Marketing Strategy Report: LG Electronics SBU and Strategy

This report provides a detailed analysis of the marketing strategy employed by LG Electronics Australia Pty Limited, specifically focusing on its mobile phone and accessories strategic business unit (SBU). The report begins with an introduction to marketing strategy, defining its long-term goals and importance in achieving a competitive advantage. It then introduces the concept of an SBU and its benefits, followed by the selection of LG Electronics as the case study. The report examines the company's product offerings and identifies the mobile phone and accessories unit as the SBU of focus. The core of the report explores the marketing strategies employed by the SBU, including interaction with customers through social and mainstream media, competitive positioning, and brand strategy. The report also delves into strategic development tools, such as SWOT analysis and Porter's Five Forces, to assess the competitive environment and inform strategic priorities. The analysis includes the benefits of the SWOT tool and the five forces that influence industry competitiveness. The report concludes by summarizing the key findings and implications for the SBU's marketing approach.

Running Head: MARKETING STRATEGY 1
MARKETING STRATEGY
Name of Student
Institution Affiliation

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Introduction
Marketing strategy is generally a long-term and forward-oriented scheme that is intended to
design a game plan for the business organization in reaching out to the people and making them
prospective customers of the service or product that they offer. The fundamental purpose of a
marketing strategy is to achieve a competitive and sustainable advantage. The marketing will
help the business organization in identifying the target markets as well as the value proposition
that can be offered on the basis of analyzing the best market opportunities. It also involves the
vital marketing information and also the information regarding the intended customers and other
elements that are high-level. All these are intended to improve the value proposition of the
business organization (Arnould & Wallendorf, 2014).
A strategic business unit (SBU) is a unit of a business that is fully functional and has got its
individual direction as well as vision. It generally carries out its operations as a separate identity
and is very vital to any department of an organization. It is in charge of a given range of
activities or products. It gives a report to the main headquarters of the organization about the
status of its operations. In most cases, it is large enough to have its own support functions that
enable it to carry out its duties efficiently. A strategic business unit brings a number of benefits
to an organization and has therefore in many cases been adopted by many business organizations
and other large companies (Barney & Hesterly, 2010).
This article discusses the roles that a strategic business unit performs to an organization as well
as the requirements for implementing a better and achievable marketing strategy. A specific
organization will be picked to help discuss these factors and their influences on the organization.

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The organization
The organization selected for this study is the LG Electronics Australia Pty Limited Company.
This company deals with all household electrical appliances, mobile communication handsets
and information systems equipment within Australia. They sell mobile phones such as tablets,
smartphones, smartwatches as well as other mobile phone accessories; television and home
entertainment systems that include home theatre and audio systems, Blu-ray players and DVD
players; and home appliances such as fridges, kitchen appliances, dishwashers, washing
machines, vacuum cleaners etc. all these products are produced at different units within the
organisation. Each unit that produces each category of items operates under different strategic
business units that operate differently as separate entities in charge of manufacturing the specific
product that they are involved with (Pearce et al, 2014).
The strategic business unit (SBU)
From this organization, we select the mobile phones and accessories as our strategic business
unit within this organization that is able to operate as a separate entity as well as makes decisions
on how to manage the products and services that they deal with. In this case, this strategic
business unit deals with the manufacture and sales of all mobile related accessories. This
business unit has been operational for over three decades within the country to provide mobile
phones and related accessories and has never disappointed. They manufacture and sell mobile
phones, such as smartphones, wearables, and smartwatches, tablets, mobile phones batteries,
chargers, earphones etc. This business unit is therefore responsible for determining its own
marketing strategy that will enable the product that it handles to meet its intended recipients as
well as meet the main objectives of the organizations (Burgelman et al, 2008). This specific
business unit is able to exercise responsibility as one of the foremost roles of SBU. It also

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enhances accountability, accountancy, independence, and efficient funds allocation since this
unit will be operating on its own.
The marketing strategy direction
The main marketing strategies that are involved in this strategic business unit is all about
allowing a better interaction with the customers as well as also getting the employees involved.
The strategies are important in creating a lead magnet that will ensure that the product reaches
the intended users at an impressive rate (Cavusgil & Zou, 2011). The most commonly used way
of making an interaction with the customers is through the social and mainstream media. This
business unit has the ability to be built and hence thrive solely on the foundation of social and
mainstream media. At this point, the employers will also be involved in the promotion of the
products that this unit deals within the most common social media sites such as Facebook,
snapchat, twitter, Instagram etc. this also enables them to reach out to other already successful
business enterprises and other potential customers that are maybe looking for similar products in
order to purchase (Clark, 2012).In any given SBU, it is important to note that the most vital
aspect is to be able to provide answers to the following questions; what differentiates the product
of your company from other potential competitors? What value does your institution provide and
how important it is in comparison to other available alternatives? These questions are in relation
to the competitive positioning strategy. The competitive marketing strategies for this given SBU
include the following;
Market profile- this strategy involves the size of the market, the range of competitors within the
market as well as the state of growth. The strategic business unit selected targets the larger
Australia nation since mobile phones are currently used by all individuals worldwide. Being that

