lg by xiao liang bin chen nicole bernhardt chad holgerson
TRANSCRIPT
LGLGBy By
Xiao LiangXiao Liang
Bin ChenBin Chen
Nicole BernhardtNicole Bernhardt
Chad HolgersonChad Holgerson
HistoryHistory
was created in 1947 was created in 1947
“ “In-Hwoi Koo Chemistry Factory” In-Hwoi Koo Chemistry Factory”
a small chemistry company a small chemistry company manufactured some commoditiesmanufactured some commodities ““Lucky” : cleaning products, toothpaste, laundLucky” : cleaning products, toothpaste, laund
ry detergentsry detergents nongovernmental petroleum smelt factory in 1nongovernmental petroleum smelt factory in 1
967 967
HistoryHistory
““Lucky Goldstar” in 1958 Lucky Goldstar” in 1958
the first electronic company in Korea the first electronic company in Korea the first radiogram and refrigerator in 1958 the first radiogram and refrigerator in 1958 Company’s value-open up new techniques Company’s value-open up new techniques
HistoryHistory
In 1960s:In 1960s:
constructing its basic industry constructing its basic industry
built electrical wire in 1962 built electrical wire in 1962
oil refining factory in 1967oil refining factory in 1967
chemical, energy sources, appliances, chemical, energy sources, appliances, electronics electronics
HistoryHistory
In 1970s:In 1970s:
insuring increase steadyinsuring increase steady
enlarging in industry enlarging in industry
producing industry with top techniqueproducing industry with top technique
enhancing advantages in petroleum, chemical, enhancing advantages in petroleum, chemical, semiconductor, finance market semiconductor, finance market
HistoryHistory
In 1980s:In 1980s:
Developing globalization and top techniques Developing globalization and top techniques
Setting up factories in America, Europe, Setting up factories in America, Europe, Middle East Middle East
Persisting on accelerating products diversifiedPersisting on accelerating products diversified
Building 18 subsidiary companies Building 18 subsidiary companies
Office building was completed in Seoul in Office building was completed in Seoul in 19871987
HistoryHistory
In 1990s:In 1990s:
“ “Facing to new 2000”Facing to new 2000”
Designing new management Designing new management
Considering people firstConsidering people first
Creating value for customers Creating value for customers
“ “Youchon” petrochemistry industrial park finYouchon” petrochemistry industrial park finished in May of 1990ished in May of 1990
HistoryHistory
In 2000:In 2000:
purchasing DECOM Company purchasing DECOM Company
leader of information communication industry leader of information communication industry
chemical, energy sources, electronics, chemical, energy sources, electronics, communication, finance, and service communication, finance, and service
HistoryHistory
In 21th century:In 21th century:
Investing on future industries Investing on future industries
developing new medicine of antibiotic developing new medicine of antibiotic
R&D in digital television and displays R&D in digital television and displays
new generation of mobile communication new generation of mobile communication system system
HistoryHistory
providing varieties creditable finance services providing varieties creditable finance services investment negotiable securities founded investment negotiable securities founded
in 1973in 1973 participated in kinds of items actively participated in kinds of items actively
constructs basic establishment constructs basic establishment
Company AnalysisCompany Analysis
LG four basic ideasLG four basic ideas1. The Value1. The Value
2. The Promise 2. The Promise
3. The Benefits3. The Benefits
4. The Personalities4. The Personalities
Company AnalysisCompany Analysis
CompetitorsCompetitors NokiaNokia MotorolaMotorola Sony EricssonSony Ericsson SamsungSamsung
Company AnalysisCompany Analysis
LG is taking part in the Greenpeace LG is taking part in the Greenpeace International ChallengeInternational Challenge Nokia, LG, Sony EricssonNokia, LG, Sony Ericsson
Dell, Apple, IBMDell, Apple, IBM
Company AnalysisCompany Analysis
LG LG Mobile CommunicationMobile Communication AppliancesAppliances MediasMedias Many moreMany more
Industry HistoryIndustry History
June 17, 1946—the first American mobile June 17, 1946—the first American mobile radiotelephone service used commercially began radiotelephone service used commercially began
Cellular radios on allocated frequencies Cellular radios on allocated frequencies Number of mobile telephones and the frequenciesNumber of mobile telephones and the frequencies
Bell Systems asked for more frequencies Bell Systems asked for more frequencies Radio Common Carriers, which advanced faster and Radio Common Carriers, which advanced faster and
further than AT&T’s mobile telephony; twice as many further than AT&T’s mobile telephony; twice as many mobile units by 1978 mobile units by 1978
HistoryHistory
Outside the United States, developments in Outside the United States, developments in mobile telephony were slowermobile telephony were slower
Many governments or PTTs did not allow Many governments or PTTs did not allow public radiotelephones to be usedpublic radiotelephones to be used
Two Exceptions: Two Exceptions: Dutch National radiotelephone networkDutch National radiotelephone network Swedish Telecommunications Administration’s Swedish Telecommunications Administration’s
automatic mobile telephone systemautomatic mobile telephone system
