LG in India (C): Sustaining Competitive Advantage

Abstract

LG was market leader in nearly all its product lines and segments in consumer electronics in India in 2007. LGIL had appointed a new MD who had to develop strategies to enable the company to sustain its market position. This case details the distribution, product development and service focus of LG, together with changing consumer behavior up to the present time with projections for strategy into the future.

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

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Table I: Ownership of Household Durables by Type (Actual Growth): 1995–2007/2007–2015 Percentage Points

19952007

20072015

Air conditioner

1.21

1.88

Bicycle

7.50

3.67

Black and white TV set

−7.86

−9.87

Cable TV

22.91

6.06

Camera

3.03

1.99

Cassette/radio player

−6.61

−11.65

CD player

0.83

−0.34

DVD player/recorder

1.44

3.26

Colour TV set

45.68

28.59

Range cooker

12.60

8.00

Dishwasher

0.70

2.80

Freezer

8.45

7.84

Hi-fi stereo

8.67

8.32

Microwave oven

11.22

7.77

Mobile telephone

13.12

19.56

Motorcycle

2.26

1.44

Passenger car

4.00

5.13

Personal computer

12.68

16.75

Internet-enabled computer

2.72

10.36

Piano

0.51

0.36

Refrigerator

5.93

5.95

Satellite TV system

2.92

1.51

Sewing machine

0.07

−0.41

Shower

8.19

5.45

Telephone

9.76

6.39

Tumble dryer

0.61

0.30

Vacuum cleaner

21.98

10.40

Video camera

0.04

0.02

Video game console

0.65

0.39

Videotape recorder

0.95

−0.15

Washing machine

14.62

11.13

Source: National statistics, Euromonitor International

Table II: Household by Type (% Analysis and % Growth) 1995/2007/2015/1995–2007/2007–2015 % Analysis/% Growth

1995

2007

2015

19952007

20072015

Single person

2.66

4.59

6.42

121.79

57.79

Couple without children

7.48

10.89

12.39

86.83

28.51

Couple with children

56.15

51.98

49.45

18.81

7.40

Single-parent family

9.34

8.79

8.40

20.83

7.88

Other

24.37

23.74

23.33

25.01

10.97

HOUSEHOLDS

100.00

100.00

100.00

28.33

12.90

Source: Euromonitor International from trade sources and national statistics

Note: Figures stated as zero refer to a negligible percentage of total households

Table III: Consumer Expenditures by Commodity Type: 1995/2000/2005/2007/2010/2015 Rs billions

1995

2000

2005

2007

2010

2015

Durable goods

377.6

498.5

685.3

769.0

919.9

1,283.9

Semi-durable goods

1,073.4

1,483.7

1,699.5

1,898.3

2,219.1

3,023.4

Non-durable goods

8,514.6

9,977.1

11,392.7

12,602.5

14,484.3

19,679.1

Services

4,573.9

6,162.7

8,945.9

10,018.2

11,865.5

16,026.1

TOTAL

14,539.5

18,122.1

22,723.5

25,288.0

29,488.8

40,012.4

Source: National statistical offices, OECD, Eurostat, Euromonitor International

Note: Constant value at 2007 prices

Table IV: Forecast Sales of Consumer Electronics by Category: % Volume Growth

Forecast Sales of Consumer Electronics by Category: % Volume Growth 20092014

% Volume growth

2009/14 TOTAL

Computer and Peripherals (Computer & peripherals)

161.6

In-Home Consumer Electronics (Home audio and cinema, Televisions and projectors, Video players)

91.1

In-Car Entertainment (In-car media players, In-car navigation, In-car speakers, Other in-car entertainment)

123.1

Portable Consumer Electronics (Cameras, Camcorders, Portable media players, Mobile phones)

71.1

Consumer Electronics

87.7

Table V: Forecast Sales of Consumer Electronics by Category: % Constant Value Growth

Forecast Sales of Consumer Electronics by Category: % Value Growth 20092014

% Constant Value Growth

2009/14 TOTAL

Computer and Peripherals (Computer & peripherals)

115.9

In-Home Consumer Electronics (Home audio and cinema, Televisions and projectors, Video players)

137.7

In-Car Entertainment (In-car media players, In-car navigation, In-car speakers, Other in-car entertainment)

48.0

Portable Consumer Electronics (Cameras, Camcorders, Portable media players, Mobile phones)

42.0

Consumer Electronics

77.0

Table VI: Flat CTV Market Share

Market Share of Different Players For Flat Colour TV (In %)

Year

LG

Samsung

Videocon Brands*

MIRC**

Philips

Sony

Others

2009–10

31.7

25.2

19

11.1

4.1

0.5

8.4

Note: *Videocon Brands includes Videocon, Sansui, Akai, Hyundai, Kenstar & Toshiba

**MICR includes Onida & Igo brands

Source: CRISIL Research Industry

Table VII: High-End TV Market Share

Market Share of Different Players For High-End TV (In %)

Year

Samsung

LG

Sony

Videocon Brands*

Philips

MIRC**

Others

2009–10

33.5

27.2

21.7

7.4

0.9

2

7.3

Note: *Videocon Brands includes Videocon, Sansui, Akai, Hyundai, Kenstar & Toshiba

**MICR includes Onida & Igo brands

Source: CRISIL Research Industry

Table VIII: Air Conditioners

Market Share of Different Players For Room Air Conditioners (In %)

Year

LG

Voltas

Samsung

Videocon

MIRC

Whirlpool

Others

2008–09

27

17

15

7

6

4

24

Note: *Videocon Brands includes Videocon, Sansui, Akai, Hyundai, Kenstar & Toshiba

**MICR includes Onida & Igo brands

Source: CRISIL Research Industry

Table IX: Washing Machines

Market Share of Different Players For Washing Machines (In %)

Year

LG

Samsung

IFB

Videocon*

Godrej

Whirlpool

Others

2009–10

26.3

21.3

5.8

15.2

7

16.2

8.2

Note: *Videocon Brands includes Videocon, Sansui, Akai, Hyundai, Kenstar & Toshiba

**MICR includes Onida & Igo brands

Source: CRISIL Research Industry

Table X: Refrigerators

Market Share of Different Players For Refrigerators (In %)

Year

LG

Samsung

Videocon*

Godrej

Whirlpool

Others

2009–10

26.4

19.2

15.4

17.1

19.3

2.6

Note: *Videocon Brands includes Videocon, Sansui, Akai, Hyundai, Kenstar & Toshiba

Source: CRISIL Research Industry

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

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