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RUNNING HEAD: MARKETING PLAN 1
Marketing Plan for LG Energy Solution
University of Maryland Global Campus
1. Executive Summary
Maryland Creative Solutions’ (MCS) newest client - LG Energy Solutions (LGES) - is desirous of expanding its EV (electric vehicle) battery manufacturing business within the highly competitive US market, given its discontent about the lack of worldwide sales and profitability. The client is confident that the robust economic U.S. forecasts will serve its company well and
RUNNING HEAD: MARKETING PLAN 2
place it in good stead to obtain a larger share of that market, by increasing sales to other U.S. businesses LGES manufactures batteries for use in EVs, tools, and other apparatus, and is one of the U.S.’s largest suppliers of EV batteries. It has established manufacturing facilities and joint ventures with US-based automotive companies, namely, General Motors, Ford Motor Company, and more recently Toyota, Honda, Hyundai. The company is reportedly in discussion with Tesla. The growing increase in the market for electric vehicles in the U.S. has simultaneously spurred the demand for EV batteries. LGES’ current and future joint ventures and
facilities in the US makes it well placed to serve the U.S. market, and to increase its sales and profitability. Maryland Creative Solutions has tasked a team of consultants to develop and implement a marketing plan. One of the target areas in drawing up this plan is researching and analyzing LG
Energy Solution’s U.S. market through the conduct of a market analysis to include a situation analysis, market analysis, strategic analysis, financial analysis, and implementation, controls and contingency plan.
The situation analysis showed the key internal and external environment and the critical issues for LG Energy Solution. It is a leading manufacturer in the production of lithium-ion batteries for vehicles and emery storage systems. The company has joint partnerships with automakers like General Motors, Hyundai, Tesla, and Honda Motor Company. It has a strong research and development depart with $4.5 billion invested over the past years and 26,641 global
patents. LG Energy Solution is striving in the battery market but it still has to worry about new competitors entering the battery market as well as trouble with the supply chain for critical minerals needed to produce lithium-ion batteries. In the energy tech market, LG Energy Solution is ranked 37th out 252 other companies and ranked 4th in the top battery production companies.
RUNNING HEAD: MARKETING PLAN 3
The company has a high compliance policy to follow all rules and regulations when it comes to producing and manufacturing its products. The changes in environmental laws can sometimes make this difficult for the company but it has a compliance department in place to ensure they are staying ethical and keeping the trust of its customers. The slowed economy and inflation have
tested the company’s ethicalness to find ways around production to still produce quality products
without losing the trust in its products. The market analysis for LG Energy Solution reports that with the proposed growth and expansion of the market for electric vehicles, it is highly likely that the company will achieve its desired goal of obtaining a larger share of the EV battery market. The company’s current and future joint ventures, existing and planned manufacturing facilities, coupled with consumers’ consciousness about ‘protecting the environment’, and the U.S. government’s offerings through clean energy statutes and policies will ensure that this market remains strong and resilient. The proposed economic growth for this market is very encouraging and “is predicted to generate an absolute dollar opportunity of $3.8 billion USD by 2032” (FactMR, n.d.). Finally, the increased manufacturing capacity of EV batteries will place the company, and by extension the U.S. in positions to be global EV competitors.
The strategic analysis for LG Energy Solution shows that it is projected that there will be more than 145 million electric vehicles in the United States by 2030. LG Energy Solution’s brand is focused on the future of the energy industry by developing advanced electrical vehicle batteries, mobility, IT, and Ess batteries to have a greener energy efficient future. To meet production of producing batteries for electrical vehicles, LG Energy Solution has invested in a facility in Arizona to produce cylindrical batteries for EV’s and lithium iron phosphate battery pouches for energy storage systems. LG Energy Solution combines multiple marketing channels
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of communication to penetrate car manufacturers and potential customers. The company’s huge investment in marketing and communications will help target customers and investors on multiple platforms reflecting its mission and vision. Break-even analysis plays a crucial role in determining the threshold at which a company's total revenue covers its total costs, guiding the development of effective pricing strategies for optimal profit margins (Sintha, 2020). This document focuses on LG Energy Solution, highlighting the importance of break-even analysis, implementation, controls, and contingency planning. In terms of break-even analysis, LG Energy Solution's calculated break-
even point is at 10.07 units, signifying the minimum quantity of units the company must sell to cover its costs effectively.
The implementation plan identifies vital teams responsible for executing the break-even analysis and marketing strategies. Executive leadership oversees sales teams' recruitment, training, and management, with business management and human resources tracking the break-
even analysis and providing crucial direction for the marketing plan. Furthermore, the contingency plan is recognized as an essential component for addressing unexpected events during the implementation process. Regular reviews of the plan are emphasized to ensure alignment with company goals and responsiveness to changes in external factors. Potential deviations, such as alterations in production plans, profitability, and heightened competition from
industry rivals like Samsung, Panasonic, and Contemporary Amperex Technology, are considered.
Adherence to evolving government regulations and effective communication strategies are highlighted to inform stakeholders and customers about significant events. The document concludes that the outlined break-even analysis, implementation plan, and contingency measures
RUNNING HEAD: MARKETING PLAN 5
for LG Energy Solution aim to ensure financial stability, competitiveness, and adaptability in a dynamic business environment. Regular reviews, effective communication, and strategic adjustments are crucial elements for securing the success and continuity of the company.
2. Situation Analysis
2.1 Mission
LG Energy Solution originated from LuckyChemical Co., Ltd, that was founded in South Korea in 1947, which was later renamed Lucky Goldstar Group in 1983. It was the beginning of a new era in the chemical and electronics industries in Korea (
About LG > history
). Over the years the company grew and overcame challenge and stayed competitive through ceaseless innovation. In 1992, the company expanded its profile and began lithium-ion battery research ushering in the start of Korea’s battery history. After supplying the world’s first mass-produced EV batteries in 2009, the company spun off its battery division as a separate entity called LG Energy Solution in 2020. LG Energy Solution has a current revenue of $26.23 billion and in 2022 the company earned a revenue of $19.60 billion a 27.13% increase from the previous year (
LG Energy Solution (373220.KS) - revenue
). LG Energy Solution has six locations in Korean and ten locations globally. Its global locations are in Germany, Poland, Australia, Michigan, Maine, Tiawan, New Delhi, and three locations in China (
Global network ｜
LG Energy Solution
). LG Energy Solution’s mission is fostered around its commitment to innovative, sustainable, and efficient energy solutions to produce clean and renewable energy sources globally. The company aims to be an eco-friendly company that focuses on the environment, creates sustainable values for the future, and fulfills its social responsibility. LG Energy Solution’s vision is “We CHARGE towards a better future,” demonstrating its commitment to developing a sustainable future as a global battery leader (LG Energy Solution). The
RUNNING HEAD: MARKETING PLAN 6
“CHARGE” relates to critical areas under its environmental, social, and governance (ESG) management framework. The first is climate action and circular economy, human rights, advanced occupational environment, health, and safety, responsible and impactful business, governance, and compliance, and transparent ESG disclosure based on meticulous framework used to measure performance and stakeholder participation (
LG Energy Solution’s ESG transformative vision
).