HistoryHistory
Cell phone can be traced back to 1945Cell phone can be traced back to 1945 First mobile radios: 460 MHz band two-way First mobile radios: 460 MHz band two-way
radios radios Idea sparked enthusiasm, but hard to build Idea sparked enthusiasm, but hard to build
cellular radios to meet expectationscellular radios to meet expectations
HistoryHistory
Technology and industry grew rapidly Technology and industry grew rapidly 1969:1969:
commercial cellular radios used frequency commercial cellular radios used frequency reuse in small zone systems reuse in small zone systems
Motorola’s Mark 12 IMTS phoneMotorola’s Mark 12 IMTS phone SCM Melabs’ phone built into an attaché caseSCM Melabs’ phone built into an attaché case
The first attaché phones—called The first attaché phones—called transportables or luggables—were transportables or luggables—were rather large and heavy, and rarely rather large and heavy, and rarely as impressive as the one pictured as impressive as the one pictured here made by Spectrum Cellular here made by Spectrum Cellular Corporation, circa 1984.Corporation, circa 1984.
A later version of the A later version of the transportable/luggable, a Motorola transportable/luggable, a Motorola bag phone, 1990s. bag phone, 1990s.
Portable Portable RadiotelephonesRadiotelephones
HistoryHistory
1982:1982: Ameritech offers AMPS; developed by AT&T Ameritech offers AMPS; developed by AT&T Motorola’s Dyna-Tac Motorola’s Dyna-Tac
1984:1984: Korea Mobile Telecommunications Company Korea Mobile Telecommunications Company
offered AMPS in South Koreaoffered AMPS in South Korea Nokia and Tandy created the Tandy Mobira Nokia and Tandy created the Tandy Mobira
Corporation to sell AMPS phones in AmericaCorporation to sell AMPS phones in America
HistoryHistory
By the 1990s, 1G analog telephones were By the 1990s, 1G analog telephones were being replaced by 2G systems:being replaced by 2G systems: GSMGSM TDMA—digital AMPS IS-54/IS-136 and TDMA—digital AMPS IS-54/IS-136 and
Motorola’s iDENMotorola’s iDEN CDMA CDMA
Evolution of the Mobile PhoneEvolution of the Mobile Phone
Appearance of cell Appearance of cell phones changedphones changed Bulky, brick phones Bulky, brick phones
became sleeker andbecame sleeker andhandheldhandheld
Usage levels Usage levels increased as a result increased as a result of the growing number of the growing number of cellular sitesof cellular sites
HistoryHistory 1998—3G cell phones’ groundwork laid 3GPP 1998—3G cell phones’ groundwork laid 3GPP
China Communications Standards Association (China)China Communications Standards Association (China) European Telecommunications Standards Institute European Telecommunications Standards Institute
(Europe)(Europe) Alliance for Telecommunications Industry Solutions Alliance for Telecommunications Industry Solutions
(North America)(North America) Association of Radio Industries and Association of Radio Industries and
Businesses/Telecommunication Technology Committee Businesses/Telecommunication Technology Committee (Japan)(Japan)
Telecommunications Technology Association (South Telecommunications Technology Association (South Korea)Korea)
HistoryHistory
2000—3GPP’s Universal Mobile 2000—3GPP’s Universal Mobile Telecommunications System 3G networks were put Telecommunications System 3G networks were put out with the incorporation of CDMA air interfaceout with the incorporation of CDMA air interface
2001 and 2002—all-IP Core Network, IP Multimedia 2001 and 2002—all-IP Core Network, IP Multimedia Subsystems, and HSDPA addedSubsystems, and HSDPA added
2004—3GPP included operation with Wireless LAN 2004—3GPP included operation with Wireless LAN networks and added HSUPA, MBMS, and networks and added HSUPA, MBMS, and enhancements to IMS like PoC and GANenhancements to IMS like PoC and GAN
Future TrendsFuture Trends
Key to surviving in the cell phone industry is Key to surviving in the cell phone industry is changing with the technology available and paying changing with the technology available and paying attention to what draws in customersattention to what draws in customers
As customers become savvier about the technology in As customers become savvier about the technology in cellular phones, they start looking for the best deals cellular phones, they start looking for the best deals
To keep their customers and edge, manufacturers To keep their customers and edge, manufacturers have to stay one step aheadhave to stay one step ahead
Future TrendsFuture Trends
3GPP began the framework of its LTE project3GPP began the framework of its LTE project improve efficiencyimprove efficiency lower costslower costs improve servicesimprove services make use of new spectrum opportunities make use of new spectrum opportunities better integrate with other open standardsbetter integrate with other open standards
Specific LTE project goals:Specific LTE project goals: fully IP-based integrated system of systemsfully IP-based integrated system of systems network of networks network of networks
Future TrendsFuture Trends Standards for 4G being developed, but not set Standards for 4G being developed, but not set Some of the objectives of groups developing 4G Some of the objectives of groups developing 4G
