Group 5Gabriele Liepinyte 1586 Mariana Proença 11089 Olivier Mollerus 1417 Patrícia Milhinhos 11424 Angus Sullivan 1403Chiara de Benedetto 1413

Nova SBE

International Management

LG Electronics: Global Strategy in Emerging Markets

High quality, innovative

electronics products

Market value of LG Electronics grew 22%

Samsung’s twice market capitalization as Sony’s

(Japan)World’s first dual-

system DVD player

Koreans’ prioritize the development of the Electronics Industry

The government encouraged foreign direct investment in technology and creation joint

ventures.

Korea’s electronics were exported by the foreign countries with joint venture

Firms were encouraged to invest in local

R&D

Research infrastructures to

help the firms were created

Vocational schools attracted

students for technical education

Universities developed experts in

science and technology

Product weren’t well received

LG started to export to developed markets

Enter markets with long-term

potential

Move to emerging markets

LG decided to stay and expand their presence

• Advertise their brand through soccer sponsorship

• Customized products• Premium positioning

strategy

• Agreements with local distribution chains

• Maximize the benefits from the government

Faced adverse economical factors

1990 Establishment of diplomatic relations

1998 LG was one of the first Korean companies in Russia

• First products were imported

• Local plants opened

• The opening of LG branded stores

• Dedicated retail channels• The hosting of festivals

and cooking events• Sponsorship

• Local offices and R&D center

• Sourcing local talent to fill company roles

• Opening local manufacturing plants

1998 Russia faced with severe economic crisis

Competitors scaled back and retracted

from RussiaLG invested heavily in their

Russian operationsDistributi

on channels

Local product

customization

Event sponsorship

• Seal of approval for “national brands”

• LG allowed by the Russian government to display on products

A sign of LGs effective localisation strategy

Good geographic proximity to Korea

1988 Scouting mission Hong Kong

1991 LG enters China, through a joint venture Huizhiou

16 corporations now

Diseases(SARS crisis)

1 2 3Unique

nature of government regulations

Geographical

proximity

Same as when they entered Brazil and India, with some

variations in the overall strategy

They tried to get local consumption instead of

export

Build strong manufacturing

presence

Hiring local employees (98% of employees local Chinese)

R&D facility in Beijing

Local event sponsoringI love China

campaign (free sanitary masks against SARS)

Dominant powers within electronics

New market

entrantsLocal rivals

Thank you for your attention!