Business Strategy

LG has numerous competitors in the market of electronics. Some competitors include Samsung Electronics, and Toshiba Corporation. They maintain competitive goals for their market strategy to produce high end mobile devices and other multimedia products. Their primary vision for a new market position is becoming one of the top three global corporations by 2010.

LG uses global differentiation as their business strategy. Like Apple, LG uses integrated collaboration environment and business intelligence system in their organization. LG works together with all departments including design and promotion to keep their products increasingly well-known for their originality and uniqueness. In recent news, LG will be joining for the first time in the Windows Mobile phone space collaborating with Microsoft. (See article: REUTERS 02/14/07). This collaboration with Microsoft Mobile windows will surely raise revenues and is a great example as a business intelligence decision for the company because of the tremendous demand for the internet via your cell phone. Microsoft recently unveiled a new version of its Windows operating system for mobile devices, making it look more like Windows Vista and adding features previously only available on personal computers.

For LG, much of the power of the 5 forces model comes from the supplier power because the relative attractiveness through their collaboration efforts with their telecommunication sector (mobile phones). Buyer power has shown efforts with the display and media sector of the company but certainly not due to the fact that LG will reduce costs in order for a consumer purchase. Well, an incentive for customers to use LG phones through a mobile phone distributor the companies work together to give a discounted upgrade to consumers to build a loyalty factor with customer satisfaction of the product. There is a high threat of substitutes and rivalry among existing competitors in the telecommunications sector due to the fact that there are many other manufacturers of mobile devices and computer products.

LG tailors their product to the prestige customer. Their is no bottom line initiatives taken by LG. They use top-line initiatives to increase revenue through information technology. Much of LG's marketing is through advertising in print, television and outdoor ads. Not only does LG advertise with these tools but also through internet advertising. Banner ads play a role in promotion for the company. They also use affiliated programs, considering Verizon, Sprint and Cingular and other mobile plan distributors play a a role in pushing customers to LG in the exchange for money that LG would owe to Verizon, Sprint, etc. for the distribution of their products. By this the company gains a great name and much advertisement. Another example of online advertisement for LG, there are many articles in Google, which is a search engine, to lead consumers to LG. There is also some use pop under, which is an excellent way of advertisement.

LG uses sports marketing in their unique marketing mix to also provide a top line initiative of the company, advertising through sponsorships. For example, In 2006, LG started sponsoring the US PGA "Skins Game." The Skins Game is the nation's biggest golf championship that opens during the holiday week of Thanksgiving Day. The Skins Game also has one of the highest TV viewing of live golf telecast which in turn is giving LG great publicity within the prestige market.

The company’s online payment systems are extremely secure, using an “s” in the https:// secure format to ensure customers of privacy. For example, if one is trying to purchase one of their products online, they have to go through a series of steps before purchasing the product. First, they have to choose what kind of phone they would like to purchase. Second, they have to choose the kind of plan that their phone provider has. After that the LG website goes to a secured encrypted website where all the payment information is taken and than scrambles their credit card data so that only a secured bank can get your information. In that website they ask the customer for all of their information such as their social security number, credit card information and all their address information.

The internet business model that LG uses is a Clicks N' Mortar model, which means that their customers can go to an actual store or shop online and purchase their products. This gives them a great deal of flexibility as a world wide company. They have two E-commerce models. A Business to Business (B2B) model because they sell much of their phone products to other companies to distribute their product. They also adopt the Business to Consumer (B2C) model because they offer much of their products online for personal use without going through a store going to directly to the consumer.