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


Lott Industries The Ceo Fights For Survival Case Study Solution is a widely known worldwide brand in innovation market, founded in 1938 by Lee Byung Chul, in South Korea. Lott Industries The Ceo Fights For Survival deals in a great deal of item classifications including Semiconductors, Telecommunications, Digital Media, Digital Appliances and many more other electronic items. Historically, the company's core clients include the Original Devices Manufacturers (OEMs), which used to sell Enterprise items withtheir own brand name. Till early 1990s, the core competency of Venture depend on its low cost offerings than its rivals by manufacturing existing items at economies of scale. Its consumer circle consists of Original Devices Manufacturers (OEMs), who used to offer Lott Industries The Ceo Fights For Survival Case Study Analysis items with their own trademark name. Corp was not merely understood outside Korea. There were likewise no or little interest in building the brand worldwide. Marketing budget was controlled by production department with a prime focus on supplying cheap products.During the 1997 Asian Financial Crisis the company almost got insolvent, but with the Vision of Chairman Lee it totally turn its fortune around and in 2002 was listed the top 25 most valuable company worldwide. When Kim was employed as a Chief Marketing Officer in 2000 the business was not even listed. He rearranged Org as an international brand name and informed his divisional supervisors to comprehend marketing and its significance. Now their objective is to reach the top 10 by 2005.

Problem Statement

Corporation's shift from an item based to a marketing business is not going as efficiently as planned.Overcoming the reluctance of divisional managers to include marketing effectively is still a major difficulty. Developing a constant brand name identity across the entire world and utilizing marketing strategies that finest fits the local culture is no easy job.
Executive Summary
Situational Analysis

Lott Industries The Ceo Fights For Survival Case Study Help efforts for constructing its brand across the world was begun after introducing the "brand-new management effort" by Chairman Lee in 1993. The goal was to change Corporation from an inexpensive OEM to a high value-added item supplier. To make the vision of Organization a truth, Chairman Lee selected Yun as a vice chairman in 1997. Yun had a rather clear image in his mind about how Corp can transform from a low end to a high end product provider. He understood that transformation can only be done through positioning Company as a company offering high-end products and this could only be done through high level of marketing.

In spite of having a clear vision about how to develop Venture brand name, with a prospective assistance of its executives, Yun faced a number of marketing obstacles in early years of its efforts.

Among the marketing difficulties for Yun was the understandings of executives about the worth of marketing. They considered marketing and selling as very same tools and thought that quality products do not needed marketing for increasing sales. As their focus towards marketing was quite low in their previous business practices, and the existing marketing requirement was excessive high, the gap was too broader and to fill this gap with wrong understandings about marketing was rather difficult for Yun.

As specified above, marketing focus was very low in previous practices, for that reason there were no correct marketing spending plans for each of the product on the portfolio. There was no marketing preparation provided for the existing products. Together with it the product series of the company was increasing with the ripening of new item concepts by the R&D sector of Corporation. Yun had a challenge to carry out marketing planning and to develop marketing budget plans for existing along with for brand-new items from the very beginning, and this would take a big time.

A substantial shift would be required in existing marketing expenditures to construct the Venture brand. This would result in increased marketing expenditures for Corporation and might disrupt the administration concerning increased expenditures, as they were hesitant to marketing expenditures previously and a sudden big shiftwould make them disturb.

Internal Analysis
SWOT Analysis

Venture strengths depend on its big item portfolio. Corp has biggest variety of patents in the industry with total number of 15499 patents granted in US( USP). Large amount of R&D costs has enabled the company to grow its product portfolio at a greater rate than its rivals. Lott Industries The Ceo Fights For Survival Case Study Analysis spent about $13.079 billion on its R&D sector in 2016, which is 7.3% of its total revenues.

Another strength of Lott Industries The Ceo Fights For Survival Case Study Analysis is its ability to develop ingenious products at a constant rate. It major shows for the development and product creating of Business is that the company has actually received so many awards for its innovation and product style.

Unlike Apple and other rivals, Business is concentrated on producing gadgets which can be easily integrated with any type of open source Os (OS) and software. This supplies Corporation an edge over Apple gadgets.
Porter's 5 Forces Analysis
Corp's ability to produce high-end items at low expense of production is likewise among the significant strength of Corp as it makes it possible for the company to catch more market by offering quality products with expense control.


