LG Electronics Inc.: Making Waves in the North American Market for Washing Machines SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

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

Topics :: Sales & Marketing

Tags :: Marketing, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

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 inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, technology disruption, supply chains are disrupted by pandemic , increasing commodity prices, geopolitical disruptions, there is increasing trade war between United States & China, etc

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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.

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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

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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 -

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.

Superior customer experience

– The customer experience strategy of Lg Washing in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

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.

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.

High brand equity

– Lg Washing has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Lg Washing to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

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.

Learning organization

- Lg Washing is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Lg Washing is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in LG Electronics Inc.: Making Waves in the North American Market for Washing Machines Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

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.

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.

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.

Cross disciplinary teams

– Horizontal connected teams at the Lg Washing are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.

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.

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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 -

High dependence on star products

– The top 2 products and services of the firm as mentioned in the LG Electronics Inc.: Making Waves in the North American Market for Washing Machines HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Lg Washing has relatively successful track record of launching new products.

High bargaining power of channel partners

– Because of the regulatory requirements, Lajos Joseph, Amitava Chattopadhyay, Park Eun-Ju suggests that, Lg Washing is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.

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.

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.

Ability to respond to the competition

– As the decision making is very deliberative, highlighted in the case study LG Electronics Inc.: Making Waves in the North American Market for Washing Machines, in the dynamic environment Lg Washing has struggled to respond to the nimble upstart competition. Lg Washing has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Capital Spending Reduction

– Even during the low interest decade, Lg Washing has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.

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.

Products dominated business model

– Even though Lg Washing has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - LG Electronics Inc.: Making Waves in the North American Market for Washing Machines should strive to include more intangible value offerings along with its core products and services.

Aligning sales with marketing

– It come across in the case study LG Electronics Inc.: Making Waves in the North American Market for Washing Machines that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case LG Electronics Inc.: Making Waves in the North American Market for Washing Machines can leverage the sales team experience to cultivate customer relationships as Lg Washing is planning to shift buying processes online.

Workers concerns about automation

– As automation is fast increasing in the segment, Lg Washing needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.

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.

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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 -

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Lg Washing to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Lg Washing to hire the very best people irrespective of their geographical location.

Learning at scale

– Online learning technologies has now opened space for Lg Washing to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.

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.

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.

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.

Identify volunteer opportunities

– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Lg Washing can explore opportunities that can attract volunteers and are consistent with its mission and vision.

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.

Creating value in data economy

– The success of analytics program of Lg Washing has opened avenues for new revenue streams for the organization in the industry. This can help Lg Washing to build a more holistic ecosystem as suggested in the LG Electronics Inc.: Making Waves in the North American Market for Washing Machines case study. Lg Washing can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.

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.

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.

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.

Leveraging digital technologies

– Lg Washing can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.

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.

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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 -

Easy access to finance

– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Lg Washing can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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.

Aging population

– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.

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.

High level of anxiety and lack of motivation

– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Lg Washing needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.

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.

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.

Capital market disruption

– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Lg Washing.

Technology acceleration in Forth Industrial Revolution

– Lg Washing has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Lg Washing needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.

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 .

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.

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.

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.

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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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