LG Electronics - Global Strategy in Emerging Markets

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For the exclusive use of J. LAU

TB0073
August 17, 2007

Kannan Ramaswamy

LG Electronics: Global Strategy in Emerging Markets
Mr. Nam Woo, President of LG Electronics (LG), was collecting his thoughts after the press conference in Beijing. He had been appointed as the President of LG Electronics in China in 2006 and was unveiling an ambitious agenda to accelerate LG’s presence in the country. He reflected on the emergence of
South Korea as a major hub in the consumer electronics business and the role that LG had played in the rapid transformation. Having spearheaded a significant part of LG’s forays into emerging markets such as Brazil, Russia, China, and India, Mr. Woo had synthesized some crucial lessons that he would have to bring to
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This success story was a product of foresight, careful strategic thinking, and leveraging an array of advantages that Korea was building at home.

The History of LG
LG was born as the Lak Hui Chemical Industrial Co. in 1947. It was founded by Mr. In-hwoi Koo for the manufacture of cosmetic creams. Finding that there were no independent manufacturers capable of supplying bottle caps needed for packaging the cream, Lak Hui Chemical set up its own facilities and utilized the excess capacity of its injection-molding machines to manufacture small consumer products based in plastic. This led to an entry into the manufacture of plastics components for telecommunication and electrical companies presaging LG’s entry into the telecommunications business. In fortifying its access to feedstock for plastics manufacture, the company moved into oil refining and later into shipping to transport crude oil. It was in 1958 that the Goldstar Co. (currently LG Electronics) was first established to consolidate expansion in the fast-growing area of plastics.
Exhibit 1

The Evolution of LG Group’s Portfolio of Businesses

Founded as a Cosmetics
Cream Maker

Electric Fan Blades and Telephone
Casings

Plastic Caps

Combs, Toothbrushes,
Soapboxes

Electronic Equipment and Telecom

Oil Refining

Insurance

Shipping

LG Electronics soon pioneered the growth of the Korean electronics and appliances industry, becoming the first Korean company to build a vacuum tube radio,

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