B.C.C.A INSTITUTE OF MANAGEMENT

T.Y.B.M.S

DIV- ‘A’

PROF INCHARGE-MR.MEHTAB AHMAD

HALL OF FAME

QURBAN SADRIWALA—28

FAIYAZ MORBIWALA—29

MOIEZ LOKHANDWALA—30

FARHAN SHEKANI—31

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SAMSUNG VS L.G

AND

THEIR H.R.M POLICIES

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PREFACE

As we enter the 21st century with new hopes and new expectations, it is imperative that we appreciate the world around us is changing rapidly, throwing open great challenge and innumerable opportunities. Survival and success depends on the abilities to be creative, flexible and adaptable. And even in that there are no defines models that can followed. The best course is to simple trust your own instincts, set your own rules and embrace challenges.

It gives an immense pleasure to present this project of Samsung vs. L.G and their H.R.M policies to our prof.Mr M.Ahmad and we are thankful to him to give us with such a good topic and allowing us to learn something new in a practical manner.

We hope that the research which we have done is up to mark.

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INDEX

PAGE NO:-

INTRODUCTION……………………………………………...5 WHAT IS HR POLICY………………………………………..6 FEATURES…………………………………………………….7 OBJECTIVE……………………………………………………8 THE WORK OF H.R.M IN A COMPANY………………….9 DRESS CODE………………………………………………..10 EQUAL EMPLOYMENT OPPORTUNITY………………..11 HISTORY OF LG WORLD………………………………….13 INTERVIEW OF HR MANAGER OF L.G INDIA……….14

SAMSUNG HISTORY……………………………………….19 SAMSUNG IN INDIA………………………………………..21

HUMAN RESOURCE IN SAMSUNG……………………..22 INTERVIEW OF SAMSUNG H.R MANAGER…………..24 SAMSUNG AND LG THE CONQUERE DURING

DEPRESSION TIME……………………………………..….29 CASE STUDY…………………………………………………31 CONCLUSION………………………………………………..35

INTRODUCTION4

Human resource management (HRM) is the strategic and coherent   approach to the management of an organization's most valued assets - the people working there who individually and collectively contribute to the achievement of the objectives of the business. The terms "human resource management" and "human resources" (HR) have largely replaced the term "personnel management" as a description of the processes involved in managing people in organizations. In simple words, HRM means employing people, developing their capacities, utilizing, maintaining and compensating their services in tune with the job and organizational requirement. Staffing, training, compensation and performance management are important HRM functions.

It can be said that the term ‘human resources management’ became popular in the UK at the latter half of the eighties and at the beginning of the nineties. It has been applied to a diverse range of management strategies and has sometimes been used simply as a more modern term for personnel, employee or industrial relations.

Its importance lies in its association with a strategic, integrated and highly distinctive managerial approach to the management of the people. The distinctiveness lies in labour being seen as an asset and resource and not as a cost. The strategy is to try to develop this resource to it’s maximum so that emphasis is on the individual employee and on his/her motivation, training and development.So in this topic we will take a brief look on the H.R.M policies of Samsung and L.G

WHAT IS HR POLICY

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The Human Resources Policy and Procedures Manual have been developed to facilitate the implementation and clearly define policies on human resource management. The Manual provides guidelines to be followed in the administration of these policies, and assists all employees in defining who is responsible for each human resource management decision, and the correct procedure which is to be followed. The policies specified within are consistent with those of best practice management principles. They have the full support and commitment of management. HR policies must be kept current and relevant. Therefore, from time to time it will be necessary to modify and amend some sections of the policies and procedures, or for new procedures to be added. Any suggestions, recommendations or feedback on the policies and procedures specified in this manual are welcome. This should be provided by email. These policies and procedures apply to all areas of operations within and related entities.

Hr policy is set of rules that define the manner in which an organization deals with a human resource or personnel related matters.

