LG Chemical: Capacity Expansion and Product Mix in China Case Solution & Answer

LG Chemical has entered the China market for ABS, a common plastic, through its subsidiary LG Yong Xing (“LGYX”). Since its founding in 1996, it was directed LGYX Chinese manufacturers who have served the domestic market and is a type of low-grade ABS. In late 2006, LGYX was the largest Chinese ABS market company, enjoying a market share of 27% and sales of $ 709 million per year. However, the ABS market was changing. With exports of Chinese manufacturers increasingly demand shifted to the higher grades of ABS. Furthermore, LGYX faced with competitive pressure both locally and producers in Middle East producers. If LGYX stick to their current product line? Management has decided that it must critically examine the strategy of the subsidiary during the previous ten years in order to not get caught up in the mind of the rigid group
by
Bowon Kim,
Sanghyung Ahn,
Chulsoon Park
Source: University of Hong Kong
29 pages.
Date Posted: January 22, 2008. Prod #: HKU709-PDF-ENG
LG Chemical: Capacity building and solving the product mix in the case of China

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