This document discusses LG Electronics' global strategy in emerging markets. It summarizes LG's localization strategies in Brazil, India, Russia, and China. In Brazil, LG focused on expanding production despite currency instability. In India, LG customized products for local needs and tapped lower economic segments. In Russia, LG heavily invested despite economic crises and used local branding. In China, LG localized production to serve global markets and hired mostly local staff.

1. Team members:
Suraj Subhash Patil
Mitali Bhuyan
Tabrez Khan
Anand Chettri
Anupol Bordoloi
LG electronics: Global
Strategy in Emerging
Markets

2. Company: LG
Industry: consumer electronic
Industry Analysis: Michael potters five forces
model
New
entrant
Supplier
bargaining
power
Industry
rivalry
Buyers
bargainin
g power
Substitutes

3. Korean Electronic Industry:
Characteristics:
Ahead in quality, innovative consumer products
Government encouragement
Industry promotion councils
Universities were encouraged to built elite groups of
experts in science and technology
Outcomes:
Innovated first dual system DVD player with Blue-
ray and HD-DVD compatibility
First to built vacuum tube radio, electric fan, b/w
TV, washing machine, automated telephone switching
system
R&D jobs multiplied five folds

4. Localization strategy:
Brazil:
Started operation in 1990, with Tv and VCR manufacturing
Govt. offered tax incentives and subsidized land for investors
Challenges:
High import tariffs
Grey market
Very low brand awareness
In 1999 local currency became unstable
Strategy:
Despite exchange losses , decided to expand
Due to dropping value of local currency exporting became
advantageous
Became largest exporter and govt. saw it as preferred partner in
national growth

5. Marketing strategy:
Sports events sponsorship
Sponsored football club Sao-Paulo
Backed products with 3 year warranty
Instantaneous service in case of product
failure
Agreements with local distributors
Enormous focus on relationship development

6. Localization in India:
In 1993, set up joint venture
Customizing parts to address local needs
cricket television set with inbuilt cricket video game
golden-eye technology
A/C for metropolitan cities
Tapped lower rungs of economic pyramid
compact size TV
TV sets with menu in local language
Challenges:
Geographical diversity
Inadequate infrastructure
Linguistic diversity
Majority of population in lower rungs of the economic
pyramid

7. Strategy:
Brick and mortar strategy
Online channel- LGEZBUY.COM
Walking-after-sale services
Brand building:
Sponsoring cricket in India
Signed on Indian leading film stars
Addressed health care needs of the employees
Subsidized school education and books
Built village school
Localization in administration and managerial
functions
Major finance decisions in the hands of head office
in Korea

8. Russia:
Challenges:
Communist heritage
State sponsored business enterprises
Challenging economic environment
Russia faced a debt moratorium
Economic crises
Investment of $150million haulted
Strategy:
Despite crises it invested heavily
Govt. allowed to use Narodnaya marka logo
Marketing:
LG brand shops
Dedicated retail chains to carry LG brand portfolio
Culture marketing events- LG festivals and cooking events
Innovative A/C for all seasons
Karaoke with folk music

9. China:
Advantages:
Geographic proximity
Labor cost advantage
Strategy:
Same as adopted for India and Brazil
Built plants across the country to serve Russia and US
98% of the all LG personnel in china were local Chinese
LG village to showcase state-of-the-art technologies
SARS crises