An hr policy is a commitment of an organization to act in a specific way while dealing with its employees

FEATURES

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A personnel policy should reflect good practice, be written down, and be communicated throughout the organization

Should be clear, precise and easily understandable

Should not be rigid, it should adapt to changing circumstances

Should be responsive to the prevailing situation and environment

Must be two way communication- between the management and the workers so that the latter are kept informed about the latest development

It should support all the concerned parties

OBJECTIVE

To achieve the objective of the organization

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Should be designed in such a way that healthy competition and effective co-operation among the workers is promoted.

Should aim at the best and the maximum use of the human resource available

Should aim at a good employer-employee relationship

Should aim at employee satisfaction

Should protect the interest of the workers

Should provide the opportunities for promotion to the workers

THE WORK OF H.R.M IN A COMPANY

Policy Statement

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A company expects its employees to achieve and maintain a high standard of ethics, professional conduct and work performance to ensure the Company maintains its reputation with all internal and external stakeholders.

Objective

To enhance reputation as a quality service provider and an enjoyable, stimulating and challenging place to work.

Application

The policy will be seen to be successfully applied when all employees are seen to perform their duties professionally with skill, care and diligence. This includes:

•observing policies and procedures

•treating colleagues with courtesy and with respect for their rights, duties and aspirations

•employees who do not conform to this standard of conduct will be subject to disciplinary action as detailed in this manual

DRESS CODE

Dress choice is a matter of personal discretion, taking into account requirements for any protective clothing, customer/supplier interaction and professional environment. Be aware that work attire will have an impact upon image as well as your work colleagues. As a

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minimum standard, dress should be clean, neat and professionally appropriate. The following are examples of items that are not acceptable:

•ripped or torn clothing

•thongs or sports sandals

•sportswear or beachwear reserves the right to request a staff member to dress to an appropriate standard as a condition of employment. If you are in a work environment with inappropriate clothing you may be sent home to change, before returning to work

EQUAL EMPLOYMENT OPPORTUNITY

Policy Statement

A company provides equal employment opportunity to all qualified persons without discrimination on the basis of age, sex, race, disability, marital status or religion in a c c o r d a n c e w i t h a p p l i c a b l e l o c a l , s t a t e a n d n a t i o n a l l a w s a n d r e g u l a t i o n s . Will make reasonable job accommodation for persons

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with disabilities who can perform the essential functions of the position for which they are qualified and selected. All employment and promotion decisions will be based solely upon individuals’ qualifications, experience, and prior contribution and demonstrated capacity to perform higher or improved levels of performance and will be in accordance with the principle of equal employment opportunity. Will take whatever affirmative action is necessary to attract and retain qualified persons.

Objective

The ob jec t ive o f the Equa l Oppor tun i ty Po l i cy i s to suppor t the a t t rac t ion and retention of employees that contribute most to the development of the business.

Application

The Equal Employment Opportunity policy will be successfully applied when all roles are filled by the best qualified and experienced candidates available regardless of personal circumstances.

Process

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The Equal Opportunity Employment process is reflected throughout staff recruitment and retention processes.

HISTORY OF LG WORLD

LG Electronics was established in 1958 as Gold star Company Ltd. And has been trendsetter in the electronics industry ever since. The corporate name was changed to LG Electronics in 1995 as of an effort to make the company a major player in the world market.

“Gold star” brand product sale in 1996 came to US $ 9 billion, which ranked one of the top electronics industry in the world. LG is known by consumers in more than 171 countries for offering products that deliver ultimate satisfaction.

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Along with the new corporate mission, LG electronics has been reborn. The organization remains youthful and vibrant. Building a better future for customers is the top priority and the company is going top gear to make the “Better Future” a reality.

The management philosophy-“Great Company, Great people” Where by only great people can create a great company, and pursue two growth strategies involving “Fast Innovation” and “Fast Growth”. Likewise, we seek to secure three core capabilities: Product Leadership, Market Leadership, and People centered Leadership. The products manufactured internationally cover multimedia players, video/Audio products, Home Appliances, Information Systems products, Communication Devices, Display products, Magnetic Recording Media and Electric/Electronics parts and components. Heavy investments are being made in the next generation and environment friendly products.