Corporation's weaknesses are concealed in the company's reliance on outsourcing software for its gadgets due to company's failure in developing software application, unlike Sony. Lott Industries The Ceo Fights For Survival Case Study Analysis likewise has low earnings margins as compare to Apple due to big distinction in the prices of Apple and Organization with a much lower difference in quality.


Opportunities for Lott Industries The Ceo Fights For Survival Case Study Analysis lie in the growing Smartphone market and the company's performance in the market. Organization presently runs in about 80 countries and the company has an opportunity to increase its geographical growth by moving towards more emerging markets outside Asia.


The dynamic industry environment of innovation market pose a severe hazard on Corporation's survival and require the company to spend much of its profits share on R&D in order to survive in the long run. The market saturation in developed countries i.e. saturation of mobile business is likewise a big hazard for the business's growth in the presence of strong rivals like Apple.

4 P's of Marketing
Swot Analysis

Organization uses quality items and has a quite rich portfolio which caters to various sectors. LCD and mobile phones are the biggest items of Company, whereas DRAM is likewise not far behind in contrast of them.

• Laptops.
• Smart phone.
• A/c.
• Personal computers.
• Hard disks.
• Washing machines.
• Refrigerators.
• Cameras.
• Microwaves.
• Flash memory.


Lott Industries The Ceo Fights For Survival Case Study Analysis uses both market competitive and market skimming pricing techniques for its wide range of products. In competitive rates it changes the price according to the competition in order to acquire advantage, whereas, it uses market skimming technique where the product has an included worth and by offering a few items it can reach break-even.


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 items are prompt supplied to the selling place/ delivered to the consumers straight in case of online order.

Vrio Analysis
It wasn't a well-known business outside of Korea up until 1993. The management initiative taken by their CEO has pressed them to market more effectively outside the borders and now it has entered the league of leading 25 companies in the world in just 9 years. This is an amazing achievement despite the ongoing arguments amongst the supervisors about embracing marketing practices. It utilizes both offline & online channels of promotion to market their products. Paid item advertisements, social promotion and digital ads are utilizes to produce awareness about Company items.

Worth Chain Analysis.

It's an analytical structure for determining company activities that add worth or competitive benefit for the company.

Incoming Logistics.

It has one of the most efficient and efficient supply chain network and has more than 2700 suppliers throughout various markets all over the world. Almost 80% of which is based in Asia and the staying around the globe. For its incoming logistics it owns numerous logistics companies as it subsidiaries. It takes care of its providers and develops an unified relationship with them and even decreased their payment cycles to improve this relationship further which adds worth to their chain network.


Corp's core competency is its mass producing it produces 90% of its items in-house. Divided into 3 different departments its operations are namely IT & Mobile Communications, Device Solutions and Customer Electronics. It is maintaining operation hubs worldwide to further add worth to its worth chain network.

Outbound Logistics.

Its outgoing logistics system performance is one of the primary factors Lott Industries The Ceo Fights For Survival Case Study Analysis is able to compete with Apple. Company's own Electronic Logitec system plays a significant function in the outbound logistics operations. It even performs the tasks of collection of payment, settling insurance claims, etc. on behalf of Business.

Marketing and Sales.

Attracting target consumer attention towards the product is done through marketing and sales to interact with them the value and competitive benefit the item offers. Lott Industries The Ceo Fights For Survival Case Study Solution advertising spending plan is continually increasing given that they began their rearranging worldwide and will continue to do so as they are constantly seeking to invest and expand in high prospective development markets. The budget plan is spent on events, print and media ads, public relations etc.

Corporation put their customers at the top and continually strive to deliver unmatchable consumer service requirements. By adding a direct support line to call them 24 hours they have even more increased the included worth of Venture service.


Lott Industries The Ceo Fights For Survival Case Study Analysis has diversified market segmentation, based upon its provision of wide variety of items to large number of consumers. Company target consumer sectors can be divided into 3 classifications i.e. Lott Industries The Ceo Fights For Survival Case Study Help IT and Mobile Communications, Enterprise Customer Electronics and Venture Device solutions.


Lott Industries The Ceo Fights For Survival Case Study Solution geographical segmentation is based upon 2 requirements i.e. area and density. Corp serves about 80 nations worldwide with its items offered to Urban along with Rural areas of the country. The Organization is likewise growing its global presence and the business's versatility in finding its plants motivates global expansion of Company.


