3 FADING BRANDS:

1. LG 2. SAMSUNG 3.LIFEBUOY

THEIR REVITALIZATION STRATEGIES: LG:

Smart Technology for Customers
LG Electronics is increasing its focus on "Smart Technology" - technology that adds convenience and joy to customers' lives. Smart Technology is a development philosophy that embraces sensitive communication with customers in order to provide products that everybody wants to use, and easily can. This customer-oriented principle has become the most important development philosophy for LG, a result of collecting customer feedback and applying it to our products.

Our Goal: To Lead Global Electronics and Information Technology Worldwide

In order to sustain leadership among global electronics and information technology companies, LG Electronics' R&D is driving the development of "Great Products" and strengthening core technological capabilities through a process of "select and focus" in key areas such as cell phones and digital TVs. In important business areas such as digital appliances and audio/video products, LG is establishing global leadership in development by focusing on premium products while enhancing R&D capacities in new product categories. Furthermore, in new-business areas such as home networking, GPS, and mobile A/V, the company is directing its efforts toward developing convergence products in response to the

current trend of merging different technologies and products. What's more, the company is leading the new market by actively participating in pilot projects to develop new products with various service providers.

Achievement Through Top Talent Recruitment and R&D Systems Consolidation

To achieve its lofty goals, LG Electronics continuously recruits new talent and strives to increase its global business by consolidating R&D systems oriented toward local markets in strategic countries such as China and India. The company is also building international R&D capacity by pushing ahead on strategic alliances with other major companies in regard to standardization and new products. LG Electronics operates a global R&D system that consists of more than 30 research centers around the world. Through this system, the company facilitates open innovation utilizing innovative technologies from the outside, in order to secure core technologies and the early identification of future growth engines. In all these ways, LG is on target toward realizing its vision: Top Global R&D.

SAMSUNG:
Intensity of the Competition within DRAM industry The competition is high because the competitors are relatively equally balanced in the industry with powerful suppliers and high exit barriers due to high fixed costs and very specialized assets, which keep the companies competing even though they are earning low or negative returns (Exhibit 7a shows an industry average of -15% operating margin). Although the industry growth is at 16% per year, low product differentiation (almost as commodities) and low switch costs for the buyers force the competitors to compete on prices.

Chinese Entrant Strategy

The large-scale entry by the Chinese firms in 2005 adds to this competitive pressure within the DRAM industry. The Chinese firms adopt Samsungs strategy from 20 years ago by competing in prices of the older product lines; they are willing to sacrifice profits for market share. To overcome the high capital investment barrier to entry, the Chinese firms attract billions of dollars from foreign investors and the Chinese government to build state-of-the-art facilities; in addition, they form partnerships with and obtain licenses from industry incumbents like Infineon and Elpida to learn the necessary expertise in design and production process that are one or two generations old. Initially, many of these Chinese firms focused on producing logic chips, with the exception of SMIC. However, the possibility of these logic chip makers entering the DRAM is imminent, especially when the chip manufacturing capacity in China is expected to increase from 4% to 9% of the worlds capacity by 2007. These Chinese firms can easily leverage their

current logic chip facility, foreign funding, and design capabilities to compete in the DRAM industry.

LIFEBUOY:
PT Unilever Indonesia Tbk., through one of its brands, Lifebuoy, which is widely known as the family healthy soap, has formed a partnership with the Ministry of Health of the Republic of Indonesia and the Ministry of National Education of the Republic of Indonesia to hold a program on revitalizing Little Doctors in an effort to educate and promote clean and healthy living (PHBS) at primary schools (SD) to support the realization of a healthier Indonesia. The partnership and presentation on the programs of revitalizing Little Doctors and cadres of health for healthier Indonesia were made public on Tuesday in a press conference at the State Primary School (SDN) Gunung 05 Jakarta (SD Mexico). Present at the press conference was Minister of Health of the Republic of Indonesia dr. Endang Rahayu Sedyaningsih, MPH, Dr. PH as the keynote speaker. Resource people involved in the partnership are Joseph Bataona, Human Resources & Corporate Relations Director of PT Unilever Indonesia Tbk.,Erwin Cahaya Adi, Senior Brand Manager of Lifebuoy; dr. Hj. Fatni Sulani, DTMH, M.Si, Director of Child Health Development of the Directorate General for Community Health Development at the Ministry of Health of the Republic of Indonesia; Drs. Abdul Syukur Madjid, Head of Life Skill Education and Health Development Division at the Center for Physical Quality Development (PUSJAS) with the National Education Ministry and dr. Handrawan Nadesul, a Little Doctor and PHBS Campaigner were also present.