Lumismart B Answering The Call For Negawatts 2 Harvard Case Study Help

Home >> Hrm >> Lumismart B Answering The Call For Negawatts 2

Lumismart B Answering The Call For Negawatts 2 Case Study Solution and Analysis


Lumismart B Answering The Call For Negawatts 2 Case Study Help is a popular global brand name in technology market, founded in 1938 by Lee Byung Chul, in South Korea. Lumismart B Answering The Call For Negawatts 2 handle large number of product categories consisting of Semiconductors, Telecommunications, Digital Media, Digital Appliances and a lot more other electronic products. Historically, the business's core customers consist of the Original Devices Manufacturers (OEMs), which used to offer Organization products withtheir own brand. Till early 1990s, the core proficiency of Organization depend on its low cost offerings than its competitors by manufacturing existing products at economies of scale. Its client circle consists of Original Equipment Manufacturers (OEMs), who used to offer Lumismart B Answering The Call For Negawatts 2 Case Study Help products with their own brand name. Corporation was not simply known outside Korea. There were also no or little interest in developing the brand name worldwide. Marketing budget plan was controlled by production department with a prime focus on offering cheap products.During the 1997 Asian Financial Crisis the business practically got bankrupt, however with the Vision of Chairman Lee it entirely turn its fortune around and in 2002 was listed the top 25 most valuable company on the planet. When Kim was employed as a Chief Marketing Officer in 2000 the company was not even noted. He repositioned Org as an international brand name and informed his divisional managers to comprehend marketing and its importance. Now their objective is to arrive 10 by 2005.

Problem Declaration

Corporation's shift from an item based to a marketing business is not going as smoothly as planned.Overcoming the reluctance of divisional managers to incorporate marketing efficiently is still a significant challenge. Creating a consistent brand identity across the whole world and utilizing marketing strategies that best fits the local culture is no easy job.
Executive Summary
Situational Analysis

Lumismart B Answering The Call For Negawatts 2 Case Study Help efforts for constructing its brand name throughout the world was begun after introducing the "brand-new management initiative" by Chairman Lee in 1993. The objective was to change Corp from a low-cost OEM to a high value-added product service provider. To make the vision of Enterprise a truth, Chairman Lee appointed Yun as a vice chairman in 1997. Yun had a rather clear image in his mind about how Organization can change from a low end to a luxury item company. He understood that improvement can just be done through positioning Business as a company offering high-end items and this could just be done through high level of marketing.

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

One of the marketing difficulties for Yun was the understandings of executives about the value of marketing. They considered marketing and selling as very same tools and believed that quality items do not needed marketing for increasing sales. As their focus towards marketing was rather low in their previous company practices, and the current marketing requirement was too much high, the space was too larger and to fill this gap with incorrect perceptions about marketing was quite challenging for Yun.

Along with it the product range of the business was increasing with the ripening of new item ideas by the R&D sector of Company. Yun had a difficulty to carry out marketing preparation and to develop marketing spending plans for existing as well as 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 build the Lumismart B Answering The Call For Negawatts 2 Case Study Solution brand name. This would result in increased marketing expenditures for Company and might disrupt the administration concerning increased expenses, as they were reluctant to marketing expenditures formerly and a sudden huge shiftwould make them interrupt. This could lead to decreasing executive assistance for worldwide marketing. In this situation, Yun deals with a challenge for validating increased marketing costs by demonstrating the long term value of big marketing expenses.

Internal Analysis
SWOT Analysis

Lumismart B Answering The Call For Negawatts 2 Case Study Help strengths lie in its substantial item portfolio. Corp has biggest number of patents in the industry with total number of 15499 patents granted in United States( USP).

Another strength of Lumismart B Answering The Call For Negawatts 2 Case Study Analysis is its ability to develop innovative items at a constant rate. It significant shows for the innovation and item developing of Corp is that the company has received so many awards for its innovation and product style.

Unlike Apple and other rivals, Corp is concentrated on producing devices which can be quickly integrated with any type of open source Operating System (OS) and software. This offers Org an edge over Apple gadgets.
Porter's 5 Forces Analysis
Business's capability to produce luxury products at low cost of production is also among the significant strength of Enterprise as it enables the company to record more market by supplying quality products with expense control.