2.2 Product or Service Description
Headquartered in Seoul, Korea, LG Energy Solution is known for reliable, energy efficient, and innovative technology that aligns with the evolving needs of electric mobility, portable electronics, and renewable energy unification. LG Energy Solution is the leader in the distribution of electric vehicles by creating batteries with the most advanced technology in the world. LG Energy Solution is taking the lead in popularizing safe, fast, and environmentally friendly electric vehicles through cells, modules, Battery Management System, and pack products for electric vehicle batteries. The LG Energy Solution electric vehicle batteries are quick charging high energy density batteries that provide extended driving hours and distance. The batteries are lightweight, significantly enhancing driving efficiency which is very crucial for commercial vehicles and its various dimensions of batteries solve commercial vehicle’s limited space by maximizing space efficiency (LG Energy Solution).
Energy Storage System (ESS) is a system produced by LG Energy Solution that stores electricity from power systems like solar panels in a battery and discharges the electricity when needed (
Home series_us: Ess: Business: Global
). ESS has applications in power plants, power transmission and distribution facilities, homes, businesses, and factories that increases the efficiency of renewable energy and reduce electricity costs. ESS can also be used as backup
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RUNNING HEAD: MARKETING PLAN 7
power to minimize damage from power outages (LG Energy Solution). Grid-scale batteries are applications of ESSS deployed at power plants, solar/wind farms, or substations to provide capabilities like peak shifting, renewable integration, and frequency regulation (
Home series_us: Ess: Business: Global
).
LG Energy Solution is also a leading manufacturer in IT devices and Light Electric Vehicles (LEVs). The company produces high-capacity, high-power, and ultra-slim mobility, and IT batteries that’s innovative and overcomes the boundaries and limitations of size and shapes for batteries. The batteries are used in a wide variety of applications such as smart phones, tablets, laptops, LEVs, power tools, electric bicycles, wearable devices, and even wireless earphones (LG Energy Solution). 2.3 Value Proposition
LG Energy Solution is committed to providing cutting-edge, reliable, environmentally friendly, and competitive materials and energy storage solutions to customers, helping to contribute to creating a sustainable future in a rapidly evolving world (
LG Energy Solution
). LG Energy Solution is committed to creating sustainable values, along with providing products and services of the greatest quality. The company’s stakeholders’ trust and respect are a leading contributor of sustainable growth of the global battery industry. LG Energy Solution is focused on ramping up its use of renewable energy, increasing the reusing and recycling of end-of-life batteries, and establishing a clean and transparent supply chain for raw materials and batteries that factor in environment. LG Energy Solution is working to address environmental issues, it plans to transition all its business sites to 100% renewable energy by 2030, achieve carbon-
neutrality for its direct and indirect emissions by 2040, and to be a carbon negative from 2050 and forth (
LG Energy Solution’s ESG transformative vision
).
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2.4 Internal Environment Scan (SWOT Analysis)
Strengths
LG Energy Solution is technologically innovative and is a leading global manufacturer of
lithium-ion batteries for vehicles, IT, mobility, and energy storage systems. LG Energy Solution has an expansive global network that spans from North America, Asia, Europe, and Australia, that includes manufacturing facilities for batteries, established through joint partnerships with major automakers like General Motors, Hyundai Motor Group, Stellantis N.V., and Honda Motor Company. Leader in future energy, LG Energy Solution has a strong business portfolio in leading the green energy industry. Its diverse energy solutions in advanced automotive, mobility,
IT, and ESS batteries are providing a sustainable and better future. It has a strong research and development base with $4.5B invested over the past 10 years with 3,923 researchers an engineer.
LG Energy Solution has 26,641 global patents as of December 2022, with 8,574 being domestic and 18,067 overseas (
Fast facts
). Weaknesses
LG Energy Solution has seen drop in profitability over the past year. The slowed demand for electrical vehicles and slowed economic growth has led to LG Energy Solution shares to drop
nearly 9%, hitting an almost 15-month low slowing revenue growth in 2024. The increase in higher interest rates and the slowed growth in economies like China and Europe is impacting car buyers and has decreased the demand for electrical vehicles. Several of LG Energy Solution partners like General Motor and Tesla are slowing the launch of new electrical vehicle models to cut costs to put profits ahead of sales targets (Yang & Lee, 2023). LG Energy Solution faces staying competitive within the energy tech market. There are 252 competitors and LG Energy Solution is ranked 37th. Its top competitors are Cygni Energy and Lohum who are based out of
RUNNING HEAD: MARKETING PLAN 9
India and QuantumScape that is based out of San Jose. All three competitors have been succeeding with earnings and being innovative with lithium battery and electrical vehicle battery production (
LG Energy Solutions - Company profile
). LG Energy Solution currently has a limited supply chain, where most of their critical minerals come from China. China controls around 70.4% of graphite production and the U.S. government recently passed an EV tax rule restricting the use of critical minerals that are extracted or processed from China. This tax rule has caused LG Energy Solution to find other supply chain sources to get the critical ingredients in the United States needed for production (Chea, 2022). Opportunities
The demand for electrical vehicles has increased tremendously over the past decade. Government agencies are increasingly beginning to introduce limits on nitrogen oxide and carbon dioxide emissions causing automakers to transition to the production of electrical vehicles. In 2021 sales records for electrical vehicles reflect an 8.7% increase and about 14% in 2022. The increase in electrical vehicles investments by car makers is leading to an increase in research and development for electrical vehicle batteries (
Electric vehicles - worldwide: Statista market forecast
). The increased demand for renewable energy is a factor from concerns of the impacts conventional fossil fuels have on the environment and decreasing the cost of renewable technologies. Over the past decade the vast majority of countries around the globe have established renewable energy targets. Electricity utilities have started investing in renewable energy technologies and setting goals to bring cheaper energy costs (
Global Renewable Energy Industry
). The rise of the demand of batteries and the change in policies around the world are accelerating the requirement for the use of more batteries and electrical vehicles. This transition is causing for more research and development and the need for improvement to produce better
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RUNNING HEAD: MARKETING PLAN 10
and cheaper batteries. Labs and companies like LG Energy Solution are researching and looking for ways to improve the technology by boosting capacity, speeding charge time, and cutting the costs for lithium-ion batteries (Crownhart, 2023).
