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Lundbeck Korea Managing An International Growth Engine 4 Harvard Case Study Analysis

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Lundbeck Korea Managing An International Growth Engine 4 Case Study Solution and Analysis


Introduction

Historically, the company's core clients consist of the Original Equipment Manufacturers (OEMs), which used to sell Lundbeck Korea Managing An International Growth Engine 4 Case Study Analysis products withtheir own brand name. Its consumer circle includes Original Devices Manufacturers (OEMs), who used to sell Business products with their own brand name. He rearranged Corp as an international brand and educated his divisional managers to understand marketing and its importance.

Problem Statement

Org's shift from an item based to a marketing business is not going as efficiently as planned.Overcoming the unwillingness of divisional supervisors to integrate marketing effectively is still a significant difficulty. Producing 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

Lundbeck Korea Managing An International Growth Engine 4 Case Study Solution efforts for building its brand across the world was begun after introducing the "new management effort" by Chairman Lee in 1993. The goal was to change Company from a low-cost OEM to a high value-added product company. To make the vision of Company a truth, Chairman Lee selected Yun as a vice chairman in 1997. Yun had a rather clear photo in his mind about how Business can transform from a low end to a high end product supplier. He knew that transformation can just be done through positioning Business as a business 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 build Org brand name, with a potential 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 worth of marketing. They thought about 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 service practices, and the current marketing requirement was too much high, the gap was too broader and to fill this gap with wrong perceptions about marketing was quite challenging for Yun.

Along with it the item variety of the business was increasing with the ripening of new product concepts by the R&D sector of Organization. Yun had an obstacle to carry out marketing preparation and to produce marketing budget plans for existing as well as for brand-new items from the very start, and this would take a substantial time.

A substantial shift would be needed in existing marketing expenditures to construct the Lundbeck Korea Managing An International Growth Engine 4 Case Study Analysis brand. This would lead to increased marketing expenses for Org and might disturb the administration relating to increased expenditures, as they were reluctant to marketing expenses previously and an unexpected huge shiftwould make them disturb. This could lead to decreasing executive support for global marketing. In this situation, Yun deals with a challenge for justifying increased marketing expenses by showing the long term value of substantial marketing expenses.

Internal Analysis
SWOT Analysis
Strengths


Org strengths lie in its substantial item portfolio. Corp has largest number of patents in the market with overall variety of 15499 patents granted in US( USP). Large amount of R&D spending has enabled the business to grow its product portfolio at a greater rate than its competitors. Lundbeck Korea Managing An International Growth Engine 4 Case Study Analysis spent about $13.079 billion on its R&D sector in 2016, which is 7.3% of its overall incomes.

Another strength of Lundbeck Korea Managing An International Growth Engine 4 Case Study Analysis is its ability to develop ingenious products at a constant rate. It significant shows for the innovation and product developing of Company is that the business has received numerous awards for its innovation and item design.

Unlike Apple and other competitors, Business is focused on producing devices which can be quickly incorporated with any kind of open source Operating System (OS) and software. This offers Venture an edge over Apple devices.
Porter's 5 Forces Analysis
Organization's capability to produce luxury products at low expense of production is likewise one of the major strength of Organization as it enables the company to record more market by supplying quality products with expense control.

Weak points

Lundbeck Korea Managing An International Growth Engine 4 Case Study Help weak points are concealed in the company's reliance on outsourcing software for its gadgets due to business's inability in developing software application, unlike Sony. Venture likewise has low earnings margins as compare to Apple due to huge distinction in the rates of Apple and Corporation with a much lower distinction in quality. The varied focus of the business due to a great deal of items in its portfolio, lead to the less effective production and make the business unable to charge higher costs like Apple. The company is likewise ineffective in managing its patents and regularly faces the issue of patent infraction.

Opportunities

Opportunities for Lundbeck Korea Managing An International Growth Engine 4 Case Study Solution lie in the growing Smart device market and the business's performance in the market. Corp currently runs in about 80 nations and the company has a chance to increase its geographical expansion by moving towards more emerging markets outside Asia.

