Case Study 3
LG Electronics: Global strategy in emerging markets
Suggested case discussion questions
Q1 Explain how LG’s experience within its domestic market (South Korea) influenced how it expanded into the BRIC emerging economies
All MNCs are shaped, to some degree, by their domestic markets. In LG’s case, its emergence in Korea during the decades following the Second World War strongly affected its ability to expand into the BRIC economies. The domestic Korean market was highly competitive, which helped hone its ability to enact “come from behind” approaches in other locations as it was used to having to fight its way to the top. The Korean Government placed strong ...view middle of the document...
’ Second, it utilized the incentives governments offered and the changes in government policy to maximize the benefits it was able to access. In India, a change in policy meant that it could launch a fully owned subsidiary, rather that joint venture with an Indian firm. While in Brazil, tax incentives and subsidized land were optioned to establish manufacturing plants. Third, it marketed itself in both countries through sponsoring national sporting events raising its brand recognition. Fourth, LG’s experience in Brazil directly influenced its strategy in India when it launched a fleet of repair vans to reach geographically remote areas at short notice. And last, localization of product and services provides a cornerstone of LG’s strategies in both India and Brazil. One area of possible divergence is in the employment of local staff to top management positions. We are informed that in India local employees occupy most of the top management positions within LGEIL and that this even resulted in some Indian staff being recruited back to Korea to manage parts of its niche analogue television business. Whereas, no mention is made of the percentage of local Brazilians occupying similar top management positions.
Q3 Looking to the...