Lock & Lock IME 20051164 Junghee Pyeon IME 20051206 Wootaek Hwang IME 20051214 Joonhyung Ahn CONTENTS 1. Company & Product Overview (1) Company Overview (2) Product Overview 2. Business Analysis (1) (2) (3) (4) SWOT Analysis TOWS Analysis Five Force Analysis BCG Matrix (1) (2) (3) (4) (5) (6) (7) (8) Collaboration Strategies Sources of Innovation Patterns of Innovation Types of Innovation Dominant Design Timing of Entry Choosing Innovation Projects Protecting Innovation 3. Strategic Management of Innovation CONTENTS 1. Company & Product Overview (1) Company Overview (2) Product Overview 2. Business Analysis (1) (2) (3) (4) SWOT Analysis TOWS Analysis Five Force Analysis BCG Matrix (1) (2) (3) (4) (5) (6) (7) (8) Collaboration Strategies Sources of Innovation Patterns of Innovation Types of Innovation Dominant Design Timing of Entry Choosing Innovation Projects Protecting Innovation 3. Strategic Management of Innovation 1. Company & Product Overview (1) Company Overview Since its establishment in 1978, Lock&Lock Co. Ltd has been grown as a global company that exports its products (Lock&Lock containers with new-concept four side interlocking system) to more than 100 countries worldwide. 1. Company & Product Overview (1) Company Overview Export Destinations 1. Company & Product Overview (1) Company Overview Financial Status Sales 2007 Million Won 2008 2009 2010(half) Operating profit 2007 2008 Million Won 2009 2010(half) Lock&Lock has been grown very fast since its establishment, and aim to achieve 10 trillion Won sales in 2020. 1. Company & Product Overview (2) Product Overview (1/3) Product Type Plastic Container Glass Container 1. Company & Product Overview (2) Product Overview (2/3) Bis-free Container Many customers have concerns that plastic containers make environmental hormones. Glass containers also have some disadvantages such as heavy weight, fragileness, and so on. Lock&Lock developed a new technology container called Bisfree, which is lighter than glass and doesn’t make any environmental hormones. 1. Company & Product Overview (2) Product Overview (3/3) Product Characteristics (1) 4-side interlocking system (2) Hollow silicon packing The patented technology of interlocking all four sides and the hollow silicon packing are utilized for the products. CONTENTS 1. Company & Product Overview (1) Company Overview (2) Product Overview 2. Business Analysis (1) (2) (3) (4) SWOT Analysis TOWS Analysis Five Force Analysis BCG Matrix (1) (2) (3) (4) (5) (6) (7) (8) Collaboration Strategies Sources of Innovation Patterns of Innovation Types of Innovation Dominant Design Timing of Entry Choosing Innovation Projects Protecting Innovation 3. Strategic Management of Innovation 2. Business Analysis (1) SWOT Analysis Strength • Powerful brand image Weakness • No other business models • High market share • Patents • Know-how • R&D • Big market(ex. China, U.S.) SWOT • Many copies & Fake products • Global brand awareness • Various airtight products • Modern life style Opportunities Threats 2. Business Analysis (2) TOWS Analysis S-O • By using know-how, diversify products • By using global image, target global market • By using brand image, grow the market share S-T • Concentrating on “high quality and good brand image” through various promotions & campaign TOWS • Prepare for new business models, although it is not profitable right now. W-O • Protecting innovation restrain fake product, allowing Lock&Lock diversify the business model. W-T 2. Business Analysis (3) Five Forces Analysis High Low Bargaining power of suppliers • Raw materials are easy to buy Potential Entrance • Existing Korean companies • Foreign low quality & low price container companies Existing Rivalry • Copies • KOMAX, GLASSLOCK, etc Threats of substitutes • Tradition containers Bargaining power of buyers • Many copies with low price. But, because of brand image, Rock&Rock can sell high price. 