EE204: Business Management for
Electrical Engineers and Computer Scientists

Emerging Markets

Read

  1. Finding Great Ideas in Emerging Markets (HBS course materials)
  2. LG Electronics: Global Strategy in Emerging Markets (HBS course materials)

Case Summary

The case focuses on the specific issues relating to Korea and LG Electronics, one of the leading consumer electronics manufacturers in the world. It follows the fortunes of LG Electronics, a company that started as a contract manufacturer supplying OEM contracts to a variety of Japanese and U.S. appliance makers. It entered the U.S. market under its Goldstar label fairly early, and quickly realized that it needed to hone important skills of product differentiation, brand positioning, design, and innovation in order to succeed. Given the huge obstacle that this steep learning curve represented, LGE turned to emerging markets as a means of building credibility outside Korea. It charted a systematic strategy that encompassed a range of elements such as locally adapted designs, localized manufacturing, rural distribution, and cultural marketing that resonated very well with emerging market consumers. It had soon built a formidable position across all the BRIC countries (Brazil, Russia, India, and China). Turning its sights once again to the developed countries, it contemplated how it could take some of the lessons it had learned in the developing world to kickstart its developed country strategy into high gear.

Discussion Questions

  1. Compare and contrast LG's strategies for creating new markets for each of the emerging economies covered in the case.
  2. What mistakes did LG make in its initial attempt to enter developed markets?
  3. How would you rate the LG culture and its support for "bridger" initiatives in emerging markets?
  4. You are the General Manager of LG India. Your team has designed, tested, and successfully introduced the now popular " Power Miser All-In-One Washer and Dryer". The customers are apartment dwellers. What steps would you take to propose this for export to other markets? What challenges do you anticipate?
  5. LG management is considering a developed-market penetration strategy. Which of the emerging-market strategies would apply in a developed market? Do you recommend any additional strategies for developed markets? What can LG do to avoid repeating its previous mistakes in selling to developed markets? Are any of your strategies disruptive?
  6. What impact does the increasing importance of software have on LG?
  7. What are your recommendations for LG, and how will you implement them? What do you see as the trade-offs for your recommendations?