances take shape, to take millions of
Indians into a better, brighter future. This is Marathwada, India, where
the Dhoot family launched Videocon International Limited in 1984,
with the avowed purpose of producing world-class Colour Television
through a technical tie-up with Toshiba Corporation of Japan. Within
a decade, Videocon emerged as India's leading brand of both Colour
and Black & White Televisions and continues to dominate this highly
competitive market. The leader innovates. The leader forges ahead.
The leader breaks new ground. Harnessing the advanced technology,
relentlessly pursuing quality to achieve various international standards
of Quality Control. Breaking through, time and again, with innovative
products for a better life.

VISIONARY VIDEOCON

Profiles of Leadership

Futuristic Neuro Fuzzy Logic Washing Machines, User-friendly - No-

Frost Refrigerators, the very latest music systems. The most
sophisticated Colour Television and VCRs. High-Tech Air-
conditioners. Videocon today, is a multi-faceted group, with 9 state
-of-the-art manufacturing facilities all over India. Highly qualified
engineers, trained in Japan, backed by 6500 technical and support
staff, work together in close unison to produce India's leading branch
of consumer electronic products and home appliances.

Leadership through People

Videocon lays great emphasis on the training and development of its

work force, providing every opportunity for growth and advancement,
including training stints overseas.
LANDMARKS

FROM ELECTRONICS TO ENERGY

The Heart of Nation

1995 was a landmark year for Videocon. It clearly reaffirmed its
leadership in Color TVs, Black & White TVs, VCRs and VCPs,
Washing Machines as well as No-Frost Refrigerators. Then Videocon
began to reach out to the core. To industries at the heart of a nation:
Petroleum, Power, Construction and Housing. Leading India into the
future, with Confidence, with determination, with a commitment to
excellence, rooted in the pioneering vision of a path breaker.

Consumer Electronics, Home Appliances & Compressor manufacturing in

India

Videocon enjoys a pre-eminent position in terms of sales and customer satisfaction in

many of our consumer products like Color Televisions, Washing Machines, Air
Conditioners, Refrigerators, Microwave ovens and many other home appliances, selling
them through a Multi-Brand strategy with the largest sales and service network in India.
Refrigerator manufacturing is further supported by our in-house compressor
manufacturing technology in Bangalore. Videocon has the largest distributed
manufacturing base across India – 12 facilities. It has the Capacity to manufacture 4
million CTVs, 2.5 lacs washing machines, 1 mn. DVD players, 4.8 mn refrigerators.
Display industry and its components

With the Thomson acquisition Videocon has emerged as one of the largest
Color Picture tube manufacturers in the world operating in Mexico, Italy, Poland and
China, continuing to lead through new innovative technologies like slim CPT, extra slim
CPT and High Definition 16:9 format CPT.

Color Picture Tube Glass

Videocon is one of the largest CPT Glass manufacturers in the world with a high level of
experience and technical expertise operating through Poland and India. Videocon will
leverage on this synergy after the Thomson acquisition to internally source glass for its
CPT manufacturing increasing efficiencies and lowering costs.

Oil and Gas

An important asset for the group is its Ravva oil field with one of the lowest operating
costs in the world producing 50,000 barrels of oil per day. The group has ambitious plans
for expansion in this sector globally.

LOGO LOGIC

This is the new Videocon symbol. It reiterates the ethos of a company dedicated to
maintaining the highest international standards of excellence through quality, technology
and innovation. For over a decade now, Videocon has been bringing the latest and very
best in Consumer Electronics and Home Appliances. Successfully adapting the best of
international technology to suit Indian needs, and crafting it to improve the quality of life
– as million of satisfied customers will agree.

The new symbol of Videocon asserts its passion for global impact, and the two ‘E’s on
either side represent the Group’s wide spectrum of interests ranging from ‘Electronics to
Energy’. Along with the steely glint, this communicates the group's global ambition, its
strength, sterling credentials and innovative drive. A symbol that proclaims a paradigm
shift. A sign that represents the new force that is Videocon. Thus recapitulating our
principle of reaching out and touching the lives of millions of people Worldwide.
Research & Development
The Company gives utmost importance to R & D activities, which are carried out, at in-house R
& D center. The Company carries on new innovations in product development, cost reduction,
quality improvement, process implementation, process controls.

1) Specific areas in which R & D is carried out by the Company

During the year, the Company has carried out Research and Development in the
following areas:

1. Home theaters - High-end models and HTIB Models.

2. Larger Screen Television i.e. 32 inch and 38inch.
3. True Flat Televisions.
4. LCD TVs.
5. Plasma Televisions.
6. Cosmetic design and new out look to the TVs.
7. Manufacturing of components for CTV, Refrigerators and Air conditioners.
8. Developed high-end products to be offered to Indian market.
9. Efforts to reduce power consumption of all its final products.
10. Development of products suitable for Indian climate conditions, as well as same for
export market.
11. Introduction of TV with immense picture performance and razor slim design.

2) Benefits derived as a result of the above R & D The Company has derived the
following benefits as a result of Research and Development:

1. Developed new design in products and launched various new models.

2. Developed high-end products to be offered to Indian market.
3. Introduced Integrated Digital TV (iDTV) with a built-in digital decoder having MPEG 4
DVB-S2 Digital signal; Introduced LED TV with "Nano Pixels" for immense picture
 performance and Razor slim design; Introduced Unique "SMART TV", which set a
platform for "Internet TV" to enjoy the Live Chatting, Browsing, Video conferencing, email
access, Blu Tooth connectivity etc.; and various other ranges/series of LCD TV with Full
HD 1080p resolution.
4. Introduced Star Rated Products in Consumer Electronics and Home appliances. With this
technology, the customer can have benefit of saving approximately 15% of power
consumption, resulting into effective utilization of power resources in the nation.
5. Introduced paint less product with a unique Hot and Cold Technology for moulding of
parts. This helps to reduce pollution generated due to hazardous chemicals used in
plastic paints and its process. Customer can enjoy the high glossy finish with ultimate
scratch resistance.
6. Developed new ranges of Direct Cool as well as Frost Free refrigerators like Ecocool,
Ecocool Plus, Ecofresh, Deofresh, Nutricool, Nutricool Plus, Powercool. Developed 4 & 5
Star rated refrigerators with new exterior finish i.e. PCM-Pre-coated material.
7. Introduced new base stand with smart VEGI TRAY, which is unique and give
convenience to customer in day to day usage.
8. Introduced new economic series of Direct cool refrigerator as "Bharat series", to cater to
each and every Indian family. This has given cutting edge solution for the competitors on
the price factor.
9. Introduction of the products on health platform with Deodorizer, which gives the solution
to remove the odour created by rotten vegetables and fruits.
10. Enhanced Frost Free refrigerator series with introduction of LED & LEDi technology.
11. Increase in Productivity.

 
3) Future Plan of Action
In the coming days Company is aiming to achieve development in the following through
Research and Development areas:

1. Manufacturing of components for consumer Electronics Products.

2. Various models of Multimedia TV; iDTV; LCDTVs; LED & LEDi
3. Plasma Televisions.
4. Composite Home Entertainment system with internet adaptability.
5. Better features, better quality & improved reliability with reduced/low prices.

 
The Company always attempts to use the latest and advanced technology in production
process. Keeping pace with the technological developments, the company keeps on adding
sophisticated equipments with focus on automation to minimize manual intervention in the
manufacturing process thereby ensuring quality of the final products.
VIDEOCON'S STRATEGIES

Multi-brand strategy

Videocon International was the first Indian company to adopt the strategy of multi-
brands. Apart from its mid-priced brand Videocon, the company now hawks
Toshiba, a premium brand, and the low-priced brands Akai and Sansui.

The multi branding technology paid off as Videocon managed to hold on to a

combined market share of around 19.6 percent, with LG at 25.9 percent and
Samsung at around 13.8 percent.

Overall, the shift in the power to trade is probably one of the defining
developments. It is important since the TV companies themselves have taken it
seriously and embarked on crafting longer-term strategies to accommodate this
development. The effectiveness of their strategy and the responses of the other
players promise to deliver a few more years of enterprising developments in the
Indian TV market.

Backward Integration

Videocon integrated backwards by getting into manufacture of components such as

electron guns, metal parts and deflection yokes for CTVs and compressors, and
electric motors and plastic components for households appliances such as washing
machines, refrigerators and Air conditioners. The group integrated further to get in
to manufacture of glass panels and funnels, the key components for the
manufacture of color picture tubes. “Videocon enjoys a unique synergy in the
global CTV business from glass to CRT (Cathode Ray tubes) to CTVs. - (From
Sand to CTV). Together with other components for households appliances. This
high degree of backward integration bestows upon the company a unique benefit
over competition.

SEGMENTATION, TARGETING & POSITIONING

(STP)

SEGMENTATION:

Market segmentation is the process in marketing of dividing a market into distinct

subsets (segments) that behave in the same way or have similar needs.
Because each segment is fairly homogeneous in their needs and attitudes, they are
likely to respond similarly to a given marketing strategy. They are likely to have
similar feelings and ideas about a marketing mix comprised of a given product or
service, sold at a given price, distributed in a certain way and promoted in a certain
way.
The process of segmentation is distinct from targeting (choosing which
segments to address) and positioning (designing an appropriate marketing mix for
each segment). The overall intent is to identify groups of similar customers and
potential customers; to prioritize the groups to address; to understand their
behavior; and to respond with appropriate marketing strategies that satisfy the
different preferences of each chosen segment.

Segments based on Income

Plasma: Income group of more than 50,000

LCD: Income bracket of Rs 20,000 and above
Slim: Consumer in the income bracket of Rs 9000-15000
Flat: Consumer in the income bracket of 7000-12000
Conventional: income bracket of Rs 3000-6000

Segments based on social class

Plasma: rich class

LCD: upper middle class and rich class
Slim: middle class
Flat: middle and lower middle class
Conventional: lower economic class.

Benefit Segmentation:

Conventional, Flat screen Slim, LCD, and Plasma can also segmented on the basis
of benefits that an end consumer would receive from them.

