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    LG Electronics India: Background

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    Deepak Tyagi
    LG Electronics India is a wholly-owned subsidiary of South Korean conglomerate LG Electronics, established in 1997. It has emerged as one of the prominent brands in the Indian consumer electronics and home appliances market through innovative marketing strategies, local and efficient manufacturing to reduce costs, leveraging India's IT advantage through partnerships, and establishing R&D facilities in India. LG aims to further expand its business in India by investing over $208 million in the next three years.

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    LG Electronics India: Background

    Uploaded by

    Deepak Tyagi
    182 views2 pages
    LG Electronics India is a wholly-owned subsidiary of South Korean conglomerate LG Electronics, established in 1997. It has emerged as one of the prominent brands in the Indian consumer electronics and home appliances market through innovative marketing strategies, local and efficient manufacturing to reduce costs, leveraging India's IT advantage through partnerships, and establishing R&D facilities in India. LG aims to further expand its business in India by investing over $208 million in the next three years.

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    LG

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    LG Electronics India is a wholly-owned subsidiary of South Korean conglomerate LG Electronics, established in 1997. It has emerged as one of the prominent brands in the Indian consumer electronics and home appliances market through innovative marketing strategies, local and efficient manufacturing to reduce costs, leveraging India's IT advantage through partnerships, and establishing R&D facilities in India. LG aims to further expand its business in India by investing over $208 million in the next three years.

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    182 views2 pages

    LG Electronics India: Background

    Uploaded by

    Deepak Tyagi
    LG Electronics India is a wholly-owned subsidiary of South Korean conglomerate LG Electronics, established in 1997. It has emerged as one of the prominent brands in the Indian consumer electronics and home appliances market through innovative marketing strategies, local and efficient manufacturing to reduce costs, leveraging India's IT advantage through partnerships, and establishing R&D facilities in India. LG aims to further expand its business in India by investing over $208 million in the next three years.

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    LG

    ELECTRONICS
    INDIA

    Background
    Based in South Korea, LG Electronics (LGE) had a global turnover of US$ 29.9 billion in 2003.
    LGE has 50 affiliated companies across the globe, with 300 offices and presence in 120 countries.
    With over 64,000 employees, it focuses on four main businesses - Electronics and
    Telecommunications, Services, Finance and Chemicals. LGE has 20 R&D centres worldwide and
    has subsidiaries in 76 countries.
    Established in 1997, LG Electronics India (LGEI) is a wholly-owned subsidiary of LG Electronics,
    South Korea. It is one of the leading companies in consumer electronics, home appliances and
    computer peripherals in India. It has a turnover of almost US$ 1000 million in India. LGEI’s sales
    are increasing with a CAGR of 40 per cent over the past five years.
    LG is the market leader in various segments like colour TVs, microwave ovens, frost-free
    refrigerators, washing machines and air-conditioners, with market shares of 26.2 per cent, 41.2
    per cent, 37.9 per cent, 34.1 per cent and 34 per cent respectively.
    LG Electronics India received the Occupational Health & Safety Management System OHSAS
    18001:1999 certification from the British Standards Institution (BSI), India, for a systematic
    approach towards Occupational Health and Safety Management System.
    LGEI exported goods and services worth US$ 40 million in 2003. The major export markets
    for LGEI are the Middle East, West Africa and Central Asia.

    India challenges one of the prominent brands in the Indian consumer


    electronics and home appliances market by leveraging
    The challenges faced by LG when it entered the
    the success factors below.
    market in 1995 were:
    • Low brand awareness about LG in India.
    Factors for success
    • One of the last MNCs to enter India. (Samsung,
    Sony & Panasonic entered in 1995 & LG in 1997.) Innovative marketing strategies
    • High import duty.
    To make itself a known brand in the consumer
    • Competition from local players and other electronics sector, LG has taken innovative marketing
    multinational companies in the consumer and promotional initiatives:
    electronics segment
    • Launch of new technologies in consumer electronics
    • Price sensitiveness of Indian consumers. and home appliances.
    LGEI has overcome these challenges to emerge as • LG was the first brand to enter cricket in a big

    FORTUNE 500 COMPANIES IN INDIA PAGE 112


    way, by sponsoring the 1999 World Cup, and offices across the country. LG had set a target of
    followed it up in 2003 as well. developing 2,000 dealers in 2004, in addition to the
    • LG brought in four captains of the Indian cricket existing 3,000 dealers all over India.
    team to endorse its products. LG invested more
    than USS 8 million on advertising and marketing Leveraging the India Advantage
    in this sport.
    • LG has differentiated its products using technology India’s IT advantage
    and health benefits. The CTV range has ‘Golden
    LG Electronics has awarded a contract to develop IT
    Eye’ technology, air-conditioners have the ‘Health
    solutions to LG Soft India (LGSI). The project involves
    Air System’ and microwave ovens have the ‘Health
    development and support for ERP, SCM, CRM and
    Wave System’.
    IT-enabled services for LG Electronics’ 60 overseas
    Local and efficient manufacturing subsidiaries and manufacturing facilities worldwide.
    to reduce cost LGSI has offices in San Jose, London and Seoul with
    To overcome high import duties, LG manufactures over 300 professionals in the development facility at
    PC monitors and refrigerators in India at its Bangalore. All its offices are networked for swifter
    manufacturing facility at Noida, Delhi. LGEIL had communication and decision making.
    already commissioned contract manufacturing at
    Mohali, Kolkata and Bhopal for CTVs. This has helped R&D potential
    LGEI to reduce costs. LG has set up research and development facilities in
    LGEIL is implementing a “digital manufacturing system” India at Bangalore and is in the process of setting up
    (DMS) as a cost-cutting innovation. This system is a another at Pune. Both the units carry out R&D work
    follow-up to the Six Sigma exercise LGEIL had initiated for the domestic market as well as for the parent
    earlier. company. It also does customised R&D for specific
    countries to which it exports products.
    Product localisation
    Product localisation is a key strategy used by LG.
    Future plans
    • LG came out with Hindi and regional language LG has a positive perception of India and the Indian
    menus on its TV. consumer. LG is making a foray into the e-commerce
    • Introduced the low-priced “Cineplus” and market in India and has partnered with various local
    “Sampoorna” range for the rural markets. websites like fabmall.com, rediff.com, indiatimes.com,
    • LG was the first brand to introduce gaming in and indiaplaza.com.
    CTVs. In continuation of its association with cricket, LG is also planning to invest over US$ 208 million in
    LG introduced the cricket game in CTVs. India over the next three years to expand the business.
    Mobile software development is also on LG’s agenda.
    Regional channel strategy
    and wide distribution network
    LG has adopted the regional distribution model in
    India. All the distributors work directly with the
    company. This has resulted in quicker rotation of
    stocks, and better penetration into the B, C, and D
    class markets.
    LG also follows the strategy of stock rotation, rather
    than dumping stocks on channel partners.
    LG has over 46 branch offices and another 110 area

    SUCCESS STORIES PAGE 113

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