Question: Case 1 South Korea Based LG Electronics, Inc. (LGE) Was A Technology Innovator In Electronics, Information And Communications Businesses Producing CDMA Handsets, DVD Players, Optical Storage Devices, Canister Vacuum Cleaners, Air Conditioners And Micro Ovens. LGE Had More Than 72,000 Employees Working In About 77 Subsidiaries And Marketing Units Across The
Case 1
South Korea based LG Electronics, Inc. (LGE) was a technology innovator in electronics, information and communications businesses producing CDMA handsets, DVD players, optical storage devices, canister vacuum cleaners, air conditioners and micro ovens. LGE had more than 72,000 employees working in about 77 subsidiaries and marketing units across the world.
In January 2006, the company launched "Blue Ocean Management" campaign to be one among the top 3 electronics, information and telecommunications firms in the world by 2010. But LGE was primarily known for its low-cost appliances, and faced challenges related to company’s image, low profitability and stiff competition across the world. With the tough road ahead would LGE be able to achieve its target by 2019? Would it be able to make its competition irrelevant, especially Samsung, its home rival?
How LG gets a leading player role in consumer electronics?
What is their Customer Value based technological innovation.
Analyze the Blue Ocean strategy and its implementation at LGE.
LG Electronics Leading Player Role in Consumer Electronics
LG Electronics achieved a leading player role in consumer electronics by focusing on low-cost appliances, which resonated with price-sensitive consumers. The company strategically positioned itself as a provider of affordable yet reliable products, gaining a competitive edge in the market. Through efficient supply chain management and economies of scale, LG optimized production costs, enabling it to offer competitive prices without compromising quality. This approach helped LG expand its customer base and gain market share, solidifying its leading position.
Customer Value-Based Technological Innovation by LG
LG's Customer Value-based technological innovation involved understanding consumers' needs and preferences to develop innovative products. By conducting market research and gathering customer feedback, LG identified pain points and unmet demands in the market. The company then invested in research and development to create products that addressed these specific needs. For example, LGE's CDMA handsets and DVD players catered to the growing demand for advanced communication and entertainment technologies. This customer-centric approach allowed LG to gain a competitive advantage and build a loyal customer base.
Blue Ocean Strategy at LG Electronics
The Blue Ocean strategy involves creating uncontested market space by offering unique value propositions to customers. At LGE, this strategy was implemented by identifying underserved customer segments and developing innovative products tailored to their needs. By focusing on low-cost appliances, LG carved out a niche market for itself, away from direct competition with high-end electronics manufacturers. The company also invested in technological innovation, introducing CDMA handsets and other cutting-edge products that set it apart in the market. This approach allowed LGE to avoid head-to-head competition and create a blue ocean of opportunity.