The demographic division of Lott Industries The Ceo Fights For Survival Case Study Help is based upon gender, age, life-cycle stage and occupation. Org produces products that can be utilized by both women and males. The target consumers for Org IT and mobile communication products have an age range of 18-65 with majority at a young or newly wed life process phase. They are mainly employees, students and professionals. Apart from it, Company Customer Electronics are targeted to a client sector with an age series of 25-65. They are primarily specialists and staff members. However Lott Industries The Ceo Fights For Survival Case Study Analysis Gadget Solutions are targeted at students, staff members and specialists with an age series of 25-65.


The psychographic division of Lott Industries The Ceo Fights For Survival Case Study Analysis s based upon the social class and the lifestyle of the consumer. Company target customers on the basis of social class are generally upper middle, middle and working class customers, as Corporation offer items like cellular phone not much less expensive i.e. Motorola in addition to very little pricey i.e. Apple. It provides quality products to middle level customers at a somewhat high rate than others targeting the exact same segment.


Lott Industries The Ceo Fights For Survival Case Study Analysis majority target consumers have unique behavioural attributes. It has consumers with an enthusiastic, stylish and determined character with moderate level of commitment towards the brand. Its clients have some degree of shift towards other prominent brand names i.e. Apple. Most of Organization customers desire quality along with cost control. Because of its moderate prices with an extent of quality, they are brought in towards Corporation.

Quantitative analysis.

Sales of Lott Industries The Ceo Fights For Survival Case Study Solution has increased remarkably from 16 billion $ in 1997 to 44.6 billion $ in 2002, and the net revenue of.48 billion $ to 5.9 billion $. Digital media is the largest selling category of Organization with sales of 13.9 billion $, whereas, Telecommunication and Semiconductors sectors both reached 11 billion $ in sales.

Qualitative analysis.

Whereas, the core strength of the company is currently manufacturing but long gone are those days when excellent items were selling themselves. Kim has already started to reinforce the marketing activities of Org and very soon it will end up being one of its core strength like making if not better.



Enterprise runs styles, produces and sell a huge portfolio of consumer electronic devices. It operates in an exceptionally competitive environment and has successfully placed itself as the maker of quality items. So, the answer is yes.


As, said earlier that Lott Industries The Ceo Fights For Survival Case Study Solution runs in an extremely competitive environment, which indicates all the business have similar products. The answer for rarity is no.


Due to the nature of the industry, it is really easy for rivals to comprehend the functionality of the items and easily make their own designs. Yes, Org is just behind IBM in registering new patents each year, but the benefit is extremely short term in this market.


Chairman Lee has totally turn-around Enterprise, from going practically bankrupt throughout the Asian monetary crisis of 1997 to the top 25 company in the world. Absolutely yes there is proper organization in the company and the results speak for themselves.

External Environmental Analysis

PESTLE Analysis


Being an international brand name spread practically in every country worldwide, majority of the environments like U.S.A., Europe, China etc., are extremely conductive for its operations. It deals with some political pressures in less developed nations where law and order situation is not great. Latin American, African and some Asian nations fall in this classification, where political instability do have a result on Lott Industries The Ceo Fights For Survival Case Study Analysis operations.


Purchasing power of customers is crucial for business like Corporation to grow and prosper. Emerging markets like India, middle-eastern nations and so on offer growth chances, whereas, due to recession even the customers of developed countries suffer severely. It is very crucial for the company to keep an eye on the continuous financial situation of the nation prior to getting in the market.


International business have to face numerous social and cultural concerns throughout its operations in a foreign country. Business has also faced lots of problems however have adopted to the regional environments of most of the countries extremely well. It has actually customized its items, practices, policies and so on accordingly in order to succeed.


With a yearly expenditure of 2.4 billion dollars in Research & Advancement, and with continuous ingenious product launches, Lott Industries The Ceo Fights For Survival Case Study Analysis is one of the top innovative business of the world. With a clear mission to be ahead of the rest when it concerns technological developments, Company has actually increased to the no 25 of the leading effective business of the world.


Each country has their own laws and policies, being a multinational business Venture need to strictly follow those laws in their jurisdictions. Failure to do so, will result in severe legal effects. It has to study or employ a local law professional before starting its operations in a particular country.


