BIG, FAT, HAIRY, AUDACIOUS...
As regards the current targets for this year both the companies are tightening up their belts on the war front. LG has ramped up its overall production capacity to 1.3 million units this year. Samsung has recently invested $10 million for its production expansion and is aggressively focusing on its AC segment with a sales volume target of around 1 million units this summer. As Ravinder Zutshi, Deputy MD, Samsung India shares with 4Ps B&M, “Overall, we are looking at a 40% jump in sales volume of our refrigerators and ACs in the April-June quarter. In ACs, we plan to double sales volumes in 2010 this year to one million units, garnering a market share of over 30%. In refrigerators, the market share target has been set at 26% by the end of 2010.” So if ACs are one of the key areas for Samsung this year, LG is busy promoting high-end products like LCDs. “We are now targeting a premium segment of consumers to give the company a premium image. Currently, we are focusing on our Home Entertainment segment, which is our next big target after the launch of the Direct Cool Range in the Home Appliances category and the all new AC range for summer 2010,” explains Shin.
Clearly, if you look at the current scenario, it’s very difficult to predict who will win the crown of glory. But more than that what is important to consider is that there are future challenges that are causes of concern for the behemoths with respect to sustaining the growth and deciding the future road map to take them to a higher level. The biggest challenge for LG, as Shin himself accepts, is succession planning. LG currenlty simply doesn’t have the next big face that could handle the huge growth pressures (“This thing is the most important and is above even numbers,” says Shin). For Samsung, the problems are more market oriented. Irrespective of the advantage till date, the fact is that the maximum sales in the Indian market takes place only through discount-promotions and that too specifically during festival seasons. Till the time Samsung is able to cleverly promote a price leadership image, without compromising its quality positioning, it’ll continue to follow LG, which – due to its supreme focus on providing value offers – leads the market indisputably.
In a 1996 article (Building Your Company’s Vision), two effervescent authors – Jim Collins and Jerry Porras – mentioned that every company needs to have its Big Hairy Audacious Goal (BHAG) to be able to achieve visionary targets that would have seemed impossible previously! LG and Samsung have already been there and done that in India. Now’s the time for something more... atrociously, audaciously more!
As regards the current targets for this year both the companies are tightening up their belts on the war front. LG has ramped up its overall production capacity to 1.3 million units this year. Samsung has recently invested $10 million for its production expansion and is aggressively focusing on its AC segment with a sales volume target of around 1 million units this summer. As Ravinder Zutshi, Deputy MD, Samsung India shares with 4Ps B&M, “Overall, we are looking at a 40% jump in sales volume of our refrigerators and ACs in the April-June quarter. In ACs, we plan to double sales volumes in 2010 this year to one million units, garnering a market share of over 30%. In refrigerators, the market share target has been set at 26% by the end of 2010.” So if ACs are one of the key areas for Samsung this year, LG is busy promoting high-end products like LCDs. “We are now targeting a premium segment of consumers to give the company a premium image. Currently, we are focusing on our Home Entertainment segment, which is our next big target after the launch of the Direct Cool Range in the Home Appliances category and the all new AC range for summer 2010,” explains Shin.
Clearly, if you look at the current scenario, it’s very difficult to predict who will win the crown of glory. But more than that what is important to consider is that there are future challenges that are causes of concern for the behemoths with respect to sustaining the growth and deciding the future road map to take them to a higher level. The biggest challenge for LG, as Shin himself accepts, is succession planning. LG currenlty simply doesn’t have the next big face that could handle the huge growth pressures (“This thing is the most important and is above even numbers,” says Shin). For Samsung, the problems are more market oriented. Irrespective of the advantage till date, the fact is that the maximum sales in the Indian market takes place only through discount-promotions and that too specifically during festival seasons. Till the time Samsung is able to cleverly promote a price leadership image, without compromising its quality positioning, it’ll continue to follow LG, which – due to its supreme focus on providing value offers – leads the market indisputably.
In a 1996 article (Building Your Company’s Vision), two effervescent authors – Jim Collins and Jerry Porras – mentioned that every company needs to have its Big Hairy Audacious Goal (BHAG) to be able to achieve visionary targets that would have seemed impossible previously! LG and Samsung have already been there and done that in India. Now’s the time for something more... atrociously, audaciously more!
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Source : IIPM Editorial, 2010.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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