LG Electronics - Competitive Environment and Business Level Strategy - Example

LG Electronics, Inc. Student’s Name Institutional Affiliation LG Electronics, Inc. Corporation Identification The corporation is considered as a company or group of investors who are authorized in acting as a single entity that is recognized by the law. It is a legal entity that is clearly distinct and separate from the owners. These companies enjoy the rights and responsibilities such as entering into the contract, employing and paying taxes among other privileges an individual possesses. The study focuses on LG Electronics Corporation dealing with the mobile devices, the home entertainment electronics and other appliances such as refrigerators. Product portfolio relates to the collection of products and services that are offered by the firm. It is an analysis of the firm’s stock type, the growth prospects, and the income distribution aspects. On the other hand, the services portfolio covers the core repository where organization services information is generated. The services are categorized and listed depending on its status and history. The service design package relates to the nature of the services that an organization offers. Therefore, the product and services portfolio relates to the products and services that an organization has in conducting its day to day operations. Business Unit Research Business Unit Identification The strategic business unit indicates the profit center whereby the firm focuses on the products or services offered and the market segment (Watson & Wooldridge, 2005). A corporation entails multiple strategic business units as every unit is responsible for its operations and profitability. The strategic business units are essential for the organizations that are multi-product and focusing toward manufacturing and marketing set of products. Furthermore, the strategic business units are responsible for their business decision and strategy making regarding the specific set of products they are dealing (Chang & Harrington, 2002). LG Electronics Inc. has different business units dealing with the specific division of electronics. The firm enjoys a wider variety of electronics and hence targeting customers from a different aspect. The business units of LG Electronics Inc. include mobile devices, home entertainment, and home appliances electronics. Identification of Product and Services Lines The product line indicates the group of related products that are sold by the firm. These products are identified depending on the brand name. The organization sells different brands using multiple product lines. On the other hand, the service line shows the grouping of all the related product and services in a certain business division. The services that are offered in certain business unit with similar features and targeting specific market can be termed as service lines. In the LG Electronics Inc., the firm considers targeting customers in different lines. The business units have enabled the firm to have different products and service lines. The approach of the organization setting electronics and categorizing into mobile devices, home entertainment, and appliances has enabled the form to improve its productivity and performance (Watson & Wooldridge, 2005). Focusing on the home entertainment, electronics, the LG Electronics Inc. has enhanced the quality of the electronics and diversity to attract the customers. The need for the entertainment electronics such as woofers, radio, and television has increased as the firm focus on the market need, the nature of the targeted customers and the demand for the entertainment electronics. Business Unit Revenue Revenue indicates the generations or returns that are obtained from selling the product and services. The LG Electronics Inc. through the home entertainment electronics has been in a position of generating $ in the year 2014. This was the highest revenue the business unit has ever generated. The company has enjoyed large market base as the demand for the home entertainment electronic grows wider (FANG, LI, HUANG, & PALMATIER, 2015). This has made the LG Electronics Inc. enter into the international market to increase its sales and hence generating more revenue. External Environment Analysis Operating environment relates to the surrounding factors influencing the organizational operations. The operational environment is categorized into the internal and external environment. These categories are essential in determining the operation of the firm as they influence the management, productivity, marketing and entering into the international market. The LG Electronics Inc. has encountered both internal and external environment. The external environmental analysis, the political, economic, social, technology, environmental and legal operating environment (PESTEL) influences the organizational operations. Political Factors Political factors are essential determinat of the multinational business operation in different countries. LG Electronics Inc. like any other multinational firm has to focus on the political stability. The political risks are supposed to be clearly assessed to ensure the company do not invest in the collapsing economy (Singh, Verma, & Rao, 2016). The LG Electronics Inc. is supposed to consider the political development and situation in the countries they ten to invest. Mot of the cusntries with proper economic performance are politicl stable and hence safe to invest. On the other hand, the countries experiencing politabl distabilities have collapsing economy and hence multinational companies such as LG Electronics Inc. has to consider the risk of investing in such economies (Various, 2011). Economic Factors The status of the global economy is another determinant factor of the success of LG Electronics Inc. (Aleksic, 2011). The economic growth and development of countries provide a proper dimension for the LG Electronics Inc. as it helps in the estimation of demand for its international brands (Menezes, 2009). The LG Electronics Inc. is operating in different countries and hence has to consider the trend of the exchange rates. The exchange rate tends to affect the valuation of imports and exports and to a large extent its profitability. Therefore, the LG Electronics Inc. has to put in place measures to manage its foreign exchange risks. The LG Electronics Inc. has to consider these economic factors before entering into international markets. Favorable trade policies have also enabled it to access cheap imports from China