Chairman Koo Bon-moo of LG Group.

Chairman Koo Bon-moo of LG Group said the group has to boost its profit-making structure to cope with changes in the market, noting that they can no longer wait on the sidelines.

The chairman made the announcement after CEOs discussed the global strategy of the group on June 1. He called on the group’s affiliate firms to look at the details of their operations to take preemptive actions on changing their business structures and methods.

Major topics going through LG Group’s major affiliates are B2B, vehicle components, and energy. Each affiliate will discuss strategies with LG Group and establish its own future direction. Medium-and long-term strategies put into place years ago have become major businesses, so the company is looking to lay out new strategies to ensure future success.  LG Electronics’ Vehicle Components Business Headquarters, which is being actively promoted by LG Group, and the ultra-premium brand LG Signature are two examples of strategies that have become successes for LG Electronics. 

LG Electronics, which is LG Group’s major affiliate, will run its strategies by its business headquarters. The major point of this briefing is to report on future businesses that will come to fruition after three to four years. Major topics for VC Business Headquarters will be future technologies, such as self-driving automobiles, and getting more customers.  “It is important to discuss with other affiliates such as LG Chemicals and LG Display within a group to create synergy,” the group said. 

HE (Home Entertainment) Business Headquarters is going to report new technologies such as VR, differentiation and continuous pioneering strategies through OLED that currently leads global premium TV markets. H&A (Home and Appliance) Business Headquarters is predicting that enforcement of leadership and premium strategies will become the center of the B2B business.

LG Chemicals is going to report new driving forces such as electric vehicles’ batteries, water treatment, and bio that are going to become next-generation’s businesses. It is going to look for a way to secure next-generation material technology that can significantly increase  battery performance and examine strategies for water treatment and bio businesses at the same time.

LG U+ is going to report on future technologies such as IoT and 5G. LG U+, which has increased its competitive edge by responding to LTE, is going to look for ways to expand its dominance more in future telecommunication technologies such as 5G. 

Also, according to its vision to become the top business in IoT generation, it is going to discuss strategies to expand its dominance from IoST (Internet of Small Things) business to future businesses. Not only is LG CNS going to look for a way to improve the system unification business, which is its a current major business, but it is also going to look for ways to improve new businesses such as energy, digital marketing, big data, IoT and others. 

It is also going to look for strategies that will allow itself to secure competitive edge in businesses such as new renewable energy and others that it is focusing on.

It is predicted that LG Display will focus on strategies to secure future applicable technologies such as flexible, foldable, and transparent display by utilizing strengths of OLED while also strengthening competitive edge that leads OLED field even more.

The group will continue to invest in R&D this year as in the past boosting investments by 500 billion won each year since 2011 when its R&D investment came to 4.5 trillion won. It hit 6.3 trillion won last year, the biggest annual investment in R&D activities by the group so far.

A model of a sedan to be driven with Smart technologies in the future developed by various electronics makers including LG Electronics as one of its major new growth engines.(Photos:LG Group)