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DESCRIPTION OF CURRENT SITUATION:- 1. Company – Voltas Voltas is among India's leading air-conditioning, refrigeration and engineering services companies. Set up in 1954, its core competencies lie in air conditioning and cooling appliances and services. Voltas is India's largest supplier of engineering products and services for the textile machinery sector and is a major manufacturer of forklift trucks. It provides solutions in turnkey pumping projects for water, effluent and sewage treatment, and water pollution control. The company has ISO 9001-2000 certification and has executed projects in the Middle East, Southeast Asia, Central Asia, Africa and Europe. The company mainly operates in the following areas: Heating, ventilation and air-conditioning (HVAC) solutions: Includes the entire range of mechanical, electrical and plumbing services for a diverse range of applications, spanning office complexes, airports, malls, mercantile ships, atomic energy plants, IT parks, hospitals, etc. Cooling appliances: Design, manufacture and marketing of a range of air conditioners and water coolers for household and institutional use
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Page 1: Introduction

DESCRIPTION OF CURRENT SITUATION:-

1. Company – Voltas

Voltas is among India's leading air-conditioning, refrigeration and engineering servicescompanies. Set up in 1954, its core competencies lie in air conditioning and coolingappliances and services. Voltas is India's largest supplier of engineering products and servicesfor the textile machinery sector and is a major manufacturer of forklift trucks. It providessolutions in turnkey pumping projects for water, effluent and sewage treatment, and waterpollution control. The company has ISO 9001-2000 certification and has executed projects inthe Middle East, Southeast Asia, Central Asia, Africa and Europe.The company mainly operates in the following areas:

Heating, ventilation and air-conditioning (HVAC) solutions: Includes the entire rangeof mechanical, electrical and plumbing services for a diverse range of applications,spanning office complexes, airports, malls, mercantile ships, atomic energy plants, ITparks, hospitals, etc.

Cooling appliances: Design, manufacture and marketing of a range of air conditionersand water coolers for household and institutional use

Engineering products and services: Design, sourcing, installation, training,maintenance, etc of engineering products and services in the fields of textilemachinery, machine tools, mining and construction equipment and materials handlingequipment.

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Chemicals: Import and distribution of an array of industrial, specialty andpharmaceutical chemicals, industrial plastics and bulk drugs. The company alsoexports gelatine, ultramarine blue and agrochemicals.

JOINT VENTURES, SUBSIDIARIES, ASSOCIATESVoltas's subsidiaries include Metrovol FZE, VIL Overseas Enterprises BV, Voice AntillesNV, Weathermaker, Jebel Ali (Dubai), Simto Investment Company and Auto Aircon(India).LOCATIONVoltas has its head office in Mumbai and regional offices in several major cities in India.Its overseas offices are in Abu Dhabi (UAE), Hong Kong and Singapore. The companyhas factories at Thane (Maharashtra) and Pantnagar (Uttarakhand) in India.

Air Conditioner Industry

Thanks to the fabled Indian middle-class, the air-conditioner market is hooting up. Aninordinately hot summer has convinced the people the comfort of an air-conditioner and alarge number appears to have decided to take one home this year. Indeed, in the last fewthe years, the demand for air-conditioners from the household sector has been growingrapidly. Still, the demand growth is particularly noticeable, and was also the mostsignificant change in the industry during this period.According to some industry estimates, growth in volume terms has been 45-50 per centthis fiscal. But official statistics underestimate this and even report a decline in production.Nevertheless, by all accounts, including a study by the Confederation of Indian Industry(CII), there has been a noticeable jump in the demand for air-conditioners from thehousehold segment. After several years of relatively modest growth, which was totally atvariance with the latent potential of the product, the sharp growth in demand the summer

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past was very welcome for air-conditioner companies in many respects. One, it relativelyreduced their dependence on the corporate sector which is still the major demand driver.Corporate traditionally accounted for about 60 per cent of the total demand for airconditioners.But the burgeoning demand from the household segment could level the ratio in the near future.

One of the significant factors influencing the fortunes of the industry is the taxationstructure. The industry has come a long way from the time when the excise duty structurefavored only the unorganized sector. The steady fall in the excise rate in the 1990s helpedthe organized sector cope with the competition from the unorganized sector on morefavorable terms. Still, the unorganized sector continues to meet a sizeable proportion ofthe demand for non-ducted products.There was a significant change in the excise duty structure in 2000. The rate was raisedfrom 30 per cent to 32 per cent and this was expected to adversely impact the industry.However, the shift to a maximum retail price based system for the levy of excise appearsto have helped the manufacturers. In the MRP-based system, an abatement of around 40

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per cent was provided. This ensured that the impact of the increase in excise was minimalif not positive. Another major fiscal change is the removal of quantitative restrictions onimports. Imports are, however, not all that competitive considering the Customs dutystructure. An import duty of 44 per cent along with a countervailing duty, which isequivalent to the excise duty, is a large enough protection for the domestic companies.

