Posted by Sabrina Warren on May-02-2023
This case study presents a detailed strategic analysis of Changes in the Global Mobile Market and New Challenges for LG Mobile. The case analysis covers key managerial and strategic issues that Changes in the Global Mobile Market and New Challenges for LG Mobile is currently facing due to challenging internal and external environments. The case solution first conducts the strategic analysis by applying the relevant strategic management tools and frameworks, and then presents strategic recommendations based on overall analysis (Hamilton and Webster, 2018).
The case offers a holistic view of Changes in the Global Mobile Market and New Challenges for LG Mobile business environment. Case findings are relevant for all key stakeholders of Changes in the Global Mobile Market and New Challenges for LG Mobile. Reader should first read the case on Changes in the Global Mobile Market and New Challenges for LG Mobile, and then read the analysis.
The external business environment comprises political, economic, social, technological, legal and environmental factors that influence the strategic positioning of Changes in the Global Mobile Market and New Challenges for LG Mobile (Khalid and Rahman, 2019).
Here are key external environment characteristics:
External environmental forces are dynamic and uncontrollable
External environment can directly influence the Changes in the Global Mobile Market and New Challenges for LG Mobile strategic positioning
External environment requires continuous monitoring to timely identify the potential threats and opportunities (Shtal et al. 2018).
The Changes in the Global Mobile Market and New Challenges for LG Mobile must carefully examine the potential impact of global political unrest on its business operations
The Changes in the Global Mobile Market and New Challenges for LG Mobile should actively monitor, and respond to the changes to legislation
The Changes in the Global Mobile Market and New Challenges for LG Mobile should analyze how taxation policies can influence its profitability in different countries where the company is currently present (Khalid and Rahman, 2019).
Rising GDP and growing consumer spending can help Changes in the Global Mobile Market and New Challenges for LG Mobile in business expansion
Increasing interest rates can increase the debt cost for Changes in the Global Mobile Market and New Challenges for LG Mobile.
Reducing inflation can decrease the production cost of Changes in the Global Mobile Market and New Challenges for LG Mobile and increase profitability by driving up the sales revenue (Begley et al. 2005).
The aging population can affect the Changes in the Global Mobile Market and New Challenges for LG Mobile brand positioning, as Changes in the Global Mobile Market and New Challenges for LG Mobile currently targets young people.
Growing preferences for luxury items, and improving lifestyles can create more demand for Changes in the Global Mobile Market and New Challenges for LG Mobile premium-priced products (Perera, 2017).
Government is granting more technology incentives to fuel the innovation. It can help Changes in the Global Mobile Market and New Challenges for LG Mobile achieve its innovation objectives.
Emerging automation trends require Changes in the Global Mobile Market and New Challenges for LG Mobile to revisit its business model, and enhance process efficiency.
Improving technological infrastructure can enable Changes in the Global Mobile Market and New Challenges for LG Mobile to resolve its supply chain inefficiencies (Shtal et al. 2018).
The stringent environmental regulations require Changes in the Global Mobile Market and New Challenges for LG Mobile to ensure strict compliance with environmental standards.
Consumers’ growing environmental consciousness provides an opportunity to Changes in the Global Mobile Market and New Challenges for LG Mobile to launch more green, environment-friendly products.
Changes in the Global Mobile Market and New Challenges for LG Mobile should incorporate environmental thinking in its strategic decision-making process to position itself as a socially responsible organization (Moser, 2015).
The Changes in the Global Mobile Market and New Challenges for LG Mobile should take strict measures to avoid discrimination at the workplace.
The Changes in the Global Mobile Market and New Challenges for LG Mobile must abide by the consumer data privacy laws to avoid reputation-damaging lawsuits
The Changes in the Global Mobile Market and New Challenges for LG Mobile must also ensure strict implementation of workplace safety standards to comply with the health and safety regulations (Khalid and Rahman, 2019).
The growing number of suppliers is weakening their bargaining power against Changes in the Global Mobile Market and New Challenges for LG Mobile (Dobbs, 2014).