2. Business Analysis (4) BCG Matrix Star Question Mark Ceramic or glass airtight container High Market Growth Water bottle and Thermos Cooking equipment Plastic airtight container Kitchen utensils Living box Low Cash Cow High Dog Middle Market Share Low CONTENTS 1. Company & Product Overview (1) Company Overview (2) Product Overview 2. Business Analysis (1) (2) (3) (4) SWOT Analysis TOWS Analysis Five Force Analysis BCG Matrix (1) (2) (3) (4) (5) (6) (7) (8) Collaboration Strategies Sources of Innovation Patterns of Innovation Types of Innovation Dominant Design Timing of Entry Choosing Innovation Projects Protecting Innovation 3. Strategic Management of Innovation 3. Strategic Management of Innovation (1) Collaboration Strategies (1/10) Strategic Alliance (1/3) Lock&Lock made a strategic alliance with partners which needs high quality air-tight containers such as tea, ice cream and so on. The company provide customized air-tight containers to the partners Ex1) Tea container In 2004, Damtuh, a tea maker, launched lemon tea and peach tea with Lock&Lock container. More than 10,000 products were sold just within one week after launching it. 3. Strategic Management of Innovation (1) Collaboration Strategies (2/10) Strategic Alliance (2/3) Ex2) Tea container In 2011, Baskin Robbins 31, an ice cream maker, started a promotion event that if a customer buy an ice cream which is bigger than quartersize, the company provide Lock&Lock container with just 1,000 KRW. 3. Strategic Management of Innovation (1) Collaboration Strategies (3/10) Strategic Alliance (3/3) Ex3) Doosan Bears Tumbler In 2011, Doosan Bears, a baseball team, made tumblers with Lock&Lock’s technology. 3. Strategic Management of Innovation (1) Collaboration Strategies (4/10) Joint Venture Since air-tight container market is red ocean, Lock&Lock needed to enter a new market but it had no speciality in other fields. So they made a joint venture with companies in other fields. Ex) Zen&Lock In 2006, Lock&Lock made a joint venture with Zen Korea, a ceramic container maker, to produce ceramic air-tight container. The joint venture got 400,000 pieces order right after it launched ceramic air-tight Kimchi container. 3. Strategic Management of Innovation (1) Collaboration Strategies (5/10) Outsourcing Ex) Design Outsourcing of Speed Cook In 2011, Lock&Lock launched Speed Cook, a lamen cooker. Since Lock&Lock’s core competency is manufacturing technologies, not designs, the company outsourced this design function to Motto Design, a design company. 3. Strategic Management of Innovation (1) Collaboration Strategies (6/10) Design Idea Collaboration for Localization India Western Countries Korea Ex) Locally Customized Design Depending on regions, customers have different needs. For example most Indians need flat bread containers, Westerns need cereal containers, and Koreans need Kimchi containers. These design ideas mostly came from local buyers and collaborators in each region. 3. Strategic Management of Innovation (1) Collaboration Strategies (7/10) Promotion Collaboration (1/2) Ex) Promotion through famous home-shopping channels At the beginning of launching Lock&Lock, since the company wanted to make a high-quality brand image, it chose QVC, the No.1 home shopping channel in the world, as a business partner. 3. Strategic Management of Innovation (1) Collaboration Strategies (8/10) Promotion Collaboration (2/2) Ex) Partnership with promotion agencies When Lock&Lock enter unfamiliar regions, the company formed a partnership with promotion companies which have more knowledge about the region. They formed a partnership with Starcom to enter Japan and UK markets, and with Hill & Knowlton to enter China markets. 3. Strategic Management of Innovation (1) Collaboration Strategies (9/10) Summary (1/2) <Protecting Core Competency> Lock&Lock’s core competency is technological superiority over other competitors. To take advantages of this, the company relies only on in-house R&D, and does not collaborate with other companies in R&D part. <Collaborating Strategically> Since Lock&Lock is a air-tight container production company, the company has no special knowledge about design, promotion, and so on. To overcome this shortage, the company collaborated with other specialist in that field. And also sometimes it made strategic alliance with other industry players to boost the sales of its products. 3. Strategic Management of Innovation (1) Collaboration Strategies (10/10) Summary (2/2) Collaboration of a certain function in a firm should be determined depending on its strategic importance!!! 3. Strategic Management of Innovation (2) Source of Innovation Customer Needs People want to buy a container which doesn’t spill over a content in the container. Needs for Airtight Container 3. Strategic Management of Innovation (3) Pattern of Innovation Added New Characteristic Not related to traditional patterns of Innovation Added New Characteristic: New Characteristic is added to New Product. It can be one of patterns of Innovation. 