Business Environment And Technological Developments Marketing Essay

At present for the interest of globalisation, liberalisation, highly competitory concern environment and technological developments, unifying and acquisitions of companies are acquiring really popular and efficient all around the universe. Another normally used technique is Joint Venture. For accomplishing the corporate growing, sellers or sellers consider it as a really strong and effectual tool.

Trying to measure the strategic analysis such as altering market status and competitory advantages of the LG Group is the existent intent of this study. How it is making to the mark economically and through competitory advantage over rivals by strategic confederation, joint ventures every bit good as amalgamations and acquisitions is the chief aims of this survey.

The study further describes the causes why those techniques of LG are taken. The success and failure of emerging/developing market is demonstrated here and the ground of Apple being the chief menace for LG in 2010 is besides discussed in this study.

1.2 Company Background

LG is a world-wide recognized Group. Initially unifying of two Korean companies GoldStar and Lucky gave birth to LG where in 1958 the chief company GoldStar got established. Electronic merchandises got sold under the trade name name GoldStar before changing the corporate name LG whereas merely the family merchandises got sold under the trade name name Lucky. Electronicss, telecommunications, chemicals and services are the on the job areas/sectors of LG group. Entire 50 1 companies work within the sphere of LG group around the universe among which eight in chemical sectors, nine in electronics sectors and thirty four in telecommunication sectors. Merging & A ; Acquisition, Joint Venture & A ; Strategic Alliance are some common and effectual tools for the companies which are applied for accomplishing corporate growing. Why LG group have followed those tools as a development method is the chief appraisal of this paper. It besides attempts to analytically measure how the schemes have been fruitful. Key menaces for LG faced in 2010 and emerging market analysis have besides been discussed exhaustively over here.

Part 2 Merging and Acquisition of LG

2.1 Introduction

Harmonizing to Sytse & A ; Hein ( 2008 ) , “ A amalgamation is a combination of two or more houses in which all but one cease to be and the combined organisation continues under the name of the lasting house ” . And “ An acquisition occurs when one company takes a commanding ownership involvement in another house ” . Because of synergisms many companies like to make unifying & A ; acquisition which means amalgamation companies work jointly more expeditiously instead than they work individually.

By unifying & A ; acquisition many companies can enlarge their growing. Through advanced merchandises and design, LG electronics besides attempts to pull attending of wide-reaching consumers. LG could achieve their ends through the aid of unifying & A ; acquisition. Some of import meeting & A ; acquisition of LG are discussed over here.

This type of synergisms comes from the common capablenesss of companies in order to construct up their fiscal graduated table, extinguish repeated maps, enlarge large sum of capitals and portion administrative apprehension ( Ravenscraft and Scherer 1987 ) . Actually, the grounds of unifying are as follows:

Operating fiscal province

Balancing of fiscal graduated table

Growth and variegation

Tax shields use

Increase value

Competition riddance and

Fiscal necessity

2.2 Merging of LG chemical and Kolon ‘s SAP

LG chemicals are the largest Korean chemical company. It manufactures and sells chemicals, plasticsand family goods. The basic natural stuffs are PVC, ethene, man-made rosins and PE petrochemicals. Building stuffs and industrial stuffs are besides produced. On the other manus, Kolon industries are a Korea-based retention company. SAP produces polymers. These polymers get largely used to do nappies and healthful serviettes. On December, 2008, LG chemicals acquired the Super Absorbent Polymer ( SAP ) Operations of Kolon Industries Inc. for 90 billion ( $ 86.8m ) .

2.2.1 Reasons of Unifying

Thorough this meeting, both LG chemicals and Kolon ‘s ( SAP ) are benefited. In order to increase the competitory addition in the petrochemical industry among the international markets this meeting helps LG chemicals greatly. For these LG chemicals acrylate production could be increased five times by 2015 and a regular buyer and user could be managed for their glacial acrylic acerb merchandise. Conversely, Kolon besides could acquire a new market for their merchandises.

2.3 Merging of LG telecom Ltd, with LG Powercom Corp and LG Dacom Corp

LG Telecom is a South Korean telecommunications and nomadic phone operator. On the other manus, LG Powercom is a telephone and broadband cyberspace supplier whereas LG Dacom is a supplier of telephone services, cyberspace services, domestic and international web and information communicating services.