Threats
LG Energy Solution is working to expand its supply chain because the United States passed the U.S. Inflation Reduction Act restricting the use of critical minerals that extracted or processed in China. Since China holds over 70.4% of graphite production, this has caused LG Energy Solution to seek other options to acquire the critical minerals needed in the production of lithium-ion batteries (Chea, 2022). Changes in environmental policies are pushing for electrical vehicles in the United States is part of the green transition as it is believed that electrical vehicles
produce less greenhouse gases than gasoline vehicles. Even the operations of electrical vehicles produce less greenhouse gases, the process to acquire and process the raw materials for lithium-
ion batteries and the disposal results in more carbon dioxide emissions than of gasoline-powered cars. As the demand and push for electrical vehicles are being forced through policy changes the increased production of lithium-ion batteries can cause a threat to the climate just as much as non-lithium-ion battery vehicles. LG Energy Solution will need to get ahead of this threat to avoid backlash once more agencies start to redo policies that effect the production and destruction of lithium-ion batteries (IER, 2023). The demand for electrical vehicles over the next decade will require a corresponding growth in electrical vehicle battery output. The demand will increase nearly six times to 2,585 GWh by 2030. A threat to this increased demand for electrical batteries is the cost and production volume. Producing quality and innovative batteries that improve and reduce charging times are more expensive than the production of affordable
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batteries and LG Energy Solution will need to focus on producing evolutionary improvements on
their current lithium-ion batteries to stay competitive (Research, 2023).
2.5 External Environment Scan (PESTEL & Porter’s Five Forces Analysis)
PESTEL Analysis
: Political Factors
Protests, non-government organizations, pressure groups, and activist movements play a huge part in policy making in Seoul Korea so it will be beneficial for LG Energy Solution to collaborate with these organizations to contribute better to community and corporate goals. Benefits from lower taxation policies in the western hemisphere has resulted in high profits and contributed to increasing spending on research and development. LG Energy Solution must follow both state and territories policies and regulations it has business with to ensure they care covering all policies (EMBA Pro).
Economic Factors
Increased investments in new industries and government expenditures for South Korea’s economy will contribute to increased performance over the next 5-10 years. South Korea has improved in investing in developing core infrastructure to improve business environment, which can be beneficial for LG Energy Solution because it can access the present infrastructure and help drive the future in its sector. Consumer spending behavior has remained stable in South Korea but is causing a growing inequality in society which could negatively impact consumer sentiment. LG Energy Solution must be aware of the increasing inflation rate since it can affect the cost of production of lithium-ion batteries (EMBA Pro).
Social Factors
RUNNING HEAD: MARKETING PLAN 12
A social factor for LG energy Solution to consider is the difference in the power structure
in Sout Korea. For the past 6-7 decades an increase in income inequality has risen causing there to be a gap in social classes. The education level for people in South Korea is high, giving the company a wide range of perspective employers to choose from who can make a difference in the company’s culture (EMBA Pro). The change and evolving of gender roles in Sout Korea have led to increasing amounts of women being employed and holding higher positions in the business infrastructure. LG Energy Solution currently has two females on its board of directors. LG Energy Solution provides support to vulnerable social groups with opportunities to be self-
sufficient by participating in volunteer programs, donating to charities to better the lives of unfortunate children, and fund educational programs for children with disabilities (LG Energy Solution).
Technological Factors
LG Energy Solution must stay innovative with research and development since the maturity of the energy level has still not been reached. The company’s research and development
department focus on providing next-generation batteries with core technologies. It has four sections to its research and development department: Battery Research and Development, Advanced Automotive Battery, Mobility and IT Battery, and ESS Battery and in 2022 LG Energy Solution used 8,760 KRW ($6.65 million USD) for their research and development department to stay up with the rapid advancement in battery technology (LG Energy Solution).
Environmental Factors
The growing concern for environmental sustainability is increasing the demand for smart and green technologies. With the implementation of the smart grids produced by LG Energy Solution will allow control over real-time monitoring of energy consumption and reduce the
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RUNNING HEAD: MARKETING PLAN 13
amount of wasted energy (Radulescu et al.). LG Energy Solution’s strategy for the environment is to increase the recycling of end-of-life batteries, ramp up the use of renewable energy, eliminate human rights risks, and establish an environmentally safe supply chain for raw materials and batteries to continue being a responsible stakeholder in communities (
LG Energy Solution’s ESG transformative vision
). LG Energy Solution has also joined global initiatives like UN Global Compact, Global Battery Alliance, Renewable Electricity 100% (RE100), Electric Vehicle 100% (EV100), as well as Responsible Minerals Initiative (RMI) to continue to creating values for a sustainable environment for the future (LG Energy Solution).
Legal Factors
A core value of LG Energy Solution is ‘Compliance”. The company expects every employee to comply with relevant laws, regulations, and corporate ethics even with the ongoing United States and China dispute causing supply chain disruptions. In 2021, the company became the first in the battery industry to gain the IS037301 certification, which is a global compliance management standard of the International Organization for Standardization. It has established a “Compliance Portal” in March 2023, that systemizes and organizes compliance activities company-wide and provides educational training programs for its employees. The company urges all employees to follow its compliance activities and adhere to relevant laws, regulations, and corporate ethics to further its growth to being the most profitable company that has the best policy compliance that customers trust and love. LG Energy Solution also has a Compliance Officer who oversees a Compliance Management System Team who identifies and evaluates compliance risks throughout the year and establish ways to address and prevent them from occurring (LG Energy Solution).
Porter’s Five Forces Analysis:
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Threat of New Entrants
New entrants into the battery market present a very low threat for LG Energy Solution. For new entrants to join the lithium-ion battery market they will need to have capital flexibility, agility, and independence and experience from other industries. Companies will also need to be able to advance their electric vehicle business, innovative business models, and have partnerships
or be able to acquire companies that offer the right capabilities to be competitive within the industry (Woodard). LG Energy Solution is ranked 37th out of 252 competitors in the energy tech market and currently are partners with two of the largest automakers General Motor and Tesla (Yang & Lee, 2023). Powerful Buyers
The buyers have a significant bargaining power because of the number of battery suppliers in the market. Customers look for quality and cost as their driving factor of which company they choose. LG Energy Solution is committed to producing products that are innovative and exceeds customers’ expectations. The company has an extensive quality management system that ensures product quality and safety throughout its entire manufacturing process. The company also has a risk mitigation process in place to alleviate potential risks caused by unexpected changes in the production or supply chains (LG Energy Solution).
Powerful Suppliers
LG Energy Solution recently has had its supply chain of critical minerals disrupted due to
the U.S. Inflation Reduction Act and the EV tax rule that restricts the use of critical minerals that
are extracted or processed in China. To offset this disruption in its supply chain, LG Energy Solution signed a deal with an Australia-based company Syrah Resources to supply graphite, which is a major ingredient in making electrical vehicle batteries. LG Energy Solution has also
RUNNING HEAD: MARKETING PLAN 15
signed supply deals with multiple North American companies like Canada Electra for 7,000 tons of cobalt sulfates for three years, Avalon for 55,000 tons of lithium hydroxide for five years, and 200,000 tons of lithium hydroxide from Snow Lake for 10 years. LG Energy Solution has been able to find suppliers to keep its supply chain going since China has been removed as an option and it controls 70.4% of graphite production (Chea, 2022).