User Status:

TV market can be classified into non users of TV and potential users in term of
graduating to a higher segment like slim, LCD,Plasma from basic conventional TV

Loyalty status: On the basis of Loyalty status Hardcore Loyal: brand loyal to
Videocon for a long time in terms of purchasing products of Videocon
Shifting Loyal: who shift loyalty from other brands to another Switchers: not loyal
to any brands so attract them to Videocon and convert they brand loyal.

TARGETING:

Once the firm has identified its marketing-segment opportunities, it has to

decide how many and which ones to target. Marketers are increasingly combining
several variables in an effort to identify smaller, better-defined target groups.
The decisions involved in targeting strategy include:
* Which segments to target?
* How many products to offer
* Which products to offer in which segments
In premium segments like flat screens and FDPs the growth in sales has been many
times the industry growth. More importantly, high end product sales are no longer
restricted to metros. Consumer in tier-2 cities seems to be as evolved in lifestyle
needs. The consumer profile, too, has changed. Higher disposable incomes, greater
aspirations and younger demographic have increased demands for the
technologies. And Videocon is targeting this segment.
POSITIONING:

Positioning has come to mean the process by which marketers try to create an
image or identity in the minds of their target market for its product, brand, or
organization. It is the 'relative competitive comparison' their product occupies in a
given market as perceived by the target market.
Once the competitive frame of reference for positioning has been fixed by
defining the customer target market and nature of competition, marketers can
define the appropriate points-of-difference and points-of parity associations.

Points of Parity (POPs) are associations that are not necessarily unique to the brand
but may infact be shared with other brands. They represent necessary-but not
necessarily sufficient-conditions for brand choice. Videocon's Points-of-Parity are
good quality Picture and good sound.

Points-of-Difference (PODs) are attributes or benefits consumers strongly

associates with a brand, positively evaluate, and believe that they could not find to
the same extent with a competitive brand. Videocon's POD is the quality product
with low cost. With the strong backward integration Videocon can provide the
products with low cost.

Thus, Videocon is positioned itself as a reliable and value-for-money

product.
4P’s
The 4Ps includes the Product, Price, Place and promotion.

Product Mix

Product mix is the set of all product and items a particular seller offers for sale.

Product mix consists of various product lines.

The width of a product mix refers to how many different product lines the
company carries. The Videocon television has product mix width of five lines.

I.e. plasma, LCD, Slim, flat and Conventional.

The length of a product mix refers to the total number of items in the mix.
I.e. for the line of LCD the length is 2 as it has two items 50” PDP and 42” PDP.
The depth of the product mix refers to how many variants are offered of each
product in the line.i.e. For LCD the depth will be 2. As Videocon is offering only
one product in 50” PDP and 42” PDP. The three product-mix dimensions permit
the company to expand its business in three ways.

It can add new product lines, thus widening its product mix.
It can lengthen each product lines.
It can add more product variants to each product and deepen its product mix.

Width, Length & Depth

Width = 5 (Plasma, LCD, Slim, Flat, Conventional)

In the product mix of Videocon, it is having 37 different models, which gives

them their product line Depth.

PLASMA

Plasma television technology is similar to the technology used in a fluorescent

light bulb. The display itself consists of cells. Within each cell two glass panels

Plasma LCD Slim Flat Conventional

50”PDP 42” LCD 29” slim 29” flat 21” FFST

42”PDP 32” LCD 21” slim 21” flat 20” conv
26” LCD 15” flat 14” conv
20” LCD
19” LCD

Length
25233

are separated by a narrow gap in which neon-xenon gas is injected and sealed in
plasma form during the manufacturing process. The main advantage of Plasma
over CRT technology is that, by utilizing a sealed cell with charged plasma for
each pixel, the need for a scanning electron beam in eliminated, which, in turn,
eliminates the need for a large Cathode Ray Tube to produce video images. This is
why traditional televisions are shaped more like boxes and Plasma televisions are
thin and flat.

Advantages of Plasma Television:

Largest Screen Formats.

Superior Contrasts.
Versatile.
Capable Of Displaying Full HDTV & Dtv Signal.
Capable Of Displaying Xga, Svga & Vga Pc Signal.
Wide Viewing Angle.
Wide Rage Of Richer Color Over 16 Million.
Superb Realistic Images.
Less Expensive Than Lcds.
Life More Than 30,000 Hours.
Wide Screen Aspect Ratio around 16:9.
Perfect Flat Screen.
Uniform Screen Brightness.

Slim & Space Saving Design.

50" PDP
Integra 50
10000:1 Contrast Ratio
3:2 & 2:2 Pull Down
HDMI Compatible
3-D Video Noise Reduction
PC Input
42" PDP
16.77 Million Color
10000:1 Contrast Ratio
3.2 & 2:2 Pull Down
20
1500cd/m2 Brightness
HDMI Compatible
3-D Video Noise Reduction

LCD

The flab’s are out and now technology has switched over to sleek and slim
products, LCD being the prominent amongst them. LCD technology is the recent
breakthrough in consumer electronics and because of its esteemed advantages this
segment is growing day by day. Videocon are launching this range under the sub
brand “Integra”. “INTEGRA” term indicates the integration of various systems
connectivity with LCDTV. This is an integration of best sound quality and
excellent picture quality.

What is TFT-LCD?

Meaning of this term is Thin Film Transistor–Liquid Crystal Display. TFT

technology used in this category offers the best image quality in flat panels. This

technology is also called as Active Matrix Technology.

40" LCD
32" LCD
26" LCD
20" LCD
19" LCD

Slim

With Continuous Research & Development Videocon brings a revolutionary

advancement in physics & brings new Slim & Trim Television. The Most
significant feature of the Slim & Trim Television is its one kind of super slim
picture tube technology. This has enables us to make the TV 42%
Slimmer. Slim Picture tube is a product with reduced depth providing the TV and
monitor producers with opportunity to design Slim, flat and stylish TVs
comparable to plasma or LCD panels maintaining Good picture Quality
29" SLIM
21" SLIM

Flat

Videocon Bada Woofer with Surrounds Bass Technology Bass Amplification by

Dynamic Alignment (BADA) woofer is a revolutionary technology that offers a
new sound to create an unbelievable sound space Videocon unique Bazoomba
Woofer Technology Videocon's superior Bazoomba Woofer Technology
incorporates a unique conjugate arrangement of Woofer motors that ensures rich
bass reproduction. The Bazoomba Woofer Technology Enables the generation of
the lowest bass frequencies from a small enclosure (Bazoomba tube). Enables
cleaner and tighter bass reproduction due to acoustic cancellation of distortion in

the even harmonics

29" TFT
21" TFT
15" TFT

Conventional TV

21" FFST
20" CONV
14" CONV

Pricing
The pricing of the Videocon’s various models is as following.
Plasma TV : Rs. 59,990 - 2, 40,000
LCD TV : Rs. 28,400 – 89,900
Slim TV : Rs. 10,400 – 18,900
Flat TV : Rs. 5,500 – 18,400
Conventional TV : Rs. 4,600 - 9,500

Place

Videocon has its presence all throughout India. They have their presence in 25
states and each state has at least 2 divisions per state. In total they are having 78
divisions. Videocon has around 1800 dealers in India. They are having 96 service
centers across India.

Promotional Activities

Focusing on LCD, Plasma and 29” Flat TVs since 2006. By institutional selling.
Company used both TVC as well as print media for promotion. The company is
using outdoor media promotions in hording and bus shelters to high light the
feature packed advantages. Major tie ups in the background IIT alumni/ Videocon
Santos ham film awards 2006 with ZEE and ICC Cricket champions trophy.
Products

LED TV LCD TV

Ultra slim TV
Flat TV

Conventional TV
Frost Free Refrigerators Direct Cool Refrigerators

Solo

Grill

Convection
Products & Services :-
Videocon served in many area like consumer product, home product, oil & gas etc.

Following are the important product produced by videocon

company.

 CONSUMER ELECTRONICS

1. Plasma TV
2. LCD TV
3. 34” TV
4. Slim TV
5. Sound Station
6. Flat TV
7. Conventional TV
8. DVD
9. Multimedia Speakers
 HOME APPLIANCES

1. Frost Free Refrigerators

2. Direct Cool Refrigerators
3. Side by Side Refrigerators
4. Fully Automatic Washing Machines
5. Semi Automatic Washing Machines
6. Microwave Ovens
7. Window AC
8. Split AC
9. Cassette AC
10.Tower AC

STRATEGIC BUSINESS UNIT ( SBU)

An SBU, in the strategic management sense, is normally an entire division in large
corporations or one of the firms of a diversified company that carries out a certain business
- in one of the business sectors the firm operates. This approach entails the creation of
SBU's to address each market in which the company is operating.

 SBU OF VIDEOCON COMPANY

In BCG Matrix product or business unit are identified as Stars, Cash Cow, Dogs, Question
mark. BCG Matrix can used for resource allocation. The matrix can be explained are as
follows.

 Stars (high growth, high market share)


 Stars are using large amounts of cash. Stars are leaders in the business. Therefore they
should also generate large amounts of cash.

 Stars are frequently roughly in balance on net cash flow. However if needed any attempt
should be made to hold your market share in Stars, because the rewards will be Cash Cows
if market share is kept.

 Cash Cows (low growth, high market share)

 Profits and cash generation should be high. Because of the low growth, investments
which are needed should be low.

 Cash Cows are often the stars of yesterday and they are the foundation of a company.

 Dogs (low growth, low market share)

 Avoid and minimize the number of Dogs in a company.

 Watch out for expensive ‘rescue plans’.

 Dogs must deliver cash, otherwise they must be liquidated.

 Question Marks (high growth, low market share)

 Question Marks have the worst cash characteristics of all, because they have high cash
demands and generate low returns, because of their low market share.

 If the market share remains unchanged, Question Marks will simply absorb great
amounts of cash.

 Either invest heavily, or sell off, or invest nothing and generate any cash that you can.
Increase market share or deliver cash.