Growth of AC market

The demand for non-ducted products grew steadily in the latter half of the 1990s. Thedemand for mini-splits has grown at a higher rate compared to window ACs because of thelower base. The demand switch from mid-sized ducted products, such as packaged ACs orducted splits, to mini-splits is also one of the reasons for the larger growth rates in thelatter segment.Another major reason for the growth in demand was the increased attention this productcategory has attracted in the recent past. Prices of air-conditioners dropped sharply in thepast few years because of competition. Most established players upgraded theirmanufacturing facilities, while fresh capacities were created by companies such asMatsushita (National brand). The marketing and advertisement spend by companies hasalso been on the rise.

With such investments flowing into building both the product and the brand, the expansionof the market was inevitable. As seen with other consumer durables, in the initial years ofincreased intensity of competition, both existing and new players invest more cash. Thisleads to a drop in prices, fuelling demand and the result is a much larger market. And thenon-ducted segment has attracted a lot of players in the last few years. The latent longtermdemand potential from Indian households has led to a number of multinationalcompanies making a beeline to set up base in the country.

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Major players in this product category are Carrier Aircon, Voltas and Blue Star. Brandssuch as Hitachi, Videocon and Godrej also have a sizeable presence. Among the recententrants, the Korean brands such as Samsung and LG have been able to make animmediate impact. Other brands that have positioned themselves for a share in this fastgrowingmarket are National, Fuji General and Daikin. On a much smaller scale,Whirlpool and Electrolux have entered the market to cater to household demand.Initially, the entry of new players did have an adverse impact on the established players --especially Voltas and Carrier Aircon. The reduced sales of window ACs by Carrier Airconand Voltas in 1999-2000 compared to 1998-99 is testimony to the adverse impact causedby the entry of the new brands, especially Samsung and LG. However, since the beginningof 2000-01, it does appear that the established players -- Carrier Aircon and Voltas -- havestarted to hit back. They may have even picked up some of the market shares they lost inthe earlier period. Again, initially, margins of established companies suffered as largeroutlays in selling and distribution failed to translate into superior sales growth. The trendnow appears to have been reversed.

MARKETING ANALYSIS

Marketing is a societal process by which individuals and groups obtain what they need andwant through creating, offering and freely exchanging products and services of value withothers or otherwise it is the process of planning and executing the conception, pricing,promotion and distribution of ideas, goods, services to create exchanges that satisfy individualand organizational goals.

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Marketing Strategy

Marketing strategy is a set of objectives, policies and rules that leads the company's marketingefforts. It is the marketing approach to accomplish the bread objective of the marketingapproach to accomplish the bread objective of the marketing plan. The various process ofmarketing strategy is given below.1. Selecting largest markets segmentation2. Positioning3. Product4. Price5. Place6. Promotion7. Research and development8. Marketing research

1. Market segmentation and selecting target market

Voltas has smartly created their market segment on the basis of the Cost sensitivitywithin consumers. Voltas has segmented their consumers as- Cost saving conscious- Cost saving plus appearance conscious- Affordability with ease

2. Positioning

Voltas has positioned themselves as a low on cost air conditioners with all the featuresof a good air conditioner.

3. Product

Voltas offers a range of air conditioners in the market, which includesSplit ACWindow ACPristine ACPanache ACCassette ACSlim line AC

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4. Price

Considering the customer segmentation and market positioning, Voltas has kept itsproduct prices competitive and lucrative for the economy minded consumers. Thecompany does operate in the higher segments but it ensures Price as their winningfactors, since they cannot compete over other value addition which is possible forother costlier brands.

5. Place

Voltas has ensured its product presence at almost all tiers of cities throughout thecountry through local retailers, exclusive showrooms, malls, electrical and electronicsuperstores etc.Since last year, the company has also started coming up with special retail franchiseewhere all the Voltas products are installed in working conditions so that the consumerscan check and feel the features of the product at the store. The location of suchinnovative stores is made such that it caters to majority of the areas within its radius.The after sale service shops are present in all major tier – A, B, C cities. Voltas haseven developed its own 24 hours dedicated customer care representatives to take alltypes of complaints, feedbacks and suggestions from customers.

6. Promotion

Voltas advertisement strategy clearly depicts their customer segmentation andpositioning within market. The advertisement is meant to emotionally bridge the gapwithin its consumers who feel that AC runs on electricity bill to electricity saving AC.The promotions done through magazines are smartly placed and designed to attract

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different income level customers who prefer AC with good exterior look and low onenergy bill.

7. Research and Development

Voltas uses the state of the art technology in its entire product range. With the solidback up of Voltas and dependable Indian label, Tata, Voltas AC continuously developsits product to match with all the compliance and customer requirement.

