LG Electronics (LG) is establishing a new CEO-led review system to address intensifying global competition.
Each business division will set up a task force to secure leadership in products and technology, manufacturing efficiency, R&D and operations with LG CEO, William Cho, personally overseeing their progress.
Cho announced the new system to strengthen structural competitiveness with the focus on Quality, Cost and Delivery.
Just last year Cho announced a complete transformation of LG’s business portfolio.
“LG is also carrying out meticulous preparations to improve its ability to respond strategically to external uncertainties,” he said.
Working with internal and external experts, the company is crafting predictive scenarios for key issues and developing a "playbook" to identify optimal responses.
This forward-looking approach is expected to minimise the impact of outside factors on the business and uncover new opportunities.
Cho was joined by key company executives and outlined the company's 2025 business strategy during a press conference held in Las Vegas in the United States last week.
The CEO emphasised the need to build structural competitiveness and accelerate qualitative growth by refining execution strategies adapted to rapidly changing global market environments.
Cho highlighted positive progress achieved through innovative business models, such as subscription service business and webOS-based advertising and content business, which demonstrate LG's agile responsiveness to evolving market demands.
"Amidst unprecedented market uncertainties and a shifting competitive landscape, we require a fundamentally different level of strategies and precise execution," he stressed.
Compared to two years ago when LG first presented its Future Vision 2030, the global market recovery is experiencing prolonged delays, while geopolitical risks, such as shifts 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 a part of the Future Vision 2030, LG aims to expand its existing device-centric business into mobility and commercial spaces.
"Despite the challenging environment, significant opportunities remain," Cho said
"By focusing on delivering differentiated customer value, we will create continuous growth."
LG is increasing its market presence through new business models like subscription-based services and the online brand shop.
The subscription business combines devices and services to provide greater convenience and flexibility, moving beyond price-driven competition.
Customers can use products for a duration that best suits their needs and receive optimised care services, allowing LG to maintain closer customer relationships and generate recurring revenue.
LG is also strengthening its competitive edge by enhancing on-site care services and diversifying sales channels.
This year, the company is expanding the service to India, Singapore and Hong Kong, following successful launches in Malaysia, Thailand and Taiwan.
In 2024, LG's revenue from subscription services rose more than 75 per cent year-over-year.
LG aims to more than triple this figure by 2030, establishing its subscription services as a key driver of growth.
The company's data-driven online brand shop is also growing at a rapid pace, with sales surging over 80 per cent YoY during last November's Black Friday period.
To accelerate growth in the B2B sector, the company is focusing on its heating, ventilation, and air conditioning (HVAC) business, which is projected to expand rapidly in the AI era.
LG has established a dedicated business division, the LG Eco Solution (ES) Company, to take its existing HVAC business to new heights.
The HVAC business, alongside LG's automotive component and smart factory business, will play a significant role in driving the company's B2B business to greater success.
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 chiller technology, which are now being applied to optimise energy efficiency in data centres – a pivotal backbone of AI infrastructure.
Additionally, in key markets, LG is hastening the establishment of a localised, end-to-end business structure that encompasses R&D, production, sales and maintenance, and has the ability to develop region-specific solutions.
By 2030, LG expects its B2B business to account for around 45 per cent of all revenue generated by the company. B2B revenue made up approximately 27 per cent of total revenue in 2021 – a figure that rose to 35 per cent by the end of last year.
The company is also revamping its future technology R&D portfolio to align with key strategic directions: maximising business potential, expanding platform-based service businesses, accelerating B2B businesses and rapidly commercialising new growth engines.
Over 75 per cent of LG's advanced R&D efforts will focus on technologies for businesses aligned with the company's mid- to long-term strategies, and on securing pivotal technologies in promising future fields.
Specifically, the company will apply CEO Cho's "3B" strategy – Build, Borrow and Buy – by fostering internal capabilities, leveraging external expertise and acquiring technologies.
In addition to investing in facilities and R&D, LG is actively exploring the strategic allocation of investment resources for equity investments and M&As to further accelerate the company's growth.
LG Electronics USA is the North American subsidiary of LG Electronics, a $68 billion global innovator in technology and manufacturing.