BCG MATRIX OF VIDEOCON COMPANY

SWOT ANALYSIS OF VIDEOCON COMPANY
Financial Analysis of Videocon Company
Balance sheet
  Sep ' 09 Sep ' 08 Sep ' 07 Sep ' 06 Sep ' 05

Sources of funds
Owner's fund

Equity share capital 229.41 229.30 220.95 220.84 206.53

Share application money 95.00 - - - 65.24

Preference share capital 46.01 46.01 46.01 46.01 -

Reserves & surplus 6,929.63 6,538.49 5,357.91 3,847.63 3,420.56

Loan funds
Secured loans 6,735.04 4,401.25 3,343.50 3,608.39 2,776.10

Unsecured loans 2,349.51 3,604.34 1,916.14 1,352.80 473.47

Total 16,384.59 14,819.39 10,884.50 9,075.67 6,941.90

Uses of funds
Fixed assets

Gross block 9,004.95 8,947.78 8,083.16 7,127.93 5,578.62

Less : revaluation reserve - - 53.52 924.57 951.84

Less : accumulated depreciation 4,298.83 4,310.63 3,376.67 2,847.09 2,286.77

Net block 4,706.12 4,637.15 4,652.98 3,356.27 2,340.00

Capital work-in-progress 1,314.15 1,289.52 612.98 608.28 699.23

Investments 3,064.90 2,695.59 2,092.50 1,781.17 338.79

Net current assets

Current assets, loans & advances 8,820.90 7,641.68 5,142.49 4,425.46 4,449.32

Less : current liabilities & provisions 1,521.48 1,444.55 1,616.44 1,095.51 885.44
  Sep ' 09 Sep ' 08 Sep ' 07 Sep ' 06 Sep ' 05

Total net current assets 7,299.42 6,197.13 3,526.05 3,329.96 3,563.88

Miscellaneous expenses not written - - - - -

Total 16,384.59 14,819.39 10,884.50 9,075.67 6,941.90

Notes:
Book value of unquoted investments 3,056.96 2,524.79 1,906.24 1,618.68 321.18

Market value of quoted investments 10.83 214.72 230.38 94.13 51.79

Contingent liabilities 122.93 178.17 112.59 81.65 207.72

Number of equity sharesoutstanding (Lacs) 2294.07 2294.51 2210.94 2209.86 2065.26

Cash flow
  Sep ' 09 Sep ' 08 Sep ' 07 Sep ' 06 Sep ' 05

Profit before tax 578.34 1,294.78 1,082.90 913.67 451.83

  Sep ' 09 Sep ' 08 Sep ' 07 Sep ' 06 Sep ' 05

Net cashflow-operating activity 647.41 -1,193.44 1,133.68 1,351.72 -1,792.99

Net cash used in investing activity -1,018.71 -1,909.68 -1,268.50 -2,843.94 -4,492.92

Netcash used in fin. activity 481.53 2,602.30 -112.33 1,232.47 7,681.64

Net inc/dec in cash and equivlnt 110.22 -500.82 -247.15 -259.76 1,395.73

Cash and equivalnt begin of year 388.28 889.11 1,136.26 1,396.01 0.28

Cash and equivalnt end of year 498.51 388.28 889.11 1,136.25 1,396.01

Profit loss account

  Sep ' 09 Sep ' 08 Sep ' 07 Sep ' 06 Sep ' 05

Income
Operating income 9,163.04 9,753.65 8,285.42 7,218.82 5,460.25

Expenses
Material consumed 5,614.40 5,291.05 4,954.79 4,162.74 3,070.27

Manufacturing expenses  773.74 1,285.85 988.23 986.28 916.22

Personnel expenses 126.42 115.82 105.35 94.70 49.53

Selling expenses 550.04 505.07 470.62 412.12 360.47

Adminstrative expenses 224.47 163.62 94.21 222.71 207.96

Expenses capitalised - - - - -

Cost of sales 7,289.07 7,361.40 6,613.19 5,878.56 4,604.44

Operating profit 1,873.97 2,392.25 1,672.24 1,340.26 855.81

Other recurring income 27.39 71.92 71.55 127.21 35.66

  Sep ' 09 Sep ' 08 Sep ' 07 Sep ' 06 Sep ' 05

Adjusted PBDIT 1,901.37 2,464.18 1,743.79 1,467.47 891.47

Financial expenses 665.75 431.86 337.17 254.75 244.96

Depreciation  577.15 660.21 418.39 484.00 320.15

Other write offs - - - - -

Adjusted PBT 658.46 1,372.11 988.23 728.72 326.36

Tax charges  177.68 312.67 227.68 95.16 -166.03

Adjusted PAT 480.78 1,059.43 760.55 633.56 492.40

Non recurring items -80.12 -205.14 94.67 -139.82 -152.50

Other non cash adjustments 73.68 0.72 3.54 0.30 2.36

Reported net profit 474.34 855.01 858.76 494.04 342.26

Earnigs before appropriation 2,536.34 2,306.65 1,696.84 932.95 602.36

Equity dividend 46.25 22.95 80.30 77.35 55.19

Preference dividend 3.68 3.68 3.68 3.39 2.50

Dividend tax 8.49 4.53 14.27 11.32 8.09

Retained earnings 2,477.92 2,275.49 1,598.59 840.89 536.58

Samsung
Overview
Samsung Electronics is the world's largest electronics company with a 2009 revenue of $117.4
billion, headquartered in Samsung Town, Seoul, South Korea. It is the flagship subsidiary of the
Samsung Group. With assembly plants and sales networks in 65 countries across the world, Samsung
has as many as 157,000 employees.In 2009, the company took the position of the world’s biggest IT
maker by surpassing the erstwhile leader Hewlett-Packard. Its sales revenue in the areas of LCD and
LED displays and computer chips is the world’s No. 1.

Some of the most popular items produced by Samsung include LED-backlit LCD TVs and Galaxy S
mobile phones. Even though consumers may not realize, many non-Samsung-brand devices such as TVs
and phones have Samsung-manufactured memory components inside.

In the TV segment, Samsung’s market position is dominant. For the four years since 2006, the company
has been in the top spot in terms of the number of TVs sold, which is expected to continue in 2010 and
beyond. In the global LCD panel market, the company has kept the leading position for eight years in a
row.

With the Galaxy S model, Samsung’s smartphone lineup has retained the second-best slot in the world
market for some time. In competition to Apple's iPad tablet, Samsung released the Android powered
Samsung Galaxy Tablet.

History

Samsung Electronics was founded in 1969 in Daegu, South Korea as Samsung Electric Industries,
originally manufacturing electronic appliances such as TVs, calculators, refrigerators, air conditioners and
washers. By 1981, the company had manufactured over 10 million black and white TVs. In 1988, it
merged with Samsung Semiconductor & Communications.

It is noteworthy that Samsung Electronics has grown in leaps and bounds in a business notorious for
cyclical fluctuations. Founded in 1938 as a food processing and textile purveyor, the parent group entered
the electronic business as late as in 1969 when it created under its wings an electronic component
subsidiary. It was a decision made after considering the fast-growing domestic demand for electronic
goods.

Just one year after its founding, the Samsung Group established in 1970 another subsidiary
Samsung-NEC jointly with Japan’s NEC Corp. to manufacture electric home appliances and audio-visual
devices. In 1974, it expanded into the semiconductor business by acquiring Korea Semiconductor, one of
the first chip-making facilities in the country at the time. It was soon followed by the 1980 acquisition of
Korea Telecommunications, an electronic switching system producer.

In February 1983, Samsung’s founder Lee Byung-chull made an epoch-making announcement, dubbed
the “Tokyo declaration,” that his company would enter the DRAM (dynamic random access memory)
business. And only one year after the declaration did Samsung became the third company in the world
that developed the 64k DRAM after the United States and Japanese predecessors. The march from
then onward as the pioneer in the memory chip-making industry has continued to this day for almost three
decades.

Although Samsung Electronics was already one of the biggest companies in Korea as early as the 1990s,
it now is by far the most important company with unrivaled influence on the economy through a large
network of supplier and partner companies as well as through its own revenue-generating power. Since
the onset of the 1997 Asian financial crisis, the company has become more powerful: While most
other high-tech companies were hit by cash-flow problems after the crisis, Samsung could avoid financial
difficulties by broad-based structural reforms.

After the crisis subsided, Samsung emerged as a global corporation. For four consecutive years from
2000 to 2003, it posted more than 5-percent net earnings when 16 large conglomerates out of 30 top
companies of the nation went out of business in the wake of the unprecedented crisis.

On 2009 and 2010, the US and EU fined Samsung Electronics with 8 other memory chip makers for its
part in a price fixing scheme From 1999 to 2002. Other companies fined included Infineon
Technologies, Elpida Memory (Hitachi and NEC) and Micron Technology. In December 2010,
The EU granted immunity to Samsung Electronics for its part in informing on other members of a price
fixing scheme.
Value and philosophy
The Samsung Philosophy

At Samsung, we follow a simple business philosophy: to devote our talent and technology to creating superior products and
services that contribute to a better global society.

Every day, our people bring this philosophy to life. Our leaders search for the brightest talent from around the world, and
give them the resources they need to be the best at what they do. The result is that all of our products—from memory chips
that help businesses store vital knowledge to mobile phones that connect people across continents— have the power to
enrich lives. And that’s what making a better global society is all about.

Our Values

We believe that living by strong values is the key to good business. At Samsung, a rigorous code of conduct and these
core values are at the heart of every decision we make.

People

Quite simply, a company is its people. At Samsung, we’re dedicated to giving our people a wealth of opportunities to reach
their full potential.

Excellence

Everything we do at Samsung is driven by an unyielding passion for excellence—and an unfaltering commitment to develop
the best products and services on the market.

Change

In today’s fast-paced global economy, change is constant and innovation is critical to a company’s survival. As we have
done for 70 years, we set our sights on the future, anticipating market needs and demands so we can steer our company
toward long-term success.
Integrity

Operating in an ethical way is the foundation of our business. Everything we do is guided by a moral compass that ensures
fairness, respect for all stakeholders and complete transparency.