Weak points

Corp's weaknesses are hidden in the business's reliance on outsourcing software for its gadgets due to company's inability in developing software application, unlike Sony. Lumismart B Answering The Call For Negawatts 2 Case Study Solution also has low revenue margins as compare to Apple due to big difference in the rates of Apple and Enterprise with a much lesser distinction in quality.


Opportunities for Lumismart B Answering The Call For Negawatts 2 Case Study Solution lie in the growing Smart device market and the company's efficiency in the market. Org currently runs in about 80 countries and the company has a chance to increase its geographical expansion by moving towards more emerging markets outside Asia.


The dynamic market environment of innovation market posture a severe hazard on Org's survival and force the business to spend much of its profits share on R&D in order to survive in the long run. The marketplace saturation in industrialized countries i.e. saturation of mobile company is also a big threat for the business's growth in the presence of strong competitors like Apple.

4 P's of Marketing
Swot Analysis

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

• Laptops.
• Smart phone.
• Air conditioner.
• Personal computers.
• Hard disk drives.
• Washer.
• Fridges.
• Electronic cameras.
• Microwaves.
• Flash memory.


Lumismart B Answering The Call For Negawatts 2 Case Study Analysis uses both market competitive and market skimming prices techniques for its wide range of products. In competitive prices it adjusts the cost according to the competition in order to gain benefit, whereas, it utilizes market skimming strategy where the item has actually an included worth and by offering a few products it can reach break-even.


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

Vrio Analysis
It utilizes both offline & online channels of promotion to market their items. Paid item advertisements, social promo and digital advertisements are uses to develop awareness about Organization items.

Worth Chain Analysis.

It's an analytical structure for identifying business activities that include worth or competitive benefit for the business.

Incoming Logistics.

It has among the most reliable and efficient supply chain network and has more than 2700 suppliers across various markets worldwide. Practically 80% of which is based in Asia and the staying around the globe. For its incoming logistics it owns different logistics companies as it subsidiaries. It cares for its providers and creates a harmonious relationship with them and even reduced their payment cycles to boost this relationship even more which includes worth to their chain network.


Corporation's core proficiency is its mass manufacturing it produces 90% of its items internal. Divided into 3 various divisions its operations are particularly IT & Mobile Communications, Gadget Solutions and Consumer Electronics. It is keeping operation hubs worldwide to even more include value to its value chain network.

Outbound Logistics.

Its outbound logistics system efficiency is among the main factors Lumismart B Answering The Call For Negawatts 2 Case Study Help is able to compete with Apple. Corporation's own Electronic Logitec system plays a significant role in the outgoing logistics operations. It even carries out the jobs of collection of payment, settling insurance coverage claims, etc. on behalf of Company.

Marketing and Sales.

Bring in target consumer attention towards the product is done through marketing and sales to interact with them the value and competitive advantage the product provides. Lumismart B Answering The Call For Negawatts 2 Case Study Analysis advertising budget plan is continually growing since they began their repositioning globally and will continue to do so as they are constantly wanting to broaden and invest in high potential development markets. The budget plan is invested in events, print and media advertisements, public relations and so on.

Org Service. Enterprise put their clients at the top and continually make every effort to provide unmatchable customer care standards. As after sales service is becoming incredibly important to keep consumers pleased and engaged, they even carry out studies through 3rd parties to find out their client's feedback and execute it in the positive way to reduce or if possible completely remove their customer problems. By including a direct support line to contact them 24 hr they have even more increased the included worth of Lumismart B Answering The Call For Negawatts 2 Case Study Help service.


Lumismart B Answering The Call For Negawatts 2 Case Study Solution has actually diversified market segmentation, based upon its arrangement of large range of items to large number of customers. Org target client sections can be divided into 3 categories i.e. Lumismart B Answering The Call For Negawatts 2 Case Study Help IT and Mobile Communications, Corporation Consumer Electronic Devices and Business Device solutions.


Lumismart B Answering The Call For Negawatts 2 Case Study Solution geographical segmentation is based upon 2 requirements i.e. area and density. Org serves about 80 nations worldwide with its products supplied 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 encourages worldwide expansion of Org.


