Lockandlock

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Lockandlock

  1. 1. Lock & Lock IME 20051164 Junghee Pyeon IME 20051206 Wootaek Hwang IME 20051214 Joonhyung Ahn
  2. 2. CONTENTS 1. Company & Product Overview (1) Company Overview (2) Product Overview 2. Business Analysis (1) SWOT Analysis (2) TOWS Analysis (3) Five Force Analysis (4) BCG Matrix 3. Strategic Management of Innovation (1) Collaboration Strategies (2) Sources of Innovation (3) Patterns of Innovation (4) Types of Innovation (5) Dominant Design (6) Timing of Entry (7) Choosing Innovation Projects (8) Protecting Innovation
  3. 3. CONTENTS 1. Company & Product Overview (1) Company Overview (2) Product Overview 2. Business Analysis (1) SWOT Analysis (2) TOWS Analysis (3) Five Force Analysis (4) BCG Matrix 3. Strategic Management of Innovation (1) Collaboration Strategies (2) Sources of Innovation (3) Patterns of Innovation (4) Types of Innovation (5) Dominant Design (6) Timing of Entry (7) Choosing Innovation Projects (8) Protecting Innovation
  4. 4. (1) Company Overview 1. Company & Product Overview Since its establishment in 1978, Lock&Lock Co. Ltd has been grown as a global company that exports its products (Lock&Lock containers with new-concept four side interlocking system) to more than 100 countries worldwide.
  5. 5. (1) Company Overview 1. Company & Product Overview  Export Destinations
  6. 6. (1) Company Overview 1. Company & Product Overview  Financial Status Sale s Operating profit 2007 2008 2009 2010(half) 2007 2008 2009 2010(half) Million Won Million Won Lock&Lock has been grown very fast since its establishment, and aim to achieve 10 trillion Won sales in 2020.
  7. 7. (2) Product Overview (1/3) 1. Company & Product Overview Plastic Container Glass Container  Product Type
  8. 8. (2) Product Overview (2/3) 1. Company & Product Overview Bis-free Container Many customers have concerns that plastic containers make environmental hormones. Glass containers also have some disadvantages such as heavy weight, fragileness, and so on. Lock&Lock developed a new technology container called Bis- free, which is lighter than glass and doesn’t make any environmental hormones.
  9. 9. (2) Product Overview (3/3) 1. Company & Product Overview  Product Characteristics (1) 4-side interlocking system (2) Hollow silicon packing The patented technology of interlocking all four sides and the hollow silicon packing are utilized for the products.
  10. 10. CONTENTS 1. Company & Product Overview (1) Company Overview (2) Product Overview 2. Business Analysis (1) SWOT Analysis (2) TOWS Analysis (3) Five Force Analysis (4) BCG Matrix 3. Strategic Management of Innovation (1) Collaboration Strategies (2) Sources of Innovation (3) Patterns of Innovation (4) Types of Innovation (5) Dominant Design (6) Timing of Entry (7) Choosing Innovation Projects (8) Protecting Innovation
  11. 11. (1) SWOT Analysis 2. Business Analysis SWOT Strength Weakness ThreatsOpportunities • Powerful brand image • High market share • Patents • Know-how • R&D • No other business models • Big market(ex. China, U.S.) • Global brand awareness • Various airtight products • Modern life style • Many copies & Fake products
  12. 12. (2) TOWS Analysis 2. Business Analysis TOWS S-O S-T W-TW-O • By using know-how, diversify products • By using global image, target global market • By using brand image, grow the market share • Concentrating on “high quality and good brand image” through various promotions & campaign • Prepare for new business models, although it is not profitable right now. • Protecting innovation restrain fake product, allowing Lock&Lock diversify the business model.