MARKETING STRATEGY

Marketing is not Euclidean geometry a fixed system of concept. Rather marketing is one ofthe dynamic fields with in the management arena. The market faces continually a newchallenge everyday and companies must respond to it positively. Therefore it is not surprisingthat new market idea keep surfacing to meet new market place challenges.The market process is applicable to more than goods and services. Anything related to marketincluding ideas, events, policies, prices and personalities comes under market strategy.However it is important to emphasize opportunity in the market through market strategy.Following strategies adopted by the organization._ Niche Marketing:Voltas has kept their marketing objectives for niche segments. The specific marketing effecthelps them staying focused with their product and customer demand_ Multi Prolonged Strategy:Voltas marketing strategy is a long term approach. They have not changed their stand sincethe inception of the brand and continue to promote the same value proposition of economicenergy consumption to their customer segments. This has helped them in creating a brandsentiment within masses and the featured product are helping them in getting into cutting edgecompetition._ Corporate selling at discount price to Employees:

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Voltas has adopted an amazing marketing technique of offering their AC product at reducedprice to the employees of TCS. This promoted the brand within in house.On the basis of marketing strategy an organization runs in the market. It is several types ofwhich makes helpful to increase sales and turnover of the organization.

MARKETING MIX

Target MarketProduct Price Promotion PlaceProduct variety List price Sales promotion ChannelsQuality Discounts Advertising CoverageDesign Allowances Sales forces AssortmentsFeatures Payment period Public relation LocationsBrand name Credit terms Direct marketing InventoryPackaging TransportSizesServicesWarrantiesReturns

MARKET POTENTIAL

The size of the air-conditioner industry in India is about Rs 2,000 crores. The industry can besub-divided into non-ducted and ducted products. The demand for non-ducted products --window air-conditioners and mini-splits -- comes from both households and corporate. Thedemand for ducted products -- central plants, packaged air-conditioners and ducted splits -- isonly from the corporate.A vast majority of middle-class Indian homes have traditionally battled the summer heat withthe help of fans or giant fan-driven water coolers which blast cool air. "All these yearscompanies have thought of an AC as an expensive luxury product but that's no longer true,”(The AC) has moved from its luxury status to a necessity item just like any washing machineor refrigerator. Air conditioner companies see India as a potential gold mine as it offers a

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winning combination of rising disposable incomes and AC ownership levels of just 1.1percent of households. And average prices for air conditioners in India have dropped by about20 percent over the past two years thanks to new companies entering the fray, making themmore accessible to consumers.With average incomes rising, AC penetration to follow the same trajectory as colour TVownership which is pegged at 18 percent of all households and whose sales have also beenspurred by falling prices. The dismal supply of power where outages, lasting hours, are a partof life in large swathes of India, could still throw a spanner into the bullish hopes of ACcompanies. The big problem is the quality of power supply and the cost of running an ACrunning costs are upwards of three rupees an hour depending upon electricity tariffs. Alsohurting growth is the unofficial "grey" market that accounts for close to 15 percent of thesales. But that is down from 70 percent a decade ago, as competition among establishedplayers and growing preference for brand name ACs among consumers who want after-salesservice has narrowed the gap to around 3,000 rupees from 7,000 earlier. It will shrink furtherand further as markets mature and consumers get educated.Indian air conditioner market is already flooded by players like Hitachi, Whirlpool, LG, Haier,Samsung, Voltas, Videocon and many more each competing on the basis of price and features.

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SAMSUNG

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2000-Present Pioneering the Digital Age

The digital age has brought revolutionary change – and opportunity – to global business, and Samsung has responded with advanced techno-logies, competitive products, and constant innovation.

At Samsung, we see every challenge as an opportunity and believe we are perfectly positioned as one of the world's recognized leaders in the digital technology industry.Our commitment to being the world's best has won us the No.1 global market share for 13 of our products, including semiconductors, TFT-LCDs, monitors and CDMA mobile phones. Looking forward, we're making historic advances in research and development of our overall semiconductor line, including flash memory and non-memory, custom semiconductors, DRAM and SRAM, as well as producing best-in-class LCDs, mobile phones, digital appliances, and more.

2010 Samsung Electronics Held the 4th Samsung Young Design Award in Italy Samsung Electronics Introduced Samsung Galaxy Tab to U.S. Market Samsung Mobile Display developed flexible AMOLED panel with four times clearer

WVGA resolution Samsung Electronics honoured with 37 CES 2011 Innovation Awards Samsung Electronics launched OMNIA 7, the first Windows Phone 7 smartphone Samsung announced that it will establish seven social enterprises over the next three

years to support the underprivileged in Korea Samsung Electronics began mass producing 20nm-class, 64-gigabit 3-bit NAND flash

memory Samsung Engineering won the Sabah (Malaysia) Oil & Gas Terminal Project Cheil Industries established the WPM (World Premier Materials) flexible display

business unit Samsung Electronics held the WCG 2010 Samsung Euro Championship at IFA 2010 Samsung Electronics held the “Samsung Mobile Solutions Forum 2010” in Taiwan Samsung’s brand value was ranked No. 19 in the world by Interbrand’s 2010 Best

Global Brands Samsung Electronics’ 3D LED 8000 & 7000 series TVs were selected as this year’s best

TVs by product testing magazines “Which?” in UK and “Test” in Germany Samsung Electronics won five European EISA Awards Samsung Electronics introduced Samsung Galaxy Tab to U.S. market Samsung Electronics’ TV won “Product of the Year” Award in Russia two years in a

row. Samsung Electronics qualified foundry industry’s first 32nm low power High-K Metal