The group segmentation of Lumismart B Answering The Call For Negawatts 2 Case Study Help is based upon gender, age, life-cycle stage and profession. Enterprise produces items that can be used by both females and males. The target clients for Venture IT and mobile communication products have an age variety of 18-65 with majority at a young or recently wed life cycle phase. They are mainly students, employees and specialists. Apart from it, Business Consumer Electronic devices are targeted to a customer segment with an age variety of 25-65. They are mostly staff members and professionals. Org Device Solutions are targeted at students, staff members and specialists with an age range of 25-65.


The psychographic segmentation of Lumismart B Answering The Call For Negawatts 2 Case Study Help s based upon the social class and the lifestyle of the customer. Organization target clients on the basis of social class are primarily upper middle, middle and working class customers, as Corporation offer items like mobile phone very little cheaper i.e. Motorola in addition to very little pricey i.e. Apple. It supplies quality items to middle level consumers at a somewhat high cost than others targeting the same segment.


Lumismart B Answering The Call For Negawatts 2 Case Study Help majority target clients have special behavioural attributes. It has clients with an ambitious, trendy and determined personality with moderate level of commitment towards the brand name. Its customers have some degree of shift towards other renowned brand names i.e. Apple. Most of Business consumers want quality in addition to expense control. Due to the fact that of its moderate costs with a degree of quality, they are drawn in towards Organization.

Quantitative analysis.

Sales of Corp has increased astonishingly from 16 billion $ in 1997 to 44.6 billion $ in 2002, and the net revenue of.48 billion $ to 5.9 billion $. It has likewise decreased its financial obligation from 15 billion $ to 4.6 billion $. Digital media is the biggest selling category of Corp with sales of 13.9 billion $, whereas, Telecommunication and Semiconductors sectors both reached 11 billion $ in sales. Since of the high overhead expense, profits/ sales are increasing but net revenue is not increasing accordingly. New expansions and hiring's were the primary factor of the boost in the overhead costs, with china presently not supplying any earnings to Org, however there is so much potential in the existing market with 75 % yet to be explored.

Qualitative analysis.

Whereas, the core strength of the business is presently manufacturing however long gone are those days when great items were selling themselves. Kim has actually already begun to strengthen the marketing activities of Corporation and really quickly it will end up being one of its core strength like producing if not much better.



Corporation runs designs, makes and sell a vast portfolio of consumer electronics. It operates in a very competitive environment and has actually successfully placed itself as the maker of quality items. The answer is yes.


As, stated earlier that Lumismart B Answering The Call For Negawatts 2 Case Study Help runs in a highly competitive environment, which implies all the companies have comparable items. The response for rarity is no.


Due to the nature of the market, it is very simple for competitors to comprehend the performance of the products and quickly make their own designs. Yes, Company is just behind IBM in signing up brand-new patents annually, however the benefit is very short term in this market.


Chairman Lee has completely turn-around Venture, from going nearly insolvent throughout the Asian monetary crisis of 1997 to the leading 25 business in the world. Certainly yes there appertains organization in the business and the results promote themselves.

External Ecological Analysis

PESTLE Analysis


Being an international brand spread practically in every nation worldwide, majority of the environments like U.S.A., Europe, China and so on, are extremely conductive for its operations. It deals with some political pressures in less industrialized countries where law and order situation is not excellent. Latin American, African and some Asian countries fall in this classification, where political instability do have a result on Lumismart B Answering The Call For Negawatts 2 Case Study Analysis operations.


Buying power of consumers is important for business like Company to prosper and grow. Emerging markets like India, middle-eastern countries and so on provide development chances, whereas, due to recession even the customers of developed countries suffer severely. It is really crucial for the business to keep an eye on the ongoing economic situation of the nation prior to getting in the market.


International business have to face numerous social and cultural issues throughout its operations in a foreign nation. Venture has actually also dealt with lots of issues but have actually adopted to the local environments of the majority of the nations incredibly well. It has tailored its products, practices, policies and so on appropriately in order to achieve success.


With an annual expenditure of 2.4 billion dollars in Research & Advancement, and with constant innovative product launches, Lumismart B Answering The Call For Negawatts 2 Case Study Solution is among the leading innovative companies of the world. With a clear objective to be ahead of the rest when it pertains to technological improvements, Org has actually risen to the no 25 of the leading successful business of the world.


Each nation has their own laws and policies, being a multinational business Corp have to strictly follow those laws in their jurisdictions. Failure to do so, will result in serious legal repercussions. So, it needs to study or employ a local law specialist before beginning its operations in a specific country.