Substitute Products and Services
Lithium-ion batteries are currently the dominant energy storage technology because of its
capacity, rechargeability, and price. The issues that surround the extraction and safety of lithium-
ion batteries alternatives are being researched to shift the power balance for energy storage. There is research being conducted on the possible use of aqueous magnesium batteries that could
be used to replace lithium and solid-state batteries are being researched by NASA and its prototype battery’s discharge rate by over 10 times. Research for graphene batteries show that graphene is 100 times stronger than steel and has a high charging capability and is highly conductive. These are just a few of the different alternatives being researched to replace lithium-
ion batteries so companies that are using lithium should start researching new, safer, and cheaper
ways to produce batteries because modern energy is moving forward to ending the use of lithium-ion batteries (Cavallo, 2022). Rivalry Among Competitors
The lithium-ion battery market is a highly competitive market and is expected to grow at a
compound annual growth rate (CAGR) of 10.8% during the forecast period of 2023-2028
due to the increase in the demand for electric vehicles and electric motorcycles. The biggest markets for electric vehicles are perceived to be led by the Asia Pacific market with China and Japan as top competitors. There are 12 top lithium-ion battery manufacturers with
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RUNNING HEAD: MARKETING PLAN 16
Complex Amperex Technology Co., Limited (CATL) based out of China being number one, BYD Company Ltd. (BYD) which is out of China is number two, and CALB-CALB Co., Ltd. (CALB) another China-based company is number three. LG Energy Solution takes fourth with it being based out South Korea (EMR, 2022).
2.6 Critical Issues
The battery market is constantly changing and advancing. LG Energy Solution needs to keep investing in research and development to stay competitive and address evolving market demands. LG Energy Solution has been dealing with its supply chain issues from China being disrupted but it has found other options for now to keep acquiring the needed critical materials for production, but its team needs to keep researching or partner with some of the companies who are working on new ways to produce batteries without needing critical minerals and are environmentally friendly. Regulatory changes for environmental and human safety are constantly
evolving locally and globally which may cause for adjusting in the manufacturing process of products to meet regulations and policies. The increase in consumer demand poses a concern for LG Energy Solution if it can meet the demands of consumers especially in the electrical vehicle sector with the demands increasing and projected to keep increasing. LG Energy Solution is facing increased competition in the lithium-ion battery market where there are 12 top companies in the market and the top three are from China. LG Energy Solution needs to stay innovative and maintain its market share to remain a crucial competitor in the market. 3. Market Analysis
Introduction
This report is presented in the form of a market analysis of LGES’ customers in the United States, and will cover the following headings: (i) marketing research; (ii) market size
RUNNING HEAD: MARKETING PLAN 17
and growth; (iii) market trends; and (iv) customer analysis. A Market Analysis is an integral component of a marketing plan. One function of a marketing plan “is to communicate to everyone in the organization who has been assigned specific marketing responsibilities and how that person should executive those duties” (University of Maryland Global Campus, n.d.). LGES manufactures batteries for use in EVs, tools, and other apparatus. Some of the batteries manufactured include but are not limited to: ‘automotive batteries such as pouch-type battery cells, modules, and battery management system products used in electric vehicles; mobility and IT batteries used for various applications in devices such as laptops, smartphones, light electric vehicles, power tools, wireless earphones, etc.; and energy storage systems (ESS) used in uninterrupted power supplies (UPS) and power grids’ (Yahoo.Finance, n.d.). LGES began operations in South Korea in 1947, under the name ‘the Lucky Chemical agency’. From 1947 to 2023, the company achieved several milestones and ground-breaking events. In 2019 LGES sought to establish the manufacturing of “Ultium Cells’ with General Motors; and in 2020
and 2022, announced the investment with General Motors for the 2
nd
and 3
rd
joint venture battery plants respectively. Note that GM delayed the initial ‘birth’ of ‘Ultium Cells’ to the delight of EV competitors such as Ford Motor Co., Hyundai, Kia, and Voltswagon. The first GM/LG Energy Solution Ultium battery plant eventually opened in September 2022, with the second plant scheduled to become operational in 2023 (Welsh, 2022 p 12). LGES was formally established in 2020.
LG Energy Solution has joined the fight against climate change with the mission to “steadily pursue efforts such as improving energy efficiency and expanding renewable energy in response to climate change”. The company informs that they “aim to provide sustainable value to
RUNNING HEAD: MARKETING PLAN 18
customers and society by minimizing greenhouse gas emissions in the battery manufacturing process” (LG Energy Solution website/climate change). LGES’ vision and goals include: building a low carbon ecosystem across the battery industry; eco-friendly battery manufacturing; and offering differentiated value to customers (ibid). 3.1 Marketing Research
LG Energy Solution is synonymous with the manufacture of batteries used to run EVS, also referred to as Electric Drive Vehicles (EDVs). EVs are automobiles that use one or more electric motors for propulsion instead of traditional internal combustion engines (ICEs) that burn fossil fuels (a strong contributor to the negative effects of climate change). EVs rely on rechargeable batteries to store the electrical energy that powers their motors (Mohammadi & Saif, 2023 p 1). The three dominant batteries used in EVs are Lead-Acid, Nickle Metal Hydride, and Lithium-ion batteries. Note that the Lithium-ion batteries are very popular as they are considered to be highly durable, yet low cost (ibid). Sodion-ion is another type of battery used in EVs. L
G Energy Solution manufactures lithium-ion batteries. Globally, the demand for EV lithium-ion batteries increased to approximately 550 gigawatt hours (GWh) in 2022, up from approximately 330 GWh in 2021, due to the increase in EV sales. In 2022, the demand for EV batteries increased by approximately 80% in the U.S., notwithstanding that the sale of EVs only increased by approximately 55% (International Energy
Agency, 2023). Statista (n.d.) reports that “the United States is experiencing a surge in the demand for electric vehicles, driven by government incentives and increasing environmental consciousness among consumers”. CNBC reports that by 2030, the states of Georgia, Kentucky, and Michigan will be the front leaders for the manufacturing of electric vehicle batteries, while Kansas, North Carolina, Ohio and Tennessee will be key players (Clifford, C.2023/01/23,
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CNBC). This, it is suggested will place the U.S. in a position to be a global EV competitor (ibid),
and will augur well for LGES’ continued joint ventures with the US market.
3.2 Market size and growth Fact.MR (n.d.) reported that between 2017 and 2021, the U.S. electric vehicle battery market recorded an unprecedented compound annual growth rate of 3.7%. Further, the report notes that “this market is forecasted to exceed a valuation of $9.2 billion USD by the end of 2023, expanding at a compound annual growth rate of 5.4% between 2022 and 2032 [and] is predicted to generate an absolute dollar opportunity of $3.8 billion USD by 2032 (ibid). As manufacturers and consumers alike become more environmentally conscious, the need to protect the environment will act, in part, as a catalyst to increase the demand for manufacturing ‘clean vehicles’ to promote a ‘cleaner climate’. With the heightened preference for lithium-nickel-
manganese-cobalt aluminum oxide (NMCA) alloys, this will promote and secure revenue opportunities for the suppliers and manufacturers of electric vehicle batteries. The use of NMCA alloys in these batteries are reported to contribute to a longer life cycle and better energy density of the batteries (Fact.MR).
