Pub Date : 2006
Countries : South Korea
Industry : Home Appliances and Personal Care Products
LG Electronics, Inc. (LGE) was primarily known for its low-cost appliances had more than
72,000 employees working in about 77 subsidiaries and marketing units across the world.
Youngdungpo-gu, South Korea based LGE was a technology innovator in electronics,
information and communications businesses producing CDMA2 handsets, DVD3 players, optical
storage devices, canister vacuum cleaners, air conditioners micro ovens and consumer electronics. LGE comprised four SBUs4: Mobile Communications, Digital Appliance, Digital Display and
Digital Media with total revenue of more than US$ 35 billion (consolidated US$ 45 billion)5.
LGE embraced the philosophy of "Great Company, Great People," and pursued two growth strategies which involved "fast innovation" and "fast growth" to secure global competitiveness. The company sought to secure three core capabilities - product leadership, market leadership, and people-centered leadership. (Exhibit I) Since 1993, LGE had been undertaking 'Super A'6 pioneering activities, to strengthen its competitiveness and create profitability. In 2003, LGE repositioned itself as a leading global consumer electronics brand.7 The company also practiced TL 20058, a technological management strategy to build and sustain prominence in the global marketplace.9
In addition, to achieve an ideal management base, LGE was carrying out the Six Sigma Campaign. In January 2006, the company launched "Blue Ocean10 Management" campaign11 to be one among the top 3 EIT12 firms in the world by 2010.13
Further, LGE planned to double its sales volume, profit and shareholder benefit with 30% of its sales volume and 50% of its profit derived from blue ocean products.14
1] W Chan Kim, Renee Mauborgne, "Blue Ocean Strategy," Harvard Business Press, 2005, Page 171.
2] Code Division Multiple Access.
3] Digital Video Device.
4] Strategic Business Units.
5] Overview, http://www.lge.com/about/corporate/company_overview.jsp
6] Super A- It was the activities performed in order to achieve profitability and competences.
7] "LG Electronics lights up time squre", http://www.ogilvypr.com/case-studies/lg-electronics.cfm
8] TL (Technology Leadership) 2005 - R&D efforts to achieve global technology leadership in selected business areas and technologies - is the technology management strategy adopted by LGE to position itself as a Global Market Leader
9] "Innovation", http://www.lge.com/about/corporate/corporateculture_innovation.jsp
10] Blue ocean strategy is about epoch-making move of strengthening business capabilities and streamlining business structure in the five arenas of products, business model, work, system and human resources.
11] "Press release", http://www.lg.co.kr/eabout/news/release/read.jsp
12] Electronics, information, and telecommunications
13] "Corporate Information", http://www.lge.com/about/corporate/company_vision.jsp
14]Jeff Ooi,"When beating competitors simply means making them irrelevant", April 16, 2006, http://www.jeffooi.com/iwitness/2006/04/blue_ocean_strategy.php,