With the increasing awareness among customers about the ethical & ecological offenses of business, Org has to make sure that it follows all the security standards. Ecological damages, ethical misbehaviors are not acceptable and in some countries the repercussions can be really serious. On the other hand it needs to do some Corporate Social Responsibility practices to reveal the residents that it appreciates their environment and people.

Porter's 5 Forces

Risk of Substitution

Hazard of alternative for Corporation's each item category is quite substantial. Elements for high danger of replacement for Lumismart B Answering The Call For Negawatts 2 Case Study Analysis Mobile phone consist of the presence of high number of providers and Market saturation in developed nations, which make the cost of switching for consumers almost no. Along with it, Business printing services items are threatened by the increasing tourist attraction of customers towards cloud storage.

Competition Amongst Existing Firms:

The rivaly among Corp and its close competitors is extreme. The major reason behind this is the approach of market saturation in different number of item categories, forcing Org to present more ingenious features in existing products and new ingenious items to preserve its development. The significant rivals for Lumismart B Answering The Call For Negawatts 2 Case Study Analysis samrtphones include Apple, Motorola, LG, Nokia, Huawei, OPPO etc.

Lumismart B Answering The Call For Negawatts 2 Case Study Analysis has a vast supply chain consisting of about 2700 suppliers across the world.( Company Sustainability Report, 2016) Supplier's bargaining power for Enterprise is low as Corporation runs economies of scale and its orders are of prospective size and worth. These big orders enable Org to work out costs with its providers. Nevertheless, due to incapability of Lumismart B Answering The Call For Negawatts 2 Case Study Analysis to build its own software application, it has to outsource its software application development to Google, which becomes a possible supplier of software for Organization, resulting in high bargaining power of Google. Although, in the majority of cases Corp has a power to negotiate rates, however it provide substantial prices to its suppliers to build a strong supply chain and to have strong relationships with its providers.

Bargaining Power of Buyers:

Bargaining power of buyers for numerous number of product categories of Org is intense. One of the aspect resulting in the intense bargaining power is the schedule of large number of rivals in nearly each product category i.e. rivals of Enterprise Mobile phone, with an extremely little differentiation. The high availability of providers of Mobile phones with minimum differentiation, make the changing cost for purchasers almost zero, for this reason increasing the bargaining power of buyers. Market saturation in the majority of the item categories also make the bargaining power of buyers more extreme in for Lumismart B Answering The Call For Negawatts 2 Case Study Help. In spite of igh bargaining power Organization is rather capable of offering its products at a greater rate than much of its competitors, due to high-end quality item and a reasonable brand image.

Danger of New Entrants:

Threat of new entrants for Corp is quite low. One of the significant aspect for low threat of brand-new entrants is the high competitors in the industry. The requirement of substantial quantity of capital to enter in the market is also among the possible barrier to entry. In addition to it, requirement of substantial expertise and research and development expenditures 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 market. High bargaining power of suppliers force the gamers in the industry to charge as low costs as possible and this can just be achieved by production performance. Brand-new companies, in bulk cases, lack the production effectiveness, for this reason increasing the risks for entryway in the technology market.

Competitive Analysis

Corporation's high product diversification provides it distinction from its competitors. Unlikely to its close rivals consisting of Sony, Intel and Nokia, who focus majority on a single product category with Sony focusing on customer electronic devices, Nokia on cell phones and Intel on chips, Lumismart B Answering The Call For Negawatts 2 Case Study Help had a substantial R&D spending on all of its product classifications which allow the company to earn possible earnings from sales of almost all of its products.

The company ranks initially in 4 item classifications i.e. DRAM Chips, LCD Displays, Big Screen TVs and Microwave ovens, in regards to worldwide market share, amongst 8 various item classifications. Enterprise was the worldwide leader in manufacturing DRAM, SRAM and NAND flash chips. Although, Corporation revenues from chips was less than Intel but its revenues from chips was growing much faster than Intel and has grown near to the earnings levels of Intel, as given up the case Display 2.

Together with the chips Venture mobile market was also growing at a high rate than its rivals i.e. Motorola and Nokia. Org's mobile phone's sales development was 51% as compare to Motorola with only 4% and Nokia with zero sales development. The significant reson behind Corporation's high growth despite of greater prices than Nokia and Motorola was the company's high-end quality mobile phone.