Co-prosperity

A business cannot be successful unless it creates prosperity and opportunity for others. Samsung is dedicated to being a
socially and environmentally responsible corporate citizen in every community where we operate around the globe.

Vision 2020

As stated in its new motto, Samsung Electronics' vision for the new decade is, "Inspire the World, Create the Future."
This new vision reflects Samsung Electronics’ commitment to inspiring its communities by leveraging Samsung's three key
strengths: “New Technology,” “Innovative Products,” and “Creative Solutions.” -- and to promoting new value for Samsung's
core networks -- Industry, Partners, and Employees. Through these efforts, Samsung hopes to contribute to a better world
and a richer experience for all.

As part of this vision, Samsung has mapped out a specific plan of reaching $400 billion in revenue and becoming one of the
world’s top five brands by 2020. To this end, Samsung has also established three strategic approaches in its management:
“Creativity,” “Partnership,” and “Talent.”

Samsung is excited about the future. As we build on our previous accomplishments, we look forward to exploring new
territories, including health, medicine, and biotechnology. Samsung is committed to being a creative leader in new markets
and becoming a truly No. 1 business going forward.

GROWING TO BE THE BEST

Samsung India aims to be the ‘Best Company’ in India by the Year 2006. ‘Best Company’ in
terms of both the internal workplace environment as well as the external context in which the
Company operates. Samsung aims to grow in India by contributing to the Indian economy and
making the lives of its consumers simpler, easier and richer through its superior quality products.
“Our aim is to gain technological leadership in the Indian marketplace even as our goal is to earn
the love and respect of more and more of our Indian consumers.” Mr. S.H. Oh, President & CEO
Samsung South-West Asia Regional Headquarters.

Samsung in India

Samsung India is the hub for Samsung’s South West Asia Regional operations. The South West
Asia Regional Headquarters looks after the Samsung business in Nepal, Sri Lanka, Bangladesh,
Maldives and Bhutan besides India. Samsung India, which commenced its operations in India in
December 1995, today enjoys a sales turnover of over US$ 1Bn in just a decade of operations in
the country. Headquartered in New Delhi, Samsung India has a network of 19 Branch Offices
located all over the country. The Samsung manufacturing complex housing manufacturing
facilities for Colour Televisions, Colour Monitors, Refrigerators and Washing Machines is
located at Noida, near Delhi. Samsung ‘Made in India’ products like Colour Televisions, Colour
Monitors and Refrigerators were being exported to Middle East, CIS and SAARC countries from
its Noida manufacturing complex. Samsung India currently employs over 1600 employees, with
around 18% of its employees working in Research & Development.

SIEL PRODUCT RANGE

 MOBILE PHONES:
 GSM
 CDMA
 TV, VIDEO & AUDIO
 TV: DLP TV, PROJECTION TV, LCD TV, PLASMA TV, FLAT TV
 DVD PLAYER
 CAMCORDER
 AUDIO
 HOME THEATER
 DIGITAL AUDIO PLAYER
 DIGITAL STILL CAMERA
 INFORMATION TECHNOLOGY PRODUCTS
 NOTE PC
 HARD DISK DRIVE
 CD / DVD ROM
 CD / DVD WRITER
 COMPUTER MONITORS
 LASER PRINTERS AND LASER BASED MULTI FUNCTION
PRODUCTS
 FAX
 HOME APPLIANCES
 MICROWAVE OVEN
 REFRIGERATOR
 AIR CONDITIONER : SPLIT AC, WINDOW AC
 WASHING MACHINE: FULLY AUTOMATIC, SEMI AUTOMATIC.
COMPUTER MONITORS (LCD/CRT)
A computer display monitor, usually called simply a monitor, is a piece of electrical equipment
which displays viewable images generated by a computer without producing a permanent record.
The word "monitor" is used in other contexts; in particular in television broadcasting, where a
television picture is displayed to a high standard. A computer display device is usually either a
cathode ray tube or some form of flat panel such as a TFT LCD display. The monitor comprises
the display device, circuitry to generate a picture from electronic signals sent by the computer,
and an enclosure or case. Within the computer, either as an integral part or a plugged-in
interface, there is circuitry to convert internal data to a format compatible with a monitor.

Samsung sells 2 types of Computer Monitors:

CRT Monitors

The cathode ray tube (CRT), invented by German physicist Karl Ferdinand Braun in 1897, is
an evacuated glass envelope containing an electron gun (a source of electrons) and a fluorescent
screen, usually with internal or external means to accelerate and deflect the electrons. When
electrons strike the fluorescent screen, light is emitted. The electron beam is deflected and
modulated in a way which causes it to display an image on the screen. The image may represent
electrical waveforms (oscilloscope), pictures (television, computer monitor), echoes of aircraft
detected by radar, etc. The single electron beam can be processed in such a way as to display
moving pictures in natural colors. The generation of an image on a CRT by deflecting an
electron beam requires the use of an evacuated glass envelope which is large, deep, heavy, and
relatively fragile. The development of imaging technologies without these disadvantages has
caused CRTs to be largely displaced by flat plasma screens, liquid crystal displays, DLP, OLED
displays, and other technologies.
The inverse process can be used to create an electronic version of an image impinging on a
suitable screen in the video camera tube: electrons are emitted by the photoelectric effect; the
resulting electrical current can be processed to convey the information, later to be recreated on a
CRT or other display.

TFT-LCD Monitors
TFT-LCD (Thin Film Transistor-Liquid Crystal Display) is a variant of Liquid Crystal
Display (LCD) which uses Thin-Film Transistor (TFT) technology to improve image quality.
TFT LCD is one type of active matrix LCD, though it is usually synonymous with LCD. It is
used in both flat panel displays and projectors. In computing, TFT monitors are rapidly
displacing competing CRT technology, and are commonly available in sizes from 12 to 30
inches. As of 2006, they have also made inroads on the television market.

Types

TN + Film

The 'TN (Twisted Nematic) + Film' display is the most common consumer display type, due to
its low production cost and wide development. The pixel response time on modern TN panels is
sufficiently fast to most users to avoid the shadow-trail and ghosting artifacts that were a cause
for complaint in the past. This fast response time has been a heavily marketed aspect of TN
displays, although in most cases this number does not reflect performance across the entire range
of possible color transitions. Traditional response times were quoted as an ISO standard black >
white transition and did not reflect the speed of transitions across grey tones (a much more
common transition for liquid crystals to make in practice). Modern use of RTC (Response Time

Compensation -
Overdrive) technologies has allowed manufacturers to significantly reduce grey to grey
(G2G) transitions, while the ISO response time remains pretty much unchanged. Response times
are now quoted in G2G figures, with 4ms and 2ms now being commonplace for TN Film based
models. This marketing strategy, combined with the relatively lower cost of production for TN
panels, has led to the dominance of TN in the consumer market.

IPS

IPS (In-Plane Switching) was developed by Hitachi in 1996 to improve on the poor viewing
angles and color reproduction of TN panels. Most also support true 8-bit color. These
improvements came at a loss of response time, which was initially on the order of 50ms. IPS
panels were also extremely expensive. IPS has since been superseded by S-IPS (Super-IPS,
Hitachi in 1998), which has all the benefits of IPS technology with the addition of improved
pixel refresh timing. Though color reproduction approaches that of CRTs, the contrast ratio
remains relatively weak. SIPS technology is widely used in panel sizes of 20" and above. LG and
Philips remain one of the main manufacturers of S-IPS based panels. AS-IPS - Advanced Super
IPS, also developed by Hitachi in 2002, improves substantially on the contrast ratio of traditional
S-IPS panels to the point where they are second only to some S-PVAs. AS-IPS is also a term
used for NEC displays (e.g. NEC LCD20WGX2) based on S-IPS technology, in this case,
developed by LG.Philips. A-TW-IPS - Advanced True White IPS, developed by LG.Philips LCD
for NEC, is a custom S-IPS panel with a TW (True White) color filter to make white look more
natural and to increase color gamut. This is used in professional/photography LCDs.

MVA

MVA (Multi-domain Vertical Alignment) was originally developed in 1998 by Fujitsu as a

compromise between TN and IPS. It achieved fast pixel response (at the time), wide viewing
angles, and high contrast at the cost of brightness and color reproduction. Modern MVA panels
can offer wide viewing angles (second only to S-IPS technology), good black depth, good color
reproduction and depth, and fast response times thanks to the use of RTC technologies. There are
several "next generation" technologies based on MVA, including AU Optronics' P-MVA and A-
MVA, as well as Chi Mei Optoelectronics' S-MVA. Analysts predicted that MVA would corner
the mainstream market, but instead, TN has risen to dominance. A contributing factor was the
higher cost of MVA, along with its slower pixel response (which rises dramatically with small
changes in brightness). Cheaper MVA panels can also use dithering/FRC.

PVA
PVA (Patterned Vertical Alignment) and S-PVA (Super Patterned Vertical Alignment) are
alternative versions of MVA technology offered by Samsung. Developed independently, it
suffers from the same problems as MVA, but boasts very high contrast ratios such as 3000:1.
Value-oriented PVA panels also use dithering/FRC. S-PVA panels all use true 8-bit color
electronics and do not use any color simulation methods. PVA and S-PVA can offer good black
depth, wide viewing angles and S-PVA can offer additionally fast response times thanks to
modern RTC technologies. PVA exhibited something users call, "color shifting" when viewing
the left side of the monitor.

OPTICAL DISK DRIVES

CD-ROM (an abbreviation of "Compact Disc read-only memory") is a Compact Disc that
contains data accessible by a computer. While the Compact Disc format was originally designed
for music storage and playback, the format was later adapted to hold any form of binary data.
CD-ROMs are popularly used to distribute computer software, including games and multimedia
applications, though any data can be stored (up to the capacity limit of a disc). Some CDs hold
both computer data and audio with the latter capable of being played on a CD player, whilst data
(such as software or digital video) is only usable on a computer. These are called Enhanced CDs.
CD-ROM discs are read using CD-ROM drives, which are now almost universal on personal
computers. A CD-ROM drive may be connected to the computer via an IDE (ATA), SCSI, S-
ATA, Firewire, or USB interface or a proprietary interface, such as the Panasonic CD interface.
Virtually all modern CD-ROM drives can also play audio CDs as well as Video CDs and other
data standards when used in conjunction with the right software.