In the USA, the market for EV batteries is expected to experience significant growth with the increase in sales of electric vehicles, specifically zero-emission vehicles. This growth
in sales of EVs/EV batteries is further driven by rising fuel prices, rigorous pollution practices, and the depletion of fossil fuel reserves (Fact.MR, n.d.). Globally, the market distribution of lithium-ion battery makers places LGES as the third largest supplier with a 14.2 %
share of the market. China’s CATL (36.9%) and Byd (15.9) are ahead of LGES in terms of market share and are their biggest competitors (Statista, 2023). 3.3 Market trends
RUNNING HEAD: MARKETING PLAN 20
The Lithium-ion battery is reported to be the most popular EV battery because of its low cost and high durability. Globally, LGES is one of the top manufacturers of this type of battery. Through strategic alliance relationships, the company has partnered with General Motors (GM), Honda, and Hyundai to create joint ventures and manufacturing facilities in the USA. Specifically, LGES and GM have established manufacturing facilities in Holland, Michigan and Queen Creek, Arizona. Notably, LGES plans on investing $3 billion in its Holland, Michigan battery facility to supply Toyota’s Kentucky plant (Lienart & Tiwary, 2023). Reportedly, “The deal will support Toyota’s expanding battery EV line-up, which includes a new model that will be assembled at a manufacturing plant in Kentucky starting in 2025” (CNBC, 2023). Further, LGES has joint ventures with General Motors (Ultium Cells) in
Warren, Ohio; Springhill, Tennessee; and Lansing, Michigan. The company also has a joint venture with Honda in Fayette County, Ohio (LG Energy Solution, 2023). Earlier this year (2023), LG Energy Solution hinted at a possible venture with Tesla to supply electric vehicle batteries through LGES’s proposed Arizona factory (Reuters, 2023).
The purchasing and buying processes follow steps from the identification and processing of raw materials; offerings by suppliers; testing and verification of material by laboratories to meet environmental and government policy safety standards; competing manufacturers, governments (regulations and incentives), automotive sale companies, and consumers. The users of EV batteries are manufacturers of BEV, HEV, and PHEV vehicles. The purchase process for EV batteries is dominated globally by the battery manufacturers as well as the various industries that utilize this market. The market is influenced by the increasing demand for electric vehicles both globally, and in the US; hence, an increase in the demand for EVs signals an increase in the demand for the batteries that power those vehicles.
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Another factor influencing the EV battery market is the U.S government’s incentives to manufacturers, suppliers, wholesalers, retailers, and customers. 3.4 Customer analysis In the United States, LGES’ customers are found mainly in the automotive industry, as
one of the top global suppliers of batteries used in electric vehicles. Sub-customers are the purchasers of the electric vehicles manufactured by industry giants such as General Motors and Toyota, two of LGES’ U.S. alliance partners. Benefits to customers include ownership of ‘clean vehicles’ which translates to contribution to a ‘cleaner climate/environment’. By extension, the scope of benefits derived from the use of vehicles powered by EV batteries is far-reaching. For example, the U.S. Department of Energy (n.d.) reports that “using more efficient vehicles like hybrid and electric vehicles supports the U.S. economy and helps diversify the U.S. transportation fleet.” Another benefit to customers who own battery-
operated electric vehicles is the extensive warranty offered by EV battery manufacturers on the batteries. The US Department of Energy reports that while “the advanced batteries in electric vehicles are designed for extended life, [they] will wear out eventually. Several manufacturers are offering 8-year/100,000-mile battery warranties.”
As the EV battery market continues to show signs of significant growth, the automobile industry is also investing huge sums of funding to build new EV manufacturing plants along with
EV component processing and battery production, which, in turn will create high-paying jobs in the U.S. A huge contributing factor to this investment is the establishment of the Inflation Reduction Act (IRA). In 2022, the Biden government established the Inflation reduction Act of 2022 designed to “support a variety of alternative fuel vehicle (AFV) and infrastructure technologies through tax credits, grant programs and loan programs” (U.S. Department of
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RUNNING HEAD: MARKETING PLAN 22
Energy, n.d.). The act is beneficial to both US-based manufacturers of EV batteries, and to individuals and businesses who purchase electric vehicles. The Inflation Reduction Act of 2022 makes provision for a tax relief of up to $7,500.00 to purchasers of new electric vehicles until 2032; this act also makes provision for tax credits for the purchase of used EV vehicles (ibid). The Infrastructure Investment and Jobs Act has allocated $7.5 billion “to building out a nationwide charging network; the initial focus being to install fast chargers alongside the interstate highway system to promote long distance charging and help mitigate battery range fears” (Colato & Ice, 2023). The legislation also includes investments to expand domestic battery
production and recycling capacity (ibid). And finally, several states have implemented a “zero-
emission vehicle (ZEV) program, requiring automobile manufacturers to sell a set quota of battery-electric or plug-in hybrid-electric vehicles” (ibid). LG Energy Solutions claims to have benefitted from subsidies from the Inflation Reduction Act of 2022. The company reported that its quarterly profits had more than doubled as
a result of the IRA. The company further reported that it had received several requests from its automobile clients regarding increasing its EV battery supply, thus leading to an increase in supply (Yang & Yin, 2023). Additionally, the Inflation Reduction Act will be advantageous to LGES as this Act is aimed at “weaning the United States off dependence on China for battery components (ibid).
4. Strategic analysis Developing a strategic analysis for LG energy Solutions involves several key components, by establishing clear marketing objectives, LG can effectively track its progress and make necessary adjustments to its strategies along the way. Below I will outline the strategic key elements provided with the annual marketing objectives for each.