INTERVIEW OF HR MANAGER OF L.G INDIA

Korea-based LG Electronics is recognized today as a market leader in India, but getting there has required a "will to succeed," according to Yasho V. Verma, who has been director of human resources and management support for the company's India division since 1997. In addition to the usual bumps that multinationals can expect when entering a new market, Verma describes the company's brushes with local "mafia" and other challenges in his book, Passion: The Untold Story of LG Electronics India. In a country known for its talent shortage, LG India's employee attrition rate has dropped from 19% to 6% in the past two years alone. (The industry average is 35%, according to Verma.) At the recent Wharton India Economic Forum, Verma spoke with an interviewer about how LG has used non-traditional

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methods for recruiting and retaining talent and empowering employees "at the lowest levels."

Interviewer: Today we are talking with Dr. Yasho Verma, who is the director of human resources and management support for LG Electronics in India. Dr. Verma, thanks very much for joining us today.

Verma: It's my pleasure.

Interviewer: You wrote the book called Passion: The Untold Story of LG in India. Can you tell us a little bit about what you feel that story is in a nutshell? What's the most compelling aspect of that story?

Verma: It's a fantastic story [about] the non-traditional way we really grew up. And the most important thing let me first tell you, is that LG is the number-one brand in India. Its market share in all the products which it has in India is over 30%. And its next competitor is about 50% less than LG. So it's a huge success story.

I worked earlier in a company for over 15 years, with the Tatas -- you must have heard the name -- and now with LG. These are two sides of management. Tata was very traditional, copy-book style; LG, was absolutely non-traditional, meaning anything which is not in the management book, we have done it.

Interviewer: Can you give us a few examples?

Verma: Let me tell you about when we started 10 years back. I was the first employee to be recruited in LG India. And we had to recruit people. Let us say I had to recruit a manager for a sales branch. We did not recruit a successful sales branch manager for that region. We recruited a very good number-two person in another brand, because what we believed is that knowledge is something that can be learned. But it is passion and it is attitude which are much more important -- and the will to succeed. These

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were the three qualities for which we were looking and we recruited and went ahead accordingly.

Another interesting story: Just now I am talking about HR, and where our factory got set up in 1997 was an area that was run by mafias. And all the factories had close-downs -- "lock-outs," as we called them -- for maybe four months in a year. Until now, we don't have a union. So the approach we took while handling our employees, while getting them recruited, while maintaining them, was absolutely non-traditional. We tried not only to make them satisfied, but to make them engaged. And the one thing which we really rewarded -- all our reward system was [based on] passion. And that is what the book talks about.

Interviewer: Are you finding that it's easy, given your culture, to retain employees?

Verma: Oh, yes, it's very tough to retain employees. Two years back, our attrition was about 19%, whereas the industry attrition, the consumer durable attrition, was about 30%. If you were to take the total industry attrition, it was about 35%. This year, we have reached an attrition of 6%. And I think that this is something which I also never dreamt that we could do, but it has been achieved.

What my belief is for [avoiding] attrition: One is career plan and the second is engagement. And the third thing, which is very unique about LG, is the idea of empowerment. Which, as you were saying, as a Korean company in India when we started, the first and the foremost thing we worked on was that empowerment should go down to the lowest level.

That is, persons with even a two-year business administration degree can take all their decisions, which was [very] unlike any other multinational in India. I think that these three reasons are why we have been able to get good talent and have been able to retain it.

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Interviewer: Is this an innovative model for the Indian market itself, or is this very much in keeping with what you know of Korean business models?

Verma: No, it was not LG's business model, LG's worldwide business model. This was LG India's business model. And now they have developed a case study on this strategy, and now it is being taught in LG Academy worldwide: How to empower and be successful in an organization.

Interviewer: There is an LG University. Do you find that's a critical component also for grooming and retaining and training employees?

