Giraj Sharma, Director, Behind The Moon Consultants
The success of LGs and Samsungs in India as against the lukewarm performance of other global giants such as Panasonic, Hitachi, Canon and Toshiba in the consumer durables industry is fodder for many debates. Often we find these debates converging to the old track of the Koreans approach versus the Japanese. I don’t think there is an approach to business that can be termed as Korean or one which can be called Japanese. As the world becomes more complex, the integration of work cultures have actually brought us to a point where we can not attribute strategic abilities to the nation of the origin of the company or the location if its headquarters. Doing so would actually amount to trivialising the entire issue and would add a lot more complexities.
Let me present another argument in support of my claim. Consider this: Look at automobile sector and just look at what the so-called Japanese brands have achieved here in India. Look at the role Suzuki (as Maruti-Suzuki) has played in the four-wheeler market in India and look at what the Toyotas and Hondas of the world are now doing here. Check out what Honda has done with two-wheelers (as Hero-Honda and as Honda on standalone platform).
Well coming back to the consumer durables space, it took some time to Sony to realise that just a ‘Made in Japan’ label would not suffice to cut ice with the new Indian customer who was perhaps as discerning as his or her European or American counterpart. The urbane Indian customer has high aspirations, but at the same time he or she displays an earthy value consciousness. This is the customer that the auto majors cater to and that too aggressively. As of now, Sony seems to be addressing to this customer pretty well too and it is not snooty any longer to ignore the large consumer base that exists in the form of households with modest income levels, a segment that was perhaps a complete no-no earlier. Sony is a force to reckon with in the flat-panel-display market (LCDs/Plasmas/LEDs) and sells decent numbers of home-theatres and music component systems. The other brands from Japan ignored the rising aspirations of this value conscious generation of Indian customer. All that is expected to change soon though. These players are reworking their strategies now and looking at India in a manner that a market of this size and potential deserves. Product offerings, prices, advertising (selection of brand ambassadors included) are being tweaked with as new strategy constructs are being worked out in a never before manner.
Now let’s look at the other end of the spectrum. It comprises of LG and Samsung (Koreans particulalrly) who have worked their way up in the Indian market admirably. And unlike what most pundits will have us believe that the story of their dominance does not hinge on price competitiveness at all. As a matter of fact, both LG and Samsung now price their products reasonably high and almost at par with the likes of Sony or an American Whirlpool. These brands, and LG in particular, have got their basics right and bang on time. They have developed robust trade channels which they service very well and have a dynamic approach to their product portfolios – replacing successful models with newer and more technologically advanced versions. This is akin to something that a Toyota did in India with Qualis. They have invested in their people heavily and have empowered the teams sufficiently to ensure their response to the needs of the market (the trade and the consumer) is super-quick. They have huge infrastructure to demonstrate their commitment to this market and not only they have world-class manufacturing facilities to boast off, they have also developed and nurtured dedicated vendors who add efficiently to the value chain. But whatever it is, one thing is sure that we are in for some serious fun in the consumer durables space and the lot is more to come!
The success of LGs and Samsungs in India as against the lukewarm performance of other global giants such as Panasonic, Hitachi, Canon and Toshiba in the consumer durables industry is fodder for many debates. Often we find these debates converging to the old track of the Koreans approach versus the Japanese. I don’t think there is an approach to business that can be termed as Korean or one which can be called Japanese. As the world becomes more complex, the integration of work cultures have actually brought us to a point where we can not attribute strategic abilities to the nation of the origin of the company or the location if its headquarters. Doing so would actually amount to trivialising the entire issue and would add a lot more complexities.
Let me present another argument in support of my claim. Consider this: Look at automobile sector and just look at what the so-called Japanese brands have achieved here in India. Look at the role Suzuki (as Maruti-Suzuki) has played in the four-wheeler market in India and look at what the Toyotas and Hondas of the world are now doing here. Check out what Honda has done with two-wheelers (as Hero-Honda and as Honda on standalone platform).
Well coming back to the consumer durables space, it took some time to Sony to realise that just a ‘Made in Japan’ label would not suffice to cut ice with the new Indian customer who was perhaps as discerning as his or her European or American counterpart. The urbane Indian customer has high aspirations, but at the same time he or she displays an earthy value consciousness. This is the customer that the auto majors cater to and that too aggressively. As of now, Sony seems to be addressing to this customer pretty well too and it is not snooty any longer to ignore the large consumer base that exists in the form of households with modest income levels, a segment that was perhaps a complete no-no earlier. Sony is a force to reckon with in the flat-panel-display market (LCDs/Plasmas/LEDs) and sells decent numbers of home-theatres and music component systems. The other brands from Japan ignored the rising aspirations of this value conscious generation of Indian customer. All that is expected to change soon though. These players are reworking their strategies now and looking at India in a manner that a market of this size and potential deserves. Product offerings, prices, advertising (selection of brand ambassadors included) are being tweaked with as new strategy constructs are being worked out in a never before manner.
Now let’s look at the other end of the spectrum. It comprises of LG and Samsung (Koreans particulalrly) who have worked their way up in the Indian market admirably. And unlike what most pundits will have us believe that the story of their dominance does not hinge on price competitiveness at all. As a matter of fact, both LG and Samsung now price their products reasonably high and almost at par with the likes of Sony or an American Whirlpool. These brands, and LG in particular, have got their basics right and bang on time. They have developed robust trade channels which they service very well and have a dynamic approach to their product portfolios – replacing successful models with newer and more technologically advanced versions. This is akin to something that a Toyota did in India with Qualis. They have invested in their people heavily and have empowered the teams sufficiently to ensure their response to the needs of the market (the trade and the consumer) is super-quick. They have huge infrastructure to demonstrate their commitment to this market and not only they have world-class manufacturing facilities to boast off, they have also developed and nurtured dedicated vendors who add efficiently to the value chain. But whatever it is, one thing is sure that we are in for some serious fun in the consumer durables space and the lot is more to come!
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Source : IIPM Editorial, 2011.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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