that has improved its competitive advantage (Beauvois, 2008). Social Factors Social factors indicates the community lifestyle, culture and how they live with other communities. Culture and social aspects are essential determinats of the international business operation . the LG Electronics Inc. has to soncider the social aspects to deermine the target market behavioral in respect to the electronic products. Social class and lifestyle helps in determining the nature of the product, marketing and pricing to attract more customers. Compactibitlity of the products are supposed to nhance the operations and ensuring the customers relates perfectly with the cultural practices (López-Navarro & Segarra Ciprés, 2015). Other factors such as population distributions, growth and age are also social factors that LG Electronics Inc. is supposed to consider when introducing its product (Dunfee, 2003). Depending on the age bracket, the company has to consider the target market and the nature of the electronics they need (Gillett, Martala, & Hammond, 2009). Therefore, social factor entails different aspects that company is supposed to consider in both local and international market. Technological Factors LG Electronics Inc. depends with the technology development and innovation in its operation. The firm consider technology as the key factor that influences its international business operation (Ali, Melewar, & Dennis, 2013). The systems that LG Electronics Inc. uses are automatic and hence helps in influencing its operation efficiency. The LG Electronics Inc. has embacked on the online platform of marketing and trading its electronics internationally (Mascull, 2012). The operation of the company through online services helps in connecting customers directly to the LG Electronics Inc. customer care desk where any assistance is offered (Ghorbani, 2004). This approach of the online services has helped the LG Electronics Inc. to enage more customers globally and improving its penetration and competing effectively with the rival companies in the electronic industry. The technology changes from one region to another. This influences the penetration of the company into the low technological connected regions. Therefore, technology is among the factors that influences the LG Electronics Inc. operations. Legal Factors Every multinational organization such as LG Electronics Inc. is supposed to focus on the laws that governs the countries where they operates. The major consideration on the legal and rule of law governing the business operation are supposed to be considered in the business strategic measures and policies. The LG Electronics Inc. is supposed to consider the international business law and its operation. The legal approaches such as employment and discrimination laws, the consumer protection and health and safety laws are supposed to be enhanced to improve good relationship with respective trade unions (Pearce, 2013, p. 504). The issues of gender, religion and racial discrimination are to enhanced to protect the vulnerable group depending on the regions (McCarthy, McCarten, & Clark, 2009). Furthermore, according to Maclnnes (2006), the LG Electronics Inc. is supposed to focus on the respective labor union on the employment and minimum wage in respective country. Collins (2006) indicates that the multinational company has to consider on the local and international rules and regulations governing the business operation. Environmental Factors Environmental aspects influences business operations especially at international business oprations. The weather and climatical changes are the major aspects that tend to influence normal operations. The multinational companies such LG Electronics Inc. operates in different countries in different time ones, climatical changes and surroundings. The infrastructural diversity in these regions tend to face the environmental calamities and hence affecting directly and indirectly to the LG Electronics Inc. operatations. Furthermore, smows and hailstorms makes the company to align its operations depending to the respective country weather and climatic conditions and patterns (Walker, Redmond, & Giles, 2010, p. 3). The operations of LG Electronics Inc. is supposed to enhance the production of the goods and services compactible to the environmental factors (McKeown & Wright, 2011). according to Sethi (2014), the company is supposed to focus on the health safety of its consumers. Therefore, the LG Electronics Inc. is obliged to ensure the electronics an other products meets the safety conditions and policies set by these international trade unions. Sustainable Competitive Advantage Sustainable competitive advantage is when an organization has products and services that are perceived by the customers as better comparing to that of the competitors. The adopted strategies are directed to the expectation of the organization in performance and productivity (Liu, 2013). The organization is required to have appropriate strategies to exploit any available opportunities in the market to compete effectively. Competitive strategies relate to the product and service differentiation that helps in designing the product and services in a manner of appealing customers using special sensitivity in a particular product offered. This makes the customers opt in paying premium is any in improving the firm’s performance. The competitive strategies contribute to the sustainable competitive advantage of the firm (Huang, Dyerson, Wu, & Harindranath, 2015). The home entertainment electronic business unit of LG Electronics Inc. enjoys competitive advantages over the rival companies offering electronics products. Some of the essential sustainable competitive advantage includes; Customer loyalty; LG Electronics Inc. enjoys the customers’ commitment and loyalty in buying the merchandise fitting their interests. The company focuses on retail branding, positioning and even setting the loyalty programs. In winning the customer loyalty, the home entertainment electronics unit has focused on developing high-quality products meeting the customers need. The customers’ preference and taste are incorporated in the electronic production to fit their needs and want (MATEI, 2013). Furthermore, the company involves the customers in developing appropriate models and packages attractive in the market. This has improved the customer loyalty to the firm and enhancing their relationship. The organization understands the importance of the customer loyalty and hence working toward enhancing and meeting