Lock & Lock IME 20051164 Junghee Pyeon IME 20051206 Wootaek Hwang IME 20051214 Joonhyung Ahn

Lock & Lock

IME 20051164 Junghee PyeonIME 20051206 Wootaek HwangIME 20051214 Joonhyung Ahn

CONTENTS1.Company & Product Overview

(1) Company Overview(2) Product Overview

2.Business Analysis(1) SWOT Analysis(2) TOWS Analysis(3) Five Force Analysis(4) BCG Matrix

3.Strategic Management of Innovation(1) Collaboration Strategies(2) Sources of Innovation(3) Patterns of Innovation(4) Types of Innovation(5) Dominant Design(6) Timing of Entry(7) Choosing Innovation Projects(8) Protecting Innovation





(1) Company Overview

1. Company & Product 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.



Export Destinations



Financial Status

Sales

Operating profit

2007 2008 2009 2010(half) 2007 2008 2009 2010(half)

Million Won Million Won

Lock&Lock has been grown very fast since its estab-lishment, and aim to achieve 10 trillion Won sales in 2020.

(2) Product Overview (1/3)


Plastic Container Glass Container

Product Type



Bis-free ContainerMany customers have con-

cerns that plastic containers make environmental hor-mones. Glass containers also have some disadvantages such as heavy weight, frag-ileness, and so on.

Lock&Lock developed a new technology container called Bis-free, which is lighter than glass and doesn’t make any environ-mental hormones.



Product Characteristics

(1) 4-side interlocking sys-tem

(2) Hollow silicon packing

The patented technology of interlocking all four sides and the hollow silicon packing are utilized for the products.





(1) SWOT Analysis

2. Business Analysis

SWOT

Strength Weakness

ThreatsOpportunities

• Powerful brand image

• High market share

• Patents

• Know-how

• R&D

• No other business models

• Big market(ex. China, U.S.)

• Global brand awareness

• Various airtight products

• Modern life style

• Many copies & Fake products

(2) TOWS Analysis


TOWS

S-O S-T

W-TW-O

• By using know-how, diversify products• By using global image, target global market• By using brand image, grow the market share

• Concentrating on “high quality and good brand image” through various promotions & campaign

• Prepare for new business models, although it is not profitable right now.

• Protecting innovation restrain fake product, allowing Lock&Lock diversify the business model.

(3) Five Forces Analysis


Existing Rivalry

• Copies• KOMAX, GLASSLOCK, etc

Potential Entrance

• Existing Korean companies• Foreign low quality & low price container companies

Threats of substitutes

Bargaining power of suppliers

Bargaining power of buyers

• Raw materials are easy to buy

• Tradition containers

• Many copies with low price. But, because of brand image, Rock&Rock can sell high price.

High

Low

(4) BCG Matrix


Star Question Mark

Cash Cow Dog

High

Low

Mark

et G

row

th

High Middle Low

Market Share

Plasticairtight

container

Ceramic or glassairtight

containerWater bottle

andThermos

Kitchen utensils

Living box

Cookingequipment





(1) Collaboration Strategies (1/10)

3. Strategic Management of Innovation

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 containerIn 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 af-ter launching it.




Ex2) Tea containerIn 2011, Baskin Robbins

31, an ice cream maker, started a promotion event that if a customer buy an ice cream which is bigger than quarter-size, the company provide Lock&Lock container with just 1,000 KRW.




Ex3) Doosan Bears Tum-bler

In 2011, Doosan Bears, a baseball team, made tum-blers with Lock&Lock’s tech-nology.



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&LockIn 2006, Lock&Lock made a

joint venture with Zen Korea, a ceramic container maker, to produce ceramic air-tight con-tainer. The joint venture got 400,000 pieces order right af-ter it launched ceramic air-tight Kimchi container.



Outsourcing

Ex) Design Outsourcing of Speed Cook

In 2011, Lock&Lock launched Speed Cook, a lamen cooker. Since Lock&Lock’s core compe-tency is manufacturing technologies, not designs, the company outsourced this design function to Motto Design, a design company.



Design Idea Collaboration for Localiza-tion

Ex) Locally Customized DesignDepending 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 collabo-rators in each region.

India Western Coun-tries

Korea

http://cfile29.uf.tistory.com/original/183783134BEB41107DC164



Promotion Collaboration (1/2)

Ex) Promotion through famous home-shopping channelsAt 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 part-ner.



Promotion Collaboration (2/2)

Ex) Partnership with promotion agenciesWhen 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.



Summary (1/2)<Protecting Core Compe-tency>

Lock&Lock’s core compe-tency is technological su-periority over other com-petitors. 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 Strategi-cally>

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 short-age, the company collabo-rated with other specialist in that field. And also some-times it made strategic al-liance with other industry players to boost the sales of its products.



Summary (2/2)

Collaboration of a certain function in a firmshould be determined depending on its strategic importance!!!

(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) Pattern of Innovation


Added New Characteristic

Not related to traditional patterns of InnovationAdded New Characteristic: New Characteristic is added to

New Product. It can be one of patterns 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 re-placed with Rock & Rock Radical Innovation

In 1978, Lock&Lock Co. Ltd has manufactured more than 600 products including kitchen wares Competence En-hancing 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 rub-ber 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%.

(5) Dominant Design (2/2)


Network Externality help Lock&Lock the dominant design of airtight container. Collaboration between Lock&Lock and lots of com-pany, rising Lock&Lock’s brand awareness.

Winner-Take-All Markets didn’t occur. There are two strong com-petitors. Lock&Lock can’t be a natu-ral monopoly company not only be-cause Komax makes the airtight con-tainer having superior design and high quality but also because Glass-lock makes airtight container consist of glass having attractiveness for Western culture.

Komax

Glasslock

(6) Timing of Entry (1/2)


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.

Follower

(6) Timing of Entry (2/2)


When KOMAX and Rock&Rock launched an airtight con-tainer, 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 shop-ping, people started to use Rock&Rock container. So, Rock&Rock can lead the market, rather than KOMAX.

How does Lock&Lock lead the market, rather than KOMAX?

(7) Choosing Innovation Project (1/2)


Since its establishment in 1978, Lock&Lock Co. Ltd had manu-factured various products which are more than 600 including kitchen and bathroom ware.

But, since 1998, the company has focused its core compe-tency only on Lock&Lock products and stop investing to other products groups.

Just 6 years after launching Lock&Lock products, the com-pany extended its market share by 60% in Korea, and became the world 3rd largest company in the food storage con-tainer industry.

(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.

(8) Protecting Innovation (1/2)


Lock&Lock takes advantages of protecting technolog-ical innovation rather than diffusing it. Since the com-pany’s core competency is technological superiority over the other companies, they need to protect their intellectual proper-ties 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.

(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 com-pany 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

Documents

Lock & Lock IME 20051164 Junghee Pyeon IME 20051206 Wootaek Hwang IME 20051214 Joonhyung Ahn