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LG Electronics SWOT & PESTLE Analysis

ID : 52228753| Dec 2019

COMPANY PROFILE -LG Electronics, Inc.

Business Sector :Consumer Electronics and Home Appliances

Operating Geography :South Korea, Global

About LG Electronics, Inc. :

LG Electronics, Inc. established in the year 1958 and headquartered in Seoul, South Korea is a global leader and technology innovator in the field of mobile communications, consumer electronics and home appliances. The company employs more than 75000 people in 118 locations across the globe. In the year of 2016, the company made global sales of USD 47.9 billion. The company has four business units which include Home Appliance and Air Solutions, Mobile Communications, Home Entertainment and Vehicle Components. Also, the company is one of the world’s leading producers of flat panel TVs, mobile devices and home appliances. It is a 2016 ENERGY STAR Partner of the Year.

LG Electronics, Inc. Revenue :

55367 KRW(bn) (2016)

Competitive Analysis of LG Electronics, Inc.

SWOT
PESTLE
The SWOT analysis for LG Electronics is presented below:
Strengths
Weaknesses
1. Healthy growth in the Home Appliance Business Unit
2. A Global Behemoth with Strong Brand Image
3. An Extensive Distribution Network
4. Product Mix
5. Straddle Positioning of the Products
1. Muted Overall Sales with Mobile Communications Business Unit acting as a drag factor
2. In BCG Matrix Analysis, Cell Phone is in the Dog Category and Smart watch is in Question Mark Category
3. Exposure to Exchange Risks
4. Debt/Equity Ratio
Opportunities
Threats
1. Growing and Changing Technological Landscape
2. Market Expansion
3. Strategic Alliance/Partnership
1. Price War with its closest competitors/ Adoption of Red Ocean Strategy
2. Sluggish economic growth of advanced economies and rising raw materials cost
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Detailed SWOT Analysis of LG Electronics, Inc.

Strengths

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Weaknesses

1. Muted Overall Sales with Mobile Communications Business Unit acting as a drag factor: The company reported sales of 55.37 trillion KRW (USD 49.61 billion) for the year ending December of 2016. When we compare it to the data of 2015, there is decrease of 2.0%. In 2015, company’s sale stood at 56.51 trillion KRW. In fact, the sales level of 2016 is close to the sales level of 2011: in 2011, LG Electronics reported a sale 54.26 trillion KRW. Contributing to this drop in overall sales was the 18.7% decline in Mobile Communications Business Unit from 14.40 trillion KRW to 11.71 trillion KRW. Also, Innotek - an aerospace division of LG Electronics reported a decrease in sales (down 3.0% to 4.67 trillion KRW). Also, Mobile Communications Division constitute 23.03% of the overall revenues.

2. In BCG Matrix Analysis, Cell Phone Business is in the Dog Category and Smartwatch Segment is in Question Mark Category: LCD TVs and Home Appliances come under the category of Cash Cows and hence will keep generating the revenues in bulk. But, the cell phone business with its meagre 3.2% market share is pulling the ship. Also, the Smartwatch business is in the Question Mark Category and investments in the same can have higher risks involved.

3. Exposure to Exchange Risks: LG generates a chunk of its revenue from export model and thus, there is always an exposure to exchange related risks. Debt/Equity Ratio: With total liabilities being 24499 KRW (bn), Total Assets (2016) equivalent to 37855 KRW (bn) and the Debt/Equity Ratio (2016) being 24499/13356 = 183.43%, it is seen that the company has been heavily taking on debt and thus has high risk.

Opportunities

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Threats

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Check Out Analysis of Other Relevant Companies

TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?
References used in LG Electronics, Inc. Analysis Report
1. LG Electronics Company Snapshot- https://www.corporateinformation.com/Company-Snapshot.aspx?cusip=C410CR750

2. LG Electronics’s opportunities and risks- https://www.ipnomics.net/?p=14805

3. LG Electronics Financial Information- https://www.lg.com/global/investor-relations/financial-info

4. Revenue of LG Electronics by business segment- https://www.statista.com/statistics/364980/lg-electronics-revenue-by-segment/

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LG Electronics SWOT & PESTLE Analysis - SWOT & PESTLE.COM

SWOT & PESTLE.com (2020). LG Electronics SWOT & PESTLE Analysis - SWOT & PESTLE.com. [online] Available at: https://www.swotandpestle.com/lg-electronics/ [Accessed 03 Apr, 2020].

In-text: (SWOT & PESTLE.com, 2020)

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LG SWOT and PESTLE analysis has been conducted and reviewed by senior analysts from Barakaat Consulting.

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LG Electronics SWOT & PESTLE Analysis
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