Verma: Yes, yes. There's been a change in the LG top management in the last year -- the worldwide CEO is a new person, and he's really focusing on capability upgradation of the employees, capability evaluation, and leadership upgradation. This is a major focus which is coming through now. This is a global intervention.

Interviewer: Is that to make up for deficits in the hiring market?

Verma: No, it is not. I think it is just to meet the future challenges. This is because they want to have 20% of the subsidiaries [to] have local CEOs in the next three years' time. So, we are growing in a global way, and we want to have a global business model keeping the local people at the top in the various subsidiaries.

Interviewer: It's a common refrain that it's very difficult to find highly skilled talent in India right now. And in fact, it will probably only become more difficult as more and more businesses move in. Is this an issue that you think that LG will face or is facing?

Verma: Getting the right type of talent in India is very difficult now. There are too many opportunities; people available for a similar job are far fewer. And it is the only the brand of the employer who will be able to pull them in. I think we were having,

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three years back, some problems, but they are slowly getting reduced.

Interviewer: Now, the innovation practice falls under your group as well. What is LG's philosophy of innovation, and how central is it to what the company does?

Verma: For our industry, innovation is very, very central. This is because the product lifecycle is getting reduced from two years to one year in consumer durables, number one. Number two is wastage elimination: How we are going to make money is through wastage elimination. All other costs are going up -- 70% of the raw materials costs, employee costs, and all that stuff; everything is going up. The only thing is wastage elimination and innovation.

So, we are having a lot of processes as Six Sigma -- TDR (tear down and reengineering process), one-hundred PPM, and so on and so forth. And they are not specialized to an innovation department, because it is believed they are part of the culture of an organization. It should go as a part of the culture of the organization where everyone starts practicing it, and that it is not with a specialized technical group, but it is with me.

Interviewer: And just speaking more on a concrete level, how does one go about beginning to establish that kind of culture in a company?

Verma: It's a very tough process to change a culture or establish a culture. So training could be one way. Then, the most important thing, I learned, is that you take people to a place where things are being done that way. Once they see it, they realize it can be done. If you only teach them, they don't realize it can be done. I think this is the best way of changing people's minds.

Interviewer: Looking ahead, what do you see as some of the greatest opportunities for LG in India?

Verma: LG is a market leader, as I told you. The opportunity which we are seeing is immense. We have three products which are growth engines from now onwards. One is the mobile, second

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is the PC and [third is] FPD, flat panel [displays]. Now these are the areas. We are not going to compromise on our business on the other products, where we are already a market leader. But, we know because the population in India is becoming younger every year, their interests -- their incomes are going up -- their interests lie with these three products. And there we are really focusing to be number-one. We are not number-one in these three particular areas.... In the next two years, we want to be number-one in all the three products.

Interviewer: Thanks very much for speaking with us today.

SAMSUNG HISTORY

Unlike other electronic companies Samsung origins were not involving electronics but other products.

In 1938 the Samsung's founder Byung-Chull Lee set up a trade export company in Korea, selling fish, vegetables, and fruit to China. Within a decade Samsung had flour mills and confectionary machines and became a co-operation in 1951. Humble beginnings.

From 1958 onwards Samsung began to expand into other industries such as financial, media, chemicals and ship building throughout the 1970's. In 1969, Samsung Electronics was established producing what Samsung is most famous for, Televisions, Mobile Phones (throughout 90's), Radio's, Computer components and other electronics devices.

1987 founder and chairman, Byung-Chull Lee passed away and Kun-Hee Lee took over as chairman. In the 1990's Samsung began to expand globally building factories in the US, Britain, Germany, Thailand, Mexico, Spain and China until 1997.

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In 1997 nearly all Korean businesses shrunk in size and Samsung was no exception. They sold businesses to relieve debt and cut employees down lowering personnel by 50,000. But thanks to the electronic industry they managed to curb this and continue to grow.

