LG Electronics: The Blue Ocean Strategy

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LGE India "LGEIL (LG Electronics India Ltd) did face obstacles initially, but from the very start we were determined to succeed" Girish Rao, VP for Sales and Marketing India LG Electronics India Pvt. Ltd., a wholly owned subsidiary of LGE South Korea was established in January, 1997. The manufacturing facility began at Noida75, in 1998, and in Pune76, in 2004.77With localization the company had established distribution network of 43 branches, over 150 area offices and more than 10,000 trading partners, LGE was ahead of its competitors. The revenues since 1997 were Rs 21,100 crore. (Exhibit XVI) By 2010, LGE expected to become a $10-billion company with export turnover contributing $3 billion or 30 per cent of LGEIL's turnover78 through its blue ocean strategy. In the CDMA mobile handset segment, LGE India had ranked 4th with a market share of 2.5%., while industry leader had Nokia a share of 78.8%, Samsung 6.4%, Motorola of 4.6%, and Sony Ericsson 5.1% in February 2006.79 LGE had a market share of 3.5 % in the GSM mobile handset segment.80

The digital display market was expected to increase to 90000 units in 2006 from 18000 units in 2005⁸¹. Market leader Samsung, had 45.7 per cent share in the LCD segment compared to LGE’s 39 % in 2006⁸². In the plasma display panel (PDP) segment, the company was at No. 2 position just behind Samsung who had a share of 35.5%. ⁸³ In the digital appliance market LGE had enjoyed a lion's share of 36% in 2005 and in the air conditioners segment LGE had a quantity turnover of 5 lakhs units and value turnover of Rs.1050 crore in 2005. In the washing machine category LGE had market share of 34%. ⁸⁴

LGE in Middle East and Africa

"We will pursue a 'Blue Ocean Strategy' which is to move away from ordinary products to create genuine differentiation. For example, in GSM mobile phones we are going to launch some highend models in May that will be luxurious like jewelry. And last year we introduced the 71-inch Gold Plasma TV, made especially for the Middle East⁸⁵."

K.W.Kim, President LGE, Middle East and Africa

The regional digital leader LGE Electronics had a turnover of US$1.36 billion, a growth of 20% in first half year sales performance in 2006. The company attributed its 8% increase in revenue in 2005 to its implementation of Blue Ocean Strategy which showed 34% increase over the year

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75]Noida was the famous town situated in Uttar Pradesh state in India.
76]Pune was the famous town situated in Maharashtra state in India
77]http://www.lgezbuy.com/aboutus.aspx?CatID=''&MaiCatID=0
78]"K. Giriprakash, "The heat is on", 17 August 06, www.thehindubusinessline.com/catalyst/2006/08/17/stories/2006081700020100.htm,.
79]Govindkrishna Seshan, "Nokia still leads in India, but. . ." 02 May 2006, www.rediff.com/money/2006/may/02spec.htm,
80]"LG eyes top slot in flat screen mart", John Satish K , September 2006, www.business standard.com/common/storypage.php?autono=259530&leftnm=1&subLeft=0&chkFlg=
81]Neha Kaushik, "LG to assemble LCD TVs in India", 11 April, 2006, www.thehindubusinessline.com/2006/04/11/stories/2006041101840800.htm,
82]June 05, 2006, www.lgindia.com/Newsroom/News-room-details.aspx?ID=1044,
83]John Satish K, "LG eyes top slot in flat screen mart", September 2006, www.business standard.com/common/storypage.php?autono=259530&leftnm=1&subLeft=0&chkFlg=
84]Op cit.,www.lgindia.com
85]"First half LG sales turnover in Mid-East And Africa touch US$1.36 billion" 6 August, 2006, www.prfactory.com.tn/site/download.php?name=../document,