Gate Logic Process and Design Ecosystem Samsung Electronics introduced high-speed 512GB SSD utilising new toggle-mode

DDR NAND memory

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Samsung Electronics captured five 2010 IDEA awards Samsung Fire and Marine Insurance entered the Chinese automobile insurance market Samsung Electronics hosts “Samsung Global Developer’s Day” for the Bada platform Samsung announced that it will invest $20 billion in new projects such as in eco-

friendly and health care sectors by 2020 Samsung Life Insurance went public with IPO in Korean Market Samsung Electronics launched World’s first 3D home theatre Samsung Electronics launched WAVE, the first smartphone based on Bada platform Samsung Engineering won $1.7 billion petrochemical plant contract in UAE Samsung Corning Precision Glass changed company name to Samsung Corning

Precision Materials Samsung Mobile Display developed the World’s largest 19-inch transparent AMOLED

display Samsung Electronics merged with Samsung Digital Imaging Samsung Heavy Industries won $500 Million contract for nine oil tankers Samsung Electronics announced the industry’s first multi-chip package (MCP) with

PRAM – for use in mobile handsets Samsung Electronics’ Android Phone “Moment” for the U.S won the “Best in Show”

award at 2010 CTIA Samsung Electronics was awarded 2010 Green Communication Award Samsung Electronics globally launched the World’s first “Full HD 3D LED TV” Samsung Electronics developed industry’s first 30-nanometer-class DRAM Samsung Electronics opened its Olympic Rendezvous @ Samsung (OR@S) for the

Vancouver 2010 Olympic Winter Games Samsung Electronics was ranked No. 1 in market share for French Door refrigerators in

the U.S. Samsung Electronics committed its sponsorship with the Singapore 2010 Youth

Olympic Games (Singapore 2010) as a Worldwide Partner Samsung C&T opened Burj Khalifa, the world's tallest building Samsung SDS merged with Samsung Networks Samsung Electronics began mass producing industry’s first 3D TV panels

2009 Displayed the world’s thinnest TV (6.5mm) at CES Launched major restructuring of its businesses Cooperates in creating a foundry with Xilinx of the US Developed the world’s first 40 nanometer DRAM Announced its “Blue Earth” solar-powered phone Released its V-line Crystal Rose LCD TV Samsung is found No. 1 in customer loyalty for 8 years consecutively by Brand Keys of

the USA Samsung Digital Imaging developed an innovative hybrid digital camera Built the world’s largest mobile phone as recorded in the Guinness Book of World

Records Received a “Quality Management Award” in Malaysia SADI, Samsung's design school, received the most iF Concept Design Awards for its

entrants Opened “samsungmobile.com” for its domestic customers Received an Excellence Award from ENERGY STAR of the US

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Released the world’s thinnest Blu-ray player Introduced Mobile WiMax into Malaysia Released the world’s first full HD camcorder with a 64GB SSD Sold more than 20 million full touch phones in shortest time ever Samsung took up a record high market share in LCD monitors Released the world’s first solar -powered mobile phone in India Released the “JET,” its new concept full touch screen phone Released its 120Hz 3D monitor Samsung took the No. 1 spot in the global digital sign market for the first time Sold 500,000 units of its LED TVs in 100 days since its release Opened the “visual mobile” era with its third generation full touch Haptic AMOLED Released the world’s first infrared video phone Became the first in the industry to acquire TCO 3.0 certification for its notebook

computers Announced its “Green Management” strategy Began mass production of the world’s first 40 nanometer DDR3 DRAM Released the world’s thinnest watch phone Developed the world’s lowest power 1GHz mobile CPU core Opened Samsung Application Store Seller Site Attained its most awards ever at IDEA 2009 Released its strategic smart phone, the OmniaⅡ Samsung's Yuna Haptic sold 500,000 units in record time Became the first in the industry to sell more than 10 million LCD TVs in the first half of

the year Samsung won the chairmanship of the 3GPP international standardization association Sold more than 5 million of its STAR full touch phones in 4 months Samsung’s Application Store officially opened Released the “Corby” full touch phone targeted at younger users Provided the WorldSkills Calgary 2009 Competition support Installed the world’s largest video wall in the US Released the first large capacity 16kg automatic washing machine in the domestic

market Samsung's “Mondi” WiMax terminal receives “Best Product” at the 4G Awards Entered the top 10 list in the world’s top 100 global brands Samsung was selected as one of the top 10 global businesses in responding to climate

change Samsung TVs took 50% of the Iranian market Introduced its R&D master system Released the “Giorgio Armani” smart phone Sold more than 5 million LCD panels for notebooks per month for the first in the

industry Developed a 240Hz 3D LCD panel Received the 2009 LCD TV Market Leadership Award Deploys its brand memory card business Reached the world’s first LTE terminal supply agreement Developed the world’s thinnest 3mm LED TV panel Samsung successfully tested WiMax global roaming Samsung’s LED TV won “TV of the Year” in Britain