The history of Samsung and mobile phones stretches back to over 10 years. In 1993 Samsung developed the 'lightest' mobile phone of its era. The SCH-800 and it was available on CDMA networks.

Then they developed smart phones and a phone combined mp3 player towards the end of the 20th century. To this date Samsung are dedicated to the 3G industry. Making video, camera phones at a speed to keep up with consumer demand. Samsung has made steady growth in the mobile industry and are currently second but competitor Nokia is ahead with more than 100% increase in shares.

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SAMSUNG IN INDIA

Samsung India is the hub for Samsung's South West Asia Regional operations.

The South West Asia Headquarters, under the leadership of Mr. J S Shin,

President & CEO, looks after the Samsung business in Nepal, Sri Lanka,

Bangladesh, Maldives and Bhutan besides India.

Samsung India which commenced its operations in India in December 1995

headquartered in New Delhi.

Samsung India has widespread network of sales offices all over the country

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HUMAN RESOURCE IN SAMSUNG

Samsung Electronics is intent on becoming a first class company that serves mankind and assists in the development of the world community in the 21st century.

Samsung Electronics has always kept research and development activities at the forefront of its operations, forecasting creativity and innovation as the key ingredients to the Company's future growth. Moreover, Samsung Electronics believes that although human resources and technological development possess separate functions, their interaction creates a synergy that contributes to overall quality management. To bring Samsung Electronics success in the market, it is very important that everybody is enjoying his/her job, and gets along with the others in the company.

Samsung Research Center is an innovative organization offering unlimited opportunity to those who strive to develop and grow to their fullest potential. As a strongly people oriented company, we work together to bond individual achievement with company goals. The rewards for superior performance come personally as well as professionally. We have a vast amount of knowledge within our company, and our people are willing to share that knowledge to help individuals achieve their goals and pursue company growth.

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Creating an environment where everybody feels a close relationship with the company, understands its policy and operation is one of the priorities of Samsung Research Center.

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INTERVIEW OF SAMSUNG H.R MANAGER

For more than 70 years Samsung Electronics has been at the forefront of innovation. The Korean major has grown to become one of the world’s leading electronics companies, specializing in digital appliances and media, semiconductors, memory and system integration. Having commenced its operation in India in 1995, Samsung India has already clocked revenues of US $1 billion in the country.SHRM India caught up with Sanjay Bali, Vice-President, Corporate HR, Samsung India, to understand how HR has contributed to the company’s success in India.Excerpts:

There is a popular notion that the Korean work culture is very different from the Indian work culture. How does one bridge this divide?

We have tried to seamlessly integrate the best of both the cultures – the Indian culture and the Samsung global culture at Samsung India. We have incorporated the best of Samsung processes and work culture into Samsung India while fully leveraging Indian talent and creativity. I think the flexible approach adopted by the Korean Management is one of the reasons that Samsung India has succeeded. The responsibility of running successful business operations has been left with the Indian managers. The Korean expats work as coordinators, using their experience and know-how of Samsung products/processes/HQ representatives to garner the best support for Samsung. 

With Mr. Jung Soo Shin at the helm of affairs for the Indian market, what are the challenges that HR faces when it has to get somebody who is not an Indian to understand the peculiarities of the Indian market and culture?

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Mr Shin has Indian heads of businesses and different functions who are advising him on relevant business issues. I think HR’s role becomes very critical when it comes to balancing the expectations of the Korean management and the Indian employees. Of course, HR also has to guide the Korean management on Indian sensitivities and ways of working, so that a smooth amalgamation can take place and the best/optimum results can be attained.

How is the people policy at Samsung different from any other Korean company, like LG for example?

While I would not like to comment on the LG policy, I can say that at Samsung we follow a people oriented policy. Our thrust is on career development and growing the people within the organization by giving them a clear growth path and a stimulating work environment. We try to give our people global exposure by sending them to different Samsung subsidiaries/global workshops etc., so that they can develop as professionals. We put a strong thrust on the training and development of our employees. In fact, we are also giving some Indian employees an opportunity to go and work in other subsidiaries as well as Samsung head quarters, so that they can become true global managers. 

