SWOT analysis of LG - LG SWOT analysis & Internal analysis

Table of Contents

Strengths in the SWOT analysis of LG electronics

Global Giant: LG Electronics controls 114 local subsidiaries worldwide, with roughly 82,000 executives and employees. LG is an MNC and is a well-recognized brand which deals in white & brown goods. It has always been known for its simple design, easy to use, Innovative & reliable technology.
Extensive distribution system: LG being a fast moving consumer durable company makes its products available in the markets through its distribution partners. Because of its pull strategy, LG observes very fast stock rotation but also has to use dumping of stocks to the channel partners. It uses Glo-cal strategy (be global act local) to market its products.
Diversified products across the categories: LG has a huge product line and length across the product categories both in white & brown goods.
High TOMA: Through its continuous branding efforts, sponsoring sporting & lifestyle events like ICC cricket world cup, Formula one championship, soccer matches etc. LG has created high visibility and thus is successful in its branding efforts.
CSR activities: LG has always been involved in community work so as to involve the people in the co-creation of the wealth.
Brand equity – The long term presence of LG in the market, along with their amazing product strategies, and reliability on their products has ensured that LG has a strong brand equity, and hence is able to survive in a tough business environment.

Management: Due to its extensive presence in the white & brown goods market they are not able to focus on every single product category properly due to which they are losing their market share in several products like T.V, Refrigerator etc.
No Cash cows – Samsung has amazing brand equity due to its smart phones and smart TV’s. Similarly, most brands have a super hit product which is a cash cow. However, in LG, there is hardly any product which is a cash cow for them.

Changing lifestyle: Growing urban population, Rise in disposable income, shift towards technological products & migration from rural to urban areas are some of the factors that will be the driving force for the home appliances, electronics goods
Competitors helping in the adaptation of the new technology: Intense competition in the industry is helping LG in making their products acceptable to the society. So LG can leverage out benefit of this & can increase their market share by considering competitors move.
Market Expansion: By further penetrating to the emerging markets will help the company in accelerating its growth rate.
Strategic Partnership: Till now LG has been involved in the collaborative partnership with many companies. It is making technology advances and identifying business opportunities through various partnerships relationships with some of the world’s leading companies. Strategic alliance between corporations in which companies with different infrastructures cooperate in the fast-developing.

Intense rivalry within the industry: Every company in this industry is fighting hard to make their presence felt & hold their market share. Majority of the players in the industry follows red ocean strategy in order to kill the competition which is affecting the industry as a whole.
Stagnant Urban demand dynamics: Since more & more companies are venturing out in the over competitive urban market, there is little growth left in these markets, so over dependence on these market will be riskier for the company like LG.
Government Regulations: Government policies relating to use of innovative technology for energy & power conservations is by & large affecting the industry & forcing them to switch to renewable sources of energy.
Sluggish Economy: Macroeconomic uncertainty, Recession, un-employment etc. are the economic factors which will daunt the industry for a long period of time.
Rising Raw material cost: Due to rising raw material prices & labor cost, LG’s margins are shrinking which is making the business operations less profitable.