  13. 13. (3) Five Forces Analysis 2. Business Analysis Existing Rivalry • Copies • KOMAX, GLASSLOCK, etc Potential Entrance • Existing Korean companies • Foreign low quality & low price container companies Threats of substitutes Bargaining power of suppliers Bargaining power of buyers • Raw materials are easy to buy • Tradition containers • Many copies with low price. But, because of brand image, Rock&Rock can sell high price. High Low
  14. 14. (4) BCG Matrix 2. Business Analysis Star Question Mark Cash Cow Dog High Low MarketGrowth High Middle Low Market Share Plastic airtight container Ceramic or glass airtight container Water bottle and Thermos Kitchen utensils Living box Cooking equipment
  15. 15. CONTENTS 1. Company & Product Overview (1) Company Overview (2) Product Overview 2. Business Analysis (1) SWOT Analysis (2) TOWS Analysis (3) Five Force Analysis (4) BCG Matrix 3. Strategic Management of Innovation (1) Collaboration Strategies (2) Sources of Innovation (3) Patterns of Innovation (4) Types of Innovation (5) Dominant Design (6) Timing of Entry (7) Choosing Innovation Projects (8) Protecting Innovation
  16. 16. (1) Collaboration Strategies (1/10) 3. Strategic Management of Innovation  Strategic Alliance (1/3) Lock&Lock made a strategic alliance with partners which needs high quality air-tight containers such as tea, ice cream and so on. The company provide customized air-tight containers to the partners Ex1) Tea container In 2004, Damtuh, a tea maker, launched lemon tea and peach tea with Lock&Lock container. More than 10,000 products were sold just within one week after launching it.
  17. 17. (1) Collaboration Strategies (2/10) 3. Strategic Management of Innovation  Strategic Alliance (2/3) Ex2) Tea container In 2011, Baskin Robbins 31, an ice cream maker, started a promotion event that if a customer buy an ice cream which is bigger than quarter- size, the company provide Lock&Lock container with just 1,000 KRW.
  18. 18. (1) Collaboration Strategies (3/10) 3. Strategic Management of Innovation  Strategic Alliance (3/3) Ex3) Doosan Bears Tumbler In 2011, Doosan Bears, a baseball team, made tumblers with Lock&Lock’s technology.
  19. 19. (1) Collaboration Strategies (4/10) 3. Strategic Management of Innovation  Joint Venture Since air-tight container market is red ocean, Lock&Lock needed to enter a new market but it had no speciality in other fields. So they made a joint venture with companies in other fields. Ex) Zen&Lock In 2006, Lock&Lock made a joint venture with Zen Korea, a ceramic container maker, to produce ceramic air-tight container. The joint venture got 400,000 pieces order right after it launched ceramic air-tight Kimchi container.
  20. 20. (1) Collaboration Strategies (5/10) 3. Strategic Management of Innovation  Outsourcing Ex) Design Outsourcing of Speed Cook In 2011, Lock&Lock launched Speed Cook, a lamen cooker. Since Lock&Lock’s core competency is manufacturing technologies, not designs, the company outsourced this design function to Motto Design, a design company.
  21. 21. (1) Collaboration Strategies (6/10) 3. Strategic Management of Innovation  Design Idea Collaboration for Localization Ex) Locally Customized Design Depending on regions, customers have different needs. For example most Indians need flat bread containers, Westerns need cereal containers, and Koreans need Kimchi containers. These design ideas mostly came from local buyers and collaborators in each region. India Western Countries Korea
  22. 22. (1) Collaboration Strategies (7/10) 3. Strategic Management of Innovation  Promotion Collaboration (1/2) Ex) Promotion through famous home-shopping channels At the beginning of launching Lock&Lock, since the company wanted to make a high-quality brand image, it chose QVC, the No.1 home shopping channel in the world, as a business partner.
  23. 23. (1) Collaboration Strategies (8/10) 3. Strategic Management of Innovation  Promotion Collaboration (2/2) Ex) Partnership with promotion agencies When Lock&Lock enter unfamiliar regions, the company formed a partnership with promotion companies which have more knowledge about the region. They formed a partnership with Starcom to enter Japan and UK markets, and with Hill & Knowlton to enter China markets.
  24. 24. (1) Collaboration Strategies (9/10) 3. Strategic Management of Innovation  Summary (1/2) <Protecting Core Competency> Lock&Lock’s core competency is technological superiority over other competitors. To take advantages of this, the company relies only on in-house R&D, and does not collaborate with other companies in R&D part. <Collaborating Strategically> Since Lock&Lock is a air-tight container production company, the company has no special knowledge about design, promotion, and so on. To overcome this shortage, the company collaborated with other specialist in that field. And also sometimes it made strategic alliance with other industry players to boost the sales of its products.
  25. 25. (1) Collaboration Strategies (10/10) 3. Strategic Management of Innovation  Summary (2/2) Collaboration of a certain function in a firm should be determined depending on its strategic importance!!!