Changes in the Global Mobile Market and New Challenges for LG Mobile has a wide supplier network, which strengthens its negotiation ability.
Low product differentiation further reduces the supplier bargaining power, as Changes in the Global Mobile Market and New Challenges for LG Mobile can easily switch to suppliers that offer better terms and conditions (Dobbs, 2014).
Overall, the bargaining power of suppliers for Changes in the Global Mobile Market and New Challenges for LG Mobile is low.
There are a small number of buyers that buy in large quantities. It enhances their bargaining power against Changes in the Global Mobile Market and New Challenges for LG Mobile (Cho et al. 2019).
Buyers are price insensitive, and cannot easily switch to other companies due to economic and psychological switching costs. It reduces their bargaining power against Changes in the Global Mobile Market and New Challenges for LG Mobile.
High product differentiation further discourages the buyers from switching to competitors (Dobbs, 2014).
Overall, the bargaining power of buyers is moderate-to-low for Changes in the Global Mobile Market and New Challenges for LG Mobile.
High entry barriers make it difficult for new entrants to enter in the market
The high initial capital expenditure also erects an entry barrier for new firms
Changes in the Global Mobile Market and New Challenges for LG Mobile has a loyal customer base, which further reduces the risk of customers switching to new entrants (Grundy, 2006).
Overall, threat of new entrants for Changes in the Global Mobile Market and New Challenges for LG Mobile is low.
The emerging innovative technologies are increasing the threat of substitutes for Changes in the Global Mobile Market and New Challenges for LG Mobile
Growing threat of substitutes is compelling Changes in the Global Mobile Market and New Challenges for LG Mobile to continuously improve product quality (Bruijl and Gerard, 2018).
Changing consumer demographics and their growing tech-savvy nature is further increasing the substitute threat for Changes in the Global Mobile Market and New Challenges for LG Mobile
However, the brand loyalty increases the psychological switching costs, which somehow reduces the substitute threat (Dobbs, 2014).
Overall, the substitute threat for Changes in the Global Mobile Market and New Challenges for LG Mobile is moderate to high.
The competition among existing market players is intense
The market is mature, and is approaching saturation point, which further intensifies the industry rivalry
However, high-quality differences and brand loyalty deters the customers from switching to competitors (Dobbs, 2014).
Overall, the industry rivalry is moderate to high, which makes the business environment challenging for Changes in the Global Mobile Market and New Challenges for LG Mobile.
Up till now, the case study presented a holistic environmental and industry-level analysis. This section now presents the Changes in the Global Mobile Market and New Challenges for LG Mobile level analysis by applying relevant tools and frameworks.
SWOT is a strategic management framework that helps Changes in the Global Mobile Market and New Challenges for LG Mobile in understanding its core strengths and weaknesses. Framework also identifies opportunities and threats that reside in Changes in the Global Mobile Market and New Challenges for LG Mobile’s external business environment (Helms and Nixon, 2010).
The Changes in the Global Mobile Market and New Challenges for LG Mobile holds a market leadership position, and has highest market share.
The Changes in the Global Mobile Market and New Challenges for LG Mobile has high customer loyalty, which makes it difficult for competitors to attract its customers.
The Changes in the Global Mobile Market and New Challenges for LG Mobile has strong financial health, which allows the company to spend heavily on R&D, and fuel the innovation (Sarsby, 2016).
The Changes in the Global Mobile Market and New Challenges for LG Mobile has successfully positioned itself as a responsible corporate citizen.
The Changes in the Global Mobile Market and New Challenges for LG Mobile has a wide supplier and distribution network, which helps in the business expansion (Valentin, 2001).
The Changes in the Global Mobile Market and New Challenges for LG Mobile currently has a high employee turnover rate.
The Changes in the Global Mobile Market and New Challenges for LG Mobile is facing supply chain inefficiencies, which are lowering the organizational productivity (Madsen, 2016).