technology:technology: spectrally efficient systemsspectrally efficient systems Improved data rates Improved data rates smooth handoffs via heterogeneous networkssmooth handoffs via heterogeneous networks high network capacityhigh network capacity the ability to operate with current wireless standardsthe ability to operate with current wireless standards seamless connectivityseamless connectivity next generation multimedia supportnext generation multimedia support
Apple’s iPhoneApple’s iPhone
A cell phone that A cell phone that could become a could become a forerunner to 4G forerunner to 4G phones phones
Unveiled by Apple in Unveiled by Apple in January 2007 at the January 2007 at the Macworld Conference Macworld Conference & Expo & Expo
Future TrendsFuture Trends
iPhone’s functions:iPhone’s functions: mobile phonemobile phone camera phonecamera phone multimedia playermultimedia player Internet services Internet services
text messagingtext messaging web browsingweb browsing e-maile-mail wireless connectivitywireless connectivity
Input Input iPhone releasesiPhone releases
Global Issues—Global Issues—Biological EffectsBiological Effects
Suspicions of the dangers of EMFs to human health Suspicions of the dangers of EMFs to human health Study in China at the Microwave Institute of Zhejiang Study in China at the Microwave Institute of Zhejiang
Medical University:Medical University: visual reaction time being delayed visual reaction time being delayed lower short-term memory test scores in several high-lower short-term memory test scores in several high-
intensity exposure groupsintensity exposure groups affect the central nervous system and the immune systemaffect the central nervous system and the immune system
American study yielded disturbingly similar resultsAmerican study yielded disturbingly similar results
Biological EffectsBiological Effects
Effects on the immune system can be linked to cancerEffects on the immune system can be linked to cancer cell phone radiation can change people’s sleep rhythmscell phone radiation can change people’s sleep rhythms affects the body’s cancer-fighting capability and change the affects the body’s cancer-fighting capability and change the
nature of the electrical and chemical signals nature of the electrical and chemical signals 2004—European Commission study2004—European Commission study Could also contribute to Alzheimer’s Could also contribute to Alzheimer’s
Biological EffectsBiological Effects
Could also be a link between cell phone usage and Could also be a link between cell phone usage and brain tumorsbrain tumors
Dr. Lennart Hardel’s study Dr. Lennart Hardel’s study Similar results were discovered by leading Similar results were discovered by leading
researchers contracted by Motorola to conduct researchers contracted by Motorola to conduct experiments; Motorola made several attempts to experiments; Motorola made several attempts to silence any reports of adverse affects and manipulate silence any reports of adverse affects and manipulate the outcomethe outcome Dr. Ross Adey Dr. Ross Adey Dr. Henry Lai Dr. Henry Lai Certain radiofrequency radiation lessened the Certain radiofrequency radiation lessened the
incidence of tumors in rats incidence of tumors in rats
Global Issues—Global Issues—Driving with Cell PhonesDriving with Cell Phones
Cell phones are dangerous the hands of drivers Cell phones are dangerous the hands of drivers People often do not realize how much brainpower is People often do not realize how much brainpower is
needed to carry on a conversationneeded to carry on a conversation Driving while talking on a cell phone impairs the Driving while talking on a cell phone impairs the
driver’s abilities more than being legally drunkdriver’s abilities more than being legally drunk The person on the other end cannot recognize when The person on the other end cannot recognize when
the driver must pay attention to the conditionsthe driver must pay attention to the conditions
Global Issues—Global Issues—Chip CompatibilityChip Compatibility
Sometimes hard to find features or functions Sometimes hard to find features or functions usable on all cell phonesusable on all cell phones
Items are often calibrated to specific phones Items are often calibrated to specific phones A potential culprit: output speed over A potential culprit: output speed over
compatibility conveniencecompatibility convenience
Competitor analysisCompetitor analysis
Worldwide cell phone market share for the year 2006
34.97%
21.85%11.86%
7.49%
6.67%
17.16%Nokia
Motorola
SamSung
Sony Ericsson
LG
Others
Main companies in the cell phone market are (2Main companies in the cell phone market are (2006):006):
No.1 Nokia 34.97%No.1 Nokia 34.97% No.2 Motorola 21.85%No.2 Motorola 21.85% No.3 Samsung 11.86%No.3 Samsung 11.86% No.4 Sony Ericsson 7.49%No.4 Sony Ericsson 7.49% No.5 LG 6.67%No.5 LG 6.67%
NokiaNokia
It is a It is a FinnishFinnish company company founded in founded in 1865 1865 headquarters are in headquarters are in EspooEspoo, a neighboring city , a neighboring city
of Helsinki, Finland of Helsinki, Finland President & CEOPresident & CEO --- ---Olli Pekka Kallasvuo Chairman ---Jorma Ollila has has 68,48368,483 employees. (at the end of Decembe employees. (at the end of Decembe
r 2006), r 2006),
Nokia in FinlandNokia in Finland
the largest company in Finland the largest company in Finland is playing a significant roleis playing a significant role in Finland’s in Finland’s
economy. economy. known as the best brand in Finland.known as the best brand in Finland.
