Managing Global Operations: Group Project Written Report on LG example

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Managing Global Operations: Group Project Written Report on LG

This report will study LG as a firm that sells mobile phones. This report is mostly concerned with managing the global operations of LG Electronics, which is an entity of LG Group that produces mobile phones. This report will study such issues as the international marketing strategy of the product, international financial management, ethics and corporate social responsibility, innovation and technology, global operations and supply chain management, and leveraging of knowledge resources globally.

The International Marketing Strategy of the Product

LG Electronics is the second largest electronics maker in South Korea after Samsung (Rowley & Paik, 2009). LG has become the third largest manufactures of mobile phones in the world (Hemmert, 2012). LG’s revenues
are well balanced across all regions of the world, and two thirds of its total workforce is located outside South Korea.

LG achieved this position mostly due to the impact of its CEO Ssang-Su Kim who was leading the company from 2003 to 2007 (Park, Lee, Suh, & Kim, 2012). In 2003, LG started repositioning strategy, which was aimed at
turning LG from a white goods corporation that imitates others into a digital trendsetter. Kim took on a top initiative to focus on building a premium brand name and image. This reflects the common view that a
corporation’s brand is its most important asset. LG raised average sales prices as it switched from low-middle-end market focus to premium design models. Park and Hong (2016) argue that LG could not position itself in the
already crowded smartphone market in 2009. That is why, in 2010 LG carried out a massive reorganization and established a new smartphone department. Although LG focus is global, the company places particular emphasis on the US as this market is critical to global success. It worth mentioning that LG managed to maintain a high flexibility in sales and marketing efforts to satisfy customer needs in each country and region, despite pushing for integration in supply chain and manufacturing operations.

It is safe to say that LG has been employing multinational strategy as the company developed customized solutions for every region after studying local preferences. LG has frequently used a strategy that simultaneously
targets the developed markets and the developing markets, which resulted in the balanced sales of LG mobile phones. In recent years, LG has opened around a hundred LG Mobile brand shops in developing nations to expose customers to high-end goods (Park & Hong, 2016). LG’s strategy of covering both developed and developing markets increases the total supply, which in turn strengthens the economies of scale. Park et al. (2012) argue that diversifying the sales market reduced the risk of global operations. Although LG has pursued a strategy of rapid and comprehensive globalization, the company managed to …

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