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Samsung ‘Seesaw Game’ LG

Posted September. 18, 2002 22:38,   


“We are number one”

“It is funny…., all of the world knows who number one is.”

It is an argument between Samsung Electronics and LG Electronics these days.

As LG announced that it recorded number one in export of CDMA mobile phone in the first half of this year, Samsung Electronics responded, “what a nonsense! Samsung is ahead of LG in world market share.” According to the survey of Strategy Analytic, Samsung Electronics sold 7.4 million of mobile phones and LG sold 6 million of the phones. LG Electronics insists “however, 4.14 million of Samsung are domestic supply, so in export LG is ahead of Samsung.” Samsung commented about “ it is a groundless numeric value even from a research institute” and expressed its pride wounded.

On the contrary, in electric home appliance, Samsung is on offensive position, in a new forming market such as digital television, home theater, DVD player etc, it is not easy to collect statistic data. There is, of course, ‘number one argument’.

▽ LG Electronics generating number one= the severe competition between two companies originated from number one slogan of LG. Even LG is a pioneer of Korean electronic industry, but has been behind of Samsung since 1990s in brand and business operation. Particularly, as Samsung dominated the leadership of world memory market in the early of 1990s, the gap between the two companies has become wider and LG looks to adhere to the second best position.

The slogan ‘number one’ of Ku Bon-moo, the chairman of LG Group, Ku Ja-hong, the Vic-Chairman of LG Electronics, in the early of this year, comes from the background. The management judged that moral relaxation to settle down at the second position appears in the group.

From the early of this year, Ku, the chairman, began to realize the slogan of ‘Number One LG’ through conceptualizing of the slogan, establishing long-term strategy, assessing and training CEO & executives, etc. LG has confidence by the best operation record of LG Changwon manufacturer in world electronic home appliance industry.

▽ the history of seesaw game= up to the end of 1980s, Kumsung (ex- LG Electronics) stood without a peer in domestic electronic home appliance market. Since eatablishment in 1968, Kumsung developed fan, refrigerator, black & white television, air condition, etc successively. It also participated in semiconductor and communication business early. Even Samsung Electronics and Daehan Cables tried their best, but they couldn’t catch up Kumsung. Kunsung never regarded Samsung established in 1969 as rival.

Samsung began to aggressive promotion from 1980s to be recognized equally with Kumsung and impressed consumers deeply with advertising of ‘Human Tech’.

As LG Electronics began to drive aggressively ‘Number One’ from this year, the promotion war began again. Whenever introducing digital television, mobile phone, new technology, next generation technology etc, they use the phrase ‘the first in industry’, ‘the biggest in the world’ etc.

▽ similarity and difference= Samsung is operated by strong leadership of Lee Kun hee, the Chairman, on the other side, LG emphasizes on autonomy.

In case of Samsung, Lee, the chairman, by himself participate in seeking for future business after 10 years, recruiting excellent human resources etc. Kim Un-soo, a professor of business administration of Korea University commented, “ Samsungmen are in strict order rather than are refined and reasonable. It is strength if wise leadership supports them. Or not it will be crisis”

On the other hand, Ku, the chairman of LG, only suggests a main frame. Ku Ja-hong defines his role ‘to encourage staffs’ energy’ and ‘seek for the next generation leaders’. ‘Harmony’ has been traditional management tool of LG since the early stage of the partnership with Hur Family. However, recently, LG introduces ‘Fun Management”. Moon Ku-hyung, a professor of the management school of Korea University commented “ LG men are not unyielding, but flexible. Even only small number of person appreciate is, but it has international competitiveness.

The two companies appear as global leaders of global market and raise national brand. Samsung Electronics and LG Electronics control themselves to comment about rival, however appreciate each other as “the development, innovation and growth are originated mainly from the competition between the companies”

Yeon-Su Shin ysshin@donga.com