The Changes in the Global Mobile Market and New Challenges for LG Mobile is unable to quickly resolve the customer complaints, which causes customer dissatisfaction (Helms and Nixon, 2010).
The hierarchal structure of Changes in the Global Mobile Market and New Challenges for LG Mobile causes resistance to change.
Changes in the Global Mobile Market and New Challenges for LG Mobile can invest on emerging automation and artificial intelligence technologies to improve the process efficiency
Changes in the Global Mobile Market and New Challenges for LG Mobile can accelerate the green product development, and invest on green marketing efforts to capture the attention of environment-conscious customers (Solaiman et al. 2015).
Changes in the Global Mobile Market and New Challenges for LG Mobile can invest on an online influence marketing strategy to expand the reach to a young population
Changes in the Global Mobile Market and New Challenges for LG Mobile can find strategic partners around the globe to achieve its expansion objectives (Sarsby, 2016).
The growing industry competition among existing players and thinning profit margins has become a major threat for Changes in the Global Mobile Market and New Challenges for LG Mobile
Global political unrest can negatively affect the Changes in the Global Mobile Market and New Challenges for LG Mobile performance at the international stage
The expanding grey market and the influx of replica goods can negatively affect the Changes in the Global Mobile Market and New Challenges for LG Mobile revenue (Davidson et al. 2019).
Aging population can threaten the Changes in the Global Mobile Market and New Challenges for LG Mobile survival that, primarily focuses on young customers
After presenting the SWOT analysis, the next framework analyzing the Changes in the Global Mobile Market and New Challenges for LG Mobile’s marketing mix strategies.
Changes in the Global Mobile Market and New Challenges for LG Mobile offers a wide product variety that meets the needs of diverse customers
Changes in the Global Mobile Market and New Challenges for LG Mobile has consistently maintained high product quality to justify premium prices
Changes in the Global Mobile Market and New Challenges for LG Mobile invests heavily on the quality improvement and management to meet the customers’ product quality expectations (Singh, 2012).
Changes in the Global Mobile Market and New Challenges for LG Mobile invests on innovative marketing and communication strategies to set a clear product positioning, and communicate how its products are different from competitors.
Changes in the Global Mobile Market and New Challenges for LG Mobile offers warranties and after-sale services that enhances the overall customer experience (Ferrell et al. 2021).
Changes in the Global Mobile Market and New Challenges for LG Mobile adopts a premium pricing strategy, which is aligned with the company’s premium brand image.
Changes in the Global Mobile Market and New Challenges for LG Mobile avoids offering price discounts to maintain brand exclusivity (Baines et al. 2017).
Changes in the Global Mobile Market and New Challenges for LG Mobile does not charge any hidden prices, and has integrated transparency in its pricing model
Changes in the Global Mobile Market and New Challenges for LG Mobile also offers value-added elements, and adopts a bundle pricing strategy to boost the sales (Giri et al. 2020).
Changes in the Global Mobile Market and New Challenges for LG Mobile offers credit payment options for the customer convenience.
Key factors that Changes in the Global Mobile Market and New Challenges for LG Mobile considers while setting the prices include- brand image, customers’ expectations and purchase capacity, and on-going competition.
Changes in the Global Mobile Market and New Challenges for LG Mobile adopts a selective distribution strategy to reach the target market
The Changes in the Global Mobile Market and New Challenges for LG Mobile chooses distributors who are located in urban areas, and can preserve the premium brand image
Currently, Changes in the Global Mobile Market and New Challenges for LG Mobile has a distribution network that is spread in more than 50 countries
Changes in the Global Mobile Market and New Challenges for LG Mobile has adopted Omni-channel strategy, and sells its products through multiple online and offline channels, including- official outlets, authorized distributors, the company website and mobile application (Palmatier et al. 2016).
Well-integrated Omni-channel strategy offers a seamless experience to the Changes in the Global Mobile Market and New Challenges for LG Mobile customers.
