Monday, September 28, 2009 Business Strategy

LG Display Co Ltd usesdifferentiation as its main business strategy by producing goods and services that are unique to the market. That is products that are used to experience new, rich life of digital display through a variety of TFT-LCD LG Display provides, such as the production and supply of thin-film transistor liquid crystal displays called TFT-LCD panels, principally used for televisions to provide slim and sleek design. It also provides large, wide and high performance screens for notebook computers and wider, brighter and crisper screens for desktop monitors. In addition, it provides TFT-LCDs for handheld products such as mobile phones, and lighter and slimmer products for industrial and other applications such as entertainment systems, automobile navigation systems, portable DVD players, digital photo displays and medical diagnostic equipment. The customers served by LG Display include manufacturers of notebook computers, televisions and desktop monitors. The customer service center provides product repair and warranty services to customers in the Americas region, where the demand for LCD TVs is rapidly growing, especially in the United States, Canada, Mexico and Brazil. The service center features optimized facilities and analysis equipment to provide warranty services primarily for LCD panels that are 32 inches and larger. In addition, the Company has one sales subsidiary and four representative offices in the U.S. As part of their strategy to improve customer alignment; this enables them to better respond to the needs of their customers in a timely and efficient manner.

Michael Porter's Five Forces Analysis In the industry LG Display operates, Michael Porters Five Forces Analysis is crucial in assessing the state of competition. The Bargaining Power of Buyers The bargaining power of buyers is moderate. There aren't many companies that offer the same quality of products as those of LG Display or have advanced as much technologically. The companys televisions, monitors, notebook PCs and applications stand out among existing competitors. LG Display reduces the buyer power by designing its products in ways that appeal to and fit the needs of today's customers. Everything from the slim and sleek, wide view, portable and compact designs and display technologies make the products superior to the competing companies. The Bargaining Power of Suppliers As far as LG Display's bargaining power of suppliers, the power is on the lower end. The company forms information partnership to create cooperation among supply chain partners for mutual success. It enters into a cooperative relationship with its suppliers by becoming their shareholders. This allows LG Display to promote strategic relationships with equipment and parts suppliers, which enables a stable source of supply at competitive prices. The result is high-quality parts at a lower cost which is done through sharing product concepts with suppliers early in the product development cycle. This kind of cooperation with suppliers has lowered costs by 10% compared to the fourth quarter of 2008. LG Display stands apart from its peers in terms of market share, cost competitiveness and supply capacity. Threat of Substitute Products or Services The threat of substitute products is moderately low. Substitutes for LCD are LED (Light-Emitting Diode) and OLED (Organic Light-Emitting Diode), both are newer technologies currently developed by the company. As long as LG Display can maintain its current market share of a quarter percent for the newer products, substitute products would not be considered as threats. The companys development

of new products and technologies that can be differentiated from those of its competitors increases switching cost as well as reduces buyers propensity to substitute. In addition, its innovation technology is another switching cost for consumers. Threat of New Entrants The threat of new entrants is low in the flat panel display industry (TFT-LCD technology) due to its various entry barriers such as rapidly evolving technology, capital-intensive characteristics, brand equity, expected retaliation among existing competitors and the significant investments required by the economies of scale. In addition, the industry may not be as appealing to potential competitors due to its highly competitive nature. Existing competitors have already experienced pressure on their prices and margins due largely to additional industry capacity from other panel makers in Korea, Taiwan, China and Japan. Other entry barriers also include LG Displays absolute cost advantage in its supply chain management and learning curve advantage with its years of experience as a leading player in the industry Rivalry among Existing Competitors

Rivalry among existing competitors is on the higher end. Although the companys market share increased to 26.4% in 2009 from 20.4% in 2007, there is still intense competition within the industry. Competitions are likely to remain intense not only due to the expected large demand for LCD panels in the market today but also due to additional industry capacity from other Asian LCD panel makers such as Samsung, AU Optronics and Sharp. However, the average selling prices may continue to decline as a result of technology advancements and cost reductions. In order to stay competitive, LG Display strives to differentiate itself with not only cutting-edge technology but also innovative designs. The BusinessWeek article "LG Bets Big on TV Design" clearly demonstrates this business initiative. http://www.businessweek.com/globalbiz/content/jan2008/gb20080116_993295.htm Major Business Initiatives & IT Advantages As a major manufacturer of LCD and other types of electronics screens such as LED and OLED, the company needs to have a strong Supply Chain Management (SCM) system to ensure supplies are in place at the right moment when they are needed (Just-In-Time method). This way cost can stay down while profits rise. Although it is uncertain whether LG Dispaly has any SCM in place, the company employs Inter-Modal Transportation to move its supplies from origin to destination through the help of Supplier Collaboration System, an ERP system that tracks goods from when they are shipped to the various stores that sell the products. The Customer Relationship Management (CRM) system is another focus of LG Dispaly since differentiation is its business strategy. The company's Customer Collaboration System serves to strengthen customer collaboration through providing services such as engineering support and market information. The Multi-channel Service Delivery also allows customers to interact with the company by either email, phone or the website. Another initiative businesses are increasingly using is E-Collaboration, the use of technology to support workflow, knowledge management, social networking, e-learning and collaboration. LG most likely uses virtual teams since there are employees in various countries like South Korea, China, Poland and the United States. The integrated collaboration environments improves work performance and allows sharing and flow of information. Considering the immence amount of technology involed in its industry, LG may also be using knowledge managment systems and wiki to capture, organize collaorate and share information. Finally, a company this size has to have an Enterprise Resource Planning (ERP) system in place to help facilitate the business practices. For LG, this integrated software that controls the various departments in the company is the Supplier Collaboration System. It allows all suppliers,