With the rising awareness among consumers about the environmental & ethical offenses of business, Company needs to ensure that it follows all the security standards. Ecological damages, ethical misconducts are not appropriate and in some countries the effects can be very serious. On the other hand it needs to do some Corporate Social Duty practices to reveal the residents that it appreciates their environment and individuals.

Porter's 5 Forces

Danger of Substitution

Risk of replacement for Organization's each item classification is quite significant. Elements for high hazard of replacement for Lott Industries The Ceo Fights For Survival Case Study Analysis Mobile phone consist of the existence of high number of providers and Market saturation in industrialized nations, which make the cost of changing for consumers practically no. Along with it, Company printing services items are threatened by the increasing tourist attraction of customers towards cloud storage.

Competition Amongst Existing Firms:

The rivaly among Company and its close competitors is intense. The major factor behind this is the method of market saturation in various number of product classifications, forcing Corporation to present more ingenious functions in existing items and new innovative items to maintain its development. The significant rivals for Lott Industries The Ceo Fights For Survival Case Study Solution samrtphones include Apple, Motorola, LG, Nokia, Huawei, OPPO etc.

Lott Industries The Ceo Fights For Survival Case Study Solution has a vast supply chain including about 2700 suppliers across the world.( Organization Sustainability Report, 2016) Provider's bargaining power for Organization is low as Org runs economies of scale and its orders are of potential size and worth. These substantial orders enable Venture to negotiate costs with its suppliers. However, due to incapability of Lott Industries The Ceo Fights For Survival Case Study Help to construct its own software, it has to outsource its software application development to Google, which ends up being a prospective supplier of software for Enterprise, resulting in high bargaining power of Google. Although, in the majority of cases Company has a power to negotiate prices, but it offer considerable costs to its suppliers to build a strong supply chain and to have strong relationships with its providers.

Bargaining Power of Buyers:

Negotiating power of purchasers for different variety of product categories of Organization is extreme. Among the aspect resulting in the extreme bargaining power is the availability of large number of competitors in almost each item category i.e. competitors of Business Smart device, with a really little differentiation. The high schedule of providers of Smartphones with minimum distinction, make the switching cost for purchasers nearly zero, hence increasing the bargaining power of purchasers. Market saturation in the majority of the item classifications likewise make the bargaining power of purchasers more extreme in for Lott Industries The Ceo Fights For Survival Case Study Help. In spite of igh bargaining power Business is quite efficient in offering its products at a higher price than much of its competitors, due to high end quality item and a reasonable brand image.

Threat of New Entrants:

Risk of brand-new entrants for Enterprise is rather low. Among the major element for low danger of brand-new entrants is the high competition in the market. The requirement of substantial quantity of capital to go into in the marketplace is also one of the possible barrier to entry. Together with it, requirement of huge competence and research study and development expenses for survival in the market also make brand-new entrants hesitant to enter in the marketplace. Market saturation is also one of the barrier of entry in technology industry. High bargaining power of suppliers require the players in the market to charge as low rates as possible and this can only be achieved by production efficiency. New firms, in majority cases, lack the production efficiency, thus increasing the risks for entryway in the innovation market.

Competitive Analysis

Enterprise's high item diversity supplies it distinction from its competitors. Unlikely to its close rivals including Sony, Intel and Nokia, who focus majority on a single product category with Sony focusing on customer electronics, Nokia on cell phones and Intel on chips, Lott Industries The Ceo Fights For Survival Case Study Solution had a substantial R&D spending on all of its item classifications which enable the company to earn potential income from sales of almost all of its products.

The company ranks first in 4 product classifications i.e. DRAM Chips, LCD Displays, Big Screen TVs and Microwave ovens, in regards to international market share, among 8 different product categories. Company was the worldwide leader in producing DRAM, SRAM and NAND flash chips. Although, Enterprise earnings from chips was less than Intel but its earnings from chips was growing much faster than Intel and has grown near the profits levels of Intel, as given up the case Display 2.

In addition to the chips Business mobile market was likewise flourishing at a high rate than its competitors i.e. Motorola and Nokia. Business's cellular phone's sales growth was 51% as compare to Motorola with only 4% and Nokia with zero sales growth. The major reson behind Corporation's high growth despite of greater prices than Nokia and Motorola was the company's high-end quality cell phones.

Corporation was likewise profiting from increasing market share of luxury LCDs as given in case Exhibit 3. The significant factor, making the business allow to avail the opportunity is its mass production at low cost. Sony was the biggest rival for Lott Industries The Ceo Fights For Survival Case Study Solution in LCD market, nevertheless, it had also started joint endeavor with Organization in 2003 for LCD making, decreasing the competition for Company.

