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The Analyst Magazine:
LG Electronics India: Life is Good
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From a failed entry into India in 1993 to becoming the de facto leader in the Indian consumer durable industry, LG Electronics India has come a long way. For the durable goods consumers in India the tag line `Life's Good' may not be unfamiliar. With the Korean chaebol's Indian subsidiary now topping the Indian consumer durable industry's ranking chart, life's indeed good for it. In a span of just seven years since it entered the Indian market in 1997, LG Electronics India, a wholly-owned subsidiary of LG Electronics, South Korea, has risen to the number one position in almost all the major market segments refrigerators, color TVs, microwave ovens and washing machinesit operates in.

The company's present success has not come without initial hiccups. LG Electronics entered India first in 1993. The company tied-up with Bestavision, a Delhi-based firm, to enter the market as Lucky Goldstar. Soon, it had to retreat as the joint venture with Bestavision did not meet with any success; the local partner lacked the financial muscle to set up a manufacturing unit. The company later entered into a partnership with the CK Birla Group. However, this venture too could not succeed for various reasons.

The company re-entered India in 1997, when the Foreign Investment Promotion Board (FIPB) allowed it to set up its own manufacturing unit. It set up a 100% subsidiary called LG Electronics India with a state-of-the-art manufacturing plant with a facility of multi-product lines at Greater Noida, near New Delhi. The company recently inaugurated its second production facility at Pune to manufacture. Today, most of the company's products are manufactured locally, which has helped it cut costs.

The company's aggressive regional distribution strategy has been a key component in its India foray and has played a significant role in its success in the Indian market. This has not only helped LG establish a strong foothold in the country, it has also allowed it to build a strong brand equity. The company, which initially opted for the National Distribution Model (NDM) later changed its distribution strategy and adopted the Regional Distribution Model (RDM).

 
 
 

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