On October 15, 2009 these three companies got merged together. Harmonizing to the meeting understanding LG Telecom demanded 0.742 and 2.149 portions per portion of LG Powercom and LG Dacom severally. After unifying, internet velocity got increased and as a consequence the current income is 543.2 billion whereas in the earlier phase it was merely 101.2 billion.

2.3.1 Reasons of Unifying

This meeting benefited LG telecom in uniting the retail and marketing distribution of VOIP and IP merchandise in the same platform. LG telecom besides got excess benefit because of holding ocular fibre web coverage all over the universe. Because of meeting, the companies could beef up their services holding a immense figure of clients. Their corporate construction besides got simplified and it became a menace to its rivals. As a consequence, they were able to salvage 1.5 % -2 % of their entire gross. It helped them to do entire one-year gross of $ 6,209.99 million which is resulted an expected net income to be around $ 776.25 million.

2.4 Acquisition of LG-Honam & A ; Hyundai Petrochemical

Honam, LG chemicals is a South Korean chemical company which is engaged in bring forthing electronics, industrial stuffs and polymers & A ; chemicals. Assorted merchandises are produced from petrochemicals. On the other manus, Hyundai Petrochemicals is a distributer and exporters of Petrochemicals. Hyundai Petrochemicals is a anterior subordinate of Hyundai Group. It produces and supplies basic natural stuffs, monomers and polymers and man-made gum elastics. On November, 2003 LG-Honam acquired Hyundai Petrochemicals polyvinyl chloride unit for 1.76 trillion to buyout Hyundai Petrochemical from Hyundai ‘s creditors holding an understanding that each of them would acquire 50 % of Hyundai.

2.4.1 Reasons for Acquisition

As a consequence of this acquisition Honam LG chemical and Hyundai Petrochemical was able to increase the production of Butadiene, Synthetic Rubber, Ethylene, Propylene and so on. LG chemical besides got the opportunity to bring forth a immense measure of petrochemicals. For this production capacity of LG chemicals PVC increased to 900000 dozenss where ab initio it was 700000 dozenss. Because of this LG chemicals was able to fulfill their clients and secured its future sweetening. LG chemical got competitory additions. Ultimately, both Honam & A ; LG were able to beef up their several concern through this acquisition.

Part 3 Strategic Alliances and Joint Venture

3.1 Introduction

Business competition in 20 first century is really high and a seller needs a powerful grab of the targeted possible market. This is the basic ground for being joined together in concern position to make a new dimension of universe market.

Harmonizing to Glover and Wasserman ( 2004 ) a joint venture is a contract fall ining together two concern organisations to accomplish a specific concern chance. Furthermore, it ‘s defined as a chance for the concern organisations so that they can lend their assets, in alternate for an equity interest for a portion in any net income, every bit good as that their confederation ( s ) are in understanding between two or more concern organisations, or companies to co-operate in a specific concern end.

A strategic confederation is a formal bond between two or more groups to carry through a set of specified marks or ends. On the other manus, a joint venture is an authorised entity between two or more groups to transport out a fiscal motion jointly. Strategic confederations and joint ventures are a really adept and cherished portion for doing an organisation. Thorough joint ventures and strategic confederations, organisations can hold immense benefits as follows:

a ) Decrease of the acquisition cost

B ) Expansion of the merchandise

degree Celsius ) Creation of competitory support in the concern sphere

vitamin D ) Minimization of the operational costs

3.2 Joint venture of LG- Philips Electronics

Philips gives lead in telecasting tubings whereas LG gives lead in proctor tubings. On the other manus, geographically LG leads in Asia whereas Phillips leads in Europe, China and USA. Furthermore, LG ‘s proficiency is in industrial and fabricating sectors whereas Phillips proficiency is in world-wide market and technological promotion.

A figure of strategic confederation and joint ventures were owned by LG-Philips with different companies in the twelvemonth 2001 to 2010. Market research says that a definite understanding was signed in 25th of June, 2010 ( Market Watch study, 2001 ) to unify their companies Cathode Ray Tubes ( CRT ) into a new joint venture company.

Both the companies have an understanding of keeping a 50 % joint venture. They aim to accomplish technological control over CRT motion in glass position. Actually, their mark is to keep a leading place in CRT holding one-year gross revenues of $ 6.5 billion and approximately 36,000 employees every bit good.

3.2.1 Reasons behind the Joint Venture

The grounds behind the joint venture are as follows:

To go a planetary leader in CRT.

