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Lott Industries The Ceo Fights For Survival Harvard Case Study Analysis

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Lott Industries The Ceo Fights For Survival Case Study Solution & Analysis


Introduction

Lott Industries The Ceo Fights For Survival Case Study Analysis is a popular international brand name in technology industry, established in 1938 by Lee Byung Chul, in South Korea. Lott Industries The Ceo Fights For Survival deals in a great deal of item categories consisting of Semiconductors, Telecom, Digital Media, Digital Appliances and many more other electronic items. Historically, the business's core customers consist of the Original Devices Manufacturers (OEMs), which utilized to sell Corporation items withtheir own brand name. Till early 1990s, the core competency of Company lie in its low rate offerings than its rivals by producing existing products at economies of scale. Its client circle includes Original Devices Manufacturers (OEMs), who used to offer Lott Industries The Ceo Fights For Survival Case Study Help items with their own trademark name. Company was not merely known outside Korea. There were also no or little interest in developing the trademark name globally. Marketing spending plan was controlled by production department with a focal point on offering low-cost products.During the 1997 Asian Financial Crisis the company practically got bankrupt, but with the Vision of Chairman Lee it entirely turn its fortune around and in 2002 was listed the top 25 most important company in the world. When Kim was employed as a Chief Marketing Officer in 2000 the business was not even listed. He repositioned Business as an international brand and informed his divisional supervisors to understand marketing and its significance. Now their goal is to reach the top 10 by 2005.

Issue Statement

Corp's shift from a product based to a marketing business is not going as smoothly as planned.Overcoming the reluctance of divisional supervisors to include marketing successfully is still a significant obstacle. Developing a constant brand name identity throughout the whole world and utilizing marketing methods that best fits the local culture is no easy job.
Executive Summary
Situational Analysis

Yun had a quite clear photo in his mind about how Lott Industries The Ceo Fights For Survival Case Study Help can change from a low end to a high end product provider. He understood that transformation can only be done through positioning Business as a company offering high-end items and this might just be done through high level of marketing.

In spite of having a clear vision about how to build Corporation brand, with a potential support of its executives, Yun dealt with a number of marketing challenges in early years of its efforts.

One of the marketing challenges for Yun was the perceptions of executives about the value of marketing. They considered marketing and selling as very same tools and believed that quality items do not required marketing for increasing sales. As their focus towards marketing was quite low in their previous company practices, and the present marketing requirement was too much high, the gap was too broader and to fill this space with wrong perceptions about marketing was quite tough for Yun.

As mentioned above, marketing focus was really low in previous practices, for that reason there were no proper marketing budgets for each of the product on the portfolio. There was no marketing preparation done for the existing items. In addition to it the item range of the company was increasing with the ripening of new item ideas by the R&D sector of Corp. Yun had a difficulty to carry out marketing planning and to produce marketing budget plans for existing in addition to for new products from the very start, and this would take a substantial time.

A substantial shift would be needed in existing marketing expenditures to develop the Lott Industries The Ceo Fights For Survival Case Study Help brand. This would result in increased marketing expenses for Enterprise and might disrupt the administration concerning increased expenses, as they hesitated to marketing expenses previously and a sudden huge shiftwould make them disrupt. This might lead to declining executive assistance for worldwide marketing. In this scenario, Yun deals with a difficulty for justifying increased marketing costs by demonstrating the long term worth of substantial marketing expenses.

Internal Analysis
SWOT Analysis
Strengths


Lott Industries The Ceo Fights For Survival Case Study Analysis strengths lie in its big item portfolio. Organization has biggest number of patents in the market with total number of 15499 patents given in US( USP).

Another strength of Lott Industries The Ceo Fights For Survival Case Study Analysis is its ability to develop ingenious products at a continuous rate. It significant proves for the innovation and item creating of Business is that the company has received numerous awards for its innovation and product style.

Unlike Apple and other rivals, Business is concentrated on producing gadgets which can be quickly incorporated with any type of open source Operating System (OS) and software. This offers Corporation an edge over Apple devices.
Porter's 5 Forces Analysis
Organization's capability to produce high-end items at low expense of production is likewise among the significant strength of Corporation as it makes it possible for the company to capture more market by offering quality items with expense control.