their specifications for a long-term relationship. Selection of location; in selecting the location, the firm is supposed to understand the demographic size and distribution (MATEI, 2013). The major concern is the availability of the market depending on the demographic category and size targeted. The customers’ selection is essential for the LG Electronics Inc. as it relates to the market for the electronics. The home entertainment electronics are mostly sold to the middle-aged population. In selecting the selling outlet, the organization has to consider the area that has the possibility of expansion and increasing the volume of sales. In competing effectively, it is important for the management to rely on the customers’ location and to present them with the quality electronic products. Distribution and market information system; the LG Electronics Inc. has great distribution channels and proper market information system. This helps in ensuring the home entertainment electronics gets into the market within the set period to meet the identified market demand. The communication system helps in conveying the information relating to the market demand. Effective market information system helps the firm in competing effectively with the rival companies. Furthermore, proper marketing and distribution channel is also a competitive advantage as the LG Electronics Inc. would get into the marker sooner and in proper condition. Differentiation; the company focuses on developing unique products that are easily differentiated from the rival companies’ product. The approach by the LG Electronics Inc. introducing the branding name is to ensure the customers identify the product more easily (Liu, 2013). Furthermore, it is essential for the customers relate the LG Electronics Inc. products with the quality and other features relating to the home entertainment electronics. The aspects of differentiation ensure the company to enjoy distinguished features that lack of the competitors. Customers services and added value as an advantage; the LG Electronics Inc. firm concentrates in offering high-quality services to customers as an after sales services. The after sales services such as transportation attracts the customers in purchasing the electronics from the LG Electronics Inc. other advantages such as efficiencies, good customer services and discounting helps in building the firm’s reputation (MATEI, 2013). These services make the firms to stand unique and hence gaining competitive advantage comparing to its competitors. Strategic Direction Strategic direction indicates the channel that an organization should take in achieving its goals and objectives. Strategic direction covers the factors that are essential in enabling governance and development requirements in achieving the right path or portfolio objective. The LG Electronics Inc. has well-established visions and objectives focusing on the market expansion and revenue improvement. The home entertainment electronics business unit in the LG Electronics Inc. focuses on the market expansion in ensuring they penetrate into the international market. The strategic direction set by LG Electronics Inc. relates to the future expansion of production, productivity, and marketing the electronic products. The company has set appropriate mechanisms that would help in realizing the future expectation through underlying rules and regulations governing the management and stakeholders (Huang, Dyerson, Wu, & Harindranath, 2015). The future of the LG Electronics Inc. relates to the international expansion to increase the market size. The form focus in opening more branches in different international countries. This channel employed by the firm concentrates on increasing the outlet's branches where the home entertainment electronics are made available. The LG Electronics Inc. considers having one controlled distribution channel of the company’s products in different countries. The international market provides the firm with a great platform of competing effectively with other rival companies. The improvement in differentiation enables the manufacturing to initiate unique features that are easily identified by the customers, but hard to imitate (Fang, Li, Huang, & Palmatier, 2015). The production and manufacturing department of home entertainment electronics focus on meeting the customer's demand and specification. This has taken the new trend whereby the firm focus is taking feedback from the customers in the future and customizing some of the home entertainment product. As the strategic marketing direction in future, the LG Electronics Inc. in the home entertainment electronics focuses on ensuring the customers’ needs and specifications are incorporated in the manufacturing. Therefore, the future strategic direction and recommendation of LG Electronics Inc. depend on the customers’ needs, specifications and preferences. Conclusion The home entertainment electronics as a business unit of LG Electronics Inc. has exemplary shows its capacity in competing effectively in the market. The organization through the home entertainment electronics has ventured in the different international market and hence contributing to the firm’s prosperity. The achievement realized in the LG Electronics Inc. has helped the organization to compete effectively with other rival firms in the electronic industry. The major objective of the form is meeting and successfully emerging victorious against the external factors influencing its operation. Political, economic, social, technology, environment, and legal factors have a greater part in influencing the operations of the organization. The operating environment can influence the firm positively and even negatively. The LG Electronics Inc. and more specifically the home entertainment electronics have focused on the strengths to emerge competitive in international market. This is through taking appropriate strategic direction in setting priorities right. Therefore, the firm has focused on the customers’ needs and interests in setting strategic goals and objectives for future achievements and competitiveness. References Aleksic, V. S. (2016). Contemporary issues in economics, business, and management. Economic Horizons / Ekonomski Horizont. 18(3), 289-290. Ali, M., Melewar, & Dennis, C. (2013). Special issue on CRM: Technology adoption, business implications, and social and cultural concerns. Journal of Marketing Management. (29), 3-4. Chang, M.-H., & Harrington, J. (2002). 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