Nokia is one of the world’s largestNokia is one of the world’s largest manufacturers of manufacturers of
- - mobile devices mobile devices
- - mobile network equipmentmobile network equipment, , solutions and solutions and services services
Nokia operates through four business divisions: mobile phones, multimedia, enterprise solutions, networks.
Revenues by DivisionRevenues by Division
Revenues by Division 2005
60.80%19.20%
17.50%2.50% mobile phones
networks
multimedia
enterprise solutions
Revenues by DivisionRevenues by Division
mobile phones
(60.8% of the total revenues during fiscal year 2005)
multimedia, (17.5%) enterprise solutions, (2.5%) networks. (19.2%)
Revenues by GeographyRevenues by Geography
The company has sales operations in about 130 countries, spanning the
Americas, Europe, Asia Pacific, and the Middle East.
Revenues by GeographyRevenues by Geography
Revenues by Geography 2005
42%
18%
13%
11%
8%8%
Europe
Asia Pacific
Middle East andAfrica
China
North America
Latin America
The company recorded revenues of E34,191 million during the year 2005
Europe, Nokia’s largest geographical market, Europe, Nokia’s largest geographical market, accounted for 42% of the total revenuesaccounted for 42% of the total revenues in the in the year 2005.year 2005.
Revenues from Europe reached E14,360.2 Revenues from Europe reached E14,360.2 million in 2005 million in 2005
Asia Pacific Asia Pacific 18% 18% E6,154.4 million E6,154.4 million Middle East and AfricaMiddle East and Africa
13%13% E4,444.million E4,444.million ChinaChina 11% 11% E3,761 millionE3,761 million North America North America 8%8% E2,735.3 million E2,735.3 million Latin America Latin America 8%8% E2,735.3 million E2,735.3 million
Strength Strength
Cell phone market leaderCell phone market leader
occupied about the 35% of the cell phone market occupied about the 35% of the cell phone market share share
Product development capabilitiesProduct development capabilities Nokia spends 3.5 billion, which is 9% of its Nokia spends 3.5 billion, which is 9% of its
sales revenue on research and develop new sales revenue on research and develop new product every yearproduct every year
Its worldwide employees who are working on Its worldwide employees who are working on research are more than 17000research are more than 17000
Now Nokia’s average new cell phone develops Now Nokia’s average new cell phone develops period are only 35 daysperiod are only 35 days
Strong revenue growth and returnsStrong revenue growth and returns
16.4% revenue increase in 2005 over 200416.4% revenue increase in 2005 over 2004
return on average asset 14.4%return on average asset 14.4%
return on average equity 23.7% return on average equity 23.7%
return on investments 23.6 % return on investments 23.6 %
WeaknessWeakness
Weak operating performanceWeak operating performance
operating revenue went down from 16.7% in operating revenue went down from 16.7% in 2003 to 13.6% in 2005 2003 to 13.6% in 2005
Weak performance in North AmericaWeak performance in North America
revenue from North America only accounts for 8revenue from North America only accounts for 8% of its all revenues % of its all revenues
Slow increase of enterprise solutions and nSlow increase of enterprise solutions and networksetworks
enterprise solutions segment increased slightly enterprise solutions segment increased slightly by only 2.6% in 2005 over 2004by only 2.6% in 2005 over 2004
net work segment had an only 2% growth in 2net work segment had an only 2% growth in 2005 over 2004005 over 2004
those two segments take up over 20% of its totthose two segments take up over 20% of its total revenueal revenue