Enterprise was also profiting from increasing market share of high end LCDs as given in case Exhibit 3. The significant factor, making the business allow to obtain the opportunity is its mass production at low expense. Sony was the greatest competitor for Lumismart B Answering The Call For Negawatts 2 Case Study Solution in LCD market, nevertheless, it had actually likewise begun joint endeavor with Corporation in 2003 for LCD making, decreasing the competition for Venture.

Porter's Competitive Technique

Low Expense Leadership method of porter is fully implemented by Corporation the method they achieve economies of scale by strengthening their core competencies of manufacturing. Even to the point that their competitor SONY decided to form an alliance with them to produce for them, due to the fact that they were not able to take on them on low cost. Distinction is another strategy well implemented by Organization by constant financial investment in the R&D and remaining ahead of the competitors. They constantly bring something new and innovative whether it's an item or a service.


Alternative Service 1

The Chief Marketing Officer (CMO) of Lumismart B Answering The Call For Negawatts 2 Case Study Help would create a brand-new brand image by targeting the younger generation of the specific nation. As, especially smart phones of Business are popular among the more youthful demographic.


1. It is the best method to construct Client Lifetime Worth (CLV) by producing a long-term relationship with consumers. Build commitment through delivering worth and profit for long-lasting, as research study has actually revealed it is more affordable to maintain present consumers than to bring in new ones.
2. Another pro of this option is that word of mouth spread faster amongst younger individuals and which in turn will generate new consumers for my items.


1. Old customers who were connected with Org prior to may not like this new image the business is trying to portray.
2 It will sustain more expenditures to rearrange some products and it might not even bring success as the trends alter extremely rapidly amongst the younger market.

Alternative service 2.

It would be done by organizing training workshops during which importance of marketing will be taught and numbers will be provided. Marketing environment must be produced internally initially as genuine marketing begins inside the corporation.


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


2. Its con can produce a very unhealthy environment in the work environment, as people often resist modification since they fear it.

Recognize the very best option

Very first option is the best as it plainly has more pros because once a Consumer Lifetime Value is developed the company will make money from it till that customer lives and has purchasing power also. Plus, our target customers are the more youthful generation which are bound to live longer than the present aging individuals. However, Business's primary objective is to create loyalty among its customers and make them redeemed it from them and even buy their various products too.

Application Strategy

• Targeting younger generation through social marketing, producing a link with them like Pepsi make with music. And set the expectations realistic and possible.
• A team including best marketing and sales professionals should be put together, and both views must be considered before securing the resources needed to carry out the strategy.
• Thorough communication of the strategy must be done as it is extremely essential for everybody to be on the exact same page to make it work.
• Tasks and timelines must be develop and interacted appropriately to each person accountable.
• The supervisor must use a dashboard which shows the progress of all the jobs which have been done or about to be done and by whom.
• The manager should monitor and keep a constant examine the private and total performance.
• Everybody ought to want to adapt midway since any new pattern or policy may be available in due to which all the important things currently prepared have to be changed. It's better to have contingency plans already prepared.
• At the end of the project the manager must interact the outcomes and if effective ought to celebrate with the team.


This change the budget allotment of various nations and numerous managers were dissatisfied and argued however the analysis done by the program was precise and revealed figures like North America and Russia growth prospective warranted a 35% allowance while they were getting 45%. It really helped to fairly disperse the resources and capture more clients by spending more on advertisements on the high growth potential areas of the world.

Lumismart B Answering The Call For Negawatts 2 Case Study Analysis is a leading 25 company worldwide now and plans to get ahead of Sony who sits presently at no. 20. Its constant financial investment in R&D and ingenious practices have actually propelled them to brand-new heights however for them its' only the start and they wish to be amongst the leading 3 brands worldwide. They entirely turn-around from almost going bankrupt throughout the Asian Financial Crisis to a world renowned brand, understood for quality and innovation. Their worth chain and their core proficiency their production capability, along-with worldwide brand image building have actually 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 just increase further in the future. Their marketing efforts need to be directed towards younger group amidst the internal arguments about marketing and should create Client Lifetime Worth as it will not just give them benefits now but will continue to reap it till the client lifetime. As the cost of retaining the customer is much cheaper than bring in a brand-new one.