1. LG faces various political, economic, social, and technological factors in its external environment according to a PEST analysis. 2. Porter's 5 Forces analysis found low threats of new entrants and substitutes but high competitive rivalry in LG's industry. 3. A SWOT analysis identified LG's worldwide brand recognition and focus on customers as strengths, and lack of innovation and talented workforce as weaknesses.

1. External Environmental Analysis LG- Televisions

2. PEST Analysis Political The factors that affect LG include taxation policies, foreign trade regulations, and trade policies. LG must follow the compliances given by the government like the Environmental Protection Agency. By following these policies in South Korea, the Korean government has made it possible for LG to grow into one of the major players in the industry. Economic LG biggest economic factor is price wars in the saturated market. LG has used competitive strategies like localization. They have begun to adapt to different markets. Making it easier to grab consumers attention with products that are easier for their everyday living. In India, LG opened an manufacturing facility that begun with the R&D looking at what competitors have already brought to the market and made their product unique and geared towards the consumers needs.

3. PEST Analysis Social LG works with UN World Food Program, providing meals and teaching facilities for 24,000 people LG has opened school called LG Hope The have equipped 15,000 households in 12 LG Hope Villages in Ethiopia Provide aid to survivors of National Disasters Provides relief funds to people affected by the Haitian Earthquake, Pakistani flood, and the Russian wildfires. Technological This is LG most important factor Has always been a leader in innovation from the 1980s LG is expanding in 3G Network technology In India, Reliance in corporation with LG has 3G plans made for smartphones LG introduced it LG Optimus 3D to the market in India

4. Porter’s 5 Forces Analysis

5. Threats of New Entrants (Low) Expensive high fixed cost Well known existing competitors in the market Constant evolving technology Threats of Substitutes (Low) Products are constantly developing Increase in switching costs Technology advancement results in the decline of substitutes

6. Bargaining Power of Suppliers (Low) Product is standardized Uses components supplied by various suppliers Bargaining Power of Buyers (Moderate) Many competitors Uses differentiation to make products more technologically advanced Quality of products stand out in the market

7. Competitive Rivalry (High) Many companies competing for the consumer’s dollar LG is one of the top 3 competitors in the telecommunications industry Competitive Rivalry

8. SWOT Analysis Strengths LG’s products are all over the world and well recognized. LG’s products have good quality and have good design LG focus on developing new products and satisfy their loyal customers Weaknesses LG’s products have some electronic issues Most of LG’s products are designed by people from other countries and LG does not have their own training system to cultivate new people

9. SWOT Analysis Opportunities Improve the quality of their products Keep invest on the technology and training’s development in order to satisfy its customers Start meeting the low-income customers group Threats LG’s products are short of innovation Price is not attractive to people LG does not have enough talented people to develop their products

10. Two Implications that the Environmental Variable could have on Sales Volume Political Any change in policies or foreign trade regulations will have a very negative impact on sales volumes. It will cause consumers to pay more for products There is a possibility that the change of government can have an effect from the support of LG’s Research and Development. Economic Things that my affect sales volume from a economic stand point is a sudden change in consumers income. If there was a recession, LG would have to look into how they can make products more affordable for consumers, especially if there may not be a change. Any new competitors entering the market will make a difference also.

11. Two Implications that the Environmental Variable could have on Sales Volume Social LG went into the market in India with all the right tools. They adapted to the market and immediately began to be the innovators of that market. Bringing products that shaped their market. They also built manufacturing plants, which increased employment and gave back to their society. Technological LG is a leader in it industry. In both electronics and telecommunications all over the world. Using 3G networks as a stepping stool in countries that have not been exposed to the world of Smartphones. They are now working on the speed of technology transfer. Using modems in Hope Villages and allowing countries that do not have this technology the way to explore.

12. To Enhance Sales Volume Politcial LG can build manufacturing companies in areas where they have noticed their profits are steady. By doing this they will not have to ship their products to countries that are far, therefore avoiding certain trade barriers. Economic LG can construct a cost competitive advantage. By doing this they can be a low-cost competitor in an industry while keeping their profit margins satisfactory, in order to keep their sales volumes from dropping.

13. To Enhance Sales Volume Social Within the social factor, LG has been able to achieve a higher sales volume in foreign countries such as India. In order to enhance their volume to a higher potential they should continue the same pattern across the globe. Technological LG should continue being a leader in the electronics and telecommunications industry. By constantly upgrading their technology and being the first to enter the market with it, they are able to maximize their sales volume.

14. 1 – Electronic industries LG Electronics LG Display LG Innotek LG Micron LG Hiplaza 2 – Chemical industries LG Chem LG DOW Polycarbonate LG Household & Health Care 3- Telecommunications and services LG Telecom LG Leader LG Dacom LG Powercom Company Market Segments

15. LG plays a price card in the television industry with its competitors like Philips and Samsung. The price war doesn’t seem like a good strategy for a company to win their customers. We think LG should focus on new technology’s development and pay attention to its customers’ feeling base on its products. Internet TV is a good example to explain that why developing the technology is so important, it will significantly increase the sales. LG’s Competitive Strategy

16. LG Display Team. (2009, September 28). Retrieved October 26, 2011, from Blog Spot: http://lgdisplayteam1.blogspot.com/2009/09/business-strategy.html Kaplan, J. A. (2009, January 09). Live from CES: Ecotech on Display at the LG Booth . Retrieved October 25, 2011, from Good Clean Tech: http:// goodcleantech.pcmag.com/ces/279942-live-from-ces-ecotech-on-display-at-the-lg-booth#fbid=dUi6Elkwten LG . (2009). Environment . Retrieved October 21, 2011, from LG (Life's Good): http:// www.lg.com/global/sustainability/environment/index.jsp Guru, G. (2011, October 10). LG and Reliance Launches 3G Plans Around Optimus 3D . Retrieved October 29, 2011, from One India Living: http:// living.oneindia.in/gadgets/mobile/lg-and-reliance-launches-3g-plans-101011.html References