From a manpower perspective how has India contributed to Samsung’s position as a global electronics leader?

Samsung is a Company that prides itself on its innovative products and we have 44000 employees working in the R&D Function globally across 16 R&D centers. We have two R&D Centers in India , at Noida and Bangalore and around 3500 employees working in these R&D centers on global projects, including India. For example, the employees at the Samsung India Software Operations Unit in Bangalore are working with developers in India for Samsung ‘bada’, our proprietary mobile operating system. Our R&D employees at Noida are working on developing software for Samsung’s global requirements for digital media products – Flat Panel television sets, Digital Still Cameras etc. Beyond R&D, Samsung India today contributes around 2% of

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our Global Sales Turnover and looking at the aggressive growth path that we are confident of charting out, I am expecting this contribution to grow.

Can you tell us something about the way in which you engage your employees that help the company to deliver its stated vision of “Inspire the World, create the Future”?

I think the first step to achieving any vision is to make it a shared vision and we are engaging with our employees to communicate with them on what the company’s vision is and what are the goals to achieving the company vision. These Goals translate back to each division and they work towards achieving the relevant goals in their own Division. 

Is there something unique about the overall leadership philosophy at Samsung that translates into an overall leadership position for the company in the various segments that it operates in?

The basic guiding principle that we follow is that we want to be in the top three slots in all the categories that we operate in. This is the clear objective that each Product Division operates with, globally as well as each subsidiary, as in the case of India. Here too, we are in the top 3 slot in all the categories that we are operating in like Flat panel televisions, mobile phones, colour monitors etc. On the basis of this overall approach, we work out the strategy required for achieving this objective. 

Samsung has manufacturing presence in India (Chennai and Noida) and an R&D centre in Bangalore along with sales and marketing offices around the country. Can you outline the different HR issues and challenges in each of these divisions, yet highlighting the singular thread that binds the personnel as belonging to the Samsung family?

We have a fairly empowered regional structure where each of the regions mirrors the core functions of the head quarters. We have

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HR people in place in each of the regions even as we have regional product marketing and marketing-communication functions in place to support the sales and the commercial operations. From the HR Perspective, we need to hire and retain the best of talent in the regions and align them with the Company’s overall direction. Beyond that, we also want to promote the people movement between head Office and regions for the sales functions, so that there is better understanding between the functions. Of course, we also have forums where there is greater face to face interaction between head Office and the regions, apart from the day to day telephonic interactions.

The consumer electronics industry is a high pressure industry. Can you tell us something about the manner in which you help your employees rejuvenate and recharge themselves to face the constant challenges of the market?

We encourage employees to use the gym and other sports facilities at the factory location. At the corporate office location, we encourage different departments to have monthly outings, so that they can unwind together.

In India, Samsung was a relative late entrant to the market leader Nokia in the mobile phone space. Yet today it is Nokia’s number one opponent in the Indian market. How did this happen and what role did HR play to make this possible?

We doubled our mobile volumes last year and this year too we are looking at aggressive growths. Apart from our achievements in the sales and marketing areas, from the HR perspective, we improved the capability index within the telecom division. We worked with the business head to restructure the division for growth and at the beginning of last year we set up the branch operations for the Mobile division, which were not there prior to that. In fact, we have even set up a zonal sales structure for Mobiles. We set up a Distributor Engagement and Enhancement team as well as a training team for the In-shop demonstrators. At the Head Office level, we strengthened the Product management

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and marketing teams. I think, people make all the difference and the success of Samsung mobile is testimony to the same.

SAMSUNG AND LG THE CONQUERE DURING DEPRESSION TIME

The world is still reeling under the biggest financial crisis since the Great Depression, but it seems that someone forgot to tell LG and Samsung. Sales of the two South Korea-based conglomerates were 35% to 50% higher in India in September and October 2008, compared to the same period last year. And both are confident of meeting their targets by this year's end, which include revenue growth of around 30%.