Risks

The dynamic industry environment of innovation industry position an extreme risk on Venture's survival and require the business to spend 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 business is likewise a huge danger for the company's development in the existence of strong rivals like Apple.

4 P's of Marketing
Swot Analysis
Item

Lundbeck Korea Managing An International Growth Engine 4 Case Study Help offers quality products and has a quite abundant portfolio which accommodates various sections. Most of the products remain in the leading 3 of their respective markets. LCD and mobile phones are the most significant items of Organization, whereas DRAM is likewise not far behind in contrast of them. Following is the line of product of Company:

• LCD/ TV
• Laptops.
• Smart phone.
• A/c unit.
• Desktop computer.
• Hard drives.
• Washing machines.
• Refrigerators.
• Cameras.
• Microwaves.
• Flash memory.
• DRAM.

Price.

Lundbeck Korea Managing An International Growth Engine 4 Case Study Analysis uses both market competitive and market skimming rates techniques for its wide variety of items. In competitive pricing it changes the rate according to the competition in order to get advantage, whereas, it uses market skimming strategy where the item has an included value and by offering a few products it can reach break-even.

Location.

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

Promotion.
Vrio Analysis
It uses both offline & online channels of promo to market their products. Paid item advertisements, social promotion and digital ads are utilizes to create awareness about Venture products.

Worth Chain Analysis.

It's an analytical framework for recognizing business activities that add value or competitive benefit for the business.

Inbound Logistics.

It has among the most effective and efficient supply chain network and has over 2700 providers throughout numerous markets around the world. Nearly 80% of which is based in Asia and the remaining around the world. For its inbound logistics it owns various logistics companies as it subsidiaries. It takes care of its providers and creates an unified relationship with them and even reduced their payment cycles to boost this relationship even more which adds worth to their chain network.

Operations.

Venture's core proficiency is its mass producing it produces 90% of its items in-house. Divided into 3 various departments its operations are namely IT & Mobile Communications, Gadget Solutions and Customer Electronic Devices. It is keeping operation hubs worldwide to even more add worth to its value chain network.

Outbound Logistics.

Its outgoing logistics system performance is among the main factors Lundbeck Korea Managing An International Growth Engine 4 Case Study Help has the ability to compete with Apple. Corporation's own Electronic Logitec system plays a major role in the outbound logistics operations. It even carries out the tasks of collection of payment, settling insurance claims, etc. on behalf of Enterprise.

Marketing and Sales.

Drawing in target customer attention towards the item is done through marketing and sales to communicate with them the value and competitive advantage the product offers. Lundbeck Korea Managing An International Growth Engine 4 Case Study Help marketing budget plan is continuously increasing considering that they started their repositioning internationally and will continue to do so as they are constantly aiming to invest and broaden in high possible growth markets. The spending plan is spent on events, print and media ads, public relations and so on.

Org put their customers at the top and continually strive to provide unmatchable customer service requirements. By adding a direct assistance line to contact them 24 hours they have even more increased the added value of Business service.

Segmentation.

Lundbeck Korea Managing An International Growth Engine 4 Case Study Analysis has diversified market division, based upon its provision of vast array of items to a great deal of customers. Company target client sections can be divided into 3 classifications i.e. Lundbeck Korea Managing An International Growth Engine 4 Case Study Analysis IT and Mobile Communications, Org Customer Electronic Devices and Corporation Device options.

Geographic.

Lundbeck Korea Managing An International Growth Engine 4 Case Study Solution geographic segmentation is based upon 2 criteria i.e. region and density. Org serves about 80 nations worldwide with its items offered to Urban along with Rural areas of the nation. The Organization is also growing its global existence and the company's flexibility in finding its plants motivates international expansion of Business.

Market.

