LG needs to take more proactive strategies
There is a joke about what people would do if a snake made its way into the office. The answer for LG Group officials is that they would try to find out what Samsung did and do the same thing.
One can dismiss it just as a joke but what makes the story funny? This reporter thinks that the anecdote is humorous because there is some truth to the ``runner-up mindset’’ at LG.
To become a bellwether is a difficult mission because the leader has to brace for lingering uncertainties and downside risks in the market. But it can chalk up first-mover benefits when its plans succeed.
By comparison, followers can be relatively safe under the umbrella provided by trend-setters ― they can merely get on the business paths explored by trailblazers without having to shoulder big risks.
In Korea, the general belief has been that the nation’s No. 1 conglomerate ― Samsung Group ― has typically played the role of a front runner while LG, also one of the top five players, followed suit.
In particular, such a relationship has been dubbed between the cross-city rivals of the two group’s flagships, Samsung Electronics and LG Electronics, as observers point out.
``I have had a set of opportunities to work together with representatives of Samsung Electronics and LG Electronics, and learned that the organizational cultures of the two are totally different,’’ said an official of the Ministry of Knowledge Economy (MKE).
``Samsung members tend to have a clear vision on future prospects and are ready to make risky bets in the driver’s seat. But LG employees tend to be happy to be on the passenger side.’’
The MKE official said that such a ``runner-up mindset,’’ which he said ends up leading to ``me-too” strategies, undermines the growth potential of LG and its major subsidiaries.
``Samsung Electronics is currently the world’s largest maker of memory chips, flat-panel displays and mobile phones. By contrast, LG Electronics has lagged behind in all rival segments over the past few years,’’ he said.
``When Samsung was set to join hands with Google for handsets, LG was strongly recommended to enter into a business alliance with Apple ― advice to which LG turned a deaf ear.’’
His conclusion: the lack of proactive tactics has something to do with the runner-up DNA of LG Electronics, which has caused the company to struggle in the smartphone competition.
LG Electronics saw its position slide in the mobile phone market because the Seoul-based entity failed to catch up with market leaders Samsung and Apple.
``In the past, people thought Samsung Electronics was the nation’s primary company and LG Electronics was its closest competitor. But now few appear to maintain the same idea,’’ the MKE official said.
``LG should have tried to become No. 1 instead of resting easy on being in second place. The group is required to scrap the runner-up mindset to reemerge as an outright leader on the business scene.’’