Weaknesses

Org's weak points are hidden in the company's dependence on outsourcing software application for its gadgets due to company's failure in developing software application, unlike Sony. Lott Industries The Ceo Fights For Survival Case Study Solution also has low earnings margins as compare to Apple due to substantial distinction in the costs of Apple and Corporation with a much lesser difference in quality.

Opportunities

Opportunities for Lott Industries The Ceo Fights For Survival Case Study Solution lie in the growing Smart device market and the business's efficiency in the market. Corporation currently runs in about 80 nations and the company has an opportunity to increase its geographical growth by moving towards more emerging markets outside Asia.

Threats

The dynamic market environment of technology market position a severe risk on Venture's survival and force the company to invest much of its earnings share on R&D in order to make it through in the long run. The marketplace saturation in industrialized countries i.e. saturation of mobile company is also a big risk for the business's development in the presence of strong rivals like Apple.

4 P's of Marketing
Swot Analysis
Product

Business uses quality items and has a quite abundant portfolio which caters to different sectors. LCD and mobile phones are the most significant items of Business, whereas DRAM is also not far behind in contrast of them.

• LCD/ TV
• Laptops.
• Mobile phones.
• Air conditioning system.
• Personal computers.
• Hard drives.
• Washing machines.
• Fridges.
• Electronic cameras.
• Microwaves.
• Flash memory.
• DRAM.

Cost.

Lott Industries The Ceo Fights For Survival Case Study Help uses both market competitive and market skimming rates methods for its wide range of items. In competitive pricing it adjusts the cost according to the competitors in order to get advantage, whereas, it utilizes market skimming strategy where the product has an included worth and by offering a few products it can reach break-even.

Place.

It has among the best supply chain networks, with retail distributors, their own sole suppliers, E commerce channels like Amazon and so on. All its products are prompt provided to the selling place/ delivered to the clients directly in case of online order.

Promo.
Vrio Analysis
It uses both offline & online channels of promotion to market their products. Paid product advertisements, social promo and digital ads are utilizes to develop awareness about Enterprise products.

Worth Chain Analysis.

It's an analytical framework for identifying company activities that add value or competitive advantage for the business.

Incoming Logistics.

It has one of the most reliable and effective supply chain network and has over 2700 providers throughout various industries around the globe. Nearly 80% of which is based in Asia and the remaining around the world. For its inbound logistics it owns various logistics firms as it subsidiaries. It takes care of its suppliers and develops an unified relationship with them and even lowered their payment cycles to enhance this relationship even more which includes worth to their chain network.

Operations.

Corporation's core proficiency is its mass making it produces 90% of its items in-house. Divided into three different departments its operations are particularly IT & Mobile Communications, Device Solutions and Customer Electronics. It is preserving operation centers worldwide to even more add value to its worth chain network.

Outbound Logistics.

Its outgoing logistics system efficiency is among the primary factors Lott Industries The Ceo Fights For Survival Case Study Analysis has the ability to take on Apple. Business's own Electronic Logitec system plays a significant role in the outbound logistics operations. It even performs the tasks of collection of payment, settling insurance claims, etc. on behalf of Enterprise.

Marketing and Sales.

Bring in target consumer attention towards the item is done through marketing and sales to interact with them the worth and competitive benefit the product offers. Lott Industries The Ceo Fights For Survival Case Study Analysis advertising spending plan is continuously increasing considering that they started their repositioning worldwide and will continue to do so as they are constantly wanting to broaden and invest in high prospective development markets. The budget plan is spent on events, print and media ads, public relations etc.

Org put their customers at the top and continuously aim to provide unmatchable client service requirements. By including a direct support line to call them 24 hours they have further increased the included worth of Corporation service.

Segmentation.

Lott Industries The Ceo Fights For Survival Case Study Help has actually diversified market segmentation, based upon its provision of wide range of items to a great deal of customers. Organization target consumer sectors can be divided into 3 categories i.e. Lott Industries The Ceo Fights For Survival Case Study Solution IT and Mobile Communications, Corp Consumer Electronic Devices and Corporation Gadget solutions.

Geographic.