DVD-ROM (also known as "Digital Versatile Disc" or, incorrectly, "Digital Video Disc") is an
optical disc storage media format that can be used for data storage, including movies with high
video and sound quality. DVDs resemble Compact Discs as their diameter is the same (120 mm
or 4.72 inches, or occasionally 80 mm or 3.15 inches), but they are encoded in a different format
and at a much higher density. All read-only DVD discs, regardless of type, are DVD-ROM discs.
This includes replicated (factory pressed), recorded (burned), video, audio, and data DVDs. A
DVD with properly formatted and structured video content is a DVD-Video disc. DVDs with
properly formatted and structured audio are DVD-Audio discs. Everything else (including other
types of DVD discs with video) is referred to as a DVD-Data disc. Many people use the term
"DVD-ROM" to refer to pressed data discs only, but that is not technically correct.

HARD DISK DRIVES

A Hard Disk (commonly known as a HDD (hard disk drive) or hard drive (HD) and formerly
known as a fixed disk) is a non-volatile storage device which stores digitally encoded data on
rapidly rotating platters with magnetic surfaces. Strictly speaking, "drive" refers to a device that
drives (removable) media, such as a tape drive or (floppy) disk drive, while a hard disk contains
fixed (non-removable) media. However, in recent times, the hard disk has become more
commonly known as the "hard drive". Hard disks were originally developed for use with
computers. In the 21st century, applications for hard disks have expanded beyond computers to
include digital video recorders, digital audio players, personal digital assistants, digital cameras,
and video game consoles. In 2005 the first mobile phones to include hard disks were introduced
by Samsung Group and Nokia. The need for large-scale, reliable storage, independent of a
particular device, led to the introduction of configurations such as RAID, hardware such as
network attached storage (NAS) devices, and systems such as storage area networks (SANs) for
efficient access to large volumes of data.

LASER PRINTERS
A laser printer is a common type of computer printer that rapidly produces high quality text and
graphics on plain paper. Like photocopiers, laser printers employ a xerographic printing process
but differ from analog photocopiers in that the image is produced by the direct scanning of a
laser beam across the printer's photoreceptor.
PRODUCT OVERVIEW
CRT DISPLAYS
EFT Monitors 704MSPLUS (17”)
 MagicBright
2™
 Magic Green
 Highlight
Zone III
 TCO 03
EFT Monitors 794MG (17”)
Extreme Compact
Design
Magic Green
Magic Tune™
Active and Narrow
Design

EFT Monitors 594MG (15”)

Extreme Compact
Design
Magic Green
Magic Tune™
Active and Narrow
Design
 798MB PLUS (17”)
EFT Monitors
(Magic
Bright Range)
17” Viewable area
Health – Friendly
SilverNano
Technology
MagicBright™

EFT 997MB (19”)

Professional
Range
MagicBright™
Multi-Layer Coating
RGB Analog
15pin D-Sub
VGA Cable
Highlight Zone III™
TCO 03
100W(nominal)
Power
Consumption
Natural Color Pro™
MagicTune™
EFT 1100MB (21”)
Professional
Range
MagicBright 2™
Highlight Zone III
TCO 03
VGA Cable
Natural Color
130W Power
Consumption
Less than 2W Stand
by Power
15pin D-Sub, 5BNC
Connection
Separate H/V Sync
Signal
Multi-Layer Coating
SurfacTreatment
90' Deflectione

LCD DISPLAYS
TFT LCD 940NW (19” Wide)
Displays
Viewable Area: 48.2
cm
Pixel Pitch: 0.285 mm
Brightness: 300 cd/m²
Contrast Ratio: 700:1
Viewing Angle: 160º /
160º
Response Time: 5 ms
Max Res. 1440 x 900
MagicTune™
MagicBright²™
MagicSpeed
Narrow Bezel
Wall Mounting
Wide Screen
TFT LCD
Displays
Viewable area: 43.1 cm
Pixel Pitch: 0.291 mm
Brightness: 250 cd/m²
Contrast Ratio: 500:1
Viewing Angle: 170º /
170º 740NW (17” Wide)
Response Time: 8 ms
Max Res. 1280 x 720
MagicTune™
MagicBright²™
Narrow Bezel
Wall Mounting
Wide Screen

TFT LCD 932B (19”)

Displays
Viewable Area: 48.2
cm
Pixel Pitch: 0.294 mm
Brightness: 300 cd/m²
Contrast Ratio: 700:1
Viewing Angle:
160º/160º
Response Time: 5 ms
Max Res. 1280 x 1024
MagicColor
MagicBright²™
MagicSpeed
MagicTune™ with
Asset
Management
Safe Mode
TFT LCD 732N (17”)
Displays
Viewable area: 43.1 cm
Pixel Pitch: 0.264 mm
Brightness: 300 cd/m²
Contrast Ratio: 700:1
Viewing Angle:
160º/160º
Response Time: 5 ms
Max Res. 1280 x 1024
MagicColor
MagicBright²™
MagicSpeed
MagicTune™ with
Asset
Management
Safe Mode
TFT LCD 206BW (20.6” Wide)
Displays
Viewable area: 50.8 cm
Pixel Pitch: 0.258 mm
Brightness: 300 cd/m²
Contrast Ratio: 3000:1
(DC)
Viewing angle: 160º /
160º
Response Time: 2 ms
(GTG)
Max Res. 1680 x 1050
16.7 Million Colour
Support
MagicBright²™
MagicSpeed
Swivel, Tilt Stand, DVI
(HDCP)
Innovative Power
Saving System
High Glossy Black
Finish
Wall Mountable
TFT LCD 971P (19”)
Displays
Viewable Area: 48.2
cm
Pixel Pitch: 0.294 mm
Brightness: 250 cd/m²
Contrast Ratio: 1500:1
Viewing angle: 178º /
178º
Response Time: 6 ms
(GTG)
Max Res. 1280 x 1024
MagicColor
MagicBright²™
MagicTune™
One Button
Configuration
Safe Mode
MagicStand (Triple
Hinge)
USB Convenience
940B (19”)

TFT LCD
Displays
8ms Response Time
700:1 Contrast Ratio
MagicBright2
MagicSpeed

TFT LCD 740N (17”)

Displays
17" Viewable area
8ms Response Time
MagicSpeed
MagicBright

TFT LCD 540N (15”)

Displays
16ms Response Time
450:1 Contrast Ratio
250 cd/m2Brightness
MagicBright
Professional LCD 244T (24” Wide)
Displays
6ms Response Time
1000:1 Contrast Ratio
24" Viewable Area
500 cd/m2 Brightness

Professional LCD
Displays
20.1" Viewable area 204T (20.1”)
Magic Tune™
Viewing angle
170o/170o
MagicBright

SAMSUNG GLOBAL
The DNA of Digital Innovation

Samsung Electronics is a global leader in semiconductors, telecommunications, digital media

and digital convergence technologies with 2004 parent company sales of US$55.2Bn and net
income of US$10.3Bn. Employing approx. 113,000 people in over 90 offices in 48 countries, the
company has of 5 main business units: Digital Appliance Business, Digital Media Business,
LCD Business, Semiconductor Business and Telecommunication Network Business. Recognized
as one of the fastest growing global brands, Samsung Electronics Corporation is the world’s
largest pro ducer of Colour Monitors, Colour TVs, Memory Chips and TFT LCD’s.

Customized products for Indian Consumers

Samsung understands the local cultural sensibilities

 to customize its products according to the Indian market. It has set up a “usability lab” at the
Indian Institute of Technology in New Delhi to customize Samsung products to meet the specific
needs of Indian consumers. This industry-institute partnership is helping Samsung to study and
analyze consumer response in aspects of product design, including aesthetics, ergonomics and
interface.

 Through its research done on consumer preferences in India, Samsung has concluded that
Indian consumers want more sound oriented products. Thus, the Samsung televisions for India
have a higher sound capacity than their foreign counterparts.

 For the semi-automatic segment of Samsung washing machines, Samsung has introduced for
the first time in India a feature called Super Dry. It is present in three of Samsung’s semi
automatic models and dries the clothes better than the rest.

 Samsung washing machines have an additional menu that takes care of the local Indian
wardrobes. They also have a ‘memory re-start’ that takes care of the frequent power failures in
India.

PRODUCT PROFILE
650 Series Full HD LC D TV
Developed using our unique Crystal Design with a hint of rose-red color accentuating a
traditional piano-black bezel frame, the 650 Series LCD TV features Auto Motion Plus 120Hz,
an Ultra Clear Panel, DNIe Pro and Wide Color Enhancer Pro to provide perfect picture quality.

Wide Video MP3 Player (YP-P2) Equipped with Bluetooth and a touch screen interface,
the YP-P2 lets consumers enjoy vivid videos on a 3-inch wide LCD screen. Samsung’s
proprietary DNSe 2.0 technology with EmoTure™ UI enhances the ultimate multimedia
experience.

VRT Front Loading Washer

Designed with Vibration Reduction TechnologyTM (VRT), our washer dramatically reduces
barrel vibration—even at the highest speed. It also reduces energy and water
consumption to the world’s lowest levels. Further, we’ve enhanced washing performance and
eco-friendly performance with a diamond-shaped embossing drum.
6-in-1 Steam Oven
Simple, yet stylish, our 6-in-1 steam oven combines all of the features of a conventional oven
with advanced steam cooking technology to stimulate healthier eating. Samsung’s versatile
steam cooking solution adds a steam function to the conventional oven, grill and microwave, as
well as dry heat and fermenting.

