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The Failure of LG (Business Stars)

LG's mobile phone division failed due to inconsistent software support, poor product design, and weak marketing efforts, which left it unable to compete against rivals like Samsung and emerging Chinese brands. The division experienced 23 consecutive quarters of losses, leading to its shutdown in 2021 despite attempts to innovate and relocate production. This case emphasizes the need for balancing innovation with practicality and responding to market trends in a competitive industry.

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36 views2 pages

The Failure of LG (Business Stars)

LG's mobile phone division failed due to inconsistent software support, poor product design, and weak marketing efforts, which left it unable to compete against rivals like Samsung and emerging Chinese brands. The division experienced 23 consecutive quarters of losses, leading to its shutdown in 2021 despite attempts to innovate and relocate production. This case emphasizes the need for balancing innovation with practicality and responding to market trends in a competitive industry.

Uploaded by

zuhrarashidovna04
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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The failure of LG's mobile phone division can be attributed to a combination of strategic

missteps, technical issues, and market dynamics.


Inconsistent Software Support
 Slow and unreliable software updates alienated customers. While competitors like
Samsung and Apple ensured timely updates, LG lagged behind, leaving users dissatisfied.
Poor Product Design and Execution
 LG's experimental approach, such as the modular design of the LG G5 and the dual-
screen LG Wing, failed to resonate with consumers who preferred practical, reliable
designs.
Weak Marketing and Brand Identity
 LG’s marketing efforts were insufficient to compete against well-established rivals. Its
campaigns lacked the appeal and consistency necessary to build a strong smartphone
brand.
 The company struggled to differentiate itself, particularly as Samsung dominated in
premium segments and Chinese brands captured the midrange and budget markets.
Intense Market Competition
 Chinese brands such as Xiaomi, Huawei and Oppo captured market share with
competitive pricing and innovative features. Meanwhile, Samsung and Apple solidified
their dominance in premium segments.
Financial and Strategic Failures
 LG's mobile division suffered 23 consecutive quarters of losses by the time it shut down
in 2021. Despite efforts like relocating production and increasing reliance on ODMs
(original design manufacturers), profitability remained elusive.
 Experimentation with high-risk flagship designs further drained resources without
yielding significant returns.
Conclusion:
By the time LG announced its exit from the smartphone market in 2021, it had tried multiple
strategies without success. The company's failure highlights the importance of balancing
innovation with practicality, ensuring brand differentiation, and responding swiftly to market
trends. LG's story serves as a cautionary tale in the hyper-competitive smartphone industry.

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