To make an advanced Cathode-ray tube by uniting the engineering from both the companies.

To accomplish competitory advantages over other rivals in the market utilizing the relationship between them.

To better the complementary strength and synergy potency for both LG and Philips.

Joint venture made them more good than unifying or acquisition as the procurance became easy.

3.3 Nortel-LG electronics Joint Venture

In November 3, 2005, Korean company LG Electronics and Canadian company Nortel Network Corporation established a new joint venture company named LG-Nortel Co. Ltd of $ 295 million on which Nortel holds 50 % partnership to develop the telecommunication equipment and universe category Network ( ! ! ! ! ! ! Telecom News Digest, 11 December, 2006 ) .

LG and Nortel both have their single strength severally LG can supply a immense electronics merchandises like wireless manus set and on the contrary The Nortel company can supply the telecommunication and networking solution through wire line, radio, Optical.

At the get downing they have a mark for South Korea but in the long tally it came to dominant the universe broad with of whole Asiatic market. At the terminal of 2006, Their combined gross revenues was about $ 570 million and the employee was about 14000.

3.3.1 Reasons behind this method

The grounds behind the joint venture are as follows:

To cover the border communicating all over the universe and web solution in the field of wire line, radio, optical and enterprise market.

To capture the whole Asiatic market.

The purpose is to present the following coevals for the advantage of service supplier and stop user.

The Company ‘s gross will be increased.

To happen out research standards and development procedure.

3.4 Viking Range Corporation and LG Electronics Strategic Alliance

A industries company Viking Corporation and LG electronics company Inc declared and entered in to a strategic confederation where about the finance was non mentioned.

Harmonizing to footings and understanding, LG have a program to take over the USA consumer and The Viking USA distribution which will do the best LG contraptions. On the other manus, Viking decided to enlarge its international distribution channel chiefly in Asia and Asian Pacific market through their strategic confederations. In the beginning of 2010 Viking proposed to LG for the strategic confederations. ( ! ! ! ! ! ! — — -http: //www.m2.com, accessed on 16/09/2010 ) .

3.4.1 Reasons behind this method

Based on the undermentioned grounds both the company LG Electronics and Viking Range Corporation and Electronics build up a strategic confederations. This is as follows:

To spread out their market research and distribution channel.

This will increase their service resources.

Plan to make more USA consumers Viking USA distribution.

To collaboration merchandise cross-sourcing and joint procurance chances.

Sharing the research and development for the both.

Finally it can be seen that during last 10 old ages, LG has created a immense articulation venture and strategic confederations which made LG to spread out its concern and concern markets and for this ground it could make advanced merchandises, addition gross and compete with universe broad market.

Part 4 Emerging Market of LG

4.1 An Analysis of New Emerging Market

Internal and external growing is really of import for any organisation. In order to put any organisation needs to take a state. Again for taking a state, the organisation is to see the things like- economic system of the state, local civilization, gustatory sensations and penchants and political stableness every bit good. Expanding the new constituted state markets every bit good as the development of its merchandise quality and services as per the targeted peoples peculiar demands and wants is the chief end of internal growing. On the other manus, creative activity of more competent distributer, licencing conformance or joint venture with foreign state is the chief mark of external growing ( ! ! ! ! ! ! ! ! ! ! ! ! — Thomson & A ; J, 2009 ) .

Harmonizing to Kay ( ! ! ! ! ! ! ! — 1990 ) , any administration needs to see the undermentioned international corporate schemes for development.

International schemes for marketing along with finance

Organizational agreement

Issues related to people and civilization

4.2 An Analysis to Indian Market of LG Electronics

4.2.1 LG ‘s success in INDIA

After acquiring sequence in Korean market, LG got entryway in immense states of the Earth. In 1997, LG helped India in set uping as a wholly auxiliary of LG. In the country of color Television, micro-cook oven, washer and air-conditioner, its current place is the market portion no. 1 internationally ( Park, 2009 ) . Furthermore, LG controls fabrication installations at three chief metropoliss in India like- New Delhi, Noida and Pune in Mumbai. Chiefly, iceboxs, air conditioners, GSM mobile phones, color Television and washers are produced by the 2nd mill of Pune in Mumbai. Now production capacity of LG is acquiring increased. As a consequence, LG is widening its mark market to south-west part of India whereas the present market part is north-east of India. Again, India owned no. 1 market place in place contraptions in regard of iceboxs, air-conditioners, DVD participant, Colour Television and nomadic phone ( ! ! ! ! ! – Maeil Business Newspaper, 2009.3.24 ) .