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Declared its “Creative Company” strategy for the next 100 years Passed 4 trillion won in operating profits for its 40th year of foundation Introduced a “Creative New Employee” hiring system Developed the world’s first 0.6mm 8 chip package Sold 10 million STAR phones in six months of its release Announced its open mobile platform, “bada” Became the first in the industry to sell more than 4 million LCD panels for TVs per

month Supported the hosting of the WCG final Launched a VIP membership program Sold 50 million full touch screen phones in 2 years Samsung's printing solutions won product of the year in the US Announced “bada” its own smart phone platform Samsung successfully commercialised its 4th generation LTE terminal Restructured its organization and appointed Gee-Sung Choi as its new CEO Sales of Samsung “Yuna Haptic” phones broke the threshold of 1 million Became No. 1 in the US digital TV market for the 4th consecutive year

2008

Named Yoon-Woo Lee as a Vice Chairman & CEO of Samsung Electronics Launched OMNIA phone Completed establishing TV manufactory in Russia Kaluga Became the official sponsor of 2010 Guangzhou Asian Game Developed the world's first 2Gb 50 NANO Samsung takes No. 1 spot in U.S. cellphone market Opened Global Brand PR Centre ‘Samsung D'light' No.1 worldwide market share position for TVs achieved for the 9th quarter in a row

2007

No.1 worldwide market share position for TVs achieved for the seventh quarter in a row Developed the world's first 30nm-class 64Gb NAND Flash™ memory BlackJack bestowed the Best Smart Phone award at CTIA in the U.S. Attained No.1 worldwide market share position for LCD for the sixth year in a row

2006

Developed the world's first real double-sided LCD Developed the worlds' first 50nm 1G DRAM Unveiled 10M pixel camera phone Launched "Stealth Vacuum," a vacuum cleaner with the world's lowest level of noises Launched the worlds' first Blu-Ray Disc Player Developed 1.72"Super-Reflective LCD Screen

2005

Developed the largest Flexible LCD Panel Ranked 27th in "the World's Most Admired Company" of Fortune Became the official sponsor of Chelsea, the renowned English soccer club Released the world's first 7 mega pixel camera phone Developed the world's first OLED for 40" TV Became the official sponsor of Chelsea, the renowned English soccer club Developed the first-ever speech recognition phone

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2004

Produced the first wrinkle-free steam washer Sold more than 20 million cellular phones in the U.S Developed the world's first 60-nano 8GB NAND Flash memory chip Ranked top in mobile phone sales in Russia Released new PDP TV featuring the highest contrast ratio in the world Developed a 3rd Generation Optical Blu-Ray Disc Recorder Developed cellular phone chip for satellite DMB system Released 46" LCD TV for the first time in the world

2003

Samsung brand value ranked 25th in the world by Interbrand Ranked 5th on the "Most Admired Electronics Company" list released by the Fortune

Magazine Released the first HD DVD combo

2002

Development of the 54"TFT-LCD, the largest digital TV monitor in the world Launches PDP-TV, the slimmest in the world Launch of colour mobile phones in which the new concept UFB-LCD is introduced Launched new high-definition TFT-LCD colour cellular phone

2001

Ranked No. 1 of world's Top 100 IT Companies by BusinessWeek Unveils 16 Chord Progression Melody Phone Begins Mass Production of 512Mb Flash Memory Device Unveils Industry's First Ultra-Slim Handset Develops World's first 40 inch TFT-LCD

2000

Unveils TFT-LCD with Record-breaking Definition Launches PDA phone Samsung Olympic Games Phone selected as the official mobile phone of the Sydney

2000 Olympic Games TV Phone and Watch Phone Make Guinness Book of World Records Unveils the Worlds Fastest Graphics Memory Chip Samsung Electronics and Yahoo! Form Strategic Alliance Develops Unique All-in-one DVD Player Developed world's first 512Mb DRAM Developed world's first 512Mb DRAM

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Vision 2020

As stated in its new motto, Samsung Electronics' vision for the new decade is, "Inspire the World, Create the Future."

This new vision reflects Samsung Electronics’ commitment to inspiring its communities by leveraging Samsung's three key strengths: “New Technology,” “Innovative Products,” and “Creative Solutions.” -- and to promoting new value for Samsung's core networks -- Industry, Partners, and Employees. Through these efforts, Samsung hopes to contribute to a better world and a richer experience for all.

As part of this vision, Samsung has mapped out a specific plan of reaching $400 billion in revenue and becoming one of the world’s top five brands by 2020. To this end, Samsung has also established three strategic approaches in its management: “Creativity,” “Partnership,” and “Talent.”

Samsung is excited about the future. As we build on our previous accomplishments, we look forward to exploring new territories, including health, medicine, and biotechnology. Samsung is committed to being a creative leader in new markets and becoming a truly No. 1 business going forward.

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The trajectory of LG Electronics, its growth and diversification, has always been grounded in the company ethos of making our customers' lives ever better and easier-happier, even-through increased functionality and fun.

Since its founding in 1958, LG Electronics has led the way to an ever-more advanced digital era. Along the way, our constantly evolving technological expertise has lent itself to many new products and applied technologies. Moving forward into the 21st century, LG continues to on its path to becoming the finest global electronics company, bar none.