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RUNNING HEAD: MARKETING PLAN 23
4.1 Marketing objectives (including financial objectives)
Component
Annual Projection
Time Frame
Details
Growth
10-15%
12 Months
Following uncertainties
affecting the outlook for Electric vehicle sales and the current pace of electric vehicle adoption, LG energy solutions warned of slowing revenue in 2024, thus revenue growth in the next one year would not be as high as the mid-30% rate forecast for this year. (Ebru Tuncay, Reuters, Nov 2023)
Market Share
10-15%
12 Months
With a market share of 14.20% as of July 2023(from 13.80% in previous year), LGES is the third largest player in the industry. We expect the market share of LGES to increase in the coming year as the company has been quick to expand its production capacity in North America and it remains the primary supplier of batteries for Tesla’s Model 3 and Model Y, as well as the Volkswagen ID.4 and Ford Mustang Mach-E. (pulse news uk, Sept 2023)
Sales
15-20%
$8,500 per unit
$3.1M
3,200,000.00 units 12 Months
LGES expects global economic uncertainties and various factors such as automakers
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RUNNING HEAD: MARKETING PLAN 24
sold 27,200bn
adjusting their EV strategies and shifting interest rates to impact EV demand negatively. Consequently, we are looking at a 15.-20% revenue growth rate for
2024 (The search for winners in the new battery era, Peter Campbell and Harry Dempsey in London, and Christian Davies in
Seoul)
Average Unit Price
$7,500-$9,000
12 Months
Price will vary with Price geographical location due to currency conversion rates
Profitability Percentage
20-30%
12 Months
Due to the challenges and uncertainties in the market that is causing reduction in demand for EV, LGES has reviewed will be reviewing its profitability forecast for
the coming year
Customer Satisfaction
Continuing
Build on ESG competitiveness, leading the way to exceed market and customer’s expectations
CSR Outcomes
Achieve carbon neutrality
By 2050
L.G. Energy Solutions is involved in the continuous management of energy consumption, the reduction of greenhouse emissions, and the growth of renewable energy sources (L.G. Energy Solutions,
2021).
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RUNNING HEAD: MARKETING PLAN 25
Employee Satisfaction
Rate
60% of Employees would recommend LGES to a friend
Biannually L.G. Energy Solution performs multiple employee engagement surveys with distinct objectives. The biannual administration
of the "Employee Experience Survey" assesses the advancements in enhancing the overall employee experience. In parallel, the "Leadership Survey" appraises leadership effectiveness within individual departments.
The "Pulse Survey" is administered periodically to assess employees' job satisfaction and highlight potential areas for enhancement (L.G. Energy Solutions,
2023)
In the rapidly growing EV vehicle market, LG Energy Solution is acknowledged as an industry leader based on the wealth of experience of providing quality products and solutions to customers in the global market. As the world’s only battery manufacturer that originated from a chemical company, LG Energy Solution is leading the global battery manufacturing industry based on the technologies to develop differentiated materials and experience in leading the market (2020_LGES_ESG_Report).
According to Ulrich, LG Energy Solution controls 26 percent of the market for battery capacity of 21.4 GWh from 2016 through 2020 (2021) and by the year 2026, the global EV battery market is expected to reach USD 93.94 billion (PR Newswire, 2018). LG Energy
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RUNNING HEAD: MARKETING PLAN 26
Solution's use was 19.3 GWh, down 37.5%, but market share dipped just a tenth of a percentage point to 14.5% (Sungsu Bae May 04, 2023).
Bringing it home, according to the U.S. Energy Information Administration, about 90% of the energy consumed in U.S. transportation comes from petroleum. The transportation
sector also is the leading source of greenhouse gas emissions (GHGs) in the U.S., accounting for 29% of the nation’s GHGs. Although motivations among state policymakers vary, many states are working to diversify the transportation sector fuel mix and drive down emissions by encouraging the use of alternative fuels, including electricity, natural gas, hydrogen, and biofuels. To accomplish this, many states have implemented incentives to promote the adoption of electric vehicles (EVs), including plug-in hybrid vehicles (PHEVs) and battery electric vehicles (BEVs) (NCSL, Austin Igleheart, August 2023).
Being an industry leader in EV space, L.G. Energy Solutions must segment, target, and
position itself correctly to reach its customers effectively and efficiently. This section of our report describes market research that needs to be conducted to analyze and segment the US market for L.G Energy solutions products.
4.2 Market segments
The goal is to figure out which people or organizations are interested in our products, and to achieve this, we need to divide or segment the people and organization into different groups of potential buyers with similar characteristics, right segmenting provides an organization with several benefits associated with the right design of its offering, pricing, and market delivery strategies. The segments or groups of people and organizations we decide to sell to are called Target Market.
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RUNNING HEAD: MARKETING PLAN 27
Usually, organizations segment their markets based on demography, geography, behavior, and psychographic patterns. Different sectors may adopt varied strategies for segmenting their consumers. However, market segmentation for industries such as LG energy solutions differs due to the need for specialization.
The main segment for LG ES is the automotive industry, thus conducting market research is necessary to understand the main users of renewable energy and electric batteries for cars. LG ES products buyers are typically businesses who use them during their production processes to make the final goods. As such, a suitable segmentation for LG ES would be Firmographic segmentation. This is a B2B grouping of customers into segments based on their organizational attributes. Firms can be categorized based on types of electric batteries and types of electric vehicles. Each of these segments uses different batteries which presents an opportunity for us at LG ES. They must identify and establish that its target market is the automotive industry, they must identify which businesses within the industry to target.
This goal must be completed by competitive and superior marketing campaigns as compared to its competitors (UMGC, 2022). The market segments LG Energy Solution should be used consist of Business-to-Business (B2B) customer groups with similar wants and objectives (UMGC, 2022).
4.3 Target market
A target market can be translated into a profile of the consumer to whom a product is most likely to appeal (Lotame, Dec, 2023).
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To capitalize on its fast-growing energy solutions market in the U.S, LG ES aims to penetrate the US market with its battery solution for electric vehicles, energy storage systems and information technology (Businesswire, September, 2023). The global demand for electric vehicle batteries is expected to amount to 110 gigawatt hours. This value is expected to increase drastically on a global scale, with a predicted demand of 6,530 gigawatt hours in 2050 (Statista, Mathilde Carlier, Oct 24, 2023). Currently, LG energy serves General Motors, Groupe Renault, Stellantis, Tesla, Volvo, VW Group, and by the year 2026, the global EV battery market is expected to reach USD 93.94 billion, these figures indicate a growing demand for E.V. batteries in the future, providing a lucrative market for L.G. Energy Solution.
The target market should be (1) large enough to give corresponding profits based on the operating costs and (2) Segmenting and Targeting of the U.S. Market and Product Positioning should be devoid of an influx of competition (UMGC, 2022), the U.S market meets these requirements.