Granted, the September-October sales figures may be higher this year for specific reasons. About 3.5 million government employees received the first installments of their delayed salary

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raises around that time, resulting in a sudden surge in disposable income. And the festive season in India typically sees a spike in sales of all products, especially consumer electronics and household appliances.

What is not so easily dismissed, however, is the level of success LG and Samsung have achieved in India. In just over 10 years, the Korean duo has established dominance over the Indian white goods market, edging out traditional multinational companies and Indian competitors. Between them, they account for the largest share of the $6 billion consumer durables, electronics and appliances market, with LG claiming the preferred brand position for virtually everything from televisions to microwave ovens and washing machines, while Samsung is a steady number-two or number-three player. Over the past decade, both have consistently seen double-digit growth rates and are convinced they will maintain, if not surpass, those levels in coming years as well -- an optimism that is shared by industry watchers. How did these two chaebols -- a South Korean term for family-owned conglomerates with government ties -- entrench themselves in India?

LG and Samsung's success is a function not just of what these two companies did, but also of what their competitors didn't do. The super-premium price and positioning of technologically superior Japanese brands like Sony and Panasonic made them inaccessible to most of the Indian market. On the other hand, lower-priced Indian brands offered old-generation products; they did not invest sufficiently in R&D because they were not able to launch new products quickly enough to amortize those costs.

"The other players in the consumer electronics space consider India a market for transactions, which is a short-term, unsustainable strategy," says Abraham Koshy, professor of marketing at the Indian Institute of Management, Ahmedabad. "On the other hand, LG and Samsung believe this is a market in which to do [long-term] business. Both have made a full commitment to India."

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Adds Pankaj Gupta, practice head (consumer and retail) at consultancy firm Tata Strategic Management Group (TSMG): "In any customer-facing business, your product, brand and distribution decide your success. Moreover, in the durables industry, after-sales service and product innovation are also key factors. These two companies leveraged their global R&D facilities to speedily bring in new products and offered more variety at attractive prices. LG followed this approach better than Samsung, which is why it is bigger than Samsung in India."

CASE STUDY

LG Electronics is the largest player in the consumer electronics market in India, which is worth Rs 35,000 crore per annum. And now it feels the need to take the brand to the next level. From an aggressive price warrior and technology provider, the brand will henceforth be communicated as a youthful enabler of life enrichment,  and of value-added products.For almost 10 years after it came to the country in 1997, LG had focused on the mass market. Initially LG’s objective was to create a footprint among the sizeable middle class, and other than its aggressive pricing, there was little to distinguish it from other consumer durable companies operating in India. Its product range choices also reflected the portfolio of its then rivals such as Whirlpool, Videocon, and Onida.

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Changing profile of Indian consumer durables marketThe Indian consumer durables market of today is very different, redefined primarily by the nimble Korean duo of LG and Samsung. Prior to their entry the consumer durables market in India was largely characterized by restricted product choice, very poor after-sales service, and distribution through limited multi-brand outlets. By the time the new millennium came around, LG and Samsung had started making their presence felt. Their priority was to establish an exclusive chain of company-owned and franchised outlets where consumer connects could be much more meaningful than in many of the poorly staffed multi-brand outlets that existed then. The other area which they felt required urgent attention was a service network which would not only ensure customer satisfaction, convenience, good word-of-mouth, and a favorable disposition towards repeat purchase, but could also become an additional source of revenue for the company. Finally, unlike Onida, Whirlpool, and Videocon which then had presence in limited product lines, the Korean companies expanded their product range to cover both home appliances such as washing machines, refrigerators, and microwave ovens as well as entertainment electronics such as music systems, VCD/DVD players and television sets. They wanted to dominate the entire chain of consumer durables for a household.Though LG and Samsung were initially perceived as similar in their strategic approach, the latter was much more interested in developing a higher-end product range targeted at the more

