To Break Competitive Structure-Jumping to the Global Top Tier : The Case of LGE DAC

To Break Competitive Structure-Jumping to the Global Top Tier : The Case of LGE DAC

&nbsp;&nbsp;Innovation is widely recognized among researchers and practitioners as a critical ingredient for firms to remain competitive or lead competitive edge (Hamel, 1998; Roberts, 1998). This paper was interested in innovation of a Korean firm, LGE DAC, which broke the status quo of the competitive structure that had been firmly fixed by long industry maturation process, and jumped to global top tier from the trivial.<BR>&nbsp;&nbsp;LGE DAC started its business under the name of Gold Star in 1960’s by importing extremely matured technologies of home appliance industry in developed countries such as refrigerator and washing machine. One of its roles was to offer a production base for the foreign home appliance companies. It exported commodity goods of appliance to developed countries on the OEM base. The role of LGE DAC has not been changed until 1990. It remained one of the cheapest overseas supply bases of home appliance machines with no world-widely recognizable brand. However, ever since companywide innovation movement started in 1990, the firm has changed itself into a world class company. This paper described how LGE DAC broke the firm competitive structure in which only a small number of companies of developed countries seize the world market. Frog-leaping type innovation was a key to the change. It was observed that four innovation mechanisms of utilizing threat gaps, all-directional approach, 50% rule, and ambidextrous innovation system supported it.