Green Technology such as Solar Power Heralded as Pure Business Opportunity
Amman, Jordan: LG Electronics, a global leader and technology innovator in consumer electronics, has highlighted increasing R&D spend as one strategy weathering the current economic storm, along with a focus on green technologies.
The message about turning 'crisis into opportunity' came from LGE's global CEO, Mr. Yong Nam at a press conference during a visit to Dubai when he said that in order to maintain product leadership and increase market competitiveness, the company would not reduce - and may increase - its investment in R&D, marketing, branding and design.
Mr. Nam went onto explain the three most important strategies.
Recession and Beyond
The company has intensified its efforts to increase market share despite the volatile economic situation. To achieve this, LG will boost its focus on investing in future growth engines such as solar power, commercial air conditioners and business (B2B) solutions, all sectors LG expects will expand and become increasingly profitable once the economy is back on track.
LG has also reorganized its business portfolio to focus on areas with longer-term growth potential, profitability and partnerships will continue to be a key element of the company's marketing activities to elevate its brand position.
At the end of 2008, LG Electronics established a Crisis War Room (CWR) to bring together LG's five business units, eight regional headquarters and executives to implement and manage the company's aggressive business plan.
In just three months the CWR, with the collaboration of each of the company's business units and company divisions such as supply chain management, marketing, procurement, human resources and finance, has identified and developed 11 key action items. Business units have been instructed to establish task force teams to take responsibility for managing the cost-saving initiatives.
Saving Costs
LG is targeting a reduction in expenses of more than US$ 2 billion in 2009. This company-wide initiative, which includes headquarters and all 82 subsidiaries around the world, also applies to manufacturing and indirect costs.
Globally, LG has been working to further improve its procurement system, which includes everything from raw materials to investment in facilities, financial services and recruitment. LG's efforts to improve its cash flow has already resulted in reduced inventory, increased liquidity, optimized supply chain management and a more consolidated, efficient purchasing process overall.
Global Standard
To cement its position as a global company, LG will continue to direct significant resources toward improving standards to global organizational levels. Efforts currently underway include improving its HR system, reorganizing business portfolios, focusing on customer-centric processes, recruiting and retaining global talent, eliminating unnecessary costs and continuing to foster technology and design innovations. LG now has non-Korean executives occupying five of its seven highest positions and has recruited approximately 200 other professionals around the world to oversee marketing, supply chain and procurement.
"These initiatives will enable LG to improve both growth and profitability over the long-term, regardless of the economic climate," CEO Nam remarked. "Becoming a stronger global brand will be a natural outcome of this effort."
-Ends-
About LG Electronics, Inc.
LG Electronics, Inc. (KSE: 066570.KS) is a global leader and technology innovator in consumer electronics, home appliances and mobile communications, employing more than 82,000 people working in 114 operations including 82 subsidiaries around the world. With 2007 global sales of USD 44 billion, LG is comprised of five business units - Home Entertainment, Home Appliance, Air Conditioning, Business Solutions and Mobile Communications. LG is the world's leading producer of mobile handsets, flat panel TVs, air conditioners, front-loading washing machines, optical storage products, DVD players and home theater systems. For more information, please visit www.lge.com.
© Press Release 2009
