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The electronics giant, LG Electronics, operates a global empire through five-core divisions including Home entertainment, Air Conditioning, Home Appliances, Mobile Communications and Energy Solutions. From the above, the entity under the LG Group Chaebol has created great advantages through its diversification into the aforementioned five divisions, with its niche in the above being espoused by its place as the second-largest global television manufacturer, in addition to fifth place in global mobile phone making and sales. By not concentrating on a single business arena/ model, the corporation increases its chances of profit making through its utility of economy. Through mergers and acquisitions, it has increased its stake significantly enabling its entry into such markets as solar cell and solar panel production. Other advantages have included the corporations acquisition of the LG.com domain name, which has further increased its presence and visibility in the arena of online shopping. Advantages from the different pools of income generating products have aided in its distribution of costs and other expenses amongst its core leading products divisions.
By venturing into new markets, the corporation has taken advantage of leveraged homegrown competitive advantage, in addition to other competitive advantages nurtured by the Korean government since the end of the Korean War. Another selling point was its product differentiation, design, brand positioning and innovation towards the various products existent. This it did with localized adapted designs, rural distribution, localized manufacturing and cultural marketing especially in emerging markets. This eventually built its formidable position in the greater global society. However, with advantages also come disadvantages such as costs and expenditures, the requisite need for expeditionary venturing, which also adds to costs, is often not successful at first trials. Additionally, differential government positions, policies and regulations, are often not to the advantage of the Corporations interests, often entailing extra tax levies and requisite applications, especially in initial venturing. However, this is solved through amongst others, tradeoffs, symbiotic partnerships and job/ employment opportunities (Ramaswamy, 2007).
Trade-off considerations that the corporation may have performed or should consider include: -partnership/ joint venture with Conergys solar-panel plant in Frankfurt, and acquisition of Zenith, the US electronics company, franchising in the different markets as it continues to go through localized ventures, strategic placement of manufacturing bases or out-sourcing of various requisite parts and additives, and in very competitive market arenas, if there is a need, a total withdrawal of certain products where they face stiff competitions. Methods of opportunity identification have and include, strategic market venturing, trial and error product availing, partnerships, joint-ventures or even corporate takeovers, which should be more corporate friendly and based on greater partnership. Productive means of knowledge accumulation and market assessment would greatly avail better alternatives for both product promotion as well as market penetration. Through constant abate spaced product promotions, the corporation can try and promote novel products which are not yet tested, based on trial basis.
By using specific market-based valuation models, the corporation can utilize the existent elements of the value maximization model towards better understanding how different management styles integrate the various aspects of finance, accounting, marketing and advertising, production capabilities and functions as well as personnel hiring procedures in each market arenas it exists or tries to venture into. Various market arenas possess various specifications and requirements, which have resulted into the corporations existent resistance in its attempts at venturing into the more developed countries. As such this may be attributed to the existence of very competitive products, especially in its flagship divisions of electronics, energy solutions, air conditioning and mobile communications divisions. Furtherance, due to the existent great competition as espoused in another giant corporation Samsung Inc. also a South Korean flagship corporation, there is hence extra pressure as far as market venturing is concerned, as both compete for almost similar consumer bases.
As aforementioned, the corporation is divided into five divisions, each of which possesses its own unique strengths and weaknesses. Specific comparative advantages the corporation possesses, is uniquely present in a number of the five divisions various products. As such, its television manufacturing division and mobile phone making divisions provide some of the best products globally. Additionally, its home entertainment division has also seen a lot of its products gain ground in both developed and developing arenas, this further boosting its sales volumes. Home appliances also have become popular requisite tools and instruments, which further prove the tenacity with which the corporation has established itself. Furtherance has been its various strategies used towards venturing into the existent different regional, local/ national and international market arenas. These would include: – localization of product designs from existent and easily adaptable forms, the cultural marketing of products according to existent socio-cultural contexts which resonate well with existent populations, manufacturing capabilities that are easily sourced and hence cheaper, as well as those which are localized (Hirschey, 2009).
Additionally, the strategic partnership with existent companies producing requisite parts would be enriching as different jurisdictions have their own specific specialties and capabilities in the manufacturing sector. The specific concentration on developing states, which potentially represent untapped market arenas, is also another strategic aspect which the corporation has and continues to employ. Through such focus, it continues to learn different aspects as pertaining to cost considerations, best hiring practices, effective and efficient organizational styles, best/ ideal products to produce as well as the best production and logistical avenues to enhance overall product availability. Furtherance is the fact that through such strategic placement, its products can and continue to build consumer bases providing good credentials requisite in the penetration of other more competitive markets, such as those in developed/ industrial nations (Ramaswamy, 2007).
In conclusion, the giant corporation has had a great growth and expansive history from a contracted supplier of OEM contracts to various existent American and Japanese appliance makers, during its hey-days before full-scale market venturing. This was primarily founded on its success via the Goldstar label, in its American market venture, and latter into other strategic states such as those represented in the BRIC countries among other developing states.