LG finally had it right the third time in india. now it is decisively upping the stakes
“Our determination for walking the full distance is unwavering. We would like to move faster but we won’t be impatient. A broad consensus in favour of industrialisation (in India) is gradually emerging and we trust that the respective Governments are doing their best...”
Yes, this is a comment from a Korean company on its commitment towards India. But while you may be tempted to think this is LG, it is actually a comment from Posco, when we asked them how, despite the problems with the steel plant, the company continues to stubbornly invest time and money in its India plans. While making steel and making consumer durables are like chalk and cheese, Posco’s determination may be due in part, to the inspiring forays of other Korean MNCs in India; LG in particular.
LG had earlier tested the waters with two unsuccessful attempts (in the form of JVs with Bestavision and Birla group). In March 1997, K. R. Kim (who was then working in Panama) was bought on board to spearhead the Indian subsidiary of the Korean consumer durable giant. Moreover, the market, which was led by the likes of BPL, Onida, Videocon, Weston, Philips, et al, was now changing. LG, along with the other Korean giant Samsung, proved more than a handful for the incumbents, with their aggressive pricing, promotion and distribution strategies.
Cut to 2009, the company has not only clocked a mind boggling turnover of Rs.107.93 billion in 2008 (with a growth rate of 18%) but is also aiming high for its next big fix – the $6-billion revenue target by 2010. But the initial experience of LG in India has not been a cakewalk as the key challenge for the company at the time was not of growth but of survival. From cultural conundrums to corruption, from office space hiccups to high attrition rates, the company had it all. In fact, there was a time when the durable giant had to bear the wrath of the local land mafia and criminal elements at its manufacturing base at Greater Noida in Uttar Pradesh.
“Our determination for walking the full distance is unwavering. We would like to move faster but we won’t be impatient. A broad consensus in favour of industrialisation (in India) is gradually emerging and we trust that the respective Governments are doing their best...”
Yes, this is a comment from a Korean company on its commitment towards India. But while you may be tempted to think this is LG, it is actually a comment from Posco, when we asked them how, despite the problems with the steel plant, the company continues to stubbornly invest time and money in its India plans. While making steel and making consumer durables are like chalk and cheese, Posco’s determination may be due in part, to the inspiring forays of other Korean MNCs in India; LG in particular.
LG had earlier tested the waters with two unsuccessful attempts (in the form of JVs with Bestavision and Birla group). In March 1997, K. R. Kim (who was then working in Panama) was bought on board to spearhead the Indian subsidiary of the Korean consumer durable giant. Moreover, the market, which was led by the likes of BPL, Onida, Videocon, Weston, Philips, et al, was now changing. LG, along with the other Korean giant Samsung, proved more than a handful for the incumbents, with their aggressive pricing, promotion and distribution strategies.
Cut to 2009, the company has not only clocked a mind boggling turnover of Rs.107.93 billion in 2008 (with a growth rate of 18%) but is also aiming high for its next big fix – the $6-billion revenue target by 2010. But the initial experience of LG in India has not been a cakewalk as the key challenge for the company at the time was not of growth but of survival. From cultural conundrums to corruption, from office space hiccups to high attrition rates, the company had it all. In fact, there was a time when the durable giant had to bear the wrath of the local land mafia and criminal elements at its manufacturing base at Greater Noida in Uttar Pradesh.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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