The market division of Lundbeck Korea Managing An International Growth Engine 4 Case Study Solution is based upon gender, age, life-cycle stage and profession. Corp produces products that can be utilized by both males and females. The target clients for Enterprise IT and mobile communication products have an age series of 18-65 with bulk at a young or recently wed life cycle phase. They are mostly students, experts and employees. Apart from it, Enterprise Customer Electronics are targeted to a consumer segment with an age variety of 25-65. They are mostly professionals and employees. Org Device Solutions are targeted at students, employees and experts with an age variety of 25-65.

Psychographic.

The psychographic segmentation of Lundbeck Korea Managing An International Growth Engine 4 Case Study Solution s based upon the social class and the life style of the customer. Corp target clients on the basis of social class are primarily upper middle, middle and working class clients, as Organization sell items like cellular phone not much more affordable i.e. Motorola along with not much expensive i.e. Apple. It supplies quality products to middle level customers at a somewhat high rate than others targeting the same segment.

Behavioural.

Lundbeck Korea Managing An International Growth Engine 4 Case Study Solution bulk target consumers have distinct behavioural qualities. It has clients with an ambitious, fashionable and figured out character 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 Organization customers desire quality as well as cost control. They are attracted towards Company since of its moderate costs with an extent of quality.

Quantitative analysis.

Sales of Org has increased remarkably from 16 billion $ in 1997 to 44.6 billion $ in 2002, and the net earnings of.48 billion $ to 5.9 billion $. It has actually likewise lowered its debt from 15 billion $ to 4.6 billion $. Digital media is the largest selling classification of Corp with sales of 13.9 billion $, whereas, Telecommunication and Semiconductors sectors both reached 11 billion $ in sales. Profits/ sales are increasing but net revenue is not increasing appropriately because of the high overhead cost. New expansions and employing's were the primary reason of the boost in the overhead costs, with china presently not providing any revenue to Corporation, however there is a lot potential in the current market with 75 % yet to be checked out.

Qualitative analysis.

Whereas, the core strength of the business is presently producing but long gone are those days when excellent products were offering themselves. Kim has actually already begun to enhance the marketing activities of Corp and extremely soon it will end up being one of its core strength like producing if not better.

VRIO.

Value.

Corporation runs designs, manufactures and sell a vast portfolio of consumer electronic devices. It operates in an extremely competitive environment and has successfully positioned itself as the maker of quality items. So, the response is yes.

Rarity.

As, stated previously that Lundbeck Korea Managing An International Growth Engine 4 Case Study Solution runs in an extremely competitive environment, which suggests all the business have similar products. The answer for rarity is no.

Imitability.

Due to the nature of the market, it is really simple for competitors to understand the functionality of the items and quickly make their own designs. Yes, Org is only behind IBM in signing up brand-new patents yearly, however the advantage is really short-term in this industry.

Company.

Chairman Lee has completely turn-around Corp, from going almost insolvent throughout the Asian monetary crisis of 1997 to the top 25 business worldwide. Absolutely yes there appertains organization in the company and the results speak for themselves.

External Environmental Analysis

PESTLE Analysis

Political

Being an international brand spread practically in every country worldwide, bulk 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 industrialized countries where order circumstance is not good. Latin American, African and some Asian nations fall in this category, where political instability do have an impact on Lundbeck Korea Managing An International Growth Engine 4 Case Study Help operations.

Economic

Buying power of clients is essential for business like Org to succeed and grow. Emerging markets like India, middle-eastern countries and so on provide growth chances, whereas, due to economic crisis even the customers of industrialized countries suffer terribly. It is very important for the business to keep an eye on the continuous economic situation of the country before getting in the market.

Socio-Cultural

Multinational companies have to face various social and cultural problems throughout its operations in a foreign nation. Corporation has likewise dealt with many issues however have embraced to the regional environments of most of the nations exceptionally well. It has actually tailored its products, practices, policies etc. accordingly in order to succeed.

Technological

With an annual expenditure of 2.4 billion dollars in Research & Advancement, and with constant ingenious item launches, Lundbeck Korea Managing An International Growth Engine 4 Case Study Help is among the leading ingenious business of the world. With a clear objective to be ahead of the rest when it comes to technological developments, Company has actually risen to the no 25 of the top successful companies of the world.