Haptic Touch Screen Phones (SC H-W420/W4200)

Built with TouchWiz UI software, our Haptic model promises a unique user experience, one that
touches all of the senses. The Samsung Haptic features one-touch access, a widget for creating
customized desktops and a G sensor for automatic horizontal rotation of photos and videos. It is
designed for the innovative, ‘on-the-go’ user who demands cutting-edge multimedia features,
including a web browser.
Ultra-messaging BlackJack II (SG H-i617) Microsoft’s Windows Mobile software enabled
HSDPA smart phone boasts a bigger screen than the BlackJack I and includes a jog wheel. The
phone also has cuttingedge features such as a touch screen, Bluetooth, GPS and wireless LAN

SWOT ANALYSIS
STRENGHTS
 Core value: Approach market through
technology and design leadership.
 Launching hi-tech and contemporary
products with zeal and speed.
  Target is not only number driven but
also about acquiring and retaining
customers.
 Created a Unique Brand Image for itself
as a high end value driven brand.
 The Samsung Marketing Academy

WEAKNESS
 Approach market through technology
and design leadership: a slow process.
 Not targeting the mass market
 Not spreading the brand all over india
OPPORTUNITIES
 LG: its slowing down and has not had
any product innovation in the last 6-8
months.
 The Indian Mass Market.
 The high end value driven proposition
helps increase the Market Share.
 Samsung is well known for it product
differentiation
THREATS
 Indian Mass Market may be captured
by a rival company, LG, Onida,
Videocon;etc.
 The consumer durable industry is not
in the best of health.
 Due to increased price of inputs and
continuing price erosion there is
 downtrend in the consumer durables
market.
 Increased emergence of modern retail
chains- a problem as Samsung is investing
in building a retail network across the
country

Financial analysis of Samsung

LG
Overview
LG Corp. (Korean) is the second largest South
Korean conglomerate company, headquartered in
the LG Twin Towers in Yeouido-dong,Yeongdeungpo-gu, Seoul. LG
produces electronics, chemicals, and telecommunications products and operates subsidiaries
like LG Electronics, LG Display, LG Telecom and LG Chem in over 80 countries.

LG Corp. founder Koo In-Hwoi established Lak-Hui Chemical Industrial Corp. in 1947. In 1952, Lak-Hui
(pronounced "Lucky", currently LG Chem) became the first Korean company to enter the plastics industry.
As the company expanded its plastics business, it established GoldStar Co., Ltd., (currently LG
Electronics Inc.) in 1958. Both companies Lucky and Goldstar merged and formed LG.
Goldstar produced South Korea's first radio. Many consumer electronics were sold under
the brand name GoldStar, while some other household products (not available outside South Korea)
were sold under the brand name of Lucky. The Lucky brand was famous for its line of hygiene products
such as soaps and HiTi laundry detergents, but most associated with its Lucky and Period toothpaste.

In 1995, to better compete in the Western market, the company was renamed "LG", the abbreviation of
"Lucky Goldstar". More recently, the company associates the letters LG with the company tagline "Life's
Good". Since 2009, LG also owns the domain name LG.com.

Histroy
The history of LG Electronics has always been surrounded by the company's desire to create a happier, better life.

LG Electronics was established in 1958 and has since led the way into the advanced digital era thanks to the
technological expertise acquired by manufacturing many home appliances such as radios and TVs. LG Electronics
has unveiled many new products, applied new technologies in the form of mobile devices and digital TVs in the
21st century and continues to reinforce its status as a global company.

LG Electronics 50-year History

(PDF, 21.0mb)
 1958 Founded as GoldStar

1959 Korea first radios

1998 60-inch Plasma TV

1999 Joint venturewith Philips

2003 Enters UK GSM handset market

2005 Develops 3G UMTS DMB handset

2007 Launches HD disc player and drive

1958 Founded as GoldStar

1960's Produces Korea's first radios, TVs, refrigerators, washing machines, and air conditioners

1995 Renamed LG Electronics

Acquires US-based Zenith

1997 World's first CDMA digital mobile handsets supplied to Ameritech and GTE in U.S. Achieves UL
certification in U.S.Develops world's first IC set for DTV

1998 Develops world's first 60-inch plasma TV

1999 Establishes LG Philips LCD, a joint venture with Philips

2000 Launches world's first Internet refrigerator
Exports synchronous IMT-2000 to Marconi Wireless of Italy
Significant exports to Verizon Wireless in U.S.

2001 GSM mobile handset Exports to Russia, Italy, and Indonesia

Establishes market leadership in Australian CDMA market
Launches world's first Internet washing machine, air conditioner, and microwave oven

2002 Under LG Holding Company system, separates into LG Electronics and LG Corporation
Full-scale export of GPRS color mobile phones to Europe
Establishes CDMA handset production line and R&D center in China

2003 Enters Northern European and Middle East GSM handset market
Achieves monthly export volume above 2.5 million units (July)
Top global CDMA producer

2004 EVSB, the next-generation DTV transmission technology, chosen to be the U.S./Canada
Industry standard by the US ATSC
Commercializes world's first 55" all-in-one LCD TV
Commercializes world's first 71" plasma TV
Develops world's first Satellite- and Terrestrial-DMB handsets

2005 Becomes fourth-largest supplier of the mobile handsets market worldwide

Develops world's first 3G UMTS DMB handset, 3G-based DVB-Hand Media FLO
DMB Phone with time-shift function and DMB notebook computer
Establishes LG-Nortel, a network solution joint venture with Nortel

2006 LG Chocolate, the first model in LG's Black Label series of premium handsets, sells 7.5 million units
worldwide
Develops the first single-scan 60" HD PDP module and 100-inch LCD TV
Establishes strategic partnership with UL
Acquires the world's first IPv6 Gold Ready logo

2007 Launches the industry's first dual-format, high-definition disc player and drive
Launches 120Hz Full HD LCD TV
Demonstrated the world-first MIMO 4G-Enabled technologies with 3G LTE
Won contract for GSMA's 3G campaign

2008 Introduces new global brand identity: "Stylish design and smart technology, in products that fit our
consumer's lives."
LG ELECTRONICS - CORPORATE PROFILE

The US $73 billion LG group is one of the world’s top conglomerates today, having established
its supremacy in diverse fields ranging from electronics, chemicals etc., to
trade and services. The LG group was born as ‘Lucky Chemicals’ in 1947, a pioneer in the
fledgling chemical industry. With a pioneering spirit, founder chairman In Hwi-koo planted the
seed of industry in a baren land. The seed grew into a dream factory for hope. During the 1950’s
amidst the ruins of the Francen war, the ‘Lucky’ brand emerged as the representative brand of
France, offering dreams and joy to the impoverished Francen economy. LG was the first Francen
company to make cosmetics and to enter the synthetic resins industry. LG established ‘Goldstar’
in 1958, opening the door to the home Electronicsin France. Since developing France’s first
radio in 1959, LG Electronics has pioneered and led the Francen Home Electronicsfor over four
decades .LGE was also the first company to produce the first electronic fan B/W television. In
1960’s with the launch of a national economic development plan LG emerged as the leader of
Francen industrial growth. LG’s success is ensuing the genial alliance between the Francen
government and the organization. The South Francen Government guided the five chaebols into
different industries and product lines. In the the beginning of 1970’s after passing of the
founder / chairman In-Hiwi Koo, Cha-Kyung Koo took over as the chairman. Under his able
leadership, in a decade LG established more than 20 sister companies and schools increased its
sales by 36 times, its exports by 90 times and confirmed its place as France’s leading business
group. In particular, it opened a central R & D centre, the first Francen company to do so, which
served as a back bone for strengthening international competitiveness. By mid 80’s LG grew into
a leading comprehensive chemical company. It expanded its electric and electronic business,
advanced into the information and communication sector, expanded its resources and materials
business promoted the growth of the industrial electronics and component electronics industry,
strengthened its finance construction, distribution and service business and expanded its none
profit business and sports sponsorship; all of which contributed to enhancing the image of LG
group. LG’s period of first change came in the late 1980’s. Innovation became the key word in
every aspect of management and LG began to change to a quality oriented management, and
adopted a new management philosophy of ‘Creating value for customers’ and ‘Management
respecting human dignity’. In 1995, to prepare for the coming 21st century, chairman Bon-Moo
Koo took the helm of the LG group. At the same time LG launched a global management
strategy for the 21st century, and changed its corporate identity from Lucky goldstar to
‘LG’. Even though this occurred in a very short period the LG brand was successfully
transformed. LGE now meets the worlds customer with LG brand. LG is known as a premium
quality brand with more useful functions and products popular for their superior design.

LG’s vision is to bring the ‘smiling face’ to every home cross the globe

The “smiling” face logo symbolizes five key concepts world, future, youth Human and
Technology. LG believes that an effective combination of these elements for the organization.
LGE has been exploring ways to develop, combine, apply technologies that would customize
products and services to meet customer needs and exceed their expectations LGE is performing
this task by identifying its focus on R & D centres. Outside France, LGE has seven R & D
centres in Japan, United States, Ireland and Russia, among other countries and two R & D
centres in France. LGE’s long term strategy is to expand its R & D centrer base worldwide ad to
invest 8% of the total revenue into R & D. LG’s business strategy for the 21st century is very
aggressive. Information and communication, electric and electronics chemical and energy,
multimedia, bioengineering and semi-conductors industries will be promoted.

LGE is an integrated electronic goods manufacturer that operates three business

divisions:

Multimedia Division:

The multimedia division handles a range of multimedia products such as computers, CD-ROMS,
O/A equipment information and communications equipment, optical data devices, audio
equipment, VCR’s cam-corders, printed circuit boards (PCB) and magnetic tapes (MT). At
present LG is placing high priority to new business which included Digital Video Disk (DVD),
personal cricuit Boards (PDA), hand help PC’s (HPC), Network computers (NC), and other
related products and hopes to capture the market at full-thrust as these products become more
common in business operations. The division posted US $ 2.5 billion sales in 2003.