LG Electronics 50-year History

1958 Founded as GoldStar 1959 Produce Korea's first consumer radios

1998 Introduce the 60-inch plasma TV 1999 Forge joint venture with

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Philips 2003 Enter UK GSM handset market 2005 Develop 3G UMTS

DMB handset 2007 Launch HD disc-player and drive

1958 GoldStar (today’s LG Electronics) established

1959 Korea’s first radio produced

1965 Korea’s first refrigerator produced

1966 Korea’s first black & white TV produced

1968 Korea’s first air conditioner produced

1969 Korea’s first washing machine produced

1974 GoldStar Communications went public

1977 Color TV produced

1978 Exports surpassed US$100 million, a first for Korea’s electronics industry

1980 First EU sales subsidiary in Germany (LGEWG) established

1982 Color TV plant established in the US in Huntsville, Alabama

1984 Sales surpassed 1 trillion Won

1986 European-standard VCR plant established in Germany

1989 Sales subsidiary and a joint production subsidiary established in Thailand

1990 Ireland-based design technology center established

1993 With the establishment of Huizhou subsidiary in China(LGEHZ), marketing in China took full swing

1995 Company name changed to LG Electronics and US-based Zenith acquired

1997 40-inch Plasma TV and the world’s first IC set for DTVs developed India production subsidiary (LGEIL) established

1998 World’s first 60-inch Plasma TV developed

1999 LG.Philips LCD established

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2000 LG Information & Communications merged The world’s first Internet-enabled refrigerator launched Global sales of refrigerators reached the number one position

2001 Asynchronous IMT-2000 equipment commercialized The world’s first Internetenabled washing machine, air conditioner, and microwave oven launched LG.Philips Displays, a joint venture with Philips established

2002 Under the LG Holding Company system, the Company spun off to LG Electronics (LGE)& LG Electronics Investment (LGEI) The first home network system commercialized in the global market

2003 World’s first synchronous-asynchronous IMT-2000 mobile phone developed The world’s first 76-inch Plasma TV developed CDMA mobile handsets took the largest share in the US and world CDMA market Launched the world’s first Super Multi DVD Rewriter

2004 EVSB, the next-generation DTV transmission technology, chosen to be the US/Canada DTV transmission standard by the US ATSC All-in-one LG 55-inch LCD TV, the world’s first and largest among LCD TVs, commercialized The world’s largest and first 71-inch Plasma TV commercialized The world’s first terrestrial DMB phone developed Developed Wireless Speaker Home Cinema System

2005 The world’s first DMB notebook commercialized The world’s slimmest TV commercialized The world’s largest 102-inch Plasma TV developed LG and Nortel Networks agreed to establish a joint venture for telecommunication network equipment Satellite-based DMB phone commercialized The largest share seized in the global CDMA market

2006 Launched the LG Shine, the second handset in the Black Label Series Globally launched the steam washing machine and interactive TV refrigerator Developed the world's first 100-inch LCD TV Launched the world's largest Full HD 102-inch Plasma TV (1080p) Developed the world's first dual-format high-definition Disc Player& Drive

2007 Launches the industry's first dual-format, high-definition disc player and drive Launches 120Hz Full HD LCD TV Demonstrated the world-first MIMO 4G-Enabled technologies with 3G LTE Won contract for GSMA's 3G campaign

2008 Introduces new global brand identity: "Stylish design and smart technology, in products that fit our consumer's lives."

LG Electronics continues to pursue its 21st century vision of becoming a worldwide leader in digital—ensuring customer satisfaction through innovative products and superior service while aiming to rank among the world’s top three electronics, information, and telecommunications firms by 2010.

On our way, we hold tight to a philosophy of "Great Company, Great People," underscoring our belief that only great people can create a great company.

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LG strives for greatness in what we've identified as our three core capabilities: Product Leadership, Market Leadership, and People Leadership—each strength a key part of realizing our growth strategies for "fast innovation" and "fast growth".

LG Electronics is pursuing the vision of becoming a true global digital leader, attracting customers worldwide through its innovative products and design. The company’s goal is to rank among the top 3 consumer electronics and telecommunications companies in the world by 2010. To achieve this, we have embraced the idea of “Great Company, Great People,” recognizing that only great people can create a great company.

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Core Capabilities

Product leadership refers to the ability to develop creative, top-quality products, using specialized new technologies.

Market leadership refers to the ability to achieve top ranking, worldwide, thanks to a formidable market presence in countries across the globe.

People leadership refers to the market dominance achieved by selecting and nurturing talented team players able to internalize and execute innovation across the board.

Growth Strategies

Fast innovation calls for securing a competitive edge over the competition by setting—and meeting—the highest of goals in all realms of innovation, by at least 30%. This applies to new-product development and unveiling, innovation in design and technology—as well as product sales, market share, and corporate value.

Fast growth is the result of implementing strategies designed to swiftly expand market size and earnings, with and eye toward monetary growth.