Legal

Each country has their own laws and policies, being an international business Corporation have to strictly follow those laws in their jurisdictions. Failure to do so, will lead to major legal consequences. So, it has to study or hire a local law professional prior to beginning its operations in a specific country.

Environmental

With the increasing awareness amongst consumers about the ethical & ecological violations of business, Org needs to make sure that it follows all the security guidelines. Environmental damages, ethical misbehaviors are not acceptable and in some countries the effects can be very severe. On the other hand it needs to do some Business Social Obligation practices to show the locals that it cares about their environment and people.

Porter's 5 Forces

Risk of Alternative

Threat of replacement for Corp's each product category is quite significant. Elements for high hazard of alternative for Lundbeck Korea Managing An International Growth Engine 4 Case Study Help Smartphone consist of the existence of high number of providers and Market saturation in industrialized nations, which make the cost of switching for consumers almost zero. Along with it, Venture printing solutions items are threatened by the increasing attraction of customers towards cloud storage.

Competition Among Existing Companies:

The rivaly among Organization and its close competitors is intense. The significant factor behind this is the approach of market saturation in numerous number of product classifications, forcing Business to introduce more innovative features in existing items and new ingenious items to preserve its growth. The major rivals for Lundbeck Korea Managing An International Growth Engine 4 Case Study Analysis samrtphones include Apple, Motorola, LG, Nokia, Huawei, OPPO and so on.

( Organization Sustainability Report, 2016) Provider's bargaining power for Business is low as Corporation runs economies of scale and its orders are of prospective size and worth. Due to incapability of Lundbeck Korea Managing An International Growth Engine 4 Case Study Solution to construct its own software, it has to outsource its software advancement to Google, which ends up being a possible supplier of software for Enterprise, resulting in high bargaining power of Google.

Bargaining Power of Buyers:

Bargaining power of purchasers for different variety of item classifications of Business is intense. Among the element causing the intense bargaining power is the schedule of a great deal of competitors in almost each item classification i.e. competitors of Business Smart device, with a really little differentiation. The high availability of providers of Mobile phones with minimum differentiation, make the changing expense for purchasers practically no, thus increasing the bargaining power of purchasers. Market saturation in most of the item categories likewise make the bargaining power of buyers more intense in for Lundbeck Korea Managing An International Growth Engine 4 Case Study Solution. In spite of igh bargaining power Company is quite efficient in selling its items at a greater rate than much of its rivals, due to high-end quality product and a reasonable brand image.

Risk of New Entrants:

Threat of brand-new entrants for Lundbeck Korea Managing An International Growth Engine 4 Case Study Solution is quite low. Along with it, requirement of huge expertise and research and advancement expenses for survival in the industry likewise make new entrants hesitant to enter in the market. Market saturation is also one of the barrier of entry in technology industry.

Competitive Analysis

Corp's high item diversification supplies it distinction from its competitors. It is one of the three leading brands by market share. Unlikely to its close rivals consisting of Sony, Intel and Nokia, who focus majority on a single product category with Sony concentrating on consumer electronic devices, Nokia on mobile phone and Intel on chips, Corporation had a huge R&D costs on all of its product categories which allow the company to earn prospective profits from sales of nearly all of its items. (See Display) Nevertheless, due to the broad product range the business deals with high number of competitors.

The company ranks initially in 4 item classifications i.e. DRAM Chips, LCD Displays, Cinema Televisions and Microwave ovens, in terms of worldwide market share, among 8 various item classifications. Org was the global leader in manufacturing DRAM, SRAM and NAND flash chips. Although, Venture incomes from chips was less than Intel but its incomes from chips was growing faster than Intel and has actually grown near the earnings levels of Intel, as given in the case Exhibition 2.

