LG HOUSEHOLD & HEALTHCARE

Industry

Soap and Other Detergents Household and Personal Products

Oral Care

Hair Care

Laundry

Home Care

Cosmetics

Beverages

Competitors

CSR: Focus Issues

Ø  Product Safety

Ø  Environmental Efficiency

Ø  Employee Diversity and Equal Opportunities

Ø  Contribute to Local Community

Stakeholders

Employees

Customers Shareholders & Investors

Community

Business Partners Government and Institutions

Key Financials

LG Market Cap: 11.4 billion Sales: 8.8 Billion Profits: 803 million Assets: 15.8 Billion Market Value: 11.4 Billion

May 2015 (Forbes)

Compared to Competitors

•  Relatively small compared to

competitors in the industry

•  Still in expansion phase

•  Competitors operate worldwide

•  Competitors have been operating

longer

LG’s Response

•  Overseas expansion strategies

•  Products promote health &

sustainability

•  Is expanding target markets

•  Is diversifying products

Customer Needs

Healthy Basic health and hygiene needs Beautiful Skincare and beauty needs Refreshing Needs of the human body

3 Broad Values

Creating Customer Value

Market Segmentation Household Products: Middle Income Families Beauty Products: Upper Middle and Middle Class Women

Target Market High end Asian Women

Product Positioning High-end cities in China and Asia

Operations HQ: Seoul, South Korea

Ø  Provides a pure good Ø  Classifies operations into categories instead

of work centers Ø  Consumer-driven management

The 4 P’s of Operations

People

Process

Partners

Place

•  Payroll Employees •  Performance-based remuneration •  Seminars and teaching programs •  Non-union workforce

•  Vertical Integration •  R&D Centers

•  Acquisition of brands •  Outsourcing in Supply-chain •  Worldwide partners •  Follow strict CSR

•  Customer service in South Korea •  Worldwide production and sales

SWOT Analysis Strengths Weaknesses

Opportunities Threats

Employee Diversity Product Variety Extensive CSR

Relatively small Still in expansion phase Lack of distinctiveness

Duty-free shops Online malls

Environment conscious

Economic slowdown Consumer-complaints

The 5 Forces Threat of New Competitors

Threat of Substitutes

Intensity of Rivalry

Bargaining Power of Customers

Bargaining Power of Suppliers

Competitive Strategy

Ø  Cost Leadership

Ø  Broad Market

Ø  Attract Aspirational Customer

Ø  Cater to Target Market

Ø  Green Management

Ethical Issue Facing Industry

Promoting Women in the Workplace

Gender Inequality

Labor Force Participation

Gender Pay Gap: Starting Base Salary (Per $1)

Gender Pay Gap: Cosmetics/Household Product Industry

(Per $1)

% Of CEOs

57% 70%

$0.78 $1.00

$0.70 $1.00

24% 76%

LG: A Model for Equality

Wolgoo Kang

CSR Committee Panel Member

Former Head of Korean Women’s

Rights Commission

53% of All Employees Are Female

75% Satisfaction Level of Female Employees

$0.00 difference in starting base salary

Certified as a “Family Friendly Enterprise”

Frameworks &

Blind Spots

Social Justice

Utilitarianism

Confirmation Bias

In-Group Favoritism

What about the stakeholders?

Majority Employees Majority Customers

Mission

We will strengthen our competitiveness as a world-class company and create values through sustainable management activities for shared growth with out business partners and the community, environmental safety, and fair trade. ”

“

Our Thoughts

LG’s goal is to empower women through beauty.

Successfully redefined productivity in their supply chain.

LG sends a powerful message on gender inequality.

THANK YOU

QUESTIONS?

TEAM 4

Max Leyn Fun Manager

Ayusha Mittal Facilitator

Owen Ward Mediator

Jordan Brooks Organizer

Paul Kim Note Taker

Valeria Villalobos Researcher