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

ConclusionConclusion

Top Competitors Top Competitors NokiaNokia MotorolaMotorola

LG is diverse companyLG is diverse company LG is a very green companyLG is a very green company