forwarders and customers to review shipment processing, import trade, electronic certification, price estimation and vendor information management.

The type of IT LG Display uses is the Top-down silo, where all the IT command and control are in the IT function. Although cuts down cost, this centralized approach discourages innovation. Fortunately, its philosophical approach of Early IT Adopters encourages the development and use of IT and allows employees to experiment with new and emerging technologies in hope of finding a few that can provide significant competitive advantage

GM's Stock Price Falters as Company Revisits Failed Strategies By David Schepp
Posted 8:00AM 03/28/11 Posted under: Company News, Technology, Economy, Apple, General Motors, Autos, Market News Share For shareholders in General Motors (GM), March has been more bear than lion. The automaker's stock has consistently traded below $33 a share -- the price stipulated in its initial public offering last November. Over the past month, GM shares have lost nearly 8% of their value. To be sure, some of the drop in value is related to events outside of GM's control: soaring fuel prices, instability in the Middle East and Japan's earthquake. But there is likely one other source for the current spate of investor angst: Chief Executive Daniel Akerson. On more than one occasion, Akerson has expressed

frustration that GM engineers aren't able to more quickly churn out fresh products -- something the automaker needs to do to keep pace with crosstown rival Ford Motor (F) and Asian automakers, including South Korea's Hyundai Motor. 'Like a Can of Diet Coke' Akerson's discontent is driven by his perception that GM is no different from any other consumer-products company. Citing Coca-Cola (KO) as an example, Akerson recently told The Wall Street Journal that a GM car was just like the can of Diet Coke he was drinking during the interview. "GM has to start acting like a consumer-driven -- not [an] engineering-driven -company," Akerson said. "We sell a consumer product -- our can just costs $30,000." To analysts (and no doubt GM employees who have been down this road before), Akerson's comments are dispiriting. Believing that cars are no different from beverages, neckties or nail polish is what caused GM's downfall and subsequent bankruptcy in 2009. It was the source of the company's bland product offerings in the 1990s, which eventually led the company to hire auto-design guru Bob Lutz in 2001 to turn things around. Akerson isn't the first CEO of a Detroit automaker to make the same wrongheaded assumption. Jacques Nasser, who led Ford for nearly three years before being fired in 2001, sought to rearrange the Dearborn, Mich.-based company into autonomous consumer business groups. He also, as with GM in recent years, pushed out people who knew the car business and hired from outside the industry. Nasser's belief was that Ford was a consumer-products company that happened to sell cars, says Arthur Wheaton, who analyzes the auto industry for Cornell University's school of industrial and labor relations. "It was a huge flop." More in Common with Tech Companies Car companies have more in common with technology companies, such as Apple

(AAPL), a company that views innovation and engineering as key, Wheaton says. Unlike beverages or hand cream, automobiles are constantly evolving technologies. Just as you wouldn't hire someone whose expertise is in shampoo or razor blades to develop the next generation iPhone or iPad, it makes as little sense to expect the same people to develop new cars, trucks and utility vehicles. By adhering to its principles, Apple hasn't only become an iconic brand known for innovation, its reputation has allowed the company to ask for and get a premium price for the products its sells, which raises another concern among GM shareholders. In the months after GM exited bankruptcy in 2009, the revived automaker stuck to its guns by not deeply discounting cars to spur sales, instead relying on a formula that produced hefty profits from each vehicle sold. But the automaker has since backtracked in a bid to boost its share of the U.S. car market by offering generous incentives. To be sure, rebates, and cheap financing and lease rates have helped GM move more vehicles off dealers' lots, as last month's sales figures showed. February sales surged 46%, exceeding analyst estimates as well as those of GM itself. But analysts warn those sales come at a cost -- reduced trade-in values, as one example. "We don't see any upside to incentives," Eric Lyman of Automotive Lease Guide told MSNBC.com. "It is manipulating the market and lowering the cost of your vehicles, which lowers the resale value of your used vehicle in the market." GM so far has done a remarkable job at turning itself around. With the two-year anniversary of its bankruptcy looming, however, it's unclear whether reshaping its identity and selling cars on the cheap can help the company stay on the road to recovery. Get info on stocks mentioned in this article:

AAPL F

GM KO Manage Your Portfolio 10) Sony Betamax

The 1979 Betamax was a real breakthrough for its time and for the video recording business. Its a shame it didn't catch on. Grandma must be pretty ticked off that all of her memories are trapped in a dead format.