Actually Indian consumer market was achieved by the leading experience of Mr. Kim. Harmonizing to Mr. Kim following are the three cardinal points of deriving success in Indian consumer market.

Production of best quality of merchandise

Supplying localisation policy

Powerful web distribution in distant countries

Among three factors mentioned above, supplying localisation policy is bit critical. LG India is entirely holding marketing pattern with the right merchandises suited for Indian market restraint ( ! ! ! ! ! SERI, 2007 ) .

4.2.2 Major Problem and Competition Faced LG in India

Besides achieving success in India, LG faced some jobs which are given below.

Policy of the authorities

Cultural job

Bi-lingual job

Competition with other multi-national companies

From the really beginning, local ordinance was the chief hinderance in doing independent investing for multi-national concern organisations. But the authorities made withdraws of the policy in 1998. Furthermore, due to the unstable power supply in India LG suffered a batch. Again LG faced a terrible job in the recognition crunch. Because their premier mark was the in-between category people whereas the recognition crunch besides targeted the in-between category citizens of that state. Furthermore, LG had no HINDI cardinal tablets along with English key tablet in their nomadic phone. On the other manus, Motorola, Nokia, Sony-Ericson used the HINDI cardinal tablet and got the control of the market. Initially, because of bi-lingual job, LG had to go through a really difficult clip with their employees. At last they got the consideration on spiritual and cultural factors of the merchandises and employees every bit good.

4.2.3 Market Share of LG in India

As per the market research study it is really clear that 7500 crore gross was achieved by the Korean mammoth company LG whereas 6300 crore gross was achieved Samsung which was jointly tantamount to market portion of around 40 % in the 2009-2010 financial old ages. Similarly, Rs.6129 Crore were achieved by LG whereas Rs. 5126 Crore were achieved by Samsung with the combined market portion in the twelvemonth 2008-2009. Furthermore, LG gained market portion of 21 % on icebox, 17 % on microwave woven and 15 % on nomadic phone market in the twelvemonth stoping 2009. LG is be aftering to acquire 35 % portion of electronic market of India in the twelvemonth 2012. ( Beginning: hypertext transfer protocol: //economictimes.indiatimes.com/ Accessed on 02/09/2010 ) .

Table 3.1: April 2010 stoping quarterly Average market portion in India:

Trade names

Installed base*

GSM

CDMA

Entire

( GSM + CDMA )

LG

6.4 %

47.6 %

15.4 %

Motorola

7.8 %

5.4 %

7.2 %

Nokia

62.6 %

24.3 %

53.7 %

Samsung

9.0 %

11.2 %

9.5 %

Sony-Ericsson

8.9 %

6.8 %

[ Beginning: hypertext transfer protocol: //www.marketresearch.com/browse.asp? categoryid=1224 ]

The above tabular array is demoing the market portion of different nomadic companies in India where LG is in a prima place.

Part 5 Key Threats for LG in 2010

5.1 Key Threats for LG in 2010

Each and every organisation wants to near new policy and present new merchandises with gorgeous characteristics in the competitory market scheme. In the universe of electronics, LG is a really popular and trusty trade name name. Laptops, latest nomadic phones, LCD proctors, Television sets are being provided by LG. on the other manus, Apple trade name has achieved the top most place in the above mentioned sectors. Apple Macbook Pro Laptop & A ; Apple Cinema Display LCD Monitor, iPhone nomadic sets, iPod etc. are being provided by Apple. Launching of iPad & A ; iPhone 3GS, iPhone 4G have already been introduced in the market. So without any vacillation it can be said that Apple is the cardinal menace for LG in 2010.

Reason of the Dainties

Apple is an advanced and diversified company, no uncertainty at all. Schemes of simpleness, quality and changeless development have been adopted efficaciously or successfully by Apple in the universe market. Again they have been able to accomplish a immense volume of trusty clients all over the universe. Some electronics merchandises have been introduced by this company and as a consequence of which the industries have got changed and has helped it to keep the prima place in the universe market. If we go for comparing between LG & A ; Apple merchandises with elaborate characteristics, we will be clear why Apple is the cardinal menace for LG.

