кейси для індивідуальної роботи 2014 н.р. / LG CORP IN CONSUMER ELECTRONICS

SCOPE OF THE REPORT

Scope

This profile on LG Corp covers the company‟s consumer electronics operations, focusing on its growth prospects for the 2010-2015 period.

LG Corp manufactures consumer electronics via its subsidiary LG Electronics.

Sales values throughout are expressed in US dollar at fixed exchange rates unless otherwise stated.

Consumer Electronics

Tablet and Other

Portable OLED TVs

Computers

Disclaimer

Much of the information in this briefing is of a statistical nature and, while every attempt has been made to ensure accuracy and reliability, Euromonitor International cannot be held responsible for omissions or errors.

Figures in tables and analyses are calculated from unrounded data and may not sum. Analyses found in the briefings may not totally reflect the companies‟ opinions, reader discretion is advised.

LG Corp has been successful in in-home electronics, particularly televisions.

However, the company’s mobile phone business has been struggling to compete, as smartphones became mainstream across most markets. In this profile, Euromonitor International examines the prospects for LG Corp in televisions, mobile phones and portable computers.

STRATEGIC EVALUATION

Key company facts

 LG Corp‟s subsidiary, LG Electronics is a global manufacturer of consumer appliances, consumer electronics and components.

Premium branding drives revenue

 LG Electronics has been successfully rebranding itself as a premium brand and is now ranked third in mobile phones and second in digital TVs in terms of sales volumes. Revenues for 2011 reached Won54.3 trillion, down 3% from 2010. The Home Entertainment (HE) division is the key revenue generator, with 41% of LG‟s consumer electronics sales in 2011.

Lack of profit in mobile communications

 A key problem of LG is the lack of profitability in mobile communications (MC) with the company only making an operating profit in this division twice in the last eight financial quarters. LG has reduced the loss in MC from 5% of sales revenue in 2010 to 2.4% in 2011, with handsets alone actually losing the company Won286 billion.

Computer monitors a

thing of the past

 A large part of LG‟s computer and peripherals business comes from monitors. This leaves LG exposed as computing moves to mobile platforms and tablets.

Weak mobile phones

line-up

 LG is late into the smartphones market, allowing new entrants to gain footholds in this lucrative and high-value market, leaving LG in the entry and mid-range price wars.

Home Entertainment (HE) - revenue generation for new products

Selling sufficient quantities of new technology will be the key challenge for LG. 3D-enabled TVs and even internet-enabled TVs are not gaining traction with consumers. While LG will be the first company to commercially ship large screened (55”) OLED TVs in Q3 2012, OLED TV sales are not expected to be strong. It will be a difficult job for LG to sufficiently push the three technologies into the marketplace in sufficient numbers to drive revenue growth.

To compound LG‟s woes, a slowdown is expected in digital TV performance in Western Europe and North America in the forecast period. The slowdown will impact LG‟s revenue and profit.

Developing regions

Mobile Communications – ensuring a strategically astute product portfolio

 Ensuring the right product mix in its mobile phone product portfolio is of vital strategic importance to LG. Ominously for LG, its fierce competitor, Samsung Corp, has established itself as one of the strongest companies in smartphones. LG appears to have made recent headway with the premium Optimus smartphone, and other smartphones finally returning the MC division to profitability in Q4 2011. However, the company cannot afford to turn its back on feature phones, as they may hold the key for LG‟s growth in developing regions.

C

C: With 41% and 54% growth from MC rivals Apple and RIM respectively, plus good growth from other rivals including Samsung and Sony, LG sees its growth rate fall below the global rate. This comes despite the company finally establishing its smartphone portfolio - a segment it grew by 115%. The company again undergoes senior management restructuring since 2009.