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

Company was also reaping the benefits from increasing market share of luxury LCDs as given in case Display 3. The major factor, making the company enable to avail the opportunity is its mass production at low cost. Sony was the most significant rival for Lundbeck Korea Managing An International Growth Engine 4 Case Study Help in LCD market, however, it had actually also begun joint endeavor with Org in 2003 for LCD manufacturing, reducing the competition for Company.

Porter's Competitive Strategy

Low Expense Leadership strategy of porter is completely executed by Business the method they attain economies of scale by enhancing their core competencies of production. Even to the point that their competitor SONY chose to form an alliance with them to make for them, because they were unable to compete with them on low expense. Differentiation is another strategy well executed by Org by constant financial 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.

Alternatives

Alternative Service 1

The Chief Marketing Officer (CMO) of Lundbeck Korea Managing An International Growth Engine 4 Case Study Solution would develop a new brand image by targeting the younger generation of the specific nation. As, specifically mobile phones of Corporation are incredibly popular among the younger group.

Pros

1. It is the very best technique to build Customer Lifetime Worth (CLV) by developing a long-term relationship with consumers. Develop loyalty through providing worth and reap the benefits for long-term, as research has showed it is much cheaper to retain present clients than to draw in brand-new ones.
2. Another pro of this option is that word of mouth spread quicker amongst younger individuals and which in turn will bring in brand-new consumers for my products.

Cons

1. Old clients who were associated with Corporation prior to might not like this new image the company is trying to portray.
2 It will incur more expenditures to rearrange some products and it may not even bring success as the patterns alter really rapidly amongst the younger demographic.

Alternative solution 2.

It would be done by arranging training workshops during which significance of marketing will be taught and numbers will be offered. Marketing environment ought to be created internally first as real marketing starts inside the corporation.

Pros

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

Cons

2. Its con can develop a very unhealthy environment in the work environment, as people often withstand change because they fear it.

Recognize the best option

Option is the best as it plainly has more pros because once a Customer Life time Value is developed the company will benefit from it till that consumer is alive and has acquiring power. Plus, our target customers are the more youthful generation which are bound to live longer than the existing old age people. Corporation's primary objective is to produce commitment among its clients and make them repurchase it from them and even buy their various products.

Execution Plan

• Targeting younger generation through social marketing, producing a relate to them like Pepsi finish with music. And set the expectations reasonable and achievable.
• A team consisting of finest marketing and sales experts ought to be assemble, and both views ought to be taken into consideration before securing the resources needed to execute the strategy.
• Thorough interaction of the plan must be done as it is really important for everyone to be on the exact same page to make it work.
• Tasks and timelines ought to be develop and communicated accordingly to each individual responsible.
• The manager must utilize a dashboard which shows the development of all the tasks which have actually been done or about to be done and by whom.
• The manager need to keep an eye on and keep a continuous check on the private and overall performance.
Because any brand-new pattern or policy might come in due to which all the things already prepared have actually to be changed, • Everyone should be willing to adjust midway. It's better to have contingency plans already prepared.
• At the end of the campaign the supervisor ought to interact the results and if successful need to commemorate with the team.

Budget

The M-net program exposed engaging analysis about the low and high development possible locations and how much advertising budget plan need to be assigned appropriately. This modification the budget plan allotment of different countries and lots of managers were dissatisfied and argued but the analysis done by the program was precise and showed figures like The United States and Canada and Russia growth possible warranted a 35% allotment while they were receiving 45%. Whereas, China and Europe need to be getting 42% but were instead given 31%. It actually assisted to fairly distribute the resources and catch more consumers by spending more on ads on the high growth capacity areas of the world.
Recommendations
Conclusion

Its consistent financial investment in R&D and ingenious practices have propelled them to brand-new heights however for them its' just the start and they want to be amongst the leading 3 brand names in the world. Their marketing efforts must be directed towards younger demographic in the middle of the internal arguments about marketing and need to create Client Life time Worth as it will not only offer them advantages now but will continue to enjoy it till the client life time. As the expense of maintaining the client is much less expensive than bring in a new one.