Alternate to Apple iPod, an eight GB HDD based music participant ‘MF JM53 ‘ has been launched by LG holding TOUCH-SENSITIVE OLED screen of 128 tens 160 declaration and 260.000 colourss. It has besides 1.77 inches display screen and dimensions ( L x W x H ) : 48 x 14 ten 101 millimeter every bit good. Digital audio criterion formats including WMA, WAV, MPEG 2 AUDIO, MPEG 2.5 AUDIO, ASF, AVI, MP3, ADPCM, OGG VORBIS, MPEG 1 AUDIO, protected WMA ( DRM ) and MPEG criterions picture file formats are supported by this music participant. ( Beginning: Mistake! Hyperlink mention non valid. ) .

But in the recent times, iPad has been introduced by Apple which is relatively an updated and modified version of iPod with many more added and attention-getting characteristics. Actually, iPad is a tablet computing machine which has been designed and marketed by Apple. Again it has been developed as a new agencies of device between Smartphone and laptops. Apple launched iPad in April 2010. Till 3rd May 2010, Apple sold 1 million iPads. For a little clip it presents the highest figure of operators gained. Within really short period of clip it has been able to convey about an evolutionary alteration in the universe market. More than twelve million apps have been downloaded from App shop and besides 1.5 million e-books from iBookstore. Though it is really likewise to iPod & amp ; iPhone touch, it operates a modified operating system organized by multi-touch LCD. It is really much medium to fingertips where appliances of e-book readers are included. Any package and necessary appliance from App shop can be easy allowed to download. Website can be easy browsed. It is really friendly to the users. They can easy direct and have electronic mails, enjoy music and picture, portion exposures, acquire e-books etc. They can bask high quality artworks on big screen. Furthermore, it is really lighter and dilutant than any laptop or notebook. It has besides more than 10 hours battery support and 64 GB informations storage every bit good. ( beginning: hypertext transfer protocol: //www.apple.com & A ; hypertext transfer protocol: //en.wikipedia.org )

LG has introduced some latest nomadic sets such as LG Voyager, LG Ally, LG ARENA GT950 etc. But they are non compatible with Apple iPhone 3GS. Following coevals iPhone 4G is besides traveling to be launched shortly holding extra characteristics of double nucleus processor, OLED screen, OLED screen, Removable Battery, iChat camera. Hi definition camera will besides be launched with Camcorder, Messaging visible radiation, LED Flash, True GPS built in and Touch sensitive outer catching which is really similar to Apple Magic Mouse. ( beginning: www.Error! Hyperlink mention non valid. )

Without utilizing iTunes and Apple store no 1 can roll up any pictures, games, music or exposures because all of the Apple merchandises are wholly different from others since their package and operating system are different.

Therefore from the above comparing and treatment, it is really much clear that no 1 but Apple is the cardinal menace for LG in 2010.

Part 6 Recommendations and Conclusion

From the above treatment it is really much clear how meeting and acquisition is of import for any company to be emerged. To increase international concern competition, cut down complexness of regulative inadvertence, adding up stockholders value, amalgamation and acquisition for LG are economically fruitful. In footings of upgraded functional effectivity, larger market portion, higher industrial capableness and equity assessment unifying & A ; acquisition is successful.

In order to decrease the cost of merchandise extension, acquisition and competitory benefits, a figure of strategic confederations and joint ventures have been done since the constitution of LG in the worldwide markets. It has helped LG in increasing its repute, heightening grosss and going a planetary leader. Now opponent ‘s strengths and failing should be analyzed and synthesized earlier traveling to joint venture. Before catching an international market, LG besides should give accent on people ‘s life style, cultural beliefs and faith issues for happening out the chief rivals.

From company ‘s position, it is really of import to observe the menaces for effectivity and future sweetening. Besides at the same clip, company should take proper stairss to acquire recovery from the menaces instantly. Recently it is found that Apple is the cardinal menace for LG, so without any hold LG authorization should take speedy necessary stairss through effectual concern tools.

Some successful meeting and acquisition, joint ventures and strategic confederations every bit good as grounds of using these processs have already been discussed in this study. As per the realistic survey on these processs, it can be decided that unifying and acquisition and joint ventures are really effectual tools for any concern. These tools get used to heighten stockholders deserving and efficiency. This is besides used to entree different resources and enlarge market and auxiliary merchandises. The success and failure of emerging market and the chief menaces for LG in 2010 have been demonstrated in this study.