Changes in the Global Mobile Market and New Challenges for LG Mobile avoids offering promotional discounts to preserve the brand exclusivity.
Changes in the Global Mobile Market and New Challenges for LG Mobile invests heavily on the celebrity endorsement strategies to promote the brand among the target market.
Changes in the Global Mobile Market and New Challenges for LG Mobile also have a strong social media presence, and specifically focuses on the online influencer marketing strategy to create brand awareness (Varadarajan et al. 2010).
Changes in the Global Mobile Market and New Challenges for LG Mobile uses both- online and offline marketing and communication channels to promote the brand.
Changes in the Global Mobile Market and New Challenges for LG Mobile’s promotional strategy is well-aligned with other marketing mix components to develop a clear brand positioning (Palmatier et al. 2016).
The Changes in the Global Mobile Market and New Challenges for LG Mobile has a wide distribution network that is spread across the globe.
The Changes in the Global Mobile Market and New Challenges for LG Mobile has extensive research and development capabilities that fuel the innovation process.
The Changes in the Global Mobile Market and New Challenges for LG Mobile offers a seamless customer experience through a well-integrated marketing mix.
The Changes in the Global Mobile Market and New Challenges for LG Mobile has strong financial health, and free cash flow that it can invest on innovative projects.
The Changes in the Global Mobile Market and New Challenges for LG Mobile has a strong presence over social media that drives the customer engagement, and increases the company’s reach to the target market.
The Changes in the Global Mobile Market and New Challenges for LG Mobile has successfully attracted and retained highly skilled staff that drives the overall organizational productivity, and helps the company in achieving its innovation objectives (Cardeal and Antonio, 2012).
Changes in the Global Mobile Market and New Challenges for LG Mobile has built strong relationships with suppliers that enable the company to achieve production objectives even when there is a material shortage in the market
Changes in the Global Mobile Market and New Challenges for LG Mobile has access to the rare and hard-to-reach raw material that is used to produce top-quality products (Cardeal and Antonio, 2012).
Changes in the Global Mobile Market and New Challenges for LG Mobile has successfully developed a strong brand reputation that keeps customers hooked with the brand
Changes in the Global Mobile Market and New Challenges for LG Mobile shares a strong emotional connection with its customers, which increases the psychological switching costs for them (Hernández and Garcia, 2018).
Changes in the Global Mobile Market and New Challenges for LG Mobile has developed its image as an environment-friendly, sustainable, and responsible brand that takes care of all stakeholders.
Changes in the Global Mobile Market and New Challenges for LG Mobile has developed an in-depth knowledge of customers’ intrinsic motivational needs, and has developed its brand image in a way that shares close relatedness with customers’ desired self-image (Liu et al. 2012).
Changes in the Global Mobile Market and New Challenges for LG Mobile has secured exclusive agreements with the suppliers to get access to unique raw materials. The exclusive agreement makes this resource inimitable for Changes in the Global Mobile Market and New Challenges for LG Mobile
Changes in the Global Mobile Market and New Challenges for LG Mobile has strong transformational and charismatic top leadership that has always successfully led the organization through a crisis (Nusari et al. 2018).
Changes in the Global Mobile Market and New Challenges for LG Mobile has developed a robust organizational culture that promotes cohesion, and strengthens the employees’ affective commitment with the organization.
Changes in the Global Mobile Market and New Challenges for LG Mobile has secured the access to human capital (skills and expertise) that is needed to exploit the above-mentioned resources.
Changes in the Global Mobile Market and New Challenges for LG Mobile has a well-developed technical infrastructure that supports the business operations, and fuels the innovation process.
Changes in the Global Mobile Market and New Challenges for LG Mobile has built extensive expertise, and gained years of experience that helps the company in leveraging its core strengths to exploit the available opportunities.
Changes in the Global Mobile Market and New Challenges for LG Mobile has built strategic partnerships that help the company in pooling the resources together to gain a strong competitive edge over rivals (Cardeal and Antonio, 2012).