  26. 26. (2) Source of Innovation 3. Strategic Management of Innovation  Customer Needs People want to buy a container which doesn’t spill over a content in the container.  Needs for Airtight Container
  27. 27. (3) Pattern of Innovation 3. Strategic Management of Innovation  Added New Characteristic Not related to traditional patterns of Innovation  Added New Characteristic: New Characteristic is added to New Product. It can be one of patterns of Innovation.
  28. 28. (4) Types of Innovation 3. Strategic Management of Innovation 1. Product vs. Process 2. Radical vs. Incremental 3. Competence Enhancing vs. Competence Destroying 4. Architectural vs. Component  Added New Characteristic to existing product Product Innovation & Component Innovation  Because of Rock&Rock, almost whole container is replaced with Rock & Rock  Radical Innovation  In 1978, Lock&Lock Co. Ltd has manufactured more than 600 products including kitchen wares  Competence Enhancing Innovation
  29. 29. (5) Dominant Design (1/2) 3. Strategic Management of Innovation Kukjin Distribution Co. founded in 1978 launched Lock&Lock products having the technology of interlocking all four sides and the hollow silicon packing. Lock&Lock instead of rubber cover have become the dominant design in airtight container market. Now, Lock&Lock is the byword for airtight container. Lock&Lock is not only a premium airtight container but also the best brand of airtight container market in China. Also, Lock&Lock’s awareness in Korea is 99%.
  30. 30. (5) Dominant Design (2/2) 3. Strategic Management of Innovation Network Externality help Lock&Lock the dominant design of airtight container. Collaboration between Lock&Lock and lots of company, rising Lock&Lock’s brand awareness. Winner-Take-All Markets didn’t occur. There are two strong competitors. Lock&Lock can’t be a natural monopoly company not only because Komax makes the airtight container having superior design and high quality but also because Glasslock makes airtight container consist of glass having attractiveness for Western culture. Komax Glasslock
  31. 31. (6) Timing of Entry (1/2) 3. Strategic Management of Innovation Many people think Rock&Rock is the first mover. But, the first mover is KOMAX in an airtight container market. That is, Rock&Rock is the follower.  Follower
  32. 32. (6) Timing of Entry (2/2) 3. Strategic Management of Innovation When KOMAX and Rock&Rock launched an airtight container, people didn’t know how the container was useful for them. So, Rock&Rock used TV home shopping to explain the usefulness of an airtight container. Because of TV home shopping, people started to use Rock&Rock container. So, Rock&Rock can lead the market, rather than KOMAX.  How does Lock&Lock lead the market, rather than KOMAX?
  33. 33. (7) Choosing Innovation Project (1/2) 3. Strategic Management of Innovation Since its establishment in 1978, Lock&Lock Co. Ltd had manufactured various products which are more than 600 including kitchen and bathroom ware. But, since 1998, the company has focused its core competency only on Lock&Lock products and stop investing to other products groups. Just 6 years after launching Lock&Lock products, the company extended its market share by 60% in Korea, and became the world 3rd largest company in the food storage container industry.
  34. 34. (7) Choosing Innovation Project (2/2) 3. Strategic Management of Innovation Lock&Lock manufactured huge amount of various products before 1998. Jun-il Kim thought Lock&Lock had to focus on one product having brand power, so he made 20 criteria for choosing product.  Easy to manage inventory  Not fragile  Small volume  Independent to season  Independent to culture Air-tight container was the best product meeting all criteria of qualitative choosing process and these decision has been excellent.
  35. 35. (8) Protecting Innovation (1/2) 3. Strategic Management of Innovation Lock&Lock takes advantages of protecting technological innovation rather than diffusing it. Since the company’s core competency is technological superiority over the other companies, they need to protect their intellectual properties through patent, trademark, and design registrations. In addition, the company organized a special team which is responsible for preventing others from imitating Lock&Lock products. In 2010, they found a fake product manufacturing factory in China and confiscate many imitations.
  36. 36. (8) Protecting Innovation (2/2) 3. Strategic Management of Innovation Lock&Lock promote the method to distinguish the real Lock&Lock product from the imitation product using the web site and the store. This strategy is so effective in the long run, although it isn’t effect on consumer in the short run. Lock&Lock don’t sue the company making the imitation product, but with market sharing power, Lock&Lock prevent the distributors from selling the imitation product. Because legal action ain't holding no air in China.
  37. 37. Q&A

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