CEO of LG PRESENTS STRATEGY FOR STRUCTURAL COMPETITIVENESS AND QUALITATIVE GROWTH UNTIL 2025. By Investing.com
The company reinforces the long-term strategy with agility Adaptability in rapidly changing business environments
Cho highlighted the positive progress made through innovative business models, such as subscription service business and webOS-based advertising and content business, which demonstrate LG’s agile response to increasing market demands. “Amid unprecedented market uncertainties and a changing competitive environment, we need a fundamentally different level of strategy and precise execution,” he emphasized.
Compared to two years ago when LG first unveiled its 2030 vision, the recovery of the global market is experiencing prolonged delays, while geopolitical risks, such as changes in trade policies in major nations, are becoming more pronounced. The competitive paradigm with Chinese companies is also shifting from price-based competition to a more sophisticated focus on technology.
As part of Future Vision 2030, LG aims to expand its existing appliance-focused business into the mobility and commercial spaces. Leveraging decades of customer understanding, knowledge and experience, and technology expertise, the company aims to transform itself into a smart living solution provider that connects and enhances customer experiences.
“Despite the challenging environment, significant opportunities remain,” Cho added. “By focusing on delivering differentiated value to customers, we will create continued growth.”
Changing business paradigms to meet market demands
LG is increasing its presence in the market through new business models such as subscription-based services and online shopping of brands. Capitalizing on the company’s strengths, the subscription business combines devices and services to provide greater convenience and flexibility, surpassing price-driven competition. Customers can use products for the duration that best suits their needs and receive optimized care services, enabling LG to maintain closer relationships with customers and generate ongoing revenue.
LG is also strengthening its competitive advantage by improving on-site care services and diversifying sales channels. This year, the company is expanding the service to
In 2024, LG’s subscription service revenue grew more than 75 percent year-over-year (year-over-year), surpassing the company’s original target (
The company’s data-driven online brand store is also growing at a rapid pace, with sales up more than 80 percent year-over-year during the Black Friday period last November.
Expanding the business of platform-based services through webOS
The platform-based service business, which contributes to the transformation of the company’s business structure into a highly profitable model, aims to increase its revenues by more than five times by 2030 “which ultimately represents 20 percent of LG’s total operating profit. This business model uses the hundreds of millions of LG products sold worldwide as a platform to generate revenue by providing users with content, customized advertising and services.
A prime example of LG’s current success in this area is its advertising and content business based on the company’s webOS smart TV operating system. Last year, the advertising and content business based on webOS exceeded the revenue goal of
Starting this year, webOS will become a comprehensive content platform for various devices and solutions, including IT products and vehicle infotainment systems. It will also expand its scope to include AI-powered Digital Out of Home (DOOH) solutions for advertisers, evolving into an “integrated media advertising platform” that delivers different content experiences across different indoor and outdoor spaces.
To that end, LG launched the integration of its display-based businesses “including TVs, signage, monitors and laptops” through an organizational realignment late last year. The company is also exploring various opportunities to secure additional capabilities through mergers and acquisitions (M&A) and partnerships.
Acceleration of growth in B2B on the example of HVAC
To accelerate growth in the B2B sector, the company is focusing on its heating, ventilation and air conditioning (HVAC) business, which is predicted to expand rapidly in the era of artificial intelligence. LG has established a dedicated business division, the Company LG Eco Solution (ES).to take his existing HVAC business to new heights. The HVAC business, along with LG’s automotive components and smart factory businesses, will play a significant role in driving the company’s B2B business to greater success.
LG HVAC boasts a comprehensive portfolio of high-efficiency, high-performance solutions that leverage the company’s industry-leading core technologies. Its state-of-the-art products range from residential air conditioners to commercial air conditioners for buildings, schools and public institutions; heating solutions designed to replace fossil fuel boilers; and advanced cooling technology, which is now being applied to optimize energy efficiency in data centers “the key backbone of AI infrastructure. In addition, in key markets, LG is accelerating the establishment of a localized, end-to-end business structure that encompasses research and development, manufacturing, sales and maintenance, and has the ability to develop region-specific solutions.
By 2030, LG expects its B2B business to account for about 45 percent of all revenue the company generates. B2B revenues accounted for approximately 27 percent of total revenue in 2021, a figure that rose to 35 percent by the end of last year.
Taking bold R&D initiatives to combat future megatrends
The company is also realigning its future R&D technology portfolio to align with key strategic directions: maximizing business potential, expanding platform-based services, accelerating B2B business and rapidly commercializing new growth drivers. Over 75 percent of LG’s advanced research and development efforts will be focused on enterprise technologies that are aligned with the company’s mid- and long-term strategies, and on securing key technologies in promising areas of the future.
LG will continue to focus on strengthening core technologies through eight core technologies: software, system-on-chip, AI, robotics, materials and parts, standards, next-generation computing, and cloud/data. Specifically, the company will apply CEO Cho’s “3B” strategy of “Build, Borrow and Buy” by fostering internal capabilities, leveraging external expertise and acquiring technologies. This approach includes creating partnerships with global tech giants as well as promising startups and academia to cement technology leadership. In addition, LG will further strengthen its research and development efforts in future high-potential areas such as quantum computing and space technology.
A working group system led by a CEO in order to improve structural competitiveness
Along with transforming its business portfolio, LG is focusing on strengthening its structural competitiveness “represented by quality, price and delivery” to tackle the increasingly intense global competition.
This year, LG is establishing a new CEO-led review system to encourage these efforts. Each business division and headquarters organization will establish a task force to provide leadership in products and technology, manufacturing efficiency, R&D and operations, with CEO Cho personally overseeing their progress. Key goals for each task force include ensuring manufacturing and technological innovation, improving manufacturing capabilities, and improving research and development capabilities.
LG is also making detailed preparations to improve its ability to strategically respond to external uncertainties. Working with internal and external experts, the company creates predictive scenarios for key issues and develops a “playbook” to identify optimal responses. This forward-looking approach is expected to reduce the impact of external factors on business and reveal new opportunities.
Sustainable investment in future growth
While it anticipates that the business environment will continue to face significant uncertainties in the years ahead, LG is committed to maintaining its strategic investments. With the aim of ensuring fundamental business competitiveness and sustaining future growth, these investments will be ‘maximised’ based on strategic priorities.
In addition to investments in facilities and research and development, LG is actively exploring the strategic allocation of investment resources for equity investments and mergers and acquisitions to further accelerate the company’s growth. Previously, LG announced its plan to inject via
About LG Electronics, Inc.
LG Electronics is a global innovator in technology and consumer electronics with a presence in nearly every country and an international workforce of more than 74,000. LG’s four companies “Home Appliance Solution, Media Entertainment Solution, Vehicle Solution and Eco Solution” have joined together for a global revenue of over