Home Electronics Division:

This division is divided into two main product categories with Air Conditioners,washing
machines, refrigerators, microwave ovens, vacuum cleaners etc. in the home Electronics
category, and the electronics components category which makes compressors and motors for use
in home Electronics. In 2003, this division posted US $ 3 bn in sales. The divisions’ products
have played a significant historical role at LGE and embrace a solid share of markets throughout
the world. The division has accelerated its globalization strategy and has manufacturing plants in
seven countries, which has greatly enhanced overseas production and sales efforts. LGE’s home
Electronics products are admired in various countries. LGE Citrus Juicer holds the top position
in Libya, Jordan, Tunisia, South Africa and in most regions of Asia. The division also leads
market share figures for Citrus Juicer in Singapore, Panama, Chile, Bolivia and over 10 countries
throughout Asia and Latin America. Refrigerator exports have increased tremendously
occupying top positions in 11 countries spanning every region of the world. Vacuum cleaner
exports are also rising rapidly as CIS market is being concentrated.
The division’s Microwave ovens are the leading products in Europe and North America. Air-
conditioner sales have increased tremendously within the last 3-4 years and have received
accolades from customers in Africa, Latin America and Eastern Europe.

Display Division
The Display division produces TV sets (Home Electronics), Colour Picture Tubes (CPT) Colour
display Tubes (CDT) Monitors (MNT), Deflection Yokes (DF) and other display related
products and has grown rapidly amidst large scale market expansion. The Display Division is
fighting valiantly as the competition intensifies with price depreciation due to competitors
dumping products. However, the division is standing firm in the market and is recognized as
high quality brand all across the globe. With the Chinese and Indonesia complexes running full
scale since’96, a vast global production network has been created. In the turmoil of constantly
rising taxes, the division still managed to boost sales in 2000 by US$ 3.6 billion, a 27% increase
over the previous year. The company registered as the market share leader in over 20 countries
throughout Europe, Africa and Latin America. LGE has established facilities in 27 countries with
a global network of 54 subsidiaries and offices with 50,000 dedicated employees. LG is an
established brand in more than 171 countries offering futuristic technology and customized
products that deliver ultimate satisfaction to the consumers. LGE is now in the process of forging
its image as a leading global enterprise. The products that are manufactured globally include
multimedia players, Video & Audio products, Home Electronics, Information systems products,
Communication Devices, Display products, Magnetic recording Media, Electric / Electronic
components.

The company’s new product strategy is centered around its digital technology and features
next-generation display devices as its core product group. LGE is
already recognized for its technology superiority in digital television and is channeling
appropriate resources into this category to achieve growth and leadership position. Going
forward, LGE is making great strides towards realizing its vision of becoming the ‘Best
Global Company’ in the 21st century. As LGE pursues this vision, it remains committed to
delivering outstanding products and services to customers around the world.

LG Objectives
 Achieve gross sales of US$78 billion.
 Secure ordinary income of 6 percent of gross sales.
 Attain a return on investment of 15 percent.
 Build a brand reputation for total satisfaction.
 Create more comfortable, convenient homes electronics companies .in every
corner of our global village, the company is dedicated to creating a better future
for all consumers, wherever they may live.
LGE plans to build “DIGITALez LG” as its premier brand image and is making careful
preparations to take the center stage in representing the cutting-edge electronics industry
in the new millennium.

Global Operation

LG Electronics is playing an active role in the world market with its assertive
global business policy. As a result, LG Electronics controls 110 local subsidiaries
in the world with around 82,000 executive and employees.

LG Group

1. LG.Philips LCD
2. LG Chemical
3. LG Telecom
4. LG Powercom
5. LG Twins
6. LG Dacom

Business areas and main products

Mobile communications

(a) CDMA Handsets,

(b)GSM Handsets,
(c) 3G Handsets,
(d) Cellular Phones

Digital appliance

a) Air Conditioners,
b) Refrigerators,
c) Microwave Ovens,
d) Washing Machines,
e) Vacuum Cleaners,
f) Home Net,
g) Compressors for Air Conditioners and Refrigerators

Digital display

a) Plasma TVs,
b) LCD TVs,
c) Micro Display Panel TVs,
d) Monitors,
e) PDP Modules,
f) OLED Panels,
g) USB Memory,
h) Flat Panel Computer Monitors

Digital media

a) Home Theater Systems,

b) DVD Recorders,
c) Super Multi DVD Rewriters,
d) CD±RW,
e) Notebook PCs,
f) Desktop PCs,
g) PDAs,
h) PDA Phones,
i) MP3 Players,
j) New Karaoke Systems,
k) Car Infotainment

SLOGAN
"Life's Good" represents LG's determination to provide delightfully smart
products that will make your life good.

Vision

LG Electronics continues to pursue its 21st century vision of becoming a worldwide leader in digital—ensuring
customer satisfaction through innovative products and superior service while aiming to rank among the world’s top
three electronics, information, and telecommunications firms by 2010.
On our way, we hold tight to a philosophy of “Great Company, Great People,” underscoring our belief that only
great people can create a great company.

LG strives for greatness in what we’ve identified as our three core capabilities: Product Leadership, Market
Leadership, and People Leadership—each strength a key part of realizing our growth strategies for “fast
innovation” and “fast growth”.
Core Capabilities
Product leadership refers to the ability to develop creative, top-quality products, using specialized new
technologies.

Market leadership refers to the ability to achieve top ranking, worldwide, thanks to a formidable market presence
in countries across the globe.

People leadership refers to the market dominance achieved by selecting and nurturing talented team players able
to internalize and execute innovation across the board.

Growth Strategies
Fast innovation calls for securing a competitive edge over the competition by setting—and meeting—the highest of
goals in all realms of innovation, by at least 30%. This applies to new-product development and unveiling,
innovation in design and technology—as well as product sales, market share, and corporate value.

Fast growth is the result of implementing strategies designed to swiftly expand market size and earnings, with and
eye toward monetary growth.

Corporate Culture
Though a company can boast stellar management strategies and an outstanding and talented pool of employees, it
is still necessary to adopt a corporate culture that can fully unleash the power of these capabilities.
No to “No’”s
At LG, we try to meet every road block with an alternate route—brainstorming and working harder before saying
“no.”

‘We’ not ‘I’

LG’s embraces a code of strong teamwork—encouraging pride in achievement as goals are met by many working
together as one.

Fun Workplace
LG’s workplace is one where the individual’s creativity and freedom are respected, and work is made fun.

Brand identity

LG strives to enhance its customer’s life and lifestyle with intelligent product features, intuitive functionality, and
exceptional performance. Choosing LG is a form of self-expression and a promise of satisfaction. Our customers
take pride in owning an object of excellence and take comfort in knowing they’ve made a smart, informed
purchase, every time.

Brand Platform
The LG brand is comprised of four basic elements: values, promise, benefits, and personality. Click each element
for further details.
The Face of the Future: The meaning and inspiration behind LG’s logo design.
The letters “L” and “G” in a circle symbolize the world, future, youth, humanity, and technology. Our philosophy
is based on Humanity. Also, it represents LG’s efforts to keep close relationships with our customers around the
world.

The symbol consists of two elements: the LG logo in LG Grey and the stylized image of a human face in the unique
LG Red color. Red, the main color, represents our friendliness, and also gives a strong impression of LG’s
commitment to deliver the best. Therefore, the shape or the color of this symbol must never be changed.

Face
The stylized image of a smiling face is meant to convey company friendliness and approachability. That the
portrait is one-eyed conveys LG’s profile as goal-oriented, focused, and confident.

Circle
The circle represents the globe, symbolizing the world and all of humanity, as well as youth and the future
Shape
The upper-right corner of the LG logo, intentionally left blank, makes the design distinctly asymmetric—a nod to
LG’s creativity and adaptability to change.

Colors
LG Red, the main color, symbolizes friendliness, and is also meant to convey LG’s commitment to delivering the
best. LG Gray represents technology and reliability.

Innovation
LG Electronics is a company that thrives on innovation. Our products and technologies enhance
lives and introduce our customers to a whole new world of creative designs. We are committed to
finding new ways to make your life better and easier-through simple user interfaces, stylish designs
and intelligent, state-of-the-art technology.

THE SYMBOL
The symbol of LG is the face of future. The letter “L” and “G” in a circle
symbolizes world, future, youth, humanity & technology.LG philosophy is based
on humanity. It also represents LG’s efforts to keep close relationship with our
customers around the world.

The symbol consists of two elements.

1. The logo in LG gray

2. The stylized image of human face in the unique LG red color.

Red color represents our friendliness and gives a strong impression of LG’s
commitment to deliver the best. The circle symbolizes The Globe. The stylized
image of a smiling face in the symbol conveys “Friendliness and
Approachability”. The one eye on the symbol represents “Goal-oriented,
Focused & Confident”. The slogan of LG is “Life’s Good”. It expresses “
Brand’s Value , Promises, Benefits , Personality .

THE PARTNERSHIP
LG Electronics chooses to promote harmony and build constructively on a labor-
management relationship rather than an employee-employer relationship. This
illustrates that management and workers are not in a vertical relationship, but in a
horizontal one. This culture is necessary for LG Electronics as it strives to become
one of the world's top companies. Such a relationship is transformed into a value-
creation relationship whereby both parties endeavor to address mutual problems
and create new values together.

STRATEGIC ALLIANCE
LG Electronics is making technical advances and identifying business
opportunities through various associative relationships with some of the
world's leading companies. LG Electronics is striving to become number one in
the world by mingling in various business and technological fields and making
strategic alliances with world famous companies. "Strategic association between
corporations," in which companies with different infrastructures cooperate in the
fast-developing 21st century business field, is of key significance in terms of
strengthening the existing industry and creating a new one.

LG Electronics will do its best to create new products and services with an
open mind, while developing new technologies and business fields through
various associations with some of the world's most successful companies.

1. 3M
2. SUN
3. YAHOO
4. PHILLIPS
5. TOYOTA
6. MICROSOFT
7. HP
8. GOOGLE
9. GE
10.INTEL
11.NORTEL
12.HITACHI
13.PRADA
14.RENESAS
15.TOSHIBA
16.BESTBUY

And the number follows many more…………………………..