Porter's Competitive Strategy

Low Expense Leadership method of porter is fully carried out by Org the method they attain economies of scale by enhancing their core competencies of manufacturing. Even to the point that their rival SONY chose to form an alliance with them to produce for them, since they were unable to compete with them on low cost. Differentiation is another strategy well implemented by Organization by continuous investment in the R&D and staying ahead of the competition. They constantly bring something new and innovative whether it's a product or a service.


Alternative Option 1

The Chief Marketing Officer (CMO) of Lott Industries The Ceo Fights For Survival Case Study Solution would create a brand-new brand name image by targeting the younger generation of the specific country. As, specifically smart phones of Venture are very popular among the younger group.


1. It is the best technique to develop Consumer Life time Value (CLV) by developing a long-term relationship with clients. Construct loyalty through delivering value and reap the benefits for long-lasting, as research has revealed it is more affordable to retain current clients than to attract new ones.
2. Another pro of this option is that word of mouth spread more quickly amongst younger individuals and which in turn will generate brand-new clients for my products.


1. Old customers who were related to Org before might not like this new image the business is attempting to represent.
2 It will sustain further costs to rearrange some products and it might not even bring success as the trends change very quickly amongst the more youthful demographic.

Alternative solution 2.

It would be done by setting up training workshops throughout which significance of marketing will be taught and numbers will be given. Marketing environment ought to be created internally first as genuine marketing starts inside the corporation.


1. Its pro will be that all the marketing approach supporters will come out and also the opposite ones.


2. Its con can develop a really unhealthy environment in the office, as individuals typically resist modification because they fear it.

Determine the very best alternative

Very first alternative is the best as it plainly has more pros since once a Client Life time Value is constructed the business will make money from it till that consumer is alive and has purchasing power also. Plus, our target clients are the more youthful generation which are bound to live longer than the current old age individuals. Nevertheless, Organization's main objective is to develop loyalty among its clients and make them bought it from them and even buy their various items also.

Execution Strategy

• Targeting more youthful generation through social marketing, creating a relate to them like Pepsi finish with music. And set the expectations reasonable and possible.
• A group consisting of best marketing and sales experts should be put together, and both views need to be taken into consideration before protecting the resources required to carry out the plan.
• Thorough communication of the plan should be done as it is really crucial for everybody to be on the exact same page to make it work.
• Jobs and timelines should be develop and communicated appropriately to each person accountable.
• The supervisor need to use a dashboard which reveals the development of all the jobs which have been done or about to be done and by whom.
• The supervisor need to keep track of and keep a constant examine the general and specific efficiency.
Due to the fact that any new pattern or policy might come in due to which all the things currently prepared have to be changed, • Everybody need to be willing to adjust midway. It's better to have contingency plans currently prepared.
• At the end of the project the manager should communicate the results and if effective need to celebrate with the group.


The M-net program exposed compelling analysis about the low and high growth potential areas and how much advertising spending plan should be designated accordingly. This modification the budget allocation of different nations and numerous supervisors were dissatisfied and argued but the analysis done by the program was accurate and revealed figures like The United States and Canada and Russia development possible merited a 35% allocation while they were receiving 45%. Whereas, China and Europe must be receiving 42% but were instead given 31%. It really assisted to relatively distribute the resources and catch more consumers by investing more on advertisements on the high growth potential areas of the world.

Lott Industries The Ceo Fights For Survival Case Study Solution is a top 25 company on the planet now and plans to get ahead of Sony who sits presently at no. 20. Its consistent investment in R&D and ingenious practices have actually moved them to new heights however for them its' only the start and they want to be amongst the leading 3 brand names in the world. They totally turnaround from nearly declaring bankruptcy during the Asian Financial Crisis to a world prominent brand, known for quality and development. Their value chain and their core competency their production ability, along-with global brand name image building have seen their sales go from 16 to 44.6 billion $ from 1997-- 2002. With more growth in China and other emerging markets those numbers will only increase further in the future. Their marketing efforts ought to be directed towards younger demographic amidst the internal arguments about marketing and ought to create Client Life time Value as it will not only give them benefits now however will continue to gain it till the consumer lifetime. As the expense of maintaining the customer is much cheaper than attracting a new one.