In addition, based on the type of application, the E.V. market value is expected to reach $410 billion by 2030. There will be more than 145 million electric vehicles in the United States by 2030. Based on the type of electric vehicle, significant potential awaits L.G. Energy Solution which has so far supplied 77.6 million cells for hybrid electric vehicles (HEVs) (1148k vehicles), 259.6 million cells for BEVs (1077K vehicles), and 87.5million for 7 plug-in hybrid electric vehicles (PHEVs) (547k vehicles) (L.G. et al., 2022). In 2020, there were 639.43k PHEVs in the U.S., and this has since grown to 721.1K in 2021 (Carlier, 2022). The Office of Energy Efficiency & Renewable Energy reported the sale of EVs and PHEVs to
have doubled from 308,000 in 2020 to 608,000 in 2021 (Minos, 2022). The growth in battery
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RUNNING HEAD: MARKETING PLAN 29
electric vehicles (BEVs) during the period was 85%, while that of PHEVs was 138% (Minos, 2022). HEVs are a top-selling category currently growing at 5% CAGR, with their value projected to grow to 7% CAGR through 2031 in the U.S. Market segmentation by drive train and power source also shows some growth. Lately, demand for electric buses and trucks has received significant attention from stakeholders in the transport industry in the United States. The U.S. Federal Transit Administration plans to spend $2.2 billion to acquire low-to-no-
emission vehicles (Wilson, 2022). The Department of Transportation plans to double the nation's fleet of electric buses. New York, Los Angeles, Chicago, Memphis, Tennessee, and Kentucky have budgeted for electric buses in the future (Wilson, 2022). By 2030, the global electric bus market is projected to grow to $50.99 billion 2030 at a 12.7% CAGR from 2022 to 2030 (Precedence Research, 2022). In 2021, the electric bus market was valued at $738 million, with North America accounting for $588 million. By 2030, the U.S. market is expected to grow to $2.588 billion at a CAGR of 17% (Article, Mc Kinsey and Company, October 2023). With the growing demand and investments in the BEVs seen from the above research, LG ES should invest significantly in the passenger BEVs market.
4.4 Positioning strategy
When it comes to building a strong brand, a tagline or a logo alone won’t do the job. One must think about how we are going to be seen by customers and that will differentiate us from other businesses offering similar products. That is why one must be strategic about positioning and make sure our brand appeals to the right audience. (Forbes, What Brand Positioning Is and Why It’s Important For Your Business, 2022.
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RUNNING HEAD: MARKETING PLAN 30
“Brand positioning is a process of getting your brand out there and establishing it as something worth thinking about” (Forbes, What Brand Positioning Is and Why It’s Important for Your Business, 2022,).
Brand positioning is not a matter of what you do, but how you do it. Brand positioning is important because (i) it allows you to differentiate your brand, (ii) it helps you to justify your pricing strategy and (iii) it makes your brand more creative. (Forbes, What Brand Positioning Is And Why It’s Important For Your Business, 2022.
“Leading the future energy industry by developing advanced automotive battery, mobility and IT battery and ESS battery enterprises which are key for the green energy transition.” Brand positioning reveals what consumers perceive about LG energy solutions products and how they relate to its competitors. By identifying the strengths and value of the various batteries offered by LG energy solutions, the value of the brand is therefore communicated to the marketplace. LG energy solution must continue to produce great products to position themselves to compete at the top of the market.
4.5 Product and branding strategy
LG energy solutions in March 2023, announced that it will invest approximately KRW
7.2 trillion (USD 5.5 billion) to construct a battery manufacturing complex in Queen Creek, Arizona. The complex will consist of two manufacturing facilities – one for cylindrical batteries for electric vehicles (EV) and another for lithium iron phosphate (LFP) pouch-type batteries for energy storage systems (ESS). It marks the largest single investment ever for a stand-alone battery manufacturing facility in North America. With these investments North America is set to account for up to 70% of our ESS sales by 2030 (LG ensol, Mar 2023).
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LG announced partnership with automakers such as GM, as they intend to have joint manufacturing plants. (
LG
ensol, planet protect 2023). This strategy will differentiate LG from the competition as they will be able to provide supplies and repairs as quickly as possible, thereby resolving one the major challenges facing the EV market.
The company will focus on developing and producing batteries based on Lithium-iron phosphate (LFP) chemistry, which are known for their safety and cost efficiency. This solution will incorporate eco-friendly design elements in the branding and packaging, adhering to the principles of environmentally conscious branding. LFP batteries are expected to dominate the stationary storage market in 2030, making up 65% of the ESS battery chemistry mix in that year (Bloomberg.net, 2023).
Offering complementary products and services, such as charging solutions and maintenance services, follows the principle of added value. Collaborations with automotive manufacturers to integrate L.G. Energy Solution's batteries seamlessly into their electric vehicles further enhance the brand's value proposition.
4.6 Pricing strategy
The pricing strategy for LG ES requires a careful consideration of various factors, including production costs, market demand, competitive landscape, and perceived value. The metals used in producing the batteries, followed by processing and mining, which goes into creating these metals are the considerations that affect the cost of these batteries. Due to increased demand for Lithium owing to labor scarcity and supply chain gaps, prices of electric
batteries have spiked in the last year. This will in turn impact how businesses sell their electric batteries.
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RUNNING HEAD: MARKETING PLAN 32
The target market for LG ES products is EV manufacturing firms, mainly those in the United States. Their pricing strategy must exploit their market share. Forecast shows that demand for EV batteries will increase exponentially over the next fifteen years, creating a need for 20 to 40 gigafactories throughout the U.S to support and sustain demand. Based on that, LG ES can forecast their costs and analyze the factors affecting pricing decisions. This strategic move aims to triple the company's sales in the ESS sector, with North America projected to account for up to 70% of LG's ESS sales by 2030. This expansion initiative, led by Chang Seungse, who heads LG's ESS business, is fueled by a desire to fend off competition from Chinese producers and regain a prominent position in the global energy storage market (Sagar Bar, Sept 202).
Market penetration is the best approach for LG ES to gain and maximize market share.
Market penetration is a measure of how many LGES EV batteries are used by car manufacturers compared to the total estimated market for EV batteries (Will Kenton, May 2023). With existing plants in Michigan and plans for increased investment and expansion in both Michigan and Arizona, in close proximity to U.S EV Manufacturers, logistical and distribution costs will be significantly reduced for LGES. Potentially passing those cost savings on to EV manufacturers will contribute greatly to increasing market penetration.
With a tremendous amount of EV battery production by the competition still taking place in China and Korea, LGES will have a significant competitive price advantage due to locally based distribution channels (Fleischmann, 2021). Making up at least 30% of an EVs retail selling price, a battery is the single most expensive component. Lower battery costs will bring down prices and inspire consumers to buy more EVs (Saiyid, 2021). Among EV manufacturers, average battery cost is approximately $186per kWh. Tesla currently pays an
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RUNNING HEAD: MARKETING PLAN 33
average of $142 per kWh from its three suppliers including LG ES while GM pays an average
of $169 per kWh (LeBeau, 2021). Although having production facilities in the U.S. significantly reduces distribution and shipping costs for local U.S. automakers, LGES will explore a higher price point for those willing to pay a premium for expedited delivery and the ability to manage and marry their EV battery inventory and supply with their EV production more effectively. With the anticipated and almost certain increase in demand for EVs, the stable supply chain of batteries for U.S. automakers will greatly increase market penetration for LGES (Rivero, 2022). 4.7 Distribution and supply chain strategy
To improve its operational efficiency for the production and distribution of electric car
batteries in the US, LG energy solutions may consider several distribution and supply chain strategies. Some of which include establishing more manufacturing plants in the U.S. LG ES can create production facilities close to where they are needed, cutting down on shipping expense and delivery timeframe. This would aid business in following local laws as well as creating job opportunities.