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mobile phones are commonly used, there are also a number of companies that are also involved
in the business hence the competition level is very high.
Customer segments- this strategy targets the groups of prospects that have similar needs and
wants.
Competitive analysis- this strategy makes an analysis of the weaknesses, strengths, threats as
well as the opportunities that are available in the landscape. Once the strengths and opportunities
have been clearly analyzed, the business unit makes a decision on where to make an investment
as well as the areas that need improvements in order to meet their objectives and also meet more
customers hence outdoing their competitors. During this stage, the possible threats are also
assessed and possible recommendations on how to make adjustments are made (Covin & Slevin,
2008).
Positioning strategy- this strategy is concerned with how the business unit will position
whatever it offers in order to focus on the opportunities that are available in the market. This
strategy is very vital since it determines whether the SBU will be able to grab the available
opportunities available in the market in order to ensure that they reap highly from those
opportunities.
Once a better competitive positioning strategy has been achieved, it is important to develop an
effective brand strategy that will help the business unit to communicate its positioning as well as
solidify its value each and every time it gets to the market. These two strategies will form a great
part when building the foundations for the business (Cravens & Piercy, 2014).
Competitive position strategy will help this business unit achieve the following benefits;
The SBU will be able to offer a one of a kind offering that the market requires and also bring a
bigger and noticeable differentiation as compared to other competitors in the market.

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The market will be able to know the company’s name as well as associate it with the product that
it is providing to the market or that one product that it has been known for. In this case, the one
product that this SBU will be known for is only quality mobile phones and accessories. This
helps build a company’s name and brand (Day & Day, 2008).
The SBU will be able to make a continuous delivery of the product it deals with such that it is
able to continue winning the mindshare in the market as well as defend the SBU own tuff thus
influence the market.
Strategic development tools
These are tools that help a business organization to have a clear understanding of the competitive
environment, recognize the options that are open to the organization, set the right the strategic
priorities, deliver the strategy and finally put an intelligent work on vital areas such as marketing,
purchasing and other organizational operations (Fornell & Wernerfelt, 2011). These tools may
include a combination of both tangible and intangible techniques that are used to make a
formulation of a marketing strategy and also put to use the tactics. The following tools are as
discussed below;
1. SWOT analysis
Carrying out a SWOT analysis involves collecting and portraying information and details about
both the external and internal determinants that could have an influence on the business. This
analytical tool is commonly used during the process of strategic planning. It is intended to
identify and make a timely priority of the strengths, weaknesses, opportunities as well as
strengths of any organization (Grönroos, 2015). It is also a framework that assists the managers
of any organization to make a synthesis of the insights that are obtained after carrying out an

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internal analysis of the strengths and weaknesses of the organization in relation to those derived
from analyzing the possible external threats and opportunities.
SWOT is basically an acronym that stands for the following;
Strengths- this includes those factors that put the company a notch higher in comparison to other
competitors.
Weaknesses- this involves all the factors can be considered dangerous whenever they are used
against the firm by other competitors in the market.
Opportunities- it is all about the situations that are considered favorable to the organization and
that can be used to bring a competitive advantage over other competitors.
Threats- it includes the situations or conditions that are considered unfavorable and that can
affect the normal operations of a business enterprise in a negative manner.
Strengths and weaknesses influence the internal operation of a company and are able to be
managed directly by the company (Hitt et al, 2012). On the other hand, opportunities and threats
are generally external and therefore little can be done by the company to regulate or control
them. This means they can only make anticipations and then react to them. SWOT analysis is
generally simple and has a value of focusing on the vital issues that can affect the organization.
This, therefore, makes it a common and widely used tool.
Benefits of SWOT tool
The SWOT tool is generally practical to use and also simple to carry out.
It is also very easy and clear to understand.
The tool focuses on very vital internal and external factors that affect the organization.
It is very helpful when identifying the future goals and objectives that an organization would
wish to achieve (Schmitt & Simonson, 2008).