Lott Industries The Ceo Fights For Survival Case Study Solution geographic division is based upon two criteria i.e. region and density. Org serves about 80 countries worldwide with its products provided to Urban in addition to Rural areas of the country. The Org is likewise growing its worldwide existence and the business's flexibility in finding its plants motivates worldwide expansion of Company.

Market.

The demographic division of Lott Industries The Ceo Fights For Survival Case Study Analysis is based upon gender, age, life-cycle phase and occupation. Enterprise produces items that can be used by both males and women. The target clients for Business IT and mobile interaction products have an age range of 18-65 with bulk at a young or newly married life process stage. They are mostly students, specialists and workers. Apart from it, Corporation Consumer Electronics are targeted to a customer section with an age series of 25-65. They are primarily specialists and workers. Business Gadget Solutions are targeted at trainees, employees and experts with an age variety of 25-65.

Psychographic.

The psychographic segmentation of Lott Industries The Ceo Fights For Survival Case Study Analysis s based upon the social class and the lifestyle of the consumer. Corp target customers on the basis of social class are primarily upper middle, middle and working class clients, as Company sell products like cellular phone very little more affordable i.e. Motorola as well as not much pricey i.e. Apple. It provides quality products to middle level consumers at a slightly high price than others targeting the same section.

Behavioural.

Lott Industries The Ceo Fights For Survival Case Study Solution bulk target clients have distinct behavioural attributes. It has consumers with an enthusiastic, fashionable and identified character with moderate level of loyalty towards the brand name. Its customers have some degree of shift towards other renowned brands i.e. Apple. Most of Org consumers desire quality along with cost control. Because of its moderate prices with a level of quality, they are attracted towards Business.

Quantitative analysis.

Sales of Business has increased astonishingly from 16 billion $ in 1997 to 44.6 billion $ in 2002, and the net profit of.48 billion $ to 5.9 billion $. It has also decreased its financial obligation from 15 billion $ to 4.6 billion $. Digital media is the largest selling category of Business with sales of 13.9 billion $, whereas, Telecommunication and Semiconductors sectors both reached 11 billion $ in sales. Due to the fact that of the high overhead expense, revenues/ sales are increasing but net revenue is not increasing accordingly. New expansions and hiring's were the primary factor of the increase in the overhead expenses, with china presently not offering any earnings to Enterprise, however there is so much potential in the current market with 75 % yet to be checked out.

Qualitative analysis.

Yes, this choice is based upon the mission of Kim to target the younger audience and produce a worldwide brand name picture of the company. Whereas, the core strength of the company is presently making however long gone are those days when good products were offering themselves. In the present age marketing is very crucial and companies can not succeed without it. Kim has actually currently started to strengthen the marketing activities of Business and very soon it will turn into one of its core strength like producing if not better.

VRIO.

Worth.

Company runs styles, makes and offer a vast portfolio of consumer electronic devices. It runs in an extremely competitive environment and has actually effectively positioned itself as the maker of quality products. So, the answer is yes.

Rarity.

As, said previously that Lott Industries The Ceo Fights For Survival Case Study Solution operates in a highly competitive environment, which implies all the companies have similar items. The answer for rarity is no.

Imitability.

Due to the nature of the industry, it is extremely easy for competitors to understand the performance of the items and quickly make their own designs. Yes, Venture is only behind IBM in registering brand-new patents yearly, however the benefit is extremely short term in this industry.

Organization.

Chairman Lee has totally turn-around Business, from going almost insolvent during the Asian monetary crisis of 1997 to the leading 25 company in the world. Certainly yes there is proper organization in the company and the results promote themselves.

External Environmental Analysis

PESTLE Analysis

Political

Being an international brand name spread practically in every country worldwide, majority of the environments like U.S.A., Europe, China and so on, are extremely conductive for its operations. Nevertheless, it faces some political pressures in less developed nations where order situation is not good. Latin American, African and some Asian nations fall in this category, where political instability do have an effect on Lott Industries The Ceo Fights For Survival Case Study Help operations.

Economic

Buying power of consumers is crucial for business like Corporation to succeed and grow. Emerging markets like India, middle-eastern countries and so on provide growth chances, whereas, due to recession even the customers of developed countries suffer terribly. Thus it is really important for the business to keep an eye on the continuous economic circumstance of the nation prior to going into the market.