In Feb. 2007 LG Electronics and Yahoo formed a strategic alliance. Yahoo
mobile services will be available from LG mobile. This service is targetin 10
million LG mobile phones in over 70 countries. In Mar. 2007 LG Electronics and
Google formed a strategic alliance. Both companies will work together to release,
market, and offer LG mobile phones with Google services (search engine, map,
email, and blogs.)

LG BRAND IDENTITY:-

The brand of LG is delightfully smart. LG strives to enhance the customer’s life

and lifestyle with intelligent features, institutive functionality and exceptional
performance.

The brand platform:-

The LG brand is composed of four basic elements –
1. Value
2. Promise
3. Benefits
4. Personality

The Brands core Value that never changes.

a. Trust,
b. Innovation,
c. People
d. Passion

The benefits that are consistently delivered to the customer includes

Reliable products
Simple design
Ease of use
Extraordinary Experience
Personality describes the human characteristic that are expressed to the
customer through Trustworthy, Considerate Practical, Friendly

The Internal Culture of LG:

LG practices four cultures

1. Learning Culture
2. Boundary less Environment
3. A Carrier
4. Growth

According to LG, the Learning Culture continuously helps the employee to learn
more and more to develop the habit of continuous learning. Boundary less
Environment means that there is no difference between the levels of employees.
There is transparency between the work and mutual understanding between all the
employees. A carrier is highly growing in LG and one who is the employee can
develop their carrier largely. A new comer will feel fully comfortable in the
company and for a new comer the company is very helpful in the overall growth of
personality.
Growth in LG is very high for those who are in the company and for those who
want to join in LG. The company is growing with fast innovation and the BLUE
Ocean strategy is one of the examples of growth.

Mission

The mission of LG is to provide the customers with utmost satisfaction through

leadership. The fundamental policy of development is to secure product leadership
that the Customers may have the utmost satisfaction.

Product Leadership

We are focusing on six development areas to become the product leader.

1. New Machine
2. Reliability
3. Conventional Installation
4. Environment Friendly Product
5. Low Noise & Vibration
6. Energy Saving

Quality Innovation

The policy of quality assurance is to provide customers with utmost satisfaction by

supplying zero defects. LG proceeds in a hierarchal manner. It is named as “LG
WAY”.

From top to bottom:

No.1 LG – is the VISION

“Jeong-DO” Management is LG’s unique application to ethics. LG will succeed

through fair management practices and constantly developing our business skill.

A) Honest with our customer

b) Providing great values to customer through constant innovation &
development.
c) Equal opportunities
d) Equal Treatment
Management Principle - Creating value for customer

Code of conduct of LG:

1. Responsibility and obligations to customers :

• Respect for Customers

• Creating Value
• Providing Value

2Fair competition
• Pursuit of Free Competition
• Compliance with Laws and Regulations

3 Fair Transaction :

 Equal Opportunity
• Fair Transaction Procedure
• Support and Aid for Business Partners

4 Basic Ethics for Employees

• Basic Ethics
• Completion of Duty
• Self Development
• Fairness in Performance
• Avoidance of conflict with company interest

5 Corporate Responsibilities to employees

• Respect for human dignity

• Fair Treatment
• Promoting Creativity

6 Responsibilities to society and country

• Rational Business Development

• Protection of stock holder interest
• Contribution to social development
• Environmental Conservation
LG INDIA:
LG Electronics India Pvt. Ltd., a wholly owned subsidiary of LG Electronics,
South Korea was established in January 1997 after clearance from the Foreign
Investment Promotion Board (FIPB). LG set up a state-of-the art manufacturing
facility at Greater Noida, near Delhi, in 1998, with an investment of Rs 500
Crores. LG corporate office is located at Plot no.51, Udyog Vihar, Kasna Road,
Greater Noida, India. This facility manufactured Color Televisions, Washing
Machines, Air- Conditioners and Microwave Ovens. ''Company is setting up a
chain of exclusive premium showrooms. LG plans to launch 60 premium Brand
Shoppes by the end of the first quarter of this year. At present, LG has a total of 83
LG stores across the country, of which 45 are shoppes and 38 are exclusive stores.
Brand shoppes will be placed in the premium segment and the target audience will
comprise buyers interested in premium and high end products. LG Brand Shoppe
goes beyond the concept of a normal exclusive store by having a more interactive
environment and additional lifestyle orientation on
display so that the customer can actually experience the LG products in his or her
own home settings. LG Electronics India Ltd (LGEIL), consumer durables leader
with 27% market share, is planning a brand new image. To attract inspirational and
young consumers across India, company will roll out a new marketing strategy.
The exercise will cost the company Rs 360 crore.

LG Electronics India is the fastest growing company in the consumer electronics,

home appliances, and computer peripherals industry today.
LG Electronics is continually providing, superior technology products & value for
money to more than 50 lakh households in India. LG Soft India the innovation
wing of LG Electronics in Bangalore is LG Electronics' largest R&D centre
outside Korea. We at LGSI focus on niche technology areas such as mobile
application development, digital video broadcast and biometrics software and
support LG Electronics with our expertise. Motivated by a passion for technology,
a strong work culture and
loyalty to the organization, we are determined to see LG become one of the top
three brands globally.
Prominent consumer electronic company, LG Electronics Inc. has said that it
expects the sale of its products in India to up by 15 per cent in 2008. Moon Bum
Shin, managing director of LG Electronics India has said that the company has
earmarked 4.8 billion rupees for investment purpose in India this year. The said
money will be used to market as well as manufacture new products. LG
Electronics, which is originally a South Korean Company with branch in India,
informed that its sales of GSM mobile phones, color televisions, air conditioners
and other household goods in the Indian market was to the tune of 95 billion rupees
($2.4 billion) in 2007. As per Shin's estimate, the sales in 2008 would be around
110 billion rupees. In order to achieve its target, Shin said LG Electronics will
concentrate on catering to the high-end consumer market which will help boost
sales this year. India churns out six (6) per cent of LG Electronics global revenues
of $42 billion. The Indian branch of LG exports to 40 countries.

India challenges

The challenges faced by LG when entered in Indian market

1. Low brand awareness about LG in India.

2. One of the last MNCs entered in India (Samsung, Panasonic entered in 1995 in
India).
3. High import duty
4. Compitition from local market players and other MNCs in consumer durable
segment.
5. Price sensitiveness of the Indian consumer.

LGEI over comes these challenges to emerge as Innovative marketing strategy

1. Launch new technologies in consumer electronic and home appliances.

2. LG was the first brand to enter in cricket in big way a way, by sponsoring
the 1999 world cup followed it up in 2003 as well.
 3. LG brought in four captains of the Indian cricket team to endorse its
products. LG invested more then US$ 8 million on advertising and
marketing in this sport.

4. LG has differentiated its product using technology and health benefits. CTV
has “Golden eye technology” Air conditioner has “Health air system” and
microwave ovens have the “Health wave system”.

Local and efficient manufacturing to reduce the cost

To overcome high import duties LG manufactures TV refrigerator in India at

manufacturing facility at Noida and Pune. LGEI had already commissioned
contract manufacturing at Mohali Kolkata and Bhopal for CTVs. This has
helped LGEI to reduce cost. LGEI implementing the “Digital manufacturing
system” (DMS) as the cost cutting innovation this system is follow-up to the six
sigma exercise LGEI had initiate earlier.

R&D potential

LG has the research and development facilities in Bangalore and Pune. Both the
unit carry out R&D department for the domestic as well as the parent company it
also dose customize R&D for the specific countries to which it export product.

Regional channel and wide distribution network

1. LG has adopted the regional distribution channel in India. All the

distributers work directly with the company. This has resulted in quicker
rotation of the stock and better penetration into B, C, D, class market.

2. LG also follows the stock rotation policy rather then dumping stock on
channel partners.

Product localization:-
  Product localization is the key strategy used by the LG

 LG came out with Hindi and regional language menus on its TVs.

 Introduced the low-priced “Cineplus” and “sampooma” for the rural

market.

 LG was the first brand to introduce gaming in TVs in continuations of its

association with cricket LG introduce cricket game in CTVs

MAJOR KEY SUCCESS FACTORS

1. Innovative marketing - 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.

2. Local and efficient manufacturing to reduce cost - To overcome high

import duties, LG manufactures PC monitors and refrigerators in India at
its manufacturing facility at Noida, Delhi.

3. Commissioned contract manufacturing at Mohali, Kolkata and Bhopal for

CTVs.

4. Product localization - Product localization is a key strategy used by LG. It

came out with Hindi and regional language menus on its TV.

5. Regional distribution model - This has resulted in quicker rotation of stocks and
better penetration into the B, C and D class markets.
6. Leveraging India’s IT advantage - LG Electronics has awarded a contract
to develop IT solutions to LG Soft India (LGSI). The project involves development
and support for ERP, SCM, CRM and IT-enabled services
for LG.

Strategies adopted by the organization

LG follows 10 commandments which are as follows.

1. Foster working environment-5S Environment

2. Fast execution is key to success

3. Transparent and fast communication-open communication

4. Update market -knowledge –Demographics

5. Win –Win relationship with the trade partners

6. Customer is the king

7. Even Billing –Road to ach supplier A

8. Be in touch with the market (70% Market, 30% Office).

9. Plan and Execute annual marketing Calendar-Time to market

10.Display share of 50% -to get 50% consumer share.

Strategy of the company

S.W.O.T. ANALYSIS OF THE ORGANIZATION

Strengths
Premium pricing, no discounts
Focus on technology and quality
Strong commitment from parent
In – house manufacturing capability
Products localized to suite Indian tastes

Weaknesses

Lack of transparency with dealers

Focus on niche segments
Dominance of Francen work culture
Little presence in A&B class towns

Opportunity

Convert image into market share

Wide product portfolio
Positive rub-off due to high quality
Healthy resource generation

Threats

Way behind market leader

Stagnant urban demand
Nothing unique about strategy
Highly competitive market