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affluent consumer. Samsung’s vision in this respect reflected a shrewd understanding of the changing profile of the growing prosperity in the Indian consumer market. In fact, LG realized that a  sizeable chunk of consumers over the years had moved up the value chain — a space well captured by rival brands like Samsung and Sony, which are also aggressively competing for market share. This shows up in the fact that LG is trailing Samsung in the LCD television market.Mind over matterResearch carried out by AC Nielsen has shown, according to LG Electronics Chief Marketing Officer LK Gupta, that people associate LG with quality and reliability. “This is because of our wide presence in the country and our service network. Most households have an LG product now,” adds he. However the brand is not perceived as youthful and trendy.Despite being the largest player in the consumer electronics market in India, LG now feels the need to take the brand to the next level. So LG is making a concerted effort to redefine itself as a youthful and up-market brand. Rivals like Samsung, Sony and Videocon too have turned aggressive. And India is a key element of LG’s global game plan. At the moment, India accounts for about 6 per cent of LG’s worldwide turnover. LG Electronics India Managing Director M B Shin wants to raise this to at least 10 per cent by 2012. By 2015, India will become the second largest contributor to LG’s revenue after the US and ahead of South Korea. It’s a tough challenge and the brand needs to keep the buzz alive to meet it.So far LG has been known in India for its home appliances and entertainment electronics products, such as audio and video-based products. The product lines where LG intends to make a big splash in India in 2010 are LCD televisions, and in a departure from its past focus, for mobile phones. For the latter, being able to appeal to youth will be a key determinant of success. LG’s advertising campaigns and its recent products like the Jazz LCD TV sets and Chocolate mobile phones reflect this thinking.The right matchShin admits that the average age of the LG consumer is above 30.The brand has low appeal among youth. As far as mobile phones are concerned, youth are attracted by music, gaming and

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file sharing options. LG’s lack of youth appeal is reflected in its performance in the mobile handsets market. In 2009, LG was able to increase its share from 4 per cent to 6 per cent in the GSM mobile phone market. While Nokia’s share went up from 70 per cent to 71 per cent during the period, Samsung doubled its share from 8 per cent to 16 per cent. All three were helped by the fall in the share of Sony Ericsson and Motorola. But Shin thinks that LG’s lack of contemporariness and up-market image is an issue that can be addressed – the question is whether the market is willing to see it that way. 

QUESTIONSQ1. Based on the track record of LG Electronics to date and Samsung India, would you classify their competitive strategy as that of a challenger or follower?Q2. For consumer durable products do you feel customer retention strategies have any value? In your assessment, has LG and Samsung undertaking any such initiative, based on information presented in the case?Q3. Based on an assessment of its product portfolio so far, identify the factors that could be responsible for LG not being perceived as a youth brand. LG wishes to associate brand ambassadors with their communications campaigns for their mobile phones. Suggest a suitable profile for youth-oriented brand ambassadors in terms of occupation, age group and gender.Q4.does H.R.M policies of both the companies has to do anything with the growth....? Give reason for your answer..?

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CONCLUSION

Regardless of the nature of the organization, it must identify the most important roles in the organization and then recruit, orient, train and organize people to effectively perform those roles.

The following link is to a resource that will help you establish suitable policies and procedures for compensating employees and for providing benefits in the most equitable and fair manner.

Development is more than conveying information to employees -- it's guiding and supporting them to evolve that information into knowledge that can be applied as skills in order to achieve the goals of the organization and its people -- and it's guiding and supporting those people to learn at the same time.

Human Resource Management is the organizational function that deals with issues related to people such as compensation, hiring, performance management, organization development, safety, wellness, benefits, employee motivation, communication, administration, and training.

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The research tell us that L.G is more in demand then Samsung and their policies are more acceptable then samsung’s H.R.M policies.

BIBLEOGRAPHY

WWW.GOOGLE.COM

WWW.WIKIPEDIA.COM

WWW.LGBUY.COM

WWW.LGE.COM

WWW.SAMSUNGINDIA.COM

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