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This tool is also helpful when there is need to initiate further and detailed analysis.
2. Porter’s five forces
This is an analysis tool that makes use of the five main industry forces in order to recognize the
competitive intensity in a given industry as well as its level of profitability (Howard, 2009). Its
development was purposefully to determine how the five vital competitive forces have an
influence on the industry. These five forces were identified as follows; Industry rivalry, threat of
substitutes, bargaining power of employees, bargaining power of buyers and threat of entry.
The above forces influence the structure of an industry as well as the competition levels available
in that industry. The profitability levels depend on how weak the competitive forces are in the
industry, that is, the weaker the competitive forces, the higher the profits realized by the
organization. Categorization of industry competitiveness and the profitability levels can be done
as follows (Jain, 2010).
Attractive industry
High entry barriers, low competition, suppliers have weak bargaining powers, buyers have weak
bargaining power and there is few or no substitute services or products.
This type of industry often leads to high profits
Unattractive industry
Low entry barriers, very intense competition, there is a lot of substitute services or products, the
buyers have a strong bargaining power and the suppliers have a strong bargaining power.
This type of industry often results to very low profits
This tool is important to a business unit in the formulation of an organizations strategy since it
depicts how influencing each of the five vital forces is in a given industry. The five forces and
their influences are as discussed below.

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The threat of new entrants
This is a force that makes a determination of how easy it is to make an entry to given industry. In
an industry that has few entry barriers and is of high profit, the chances of having intense rivalry
are increased (Jain, 2009). In situations where more companies compete for the same market
share, the profits will begin to reduce. The possible threats that new entrants to an industry may
face include the following;
Low required amount of capital to enter an industry
Lack of government regulation
Little retaliation from the existing companies
Nearly identical products
Easily achievable economies of scale
Suppliers bargaining power
In situations of strong suppliers bargaining power, the suppliers will be able to make sales at
high prices and with low quality. An organization will, therefore, have to pay more to acquire the
products. The suppliers bargaining power is increased when; Suppliers have scarce resources,
there are many buyers with few suppliers, the costs of changing raw materials are high and when
there are little substitute raw materials.
Buyers bargaining power
Stronger bargaining power allows buyers to ask for lower prices and high-quality products form
the producers (Teece et al, 2010). The lower prices will translate to little revenue for the
producer whereas the high-quality products will increase the costs of production hence a
reduction in the profits for the producers. The buyers bargaining power is improved when; there

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are few buyers, many substitutes exist, buyers are sensitive to the prices and the costs of
switching to other suppliers are low.
Threat of substitutes
This force is mostly felt when the buyers are able to find substitute products or services at very
affordable prices and improved quality. It also occurs when the buyers are able to switch from
one product to another with very little costs involved. For example in the case of the selected
SBU, the chances of a buyer switching from LG manufactured mobile phones to say Samsung
manufactured mobile phones is easily attainable and will not cost the buyer anything (Ulaga &
Chacour, 2015).
Rivalry among existing competitors
This is the main force that will determine whether the industry will be competitive and profitable
it will be. In an industry that is competitive, the companies will also have to aggressively
compete for a market share that thus leads to reduced profits. The rivalry is likely to be intense
when; there are high exit barriers, there is slow industry growth, there is reduction in customer
loyalty, there are several competitors and when the products have substitutes are not easily
differentiated.
To make use of this tool, the SBU needs to gather information on each of these forces then make
an analysis of the results. They should then be able to formulate strategies that are in relation to
the conclusions (Van et al, 2013).
Summary

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Several marketing teams always find it difficult to get the correct strategy that will market their
products. The above findings have several different impacts on the strategic marketing strategy
in relation to the planning and implementation. Better marketing tools and strategies will help the
organizations carry out their activities more efficiently and effectively. The tools that were
discussed above will enable any prospective organization to have a clear picture of the
competitive environment that they intend to move into and what necessary strategic priorities
should they put in place in order to ensure that overcome the competition and thus achieve the
company’s goals. Marketing is one vital strategy that has to be carefully discussed before
selecting the best strategy to adopt. The SWOT tool will help the SBU to identify the potential
strengths and opportunities that they can build on to ensure that the mobile phones and
accessories that they avail to the buyers will meet their specifications and therefore outdo other
competitors that offer the same product. An analysis of the potential threats and weaknesses is
also done and this will enable the SBU to develop better ways of handling them whenever they
arise (Varadarajan & Menon, 2011).

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