Lockandlock

Lock & Lock
IME 20051164 Junghee Pyeon
IME 20051206 Wootaek Hwang
IME 20051214 Joonhyung Ahn

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

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.

 Export Destinations

 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.

(2) Product Overview (1/3)
Plastic Container Glass Container
 Product Type

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.

 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.

(1) SWOT 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

(2) TOWS 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.

(3) Five Forces 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

(4) BCG Matrix
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

(1) Collaboration Strategies (1/10)
 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.

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.

Ex3) Doosan Bears Tumbler
In 2011, Doosan Bears, a
baseball team, made tumblers
with Lock&Lock’s technology.

 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.

 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.

 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

 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.

 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.

 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.

 Summary (2/2)
Collaboration of a certain function in a firm
should be determined
depending on its strategic importance!!!

(2) Source of Innovation
 Customer Needs
People want to buy a container which doesn’t spill over a content
in the container.
 Needs for Airtight Container

(3) Pattern 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.

(4) Types 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

(5) Dominant Design (1/2)
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%.

(5) Dominant Design (2/2)
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

(6) Timing of Entry (1/2)
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

(6) Timing of Entry (2/2)
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?

(7) Choosing Innovation Project (1/2)
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.

(7) Choosing Innovation Project (2/2)
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.

(8) Protecting Innovation (1/2)
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.

(8) Protecting Innovation (2/2)
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.

Lockandlock

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