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PESTAL Analysis of LG Electronics
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- 2. A Presentation Reporton PESTLE Analysis of Electronic Industry. (LG) Submitted to:- IPS Business School Submitted By:- Dheeraj Rajpurohit Under Guidance of:- Dr. Aashish Sharma
- 3. The Indian Electronicsindustry is being driven by macro factors such as growing middle-class population and rising disposable income. In addition, declining electronics prices and adoption of high-end technology devices is leading to an uptick in consumption of electronics devices. Electronic Industry
- 4. Industry Scenario Electronics marketin India is projected to reach US $ 228 bn by 2020 from over $ 100 bn in 2016-17 The electronics products segment contributed 82% to the overall market in 2015, while the rest comprised electronic components. The Electronic Products industry in India was valued at $ 61.8 bn in 2015, which is further segmented as follows: 1. Mobile devices (27%) 2. Consumer electronics (18%) 3. Industrial electronics (15%) 4. IT/Office automation (10%) 5. Automotive electronics (8%) 6. Telecom (8%) 7. Strategic (Aerospace and Defense) (7%) 8. Medical devices (4%) 9. Others (3%) The Electronic component industry was valued at $ 13.5 bn in 2015; of which Electro-mechanical segment had the highest share at 30%. Passive and active segments handled 27% and 22% share, respectively, while remaining market of 20% was handled by the Others segment. Nearly 70-80% of the electronic components market is imports-driven.
- 5. LG Electronics Inc. LGElectronics Inc. is a South Korean multinational electronics company headquartered in , Seoul, South Korea. LG Electronics is part of the fourth-largest chaebol in South Korea (LG Corporation) and in 2014 global sales reached $55.91 billion (₩ 59.04 trillion), LG comprises four business units: Home Entertainment, Mobile Communications, Home Appliances & Air Solutions, and Vehicle Components, with Station India as its main production vendor for refrigeration and washing machines in the Indian sub- continent. LG Electronics owns Zenith and controls 37.9 percent of LG Display and since 2008, LG Electronics remains the world's second-largest LCD television manufacturer. The company has 128 operations worldwide, employing 83,000 people.
- 6. PESTLE Analysis ofLG Electronic LG Display Co., Ltd. PESTEL analysis is a strategic tool to analyze the macro environment of the organization. PESTEL stands for - Political, Economic, Social, Technological, Environmental & Legal factors that impact the macro environment of LG Display Co., Ltd.. Changes in the macro-environment factors can have a direct impact on not only the LG Display Co., Ltd. but also can impact other players in the Diversified Electronics. The macro-environment factors can impact the Porter Five Forces that shape strategy and competitive landscape. They can impact individual firm’s competitive advantage or overall profitability levels of the Technology industry.
- 7. Political Factors • Politicalstability and importance of Diversified Electronics sector in the country's economy. • Risk of military invasion • Level of corruption - especially levels of regulation in Technology sector. • Bureaucracy and interference in Diversified Electronics industry by government. • Legal framework for contract enforcement • Intellectual property protection • Trade regulations & tariffs related to Technology • Favored trading partners • Anti-trust laws related to Diversified Electronics • Pricing regulations – Are there any pricing regulatory mechanism for Technology • Taxation - tax rates and incentives • Wage legislation - minimum wage and overtime • Work week regulations in Diversified Electronics • Mandatory employee benefits • Industrial safety regulations in the Technology sector. • Product labeling and other requirements in Diversified Electronics
- 8. Economic Factors • Typeof economic system in countries of operation – what type of economic system there is and how stable it is. • Government intervention in the free market and related Technology • Exchange rates & stability of host country currency. • Efficiency of financial markets – Does LG Display Co., Ltd. needs to raise capital in local market? • Infrastructure quality in Diversified Electronics industry • Comparative advantages of host country and Technology sector in the particular country. • Skill level of workforce in Diversified Electronics industry. • Education level in the economy • Labor costs and productivity in the economy • Business cycle stage (e.g. prosperity, recession, recovery) • Economic growth rate • Discretionary income • Unemployment rate • Inflation rate • Interest rates .
- 9. Social Factors • Demographicsand skill level of the population • Class structure, hierarchy and power structure in the society. • Education level as well as education standard in the LG Display Co., Ltd. ’s industry • Culture (gender roles, social conventions etc.) • Entrepreneurial spirit and broader nature of the society. Some societies encourage entrepreneurship while some don’t. • Attitudes (health, environmental consciousness, etc.) • Leisure interests
- 10. Technological Factors • Recenttechnological developments by LG Display Co., Ltd. competitors • Technology's impact on product offering • Impact on cost structure in Diversified Electronics industry • Impact on value chain structure in Technology sector • Rate of technological diffusion
- 11. Environmental Factors • Weather •Climate change • Laws regulating environment pollution • Air and water pollution regulations in Diversified Electronics industry • Recycling • Waste management in Technology sector • Attitudes toward “green” or ecological products • Endangered species • Attitudes toward and support for renewable energy
- 12. Legal Factors • Anti-trustlaw in Diversified Electronics industry and overall in the country. • Discrimination law • Copyright, patents / Intellectual property law • Consumer protection and e-commerce • Employment law • Health and safety law • Data Protection
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