How LG Electronics is restructuring to accelerate growth
Life's Good at LG Electronics – and is getter better, as the South Korean conglomerate picks up the pace on its transformation.
The US$13.75 billion tech giant has announced a restructure and executive reshuffle, marking the latest move in its transition to a smart life solutions company.
The Seoul-based company has said it will set up a sales and marketing company to oversee international business, as it looks to boost global business and become more competitive.
LG Electronics has a presence in almost every country worldwide and an international workforce of more than 74,000.
The newly set-up overseas sales division will oversee sales subsidiaries in North America, Europe, the Middle East and Africa, Latin America and Asia and will be responsible for elevating LG Electronics' global recognition by fostering new opportunities and growth, the company said.
This latest restructure is the next step in the company’s 2030 Future Vision, and transformation beyond just electronics to a smart life solutions company “that connects and expands customers’ various spaces and experiences, rather than resting on its current position as the bet home appliance brand”, CEO William Cho announced in July.
Vision 2030 – beyond electronics
Built on three growth engines, the vision focuses on transitioning to a platform-based service model, accelerating B2B areas, and procurement of new growth engines – all of which the company hopes will account for 50% of sales and operating profit by 2030.
The financial objective, according to Cho, is to achieve an average growth rate and operating profit of 7% and drive global annual revenues of US$77.5 billion by 2030.
In achieving its bold vision, Cho has earmarked 50 trillion Korean won in its expansion plans by 2030, including 25 trillion on R&D and 17 on facilities.
The new sales and marketing company, led by former LG Electronics North America CEO Thomas Yoon, and reporting directly to Cho, will not only drive growth in international sales but work to expand B2B deals globally – with LG’s Business Solutions (BS) Company expanding sales and business operations in major regions.
Among other restructurings, LG has formed new divisions and dedicated teams within its four business units to tap emerging opportunities and growth sectors.
The Home Entertainment (HE) Company will now be overseen by new President Park Hyoung-sei there and will be home to a dedicated Extended Reality (EX) team, with plans to develop an XR device by 2025.
There is a new division and team too in the Vehicle Solutions (VS) Company, with the Global Customer Strategy Division set to facilitate the procurement of more carmakers to its client base.
The Home Appliance & Air Solution (H&A) Company is establishing an engineering sales division to boost engineering capabilities designed to maximise business synergy in heating, ventilation and AC, and home beauty business has been merged into its home appliances and air solution division, while the vehicle solutions division.
