LG business

EDUCATION HCMC

RECORDING AND FEEDING BACK ON LEARNER ACHIEVEMENT

Table of content

Task………………………………………………………………………….Page

1………………………………………………………………………………….1

1.1………………………………………………………………………..1

1.2………………………………………………………………………..2

1.3………………………………………………………………………..3

2………………………………………………………………………………….4

2.1………………………………………………………………………..4

2.2………………………………………………………………………..5

Task 1:

1.1 The engineering business functions of LG Electronics:

LG Electronics, Inc. (LG) is an innovative technology company leading technologies specialized in manufacturing consumer electronics, mobile communications and home appliances, with more than 84,000 employees in 112 field including 81 subsidiaries around the world . LG comprises of five business units - Home Entertainment, Mobile Communications, Home Appliances, Air Conditioning and Business Solutions.

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LG is one of the leading manufacturers of flat screen TV, the audio and video products, mobile phones, air conditioners and washing machines in the world. LG continues efforts to strengthen the presence of the LG brand and to maximize global profit growth. In particular, LG Electronics will focus on achieving growth and sustainable profitability in mobile communications and home entertainment to strengthen its leading position in the industry, while expanding the market his part in the field of home appliances, air conditioning and business solutions.

LG has four subsidiaries:

Home Entertainment Company:

Its products include: LCD TV, LED TV, 3D TV, Plasma TV, home theater, sound and audio-visual equipment. LG product has become the favorite products in the world's leading family entertainment by blending design and innovative style, price and quality.

Mobile Communications Company:

The product of mobile communications is Mobile (CDMA/GSM/3G) and mobile phone accessories. LG Electronics Mobile Communications is an innovator and trend leader in the global mobile communications industry. It grows up with highly competitive core technologies in the areas of display, battery and camera optics.

Home appliance Company:

In this aspect, LG focuses on products such as washing machines, refrigerators, kitchen appliances, vacuum cleaners, equipment installed. Because of good design and reasonable price, the LG products in this segment are very popular. They provide thoughtfully designed products that combine excellent performance with enhanced user convenience.

Air conditioning and energy solution Company:

Household air conditioners, commercial air conditioners, household solutions, compressors are the preferred LG products in this segment. Through energy efficient and eco-friendly technologies, heavy investment in R&D and effective marketing strategies, LG continues to consolidate its position.

1.2 The interrelationships between the different processes and engineering functions of LG Electronics:

Because of the flexibility in the market, LG has made remarkable achievements, typical in 2009, LG Electronics has received CES Innovation awards in 14 domains: LG wins 14 Design & Technology award were honored at the 2009 CES including the CES ' Best of Innovations ' in the Wireless Communication list for LG Dare (VX9700) and Home Appliances duo name for steam cleaning products: Steam Washer with All engine Cycle and Steam Dryer (WM3001H). LG has been honored in many competitive categories high, including video screens, Hearing Components / visual, home theater speakers, Computer Accessories, Appliances, and wireless communications. LG Electronics was recognized with the IF Design Awards in 7 domains: A total of 7 products received an IF Design Award. Includes Touch lighting phone ( KF510 ) , Phone Renoir ( KC910 ) , phone message ( KS - 360 ) , PDP TV ( PS80 , PS70 ) , DVD style ( DV4S ) , and France 4 door Refrigerator ( LMX25981 ) . LG Electronics has received reddot Design Award with 7 fields: A total of 7 products received reddot design award. Includes Bluetooth Headset ( MSB - 200 ) , DVD Style ( DVS 40 ) , Secret phone (KF750) , wrist watch phone (GD910) , Washer & Dryer Multifunctional Microwave (UD A2) and RAC (AS - W126BMS0) . In particular, Bluetooth speaker (MSB - 200) was voted "Best of the Best products". Most recently, at the fair MWC 2014, the LG G2 series, LG G Tablet 8.3, 5 and LG G Flex Nexus, LG was honored to receive the award "Manufacturer innovative mobile phone of the year".

LG has always sought coordination between design, quality and price. Rating into the psychology of customers, LG has always sought to give birth to the products with good design, good quality, which comes with a reasonable price. To do that, LG has constantly researching and applying new technology into their products. In addition, LG also interested in the distribution and warranty their products after sale to customers. Therefore, the product of LG is the first choice for those customers who have needs.

To having those advantages, LG is always leading companies in technology, it has always apply new technologies in their products. Therefore, the LG products are always preferred customers. E.g., Digital TV soft prices attract customer, because of going ahead in terms of technology, production costs TVs integrated DVB-T2 is not increased, so LG will not increase the price of TVs on the market. The model integrates TV DVB - T2 LG attracting customers and selling, thanks to price "soft" than other types of TVs. These include the following TV models: LB551T-32 inches, LB 561T - 39 inches; LB551T - 42 inches; LB561T - 47 inches; LB561T - 50inch. And TV is the flagship product of the company LG.

