LG Electronics Inc.: Making Waves in the North American Market for Washing Machines SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of LG Electronics Inc.: Making Waves in the North American Market for Washing Machines
The LG brand was launched in the US in 2002 with the ambition to build it up as a premium brand. The case outlines LG's strategy in the washing machine category from 2002-2005, during which a series of successful launches has established LG as a strong player. The case presents extensive customer data and information on potential product features for a new washing machine and raises several questions: Which segment should LG serve? What features should the new machine contain? How should it be priced? How should it be marketed? The questions need to be addressed in light of LG's desire to be a premium brand. The case can be used with UG, MBA or executive audiences.
Authors :: Lajos Joseph, Amitava Chattopadhyay, Park Eun-Ju
Swot Analysis of "LG Electronics Inc.: Making Waves in the North American Market for Washing Machines" written by Lajos Joseph, Amitava Chattopadhyay, Park Eun-Ju includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Lg Washing facing as an external strategic factors. Some of the topics covered in LG Electronics Inc.: Making Waves in the North American Market for Washing Machines case study are - Strategic Management Strategies, Marketing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the LG Electronics Inc.: Making Waves in the North American Market for Washing Machines casestudy better are - – increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, there is backlash against globalization, increasing energy prices, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic ,
technology disruption, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of LG Electronics Inc.: Making Waves in the North American Market for Washing Machines
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in LG Electronics Inc.: Making Waves in the North American Market for Washing Machines case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Lg Washing, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Lg Washing operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of LG Electronics Inc.: Making Waves in the North American Market for Washing Machines can be done for the following purposes –
1. Strategic planning using facts provided in LG Electronics Inc.: Making Waves in the North American Market for Washing Machines case study
2. Improving business portfolio management of Lg Washing
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Lg Washing
Strengths LG Electronics Inc.: Making Waves in the North American Market for Washing Machines | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Lg Washing in LG Electronics Inc.: Making Waves in the North American Market for Washing Machines Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the LG Electronics Inc.: Making Waves in the North American Market for Washing Machines Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Low bargaining power of suppliers
– Suppliers of Lg Washing in the sector have low bargaining power. LG Electronics Inc.: Making Waves in the North American Market for Washing Machines has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Lg Washing to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Lg Washing is one of the leading recruiters in the industry. Managers in the LG Electronics Inc.: Making Waves in the North American Market for Washing Machines are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Lg Washing is one of the most innovative firm in sector. Manager in LG Electronics Inc.: Making Waves in the North American Market for Washing Machines Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Lg Washing has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Lg Washing has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Training and development
– Lg Washing has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in LG Electronics Inc.: Making Waves in the North American Market for Washing Machines Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to lead change in Sales & Marketing field
– Lg Washing is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Lg Washing in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Lg Washing is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Lg Washing is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Lajos Joseph, Amitava Chattopadhyay, Park Eun-Ju can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Effective Research and Development (R&D)
– Lg Washing has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study LG Electronics Inc.: Making Waves in the North American Market for Washing Machines - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Lg Washing digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Lg Washing has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Diverse revenue streams
– Lg Washing is present in almost all the verticals within the industry. This has provided firm in LG Electronics Inc.: Making Waves in the North American Market for Washing Machines case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Weaknesses LG Electronics Inc.: Making Waves in the North American Market for Washing Machines | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of LG Electronics Inc.: Making Waves in the North American Market for Washing Machines are -
Slow to strategic competitive environment developments
– As LG Electronics Inc.: Making Waves in the North American Market for Washing Machines HBR case study mentions - Lg Washing takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Need for greater diversity
– Lg Washing has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Slow decision making process
– As mentioned earlier in the report, Lg Washing has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Lg Washing even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Lg Washing is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study LG Electronics Inc.: Making Waves in the North American Market for Washing Machines can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study LG Electronics Inc.: Making Waves in the North American Market for Washing Machines has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Lg Washing 's lucrative customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study LG Electronics Inc.: Making Waves in the North American Market for Washing Machines, it seems that the employees of Lg Washing don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Low market penetration in new markets
– Outside its home market of Lg Washing, firm in the HBR case study LG Electronics Inc.: Making Waves in the North American Market for Washing Machines needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Lg Washing has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Skills based hiring
– The stress on hiring functional specialists at Lg Washing has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Increasing silos among functional specialists
– The organizational structure of Lg Washing is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Lg Washing needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Lg Washing to focus more on services rather than just following the product oriented approach.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Lg Washing supply chain. Even after few cautionary changes mentioned in the HBR case study - LG Electronics Inc.: Making Waves in the North American Market for Washing Machines, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Lg Washing vulnerable to further global disruptions in South East Asia.
Opportunities LG Electronics Inc.: Making Waves in the North American Market for Washing Machines | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study LG Electronics Inc.: Making Waves in the North American Market for Washing Machines are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Lg Washing can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Lg Washing can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Lg Washing can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Lg Washing can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. LG Electronics Inc.: Making Waves in the North American Market for Washing Machines suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Lg Washing can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, LG Electronics Inc.: Making Waves in the North American Market for Washing Machines, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Lg Washing can use these opportunities to build new business models that can help the communities that Lg Washing operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Building a culture of innovation
– managers at Lg Washing can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Lg Washing in the consumer business. Now Lg Washing can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Lg Washing has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Developing new processes and practices
– Lg Washing can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Lg Washing can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Lg Washing is facing challenges because of the dominance of functional experts in the organization. LG Electronics Inc.: Making Waves in the North American Market for Washing Machines case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Manufacturing automation
– Lg Washing can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Lg Washing in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Threats LG Electronics Inc.: Making Waves in the North American Market for Washing Machines External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study LG Electronics Inc.: Making Waves in the North American Market for Washing Machines are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Lg Washing can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study LG Electronics Inc.: Making Waves in the North American Market for Washing Machines .
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Lg Washing will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Stagnating economy with rate increase
– Lg Washing can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Lg Washing business can come under increasing regulations regarding data privacy, data security, etc.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Lg Washing in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Regulatory challenges
– Lg Washing needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Environmental challenges
– Lg Washing needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Lg Washing can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Lg Washing in the Sales & Marketing sector and impact the bottomline of the organization.
Increasing wage structure of Lg Washing
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Lg Washing.
High dependence on third party suppliers
– Lg Washing high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study LG Electronics Inc.: Making Waves in the North American Market for Washing Machines, Lg Washing may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Shortening product life cycle
– it is one of the major threat that Lg Washing is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of LG Electronics Inc.: Making Waves in the North American Market for Washing Machines Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study LG Electronics Inc.: Making Waves in the North American Market for Washing Machines needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study LG Electronics Inc.: Making Waves in the North American Market for Washing Machines is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study LG Electronics Inc.: Making Waves in the North American Market for Washing Machines is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of LG Electronics Inc.: Making Waves in the North American Market for Washing Machines is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Lg Washing needs to make to build a sustainable competitive advantage.
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