The core products of the Changes in the Global Mobile Market and New Challenges for LG Mobile fall in the star category. Changes in the Global Mobile Market and New Challenges for LG Mobile has secured market leadership in these categories
Changes in the Global Mobile Market and New Challenges for LG Mobile’s market share in these product categories is growing due to high market growth potential
Changes in the Global Mobile Market and New Challenges for LG Mobile should pay specific attention to these product categories, and should try to preserve the market share
The intensifying competition imposes a threat to the Changes in the Global Mobile Market and New Challenges for LG Mobile’s market leadership in the ‘Star’ category
Overall, Changes in the Global Mobile Market and New Challenges for LG Mobile should increase investment on the star category to maintain leadership in the growing market (Mohajan, 2017).
Changes in the Global Mobile Market and New Challenges for LG Mobile has several product categories in which the firm has attained the market leadership position.
However, the market growth in these product categories has become slowed with time, as the market has become mature.
Changes in the Global Mobile Market and New Challenges for LG Mobile should ‘milk’ these product categories as they are an important source of cash flow.
However, Changes in the Global Mobile Market and New Challenges for LG Mobile should avoid increasing investment due to slowed market growth, and should bring innovation to keep adding new features.
Overall, Changes in the Global Mobile Market and New Challenges for LG Mobile should aim to maintain the current market position, but avoid increasing the investment due to slow market growth (Kader and Hossain, 2020).
Changes in the Global Mobile Market and New Challenges for LG Mobile has some product categories that are in a growing market segment. Despite high market growth, Changes in the Global Mobile Market and New Challenges for LG Mobile is unable to increase the market share in these segments.
The products under this category have the potential to become stars, as they operate in a high-growth market.
But, extensive investment is needed to understand the reasons behind the low market share, and it can affect the cash flow of Changes in the Global Mobile Market and New Challenges for LG Mobile.
Therefore, Changes in the Global Mobile Market and New Challenges for LG Mobile needs to evaluate if it is feasible to increase the investment to drive the market share, or it is wise to divest from this market segment (Mohajan, 2017).
Changes in the Global Mobile Market and New Challenges for LG Mobile has one product that operates in a market with low growth potential
Changes in the Global Mobile Market and New Challenges for LG Mobile has only a marginal share in this market.
As growth in this market is stagnant, and market share is also marginal, Changes in the Global Mobile Market and New Challenges for LG Mobile may consider divesting from this market segment.
It will be unwise to invest in this segment, as this product has turned into ‘dog’, which means the product is aged and waning.
Here, two options are available to Changes in the Global Mobile Market and New Challenges for LG Mobile:
o First, Changes in the Global Mobile Market and New Challenges for LG Mobile may entirely refresh the dying product.
o Alternatively, Changes in the Global Mobile Market and New Challenges for LG Mobile may divest this product from the portfolio.
Considering the current business environment, and competitive dynamics, Changes in the Global Mobile Market and New Challenges for LG Mobile is recommended to get rid of this product by taking divestment decisions (Torquati et al. 2018).
Changes in the Global Mobile Market and New Challenges for LG Mobile aims to expand its business operations to strengthen the competitive positioning in the market. Ansoff matrix here can help Changes in the Global Mobile Market and New Challenges for LG Mobile in taking the right business expansion decision.
Four business expansion strategies available to Changes in the Global Mobile Market and New Challenges for LG Mobile are- market penetration, market expansion, product development, and diversification (Loredana, 2016).
Choosing the right expansion strategy is important for Changes in the Global Mobile Market and New Challenges for LG Mobile to achieve its expansion objectives.
Changes in the Global Mobile Market and New Challenges for LG Mobile can penetrate into existing markets by expanding the market reach. This strategy is recommended when the market has high growth potential.
Changes in the Global Mobile Market and New Challenges for LG Mobile can expand the market reach by increasing the customer loyalty, and encouraging them to increase the spending.