3. Strategic Management of Innovation (4) Types of Innovation 1. Product vs. Process 2. Radical vs. Incremental 3. Competence Enhancing vs. Competence Destroying 4. Architectural vs. Component Added New Characteristic to existing product Product Innovation & Component Innovation Because of Rock&Rock, almost whole container is replaced with Rock & Rock Radical Innovation In 1978, Lock&Lock Co. Ltd has manufactured more than 600 products including kitchen wares Competence Enhancing Innovation 3. Strategic Management of Innovation (5) Dominant Design (1/2) Kukjin Distribution Co. founded in 1978 launched Lock&Lock products having the technology of interlocking all four sides and the hollow silicon packing. Lock&Lock instead of rubber cover have become the dominant design in airtight container market. Now, Lock&Lock is the byword for airtight container. Lock&Lock is not only a premium airtight container but also the best brand of airtight container market in China. Also, Lock&Lock’s awareness in Korea is 99%. 3. Strategic Management of Innovation (5) Dominant Design (2/2) Komax Glasslock Network Externality help Lock&Lock the dominant design of airtight container. Collaboration between Lock&Lock and lots of company, rising Lock&Lock’s brand awareness. Winner-Take-All Markets didn’t occur. There are two strong competitors. Lock&Lock can’t be a natural monopoly company not only because Komax makes the airtight container having superior design and high quality but also because Glasslock makes airtight container consist of glass having attractiveness for Western culture. 3. Strategic Management of Innovation (6) Timing of Entry (1/2) Follower Many people think Rock&Rock is the first mover. But, the first mover is KOMAX in an airtight container market. That is, Rock&Rock is the follower. 3. Strategic Management of Innovation (6) Timing of Entry (2/2) How does Lock&Lock lead the market, rather than KOMAX? When KOMAX and Rock&Rock launched an airtight container, people didn’t know how the container was useful for them. So, Rock&Rock used TV home shopping to explain the usefulness of an airtight container. Because of TV home shopping, people started to use Rock&Rock container. So, Rock&Rock can lead the market, rather than KOMAX. 3. Strategic Management of Innovation (7) Choosing Innovation Project (1/2) Since its establishment in 1978, Lock&Lock Co. Ltd had manufactured various products which are more than 600 including kitchen and bathroom ware. But, since 1998, the company has focused its core competency only on Lock&Lock products and stop investing to other products groups. Just 6 years after launching Lock&Lock products, the company extended its market share by 60% in Korea, and became the world 3rd largest company in the food storage container industry. 3. Strategic Management of Innovation (7) Choosing Innovation Project (2/2) Lock&Lock manufactured huge amount of various products before 1998. Jun-il Kim thought Lock&Lock had to focus on one product having brand power, so he made 20 criteria for choosing product. Easy to manage inventory Not fragile Small volume Independent to season Independent to culture Air-tight container was the best product meeting all criteria of qualitative choosing process and these decision has been excellent. 3. Strategic Management of Innovation (8) Protecting Innovation (1/2) Lock&Lock takes advantages of protecting technological innovation rather than diffusing it. Since the company’s core competency is technological superiority over the other companies, they need to protect their intellectual properties through patent, trademark, and design registrations. In addition, the company organized a special team which is responsible for preventing others from imitating Lock&Lock products. In 2010, they found a fake product manufacturing factory in China and confiscate many imitations. 3. Strategic Management of Innovation (8) Protecting Innovation (2/2) Lock&Lock promote the method to distinguish the real Lock&Lock product from the imitation product using the web site and the store. This strategy is so effective in the long run, although it isn’t effect on consumer in the short run. Lock&Lock don’t sue the company making the imitation product, but with market sharing power, Lock&Lock prevent the distributors from selling the imitation product. Because legal action ain't holding no air in China. Q&A