With increasing worldwide cases of supply chain sustainability issues affecting businesses, directly and indirectly, the importance of related risk management is also growing rapidly.
LG Energy Solution has established a supply chain management system in accordance with the standards required by international institutions such as the UN and OECD. We maintain close communications with major stakeholders such as suppliers, clients, investors, and NGOs, introducing the Supplier Code of Conduct and recommending suppliers to protect human rights in business activities through ESG evaluations (LG ensol, 2023).
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4.8 Integrated marketing communications strategy
One of the most important aspects of marketing strategy is integrated marketing communications strategy. Integrated marketing strategy combines multiple sources of marketing information to maximize the effectiveness of marketing campaign. Multiple marketing channels of communication such as sales promotion, public relations, and direct marketing, and in person public relations to penetrate carmakers.
As market penetration deepens LG ES will have to invest heavily in its marketing and communications. The promotional messages curated will highlight the features and benefits of
LG ES batteries and will be tailored for the specific market audience. The content plan would demonstrate LG ES expertise and knowledge as well as materials such as articles and insights,
brochures, specification sheets, video content and webinars. Once the content has been developed, LG ES will begin to relay these messages to the target market using social media influencers, the internet, emails, newspaper publications, as well as in person visits.
All messaging will be consistent with and must reflect the LG ES mission and vision and enhancing the value proposition of the company.
5. Financial Analysis
5.1 Breakeven Analysis
Break-even analysis is vital in determining the total revenue a company or a business requires to cover its total cost. Therefore, through a break-even analysis, companies can develop an appropriate pricing approach to generate an ideal profit margin and gross profit (Sintha, 2020). This section focuses on determining the break-even analysis of LG Energy Solution company; therefore, through the break-even analysis, the company can devise effective and appropriate ways to help it generate meaningful profits that will enhance the continuity of the
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RUNNING HEAD: MARKETING PLAN 35
business. It is essential to understand that everything above the break-even point will illustrate that the company is making profits and that anything below will mean it is on a loss-making trajectory. The information below demonstrates the break-even analysis, implementation, controls, and contingency plan for LG Energy Solution. The first step is identifying the team that
will be responsible for the proper implementation of the program.
Break Point Analysis for LG Energy Solution Total number of items produced 540 p/a
Average price per item $40140
Total Sales
21,675,600
Average Unit Variable Cost $5400
$780000
Fixed cost
$5000
$ 350,000 (Per year)
Breakeven point (Units)
10.07
Break-even point $404209
Break-even point (units) = 350000/$ (40140 – 5400) = 10.07 units Break-even point = break-even point * average unit price
= 10.07 * 40140 = $404209
6. Implementation, Controls, And Contingency Plan
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RUNNING HEAD: MARKETING PLAN 36
6.1 Implementation
LG Energy Solution will ensure that it complies with set standards and regulations of the contingency plans and will also decide upon the appropriate plan that will be critical in the implementation plan. In this regard, one of the teams that will be responsible for the implementation plans is the executive leadership. The executive leadership will be responsible for recruiting the sales managers and ensuring they undergo thorough training consistent with the
set expectations. The business management and human resource departments will also be included in the implementation and the marketing plan. The business management department will focus on managing and tracking the break-even analysis point. Consequently, the human resource department will adequately provide the company's direction on implementing the marketing plan.
6.2 Controls
With the implementation team having been identified, it would be necessary for the team leadership to set the timelines for the executions and the controls that would be essential for the decision-making process. Throughout the implementation process, hindrances are expected to arise. Therefore, after the critical operations and processes have been activated, it would be necessary to determine the ideal business direction. Furthermore, implementing the marketing plan is expected to commence immediately; however, the duration of the time frame may vary. Additionally, some critical resources, such as the financials and the human resources, would be necessary for the commencement and implementation of the plan. In this regard, the implementation team members will be required to make decisions that will enhance the plan's stability. For example, in cases of emergency, the team will be expected to provide financial guidelines that will be vital in the reduction of financial risks and, thus, will
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RUNNING HEAD: MARKETING PLAN 37
improve the general operations of the implementation processes. In addition, by ensuring that the
marketing plan is on track, the implementation team will also determine factors such as the Key Performance Indicators (KPIs); these would be essential in measuring the revenues, sales revenue, expenses, service rating, profitability and also the number of orders made by the company in a given period (Ishaq Bhatti et al., 2014).
6.3 Contingency Plan
A contingency plan is an essential component for the success and performance of a company. This is because contingency plans help organizations devise alternative ways to recover from unexpected and unwanted events. Therefore, a contingency plan would be necessary for this process because it will help restore and recover the critical functions that may be faced in the implementation process for LG Energy Solutions. The contingency plan will also highlight examples of disruptive events and the essential steps for taking action during these proceedings. However, deviations can occur throughout the marketing plan implementation, which brings unforeseen changes. Therefore, ensuring the plan is reviewed regularly would be vital to ensuring the company stays on track. Moreover, it is essential to understand that severe deviations may also result from the production plans and profitability of the company. Additionally, increased competition from companies such as Samsung, Panasonic, and Contemporary Amperex Technology creates a need to continue researching and developing the best strategies to maintain a competitive advantage. Furthermore, with constant changes in government regulations, the company must ensure that it complies with state and federal laws. Consequently, communication will also be vital, especially for changes in product design. Therefore, the company should develop appropriate communication strategies to ensure both the customers and the stakeholders are informed of the
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RUNNING HEAD: MARKETING PLAN 38
novel events undertaken in the company. Finally, other contingency plans that would be developed to address the possible deviations in the expected and actual results would be the changes in the approaches used to meet the needs and desires of the customers, including a change in the repackaging of the products.
Conclusion
The aformentioned report centered on LG Energy Solution's break-even analysis, implementation plan, and contingency measures. It highlighted the importance of determining the break-even point, which for LG Energy Solution, is at 10.07 units. This means that the company must sell this minimum quantity to cover its costs effectively. The implementation plan
identified key teams responsible for executing the break-even analysis and marketing strategies, with executive leadership overseeing sales teams and business management and human resources
tracking the break-even analysis and providing direction for the marketing plan. The contingency
plan emphasized regular reviews to ensure alignment with company goals and responsiveness to changes in external factors, such as alterations in production plans, profitability, and heightened competition from industry rivals like Samsung, Panasonic, and Contemporary Amperex Technology.
Regarding implementation, LG Energy Solution will comply with set standards and regulations. The executive leadership will be responsible for recruiting and training sales managers, while the business management department will focus on tracking the break-even analysis point and the human resource department will provide direction for the marketing plan. Timelines and controls are essential in the decision-making process, and while hindrances are expected during the implementation process, the team leadership will set the necessary timelines for execution and establish controls for the business direction. Critical resources such as
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RUNNING HEAD: MARKETING PLAN 39
financials and human resources will be vital for the commencement and implementation of the plan.
References
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RUNNING HEAD: MARKETING PLAN 42
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