‘Oman is a bipolar market’

Akshay Bhatnagar catches up with Ki Wan Kim, President, Middle East & Africa, LG Electronics Inc., who was on his maiden visit to Oman

Ki Wan Kim, who moved in as the new President based out of Dubai for LG Electronics in the Middle East (ME) & Africa, was completely surprised by the Sultanate of Oman on his first trip here after assuming the office in February this year. “To be honest, Oman is much better than I had anticipated. Muscat is very clean and beautiful. I’ve not seen such clean roads anywhere in the ME. And Omanis are one of the most friendly people in the Arab world,” he said.

What brought him to Oman? “I’m here to participate in the ongoing celebrations to commemorate LG’s ten successful years in the Sultanate. Through our local partners OTE Group, I have also launched the new sleek and trendy LG Chocolate mobile phone in Oman,” he informed.

Even though he’s fairly new in his position, he is familiar with the ME and Africa as he was handling the global operations for certain product categories within LG fold earlier. He realises the importance of the region in LG’s quest to become one among the top three electronics, information and telecommunications firm in the world by 2010. Sharing LG’s performance and vision for the region, Kim said, “With windfall oil revenues, many countries in the region are developing their infrastructure rapidly and the lifestyle of the people is also improving fast. This trend has opened a big market for us in the corporate and consumer segments alike.”

He added further, “The ME & Africa currently contributes 7 per cent of LG’s global revenues (US$23,217 million in 2005). For the last decade, our operations are growing by almost 15-20 per cent on an annual basis. But last year our growth rate dropped to single digit. The main challenge came on the front of the mobile business, as it didn’t grow as per our expectations.”

Vision 2010 on Track
With a negative growth rate in global sales in 2005, LG faced a setback towards achieving its Vision 2010. Kim accepted the fact that 2005 was a bad year for LG and 2006 is also going to be difficult and challenging but claimed that the company is on track to achieve its Vision 2010. He said, “In terms of geographical markets, our financial performance was affected mainly due to adverse market conditions in markets including Russia and China. Product wise, we moved well in all product segments except the mobile business. We are the number one player in CDMA based mobile phone category globally but we need to catch up in the GSM category which comprises the major chunk of the mobile market. We are the inventor of 3G but it is an expensive technology for the consumers and consumed mainly in the developed markets like Europe. ”

He added, “Our resources and priorities are focused towards growing our mobile business. As part of this exercise, I’m here in Oman to launch and promote the new LG chocolate mobile phone. It is an important step in the direction to transform and place LG’s mobile brand in the same league as the market leader Nokia in the consumer mindset. Every month from now on we are going to launch a new mobile product in the market to maintain the momentum.”

On the change in the company’s management strategy, he said: “LG has shifted its strategy and policy by implementing the ‘Blue Ocean Management,’ which we believe will ensure our resounding success. Blue Ocean Management is a creative new style of management which opens new markets and invents new methods and systems that will maximize management efficiency. In other words, this is a management strategy for a whole new paradigm in which we will compete in the areas that we have to, while developing a blue ocean area which does not have any competition thus creating more profit. To this end, this year, we will focus on customer oriented management, strong technological competitiveness, and operational excellence.”

Networking and engineering are the buzzwords at LG’s research & development and design labs. Kim informed, “From being just a device supplier, we are positioning ourselves as a total networking solutions provider. For example, we provide total electronics and information products networking solutions for an intelligent home. This kind of specialized solutions is in great demand among the design consultants and architects. The regional market here has a good potential for such solutions which are currently more in demand in highly developed markets.”

He also emphasized on the growing trend for personalized and individualistic products. He elaborated: “Ten years back, people used to like listening to music with their friends and families. But today people like to listen to music on their own personalized MP3 players. Individualized products are in demand now. To develop new products to meet consumer’s penchant for personal consumption gadgets is a focus area for us.”

Regional Market

On the consumer characteristics of the regional market, Kim said, “The markets here are bipolar. Take Oman for example. There is demand for high end of the spectrum products and simultaneously, there is a constant requirement for low end products too. Take TV segment for example. On one hand, there is demand for big size Plasma TV and on the other hand, people are looking at 20 inch conventional CRT based TV sets too. A company needs to meet the demand of both the segments.”

Despite claiming that the region is a focus area for growth, not many electronics and information products manufacturing companies are coming forward to set up their R&D centres in the region to develop new technologies. Kim agreed and clarified on the reasons behind this: “It is difficult to find good local talent in most parts of the region to establish and manage a world class R&D centre here. That’s why we look at countries like India where there is large pool of skilled workforce. In this age of cutthroat global competition, we have to innovate at a very fast pace efficiently. The states in this region have to benchmark themselves with countries like India and China and take steps accordingly to encourage research and design development activities which could prepare and produce new technologies and products which are not just useful in this region but could be used globally.”

On LG’s performance in Oman, Kim said, “LG has been doing very well with OTE Group as its partners in progress. They have a sound long term vision which is in alignment with LG’s business growth strategy.”

LG Chocolate Mobile Phone

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