Corporate Culture

Though a company can boast stellar management strategies and an outstanding and talented pool of employees, it is still necessary to adopt a corporate culture that can fully unleash the power of these capabilities.

No to “No’s”

At LG, we try to meet every road block with an alternate route—brainstorming and working harder before saying “no.”

‘We’ not ‘I’

LG’s embraces a code of strong teamwork—encouraging pride in achievement as goals are met by many working together as one.

Fun Workplace

LG’s workplace is one where the individual’s creativity and freedom are respected, and work is made fun.

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LG marketing strategy

Global and regional digital leader, LG Electronics, has announced a new marketing initiative to ensure its home appliance business rakes in USD14 billion in global sales by 2007 to become the world's largest appliance manufacturer.

David Park, vice president and head of overseas sales and marketing, LG Digital Appliance Company.

LG Electronics RSS feed

LG becomes world's largest PDP panel producer LG Express Notebook series set to harness Wi-Fi revolution LG introduces mini notebooks LG to unveil revolutionary technology at Gitex 2005 New age for robotic vacuums with LG Electronics Roboking LG set to lead plasma display segment

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LG launches GSM L3100 for fun seekers LG calls for reduction in GCC power consumption LG showcases the latest in mobile entertainment LG introduces energy conservation system for air conditioners

LG's new strategy aims to focus on the premium segment of the market that fetches greater margins as opposed to volumes. The company claims this will benefit its consumers, channel partners and stakeholders as it focuses on products that drive rapid growth and lead in their brand category to create value for customers. Market studies indicate the demand for luxury consumer goods in the Middle East is burgeoning as a result of the high per capita income and quality savvy consumers with increased purchasing power. LG enjoys high brand recognition in the region, it is the second most recognised electronics brand with 55.7 per cent unaided brand awareness according to the 2004 Gallup brand equity index survey, which represents high purchasing probability for its premium products.

"Even though LG has strong brand awareness in the region, the sales of our premium products in the Middle East need a boost. LG is already the world's top selling brand in terms of air conditioners, microwave ovens and canister vacuum cleaners. The goal of LG's Digital Appliance Company is to become the number one brand worldwide in the home appliance sector by 2007 and increase global sales to US$ 14 billion. We are focusing our production and marketing efforts on high end products in the appliances market. To keep pace with our growth, we now need to fine tune our marketing strategy and focus on premium products," said David Park, vice president and head of overseas sales and marketing, LG Digital Appliance Company.

To succeed in its premium marketing efforts, Park said LG would concentrate on staying ahead of the technology curve and develop products that deliver high value to consumers. Park also announced a new channel marketing strategy to reward its distributors and build on its channel successes in the region. LG has developed a CRM program called the 'Diamond Club' to drive the sales of premium products. Sustaining one market price in all stores, maintaining a price gap with main competitors to retain a premium image, unique promotions for target customers and well-trained customer care executives are features of this channel initiative.

"We are committed to investing marketing and training resources to educate the channel on the benefits of delivering cutting-edge mobility, digital convergence and appliances to customers in these markets," said Park.

Focusing on the premium segment in the appliances market will help LG overtake competitors such as Whirlpool of the USA and Sweden-based Electrolux. In the Middle East, LG is aiming for overall regional sales of US$ r2.8 billion this year, a 34 per cent growth over 2004. Since 1999, LG's Digital Appliance Company has been posting over 20 per cent growth in sales every year compared to the four to five per cent average growth rate in the global home appliances industry.

"To date, our major revenue earners have been commercial and residential air conditioners, microwave ovens, refrigerators, washing machines and vacuum cleaners. We intend to continue to build on these core product categories as well as to focus on future sources of growth in areas such as central air conditioners (CAC's), built-in appliances, ovens, dishwashers, and plasma lighting

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systems," Park added.

Around 48 representatives from LG's regional distribution network in the UAE, Qatar, Bahrain, Oman, Kuwait, Yemen, KSA, Iran and Turkey participated in the forum.

BRAND COMPARISON

COMPANY: L.G. ELECTRONICS

Punch lines: “Life’s good”, “Think about tomorrow”

Basis for campaign: Brand name ,Linking happiness with health ‘happiness in every breath’, Its

worlds no one manufacture of ac.

Features: Neo plasma health filters, Gold fins, Chaos logic, Energy savers, Jet cool, Anti bacterial

filters

Promotional schemes: 1 + 4 years warranty

Type of ac Capacity (in tons )

Window ac 1, 1.5 and 2

Split ac 1, 1.5 and 2

Wall mounted 1,1.5 and 2

Multi split 2,3, and 4

Floor standing 2,2.5 and 3

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COMPANY: SAMSUNG

Punch lines:“Breaths life”

Basis for campaign:

Brand name, Clean and purified air “help your child breath free”, Own compressor

Features: Turbo power, Quick power, Optimizer, Bio health plus, Tropical Rotatory compressor,

Compact design, Bionizer, Silver Nano health system

Promotional schemes: 1 + 4 years warranty for corp., 0% interest without any files changes

Types of ac Capacity (in tons)