1.3 LG Electronics organizes work activities to meet the specifications and standards demanded by their products:

To get success in the market, LG has divided its products into four groups, and making the growing trend for each group.

Home Entertainment Company:

Home Entertainment is the group's core products. LG has become a top global player in home entertainment by blending stylish design and cutting-edge 3D and Smart TV technology in their flat-panel TVs, audio players, monitors, PC and other products. The company is always pushing the boundaries of technology to create feature-rich devices with stylish designs that meet the needs of global consumers. LG is committed to improving customers' lives with innovative home entertainment products led by its award-winning OLED TVs, 4K ULTRA HD TVs and CINEMA 3D Smart TVs featuring the new webOS platform. LG Home Entertainment Company is a major manufacturer of high-tech electronics with an ongoing commitment to developing next-generation displays. This gives LG a distinct advantage in this fast-moving industry. LG will continue to invest in future technology and redefine expectations for the future of entertainment, thus positioning itself as the No. 1 global player in the home entertainment market. Some of main product: LG CINEMA 3D Smart TV, LG Pentouch Smart TV, Smart TV Upgrader, Home Theatre System with 3D Sound Zooming, Projector, Security System

Mobile Communications Company:

LG Electronics Mobile Communications Company is an innovator and trend leader in the global mobile communications industry. LG is driving the evolution of mobile forward with its highly competitive core technologies in the areas of display, battery and camera optics and strategic partnerships with noted industry leaders. LG's consumer-centric products - including the flagship premium G Series models - incorporate unique, ergonomic designs and intuitive UX features that enhance the user experience. The company remains committed to leading consumers into the era of convergence, maximizing inter-device connectivity between smartphones, tablets and a wide range of home and portable electronics products.

Home appliance Company:

LG Electronics Home Appliance Company is a global leader in the home appliance industry, providing thoughtfully designed products that combine excellent performance with enhanced user convenience. The company's smart appliances offer consumers impressive energy and time savings along with greater health benefits. LG's innovative products, including refrigerators, washing machines, dishwashers, cooking appliances, vacuum cleaners, built-in appliances, and healthcare products are designed to resonate with consumers around the world.

Air conditioning and energy solution Company:

LG Electronics Air Conditioning & Energy Solution Company is a total heating, ventilation and air conditioning and energy solutions provider. The company offers a comprehensive range of customized HVAC products, including Residential Air Conditioning (RAC), System Air Conditioning (SAC), Air Quality and Building Management Systems (BMS). Through energy efficient and eco-friendly technologies, heavy investment in R&D and effective marketing strategies, LG continues to consolidate its position as a global leader in the HVAC and energy sectors.

Task 2:

2.1 Appropriate costing systems and techniques for LG Electronics:

The costing system for LG Electronics is process costing. Because, Process costing takes into account the cost of a continuous manufacturing process and apportions part of the cost of each process to an individual product. Process costing is used in industries that operate on a continuous basis, and LG is a company manufacturing electronic, so, the costing process completely fit for this company.

The costing techniques for LG Electronics is Activity-based costing (ABC). Because, Activity-based costing is an attempt to assess the 'true' cost of providing a product or service. Activity-based costing focuses on indirect costs (overheads). It does this by making costs that would traditionally be considered indirect into direct costs. In effect, it traces costs and overhead expenses to an individual cost object. Activity-based costing is particularly useful when the overhead costs associated with a particular product are significant and where a number of products are manufactured in different volumes. Activity-based costing is particularly applicable where competition is severe and the margin of selling price over manufacturing cost has to be precisely determined.

2.2 Measure and evaluate the impact of changing activity levels on business performance of LG Electronics:

The costing of some of products of home entertainment segment at the subsidiary LG Home Entertainment Company is as following the table below:

Note: costing in the table is calculated per unit, and is calculated by $.

Profit on per unit:

LCD TV: ($298.15 * 145%) - $298.15 = $134.17

Plasma TV: ($547.55 * 145%) - $547.55 = $246.4

LCD TV: ($635.35 * 157%) - $635.35 = $362.15

Security Camera: ($168.91 * 130%) - $168.91 = $50.67

Profit on products:

LCD TV: $134.17* 72,000 = $9,660,240

Plasma TV: $246.4 * 64,000 = $15,769,600

LCD TV: $362.15 * 57,500 = $20,823,625

Security Camera: $50.67 * 80,500 = $4,078,935

Through the calculation, we can see, the security cameras are manufactured products the most, but have the lowest profit. And vice versa, LCD TV production number at least, but it bring the most profit. Quantity of goods produced is inversely proportional to the profits. Therefore, if increasing the number of LCD TVs and reduce the number of security cameras will increase profits.

Core competencies of the company LG Electronics Home Entertainment, namely products of LCD TV and Plasma TV. Therefore, companies should increase TV products, and the production of other goods in small quantities or order.

Source: http://www.lg.com/ , Reading on March 29, 2014.