Socio-Cultural

International business need to face various social and cultural issues during its operations in a foreign country. Corp has likewise dealt with lots of issues however have actually adopted to the local environments of most of the nations remarkably well. It has actually tailored its products, practices, policies etc. accordingly in order to achieve success.

Technological

With a yearly expense of 2.4 billion dollars in Research & Development, and with constant innovative product launches, Lott Industries The Ceo Fights For Survival Case Study Solution is one of the top ingenious companies of the world. With a clear objective to be ahead of the rest when it pertains to technological improvements, Org has risen to the no 25 of the top effective companies of the world.

Legal

Each nation has their own laws and policies, being a multinational business Company need to strictly follow those laws in their jurisdictions. Failure to do so, will result in severe legal effects. So, it needs to study or employ a regional law professional before beginning its operations in a particular country.

Environmental

With the increasing awareness amongst consumers about the ethical & environmental violations of companies, Organization needs to guarantee that it follows all the safety standards. Ecological damages, ethical misconducts are not acceptable and in some countries the repercussions can be very serious. On the other hand it has to do some Business Social Responsibility practices to reveal the residents that it cares about their environment and individuals.

Porter's 5 Forces

Risk of Alternative

Risk of alternative for Org's each item category is quite considerable. Aspects for high hazard of substitution for Lott Industries The Ceo Fights For Survival Case Study Analysis Smart device include the existence of high number of suppliers and Market saturation in developed countries, which make the expense of switching for consumers nearly zero. Along with it, Business printing options products are threatened by the increasing attraction of customers towards cloud storage.

Competition Amongst Existing Companies:

The rivaly amongst Organization and its close competitors is extreme. The major factor behind this is the method of market saturation in various number of item classifications, requiring Organization to present more ingenious functions in existing items and brand-new innovative products to preserve its growth. The major competitors for Lott Industries The Ceo Fights For Survival Case Study Help samrtphones include Apple, Motorola, LG, Nokia, Huawei, OPPO etc.

( Corp Sustainability Report, 2016) Provider's bargaining power for Organization is low as Venture runs economies of scale and its orders are of possible size and worth. Due to incapability of Lott Industries The Ceo Fights For Survival Case Study Solution to develop its own software, it has to outsource its software application advancement to Google, which ends up being a prospective provider of software application for Org, resulting in high bargaining power of Google.

Bargaining Power of Purchasers:

Market saturation in most of the item classifications also make the bargaining power of purchasers more extreme in for Business. In spite of igh bargaining power Enterprise is quite capable of offering its items at a greater cost than much of its competitors, due to high end quality item and a fair brand image.

Risk of New Entrants:

Risk of new entrants for Lott Industries The Ceo Fights For Survival Case Study Solution is rather low. Along with it, requirement of big knowledge and research and development expenses for survival in the industry also make new entrants unwilling to enter in the market. Market saturation is also one of the barrier of entry in technology industry.

Competitive Analysis

Company's high item diversity supplies it distinction from its rivals. It is among the 3 leading brand names by market share. Unlikely to its close rivals consisting of Sony, Intel and Nokia, who focus bulk on a single product category with Sony concentrating on consumer electronic devices, Nokia on cellular phone and Intel on chips, Corporation had a huge R&D spending on all of its item classifications which allow the business to earn possible profits from sales of almost all of its items. (See Display) Nevertheless, due to the broad product variety the company faces high variety of rivals.

The company ranks first in 4 product classifications i.e. DRAM Chips, LCD Displays, Big Screen Televisions and Microwave ovens, in regards to worldwide market share, among 8 various product categories. Corporation was the global leader in producing DRAM, SRAM and NAND flash chips. Organization incomes from chips was less than Intel but its profits from chips was growing faster than Intel and has actually grown close to the income levels of Intel, as offered in the case Exhibit 2.

Along with the chips Org mobile market was also flourishing at a high rate than its rivals i.e. Motorola and Nokia. Company's cell phone's sales growth was 51% as compare to Motorola with only 4% and Nokia with zero sales development. The significant reson behind Corp's high development despite of higher prices than Nokia and Motorola was the company's high-end quality cellular phone.