Changes in the Global Mobile Market and New Challenges for LG Mobile can use the influencer marketing strategy as a tool to create e-WOM. It will create brand awareness, spread the brand message, and enable Changes in the Global Mobile Market and New Challenges for LG Mobile to penetrate deeper into the market.
Some other ways through which Changes in the Global Mobile Market and New Challenges for LG Mobile can penetrate into the market is- to increase the marketing and promotional budget, making price adjustments, and improving the product quality to gain a larger share from the existing market (Shaw, 2012).
Changes in the Global Mobile Market and New Challenges for LG Mobile can find new geographic markets to launch its existing products
Another way to pursue this expansion strategy is through celebrity endorsements. Celebrities can help Changes in the Global Mobile Market and New Challenges for LG Mobile in finding new customers for existing products
Changes in the Global Mobile Market and New Challenges for LG Mobile can also consider adding new product dimensions, or revising the packaging to reach new consumer markets.
Another way to pursue this expansion strategy is by exploring new distribution channels. Changes in the Global Mobile Market and New Challenges for LG Mobile can strengthen its presence on e-commerce, and open multiple online sales channels to reach new customer markets (Hussain et al. 2013).
Changes in the Global Mobile Market and New Challenges for LG Mobile can also charge two different prices to expand the reach from high-end to middle-class customers.
Changes in the Global Mobile Market and New Challenges for LG Mobile can expand its business operations by pursuing a product development strategy.
Instead of adopting a reactive attitude by coping with the competitors, Changes in the Global Mobile Market and New Challenges for LG Mobile must proactively behave while launching new products. Some possible proactive product development strategies are discussed below.
To pursue a proactive product development strategy, Changes in the Global Mobile Market and New Challenges for LG Mobile may increase investment on research and development activities to bring the product innovation.
Changes in the Global Mobile Market and New Challenges for LG Mobile may also invest on the market research to identify and respond to the unmet customer needs (Katsikeas et al. 2016).
Changes in the Global Mobile Market and New Challenges for LG Mobile may consider strategic alliance and partnership options to launch new products. It will enable the company to pool the resources and capabilities together, and share risks while launching new products.
Acquisition of smaller firms can also enable Changes in the Global Mobile Market and New Challenges for LG Mobile to successfully launch new products in the comparatively shorter time span.
Changes in the Global Mobile Market and New Challenges for LG Mobile can adopt the diversification strategy to reach new markets through new products.
Changes in the Global Mobile Market and New Challenges for LG Mobile can pursue either a related or unrelated diversification strategy.
The related diversification strategy requires Changes in the Global Mobile Market and New Challenges for LG Mobile to enter in similar markets. But, unrelated diversification requires Changes in the Global Mobile Market and New Challenges for LG Mobile to find entirely new markets (Dhir and Dhir, 2015).
Unrelated diversification is riskier, and can affect the brand image. So, Changes in the Global Mobile Market and New Challenges for LG Mobile should pursue a related diversification strategy.
By pursuing related diversification, Changes in the Global Mobile Market and New Challenges for LG Mobile can horizontally and vertically add new product lines
Through successful diversification, Changes in the Global Mobile Market and New Challenges for LG Mobile can increase its profitability, and generate more revenue from the new products and new market segments (Loredana, 2016).
The in-depth strategic analysis of Changes in the Global Mobile Market and New Challenges for LG Mobile reveals some interesting insights. Changes in the Global Mobile Market and New Challenges for LG Mobile currently holds strong competitive positioning. However, the challenging business environment and intensifying competition require Changes in the Global Mobile Market and New Challenges for LG Mobile to adopt a proactive behavior. Changes in the Global Mobile Market and New Challenges for LG Mobile needs to continuously assess its external and internal business environment to timely identify the potential threats and opportunities. Here, the application of relevant strategic management tools and frameworks can help Changes in the Global Mobile Market and New Challenges for LG Mobile in making wise business decisions. The key to success in a such challenging and complex business environment is- to proactively respond to the external environment by leveraging core strengths, and overcoming the weaknesses.
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