Why it failed: Despite having higher quality (and a cooler name), Betamax was
defeated by VHS when over 40 companies decided to run with the VCR-compatible format instead. The lower price of VHS-C camcorders probably helped a little too. Want to avoid these types of mistakes? Hiring a professional business plan consultant can help you avoid common pitfalls.

9) Coca Cola- New Coke

Bill Cosby, a soda can, and a crystal ball. Nope, nothing odd there. Is Bill Cosby really trying to be believable?

Why it failed: There was nothing wrong with old coke. Life lesson: If it aint broke,
dont fizz it.

8) Polaroid - Instant Home Movies

Five seconds into this commercial and this guy has already lost us. "Imagine if someone invented a wonderful box (what??) and gave you a way to catch little pieces of your life so that you could see them again, anytime, by just dropping them into the box. Now, now...wo..wouldn't that be something?"

Why it failed: Polaroid will inevitably be associated forever with the act of standing
around shaking a picture that may or may not come out as intended. Trusting Polaroid to capture any life event big enough to warrant a video camera would just seem reckless. What about you? Are you planning a new marketing plan campaign? Need help planning your strategy? Call 877-478-4467 to speak with Growthink's professional business plan writers.

7) Pepsi - Crystal Pepsi

Who knew that 15 years later Van Halen would be done with Sammy Hagar and bring back David Lee Roth? Also, who knew we would live in a world without Crystal Pepsi? We were pretty sure it was here to stay.

Why it failed:Similar to New Coke, there was no real need for Crystal Pepsi. Despite
the shifting tides in early 90s marketing towards healthiness and purity, people just didnt get excited about a clear caffeine-free Pepsi. Not really a surprise- those who were that concerned with the health and color of their beverage probably would not be Pepsi drinkers to begin with.

6) McDonalds - Arch Deluxe Burger

Worst. Commercial. Ever. Anytime you think the best way to market your product is by standing in an elevator in a chef's outfit and begging the people on that elevator to eat that product...you might want to go back to the drawing board.

Why it failed:The goal of the Deluxe line was to market McDonalds fine cuisine to
the adult demographic. Unfortunately, adults werent interested in paying significantly more for slightly different burgers.

5) Apple - Lisa
Wow. Looks like it took Steve Jobs and his minions a few years to really get the hang of that "cool commercial" thing....

Why it failed: The Lisa was geared towards business consumers, though those
consumers were attracted to the lower price tag on IBM PCs. NASA got behind the Lisa project, which they regretted after it was discontinued two years later. Don't repeat the mistakes of the past. Growthink's professional business plan consultants have worked with more than 2,000 entrepreneurs. We know what works and what doesn't.

4) Levis - Type 1 Jeans

Apparently jeans that are perfect for those situations when you're being dragged through the dirt while hanging on to a rope wrapped around a possessed car dont resonate with the masses. This confusing Super Bowl commercial was simultaneously the debut and the death knell for Levi's Type 1 Jeans.

Why it failed: Fashion is a capricious field. The designers at Levis made Fashion
Fumble #41b: Celebrating the launch of a product before checking to see if anyone RSVPd to the Evite.

3) IBM - PCjr
This is what happens when you only have enough money in your marketing budget to afford a dead guy. This commercial is flawed on many levels. Would Charlie Chaplin really know how to use a computer? He was born in 1889, back when North Dakota wasn't even a state yet.

Why it failed: This computer had a hefty price tag. At $699, it was twice the price of
computers from Atari and Commodore. Many were also disappointed at the awkward layout of the factory-shipped keyboard.

2) DeLorean - DMC-12
How this car failed to catch on perplexes us. We know we''d want one.

Why it failed: The fall of the DeLorean Motor Company was not due to the vehicle,
which is no surprise because this car is an incredible piece of engineering and style. Rather, failure ensued after hard times fell on the companys founder. John DeLoreans empire was dismantled after his arrest on accusations of drug-trafficking resulted in bankruptcy.

1) Ford - Edsel
"They'll know you've arrived when you drive up in the 1958 Edsel, the car that's truly new!" I guess in 1958, new was slang for ugly. The front of this car bothers us, as it looks like an angry mechanical face.

Why it failed: A small army worth of factors came together to curse the Edsel. A
name that didnt resonate with the crowd, a bizarre pricing strategy, and a national recession have all been cited as factors by those who use the Edsel as an example of how not to market a product.