Organization was likewise profiting from increasing market share of high end LCDs as given in case Exhibit 3. The significant reason, making the business enable to get the chance is its mass production at low cost. Sony was the greatest rival for Lott Industries The Ceo Fights For Survival Case Study Help in LCD market, nevertheless, it had actually likewise started joint endeavor with Business in 2003 for LCD manufacturing, minimizing the competition for Venture.

Porter's Competitive Technique

Low Cost Leadership method of porter is completely carried out by Company the method they attain economies of scale by enhancing their core proficiencies of manufacturing. Even to the point that their rival SONY chose to form an alliance with them to produce for them, because they were unable to compete with them on low expense. Differentiation is another technique well executed by Corporation by constant investment in the R&D and remaining ahead of the competition. They always bring something innovative and new whether it's an item or a service.

Alternatives

Alternative Service 1

The Chief Marketing Officer (CMO) of Lott Industries The Ceo Fights For Survival Case Study Analysis would produce a brand-new brand image by targeting the younger generation of the particular country. As, especially mobile phones of Corporation are popular among the more youthful group.

Pros

1. It is the very best method to build Consumer Lifetime Value (CLV) by developing a long-term relationship with clients. Develop loyalty through providing worth and profit for long-lasting, as research study has showed it is more affordable to retain existing customers than to draw in new ones.
2. Another pro of this alternative is that word of mouth spread faster among more youthful people and which in turn will generate brand-new consumers for my products.

Cons

1. Old customers who were connected with Corp prior to may not like this new image the business is trying to represent.
2 It will sustain additional expenses to reposition some items and it may not even bring success as the trends alter really rapidly among the more youthful demographic.

Alternative service 2.

Venture has made making its core proficiency for the many part of their service and due to which its managers are not scared to totally get out of their comfort zone. It would be done by setting up training workshops throughout which significance of marketing will be taught and numbers will be given. Failure to get the passing ratings will get demoted. Marketing environment should be developed internally first as real marketing starts inside the corporation.

Pros

1. Its pro will be that all the marketing technique advocates will come out and likewise the opposite ones.

Cons

2. Its con can develop an extremely unhealthy environment in the office, as people frequently withstand change because they fear it.

Determine the best alternative

Very first alternative is the best as it plainly has more pros because as soon as a Consumer Lifetime Worth is developed the business will make money from it till that consumer is alive and has buying power as well. Plus, our target consumers are the more youthful generation which are bound to live longer than the existing old age individuals. Nonetheless, Company's primary goal is to create commitment among its clients and make them redeemed it from them and even buy their various products as well.

Implementation Plan

• Targeting more youthful generation through social marketing, producing a link with them like Pepsi do with music. And set the expectations sensible and possible.
• A team including finest marketing and sales specialists must be put together, and both views must be considered prior to protecting the resources required to carry out the plan.
• Thorough interaction of the plan should be done as it is extremely essential for everyone to be on the very same page to make it work.
• Tasks and timelines must be develop and interacted appropriately to each individual accountable.
• The supervisor should utilize a dashboard which shows the development of all the tasks which have been done or about to be done and by whom.
• The supervisor need to keep track of and keep a constant check on the general and specific performance.
• Everyone need to want to adapt midway since any new pattern or policy might be available in due to which all the things already planned need to be changed. It's better to have contingency strategies already prepared.
• At the end of the campaign the manager should interact the results and if successful ought to celebrate with the team.

Spending plan

This modification the spending plan allowance of various countries and numerous supervisors were unhappy and argued however the analysis done by the program was precise and revealed figures like North America and Russia development potential warranted a 35% allowance while they were getting 45%. It actually assisted to fairly disperse the resources and catch more consumers by investing more on advertisements on the high growth capacity regions of the world.
Recommendations
Conclusion

Its constant investment in R&D and ingenious practices have moved them to brand-new heights however for them its' just the start and they desire to be among the top 3 brand names in the world. Their marketing efforts ought to be directed towards younger demographic amidst the internal arguments about marketing and must produce Consumer Lifetime Value as it will not just give them advantages now but will continue to enjoy it till the customer lifetime. As the cost of maintaining the client is much more affordable than bring in a new one.