Window ac 1,1.5 and 2

Split ac 1,1.5 and 2

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COMPANY: VOLTAS

Punch lines: “Ac’s with IQ”

Basis for campaign: Old brand, AC with IQ, Sleek & streamlined body

Features : Vertis Power saver mode, air filter, Timer, Uniform cooling, Burst proof capacitor,

Vitamin-c filter, Blue fin technology

Promotional schemes: 1 + 4 years warranty, 0% finance available

Types of ac Capacity ( in tons)

Vertis

Window ac 1,1.5 and 2

High wall split ac 1,1.5,2 and 3

Vectra

Window ac O.75,1,1.5 and 2

High wall split ac 1,1.5,2 and 3

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Air Conditioner Industry:

The size of the air-conditioner industry in India is about Rs 2,000 crore. The industry can be sub-

divided into non-ducted and ducted products. The demand for non-ducted products window air-

conditioners and mini-splits comes from both households and corporate. The demand for ducted

products central plants, packaged air-conditioners and ducted splits is only from the corporate.

Corporate traditionally accounted for about 60 per cent of the total demand for air conditioners.

Corporate sector is still the major demand driver in this industry but because of the burgeoning

Indian middle class there has been a noticeable jump in the demand for air-conditioners from the

household segment

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Air-Conditioner in India

Product Segment Size (Rs. in crores)

Window and Split 900 (Approx.)

Central and Chiller 600 (Approx.)

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The domestic Window Air-conditioner has been growing at the fastest rate but this has been

accompanied by increasing competition leading to low profit margins. Profits in this segment are

driven by volume growth.

Against most developing countries, Indian market is Window A.C. oriented - both commercially as

well as household. Considering the low penetration of A.C.s, the segment is likely to grow, at least

for the next 5 to 10 years.

An important player in the Window A.C. segment is the unorganized sector. Current market share

of organized and unorganized players are 60% and 40% respectively.

The market for air-conditioners was earlier dominated by the unorganized sector as a result of high

excise duty. This sector accounted for around 55 to 60% of the market share only 2-3 years ago.

The proportion used to be 30:70 during 91-92. Then lowering of excise duties from 110% to 40%

favored the organized sector by narrowing the price gap e.g., a 1.5 ton air-conditioner which costs

Rs.45,000/- in 91-92, now costs below Rs. 30,000/- in the organized sector against Rs. 24,000/- in

the unorganized sector. This has led to the organized sector entering into the unorganized sector's

share and also due to brand awareness on part of the customers.

Industry Segments

Volume (Units) Value (Rs. in

crores)

Window Air-conditioner 3,00,000 900

Split Air-conditioner 75,000 300

Package Air-conditioner 30,000 290

Total 4,05,000 1490

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History of Air Conditioners

Air conditioning as we know it today is a rather new technology although different form of cooling

air and dehumidifying the air has been around for centuries. The ancient Romans used aqua duct

water to circulate through the walls of the wealthiest homes. This is just one example of ancient air

conditioning.The Chinese were also were also obsessed with cooling the air through water and

wind. They used various methods to cool their interior buildings and stay cool during the hot

months. In the 1800's one man came close to inventing what is similar to modern day air

conditioning.

In 1820 British Inventor Michael Faraday discovered that ammonia could chill the air when

compressed and liquidized and then allowed to evaporate. In 1841, John Gorrie, a medical doctor

discovered that he could use compressor technology to create ice to cool his patients rooms in

Florida. This discovery gave Gorrie the great aspiration of inventing the first air conditioning unit.

He came very close. His first pro type leaked and was unsuccessful. He secured funding and his

patent was approved in 1851. His funding partner died and he lost the money to see his dream

realized. He later died in 1855 and with him his vision of indoor air conditioning died as well for the

next 50 years.

The commercially available of air conditioning applications started based on the need to cool air for

industrial processes than for personal comfort. The first electrical air conditioning was invented by

Willis Haviland Carrier in the year 1902. He was also known as the Father of Modern Air

Conditioning. His invention was designed to improve the manufacturing process of a printing plant.

By controlling the temperature and humidity of the plant, the processes were made more efficient

as the paper size and the ink alignment were consistently maintained.

The Carrier Air Conditioning Company of America was established by him to meet the demand of

better productivity in the workplace.

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Today, Carrier Corporation is the biggest air conditioner manufacturer and marketing corporation

in the world in central air conditioning.

The term air conditioning was first coined by Stuart W. Cramer of Charlotte, North Carolina in 1906.

Cramer was trying to create ways to add moisture to the air in his textile plants. Cramer used the

term Air conditioning in a papers filed to the patent office for his invention of a water conditioning

unit which was required to control the humidity in textile plants. Willis Carrier took the term air

conditioning and put it into his companies name as he used evaporative cooling to provide a

cooling effect in the air.

The first air conditioners proved to be hazardous to human’s health when the toxic gases leaked.

The use of ammonia, methyl chloride and propane. These toxic, flammable gases tended to leak

causing fatal results. In 1928 Thomas Midgley, Jr. was the first to create an air conditioner that used

Freon. This was found to be much safer for humans but had disastrous effects to the environme