The company strengthens its long-term strategy with Agile Adaptability in rapidly changing business environments
LAS VEGAS, January 9, 2025 /PRNewswire/ — LG Electronics (LG) CEO William Cho and top company executives presented the company’s 2025 business strategy at a press conference today for Korean media has Las Vegas, NevadaUnited States CEO emphasized the need to strengthen structural competitiveness and accelerate qualitative growth by refining execution strategies suited to rapidly changing global market environments.
Cho highlighted the positive progress made through innovative business models, such as subscription service businesses and WebOS-based advertising and content businesses, which demonstrate LG’s agile responsiveness to the evolving demands of the walk. “Amid unprecedented market uncertainties and a changing competitive landscape, we need a fundamentally different level of strategy and precise execution,” he emphasized.
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 changes in trade policies of major countries, become more pronounced. The competitive paradigm for Chinese companies is also shifting from price-based competition to a more sophisticated approach to technology.
Under Future Vision 2030, LG aims to expand its existing device-centric business into mobility and commercial spaces. Leveraging decades of customer understanding, know-how and technology expertise, the company seeks to transform into a smart living solutions provider that connects and enhances customer experiences.
“Despite a challenging environment, significant opportunities remain,” Cho added. “By focusing on delivering differentiated customer value, we will create continued growth.”
Shifting business paradigms to meet market demands
LG is increasing its market presence through new business models such as subscription services and the brand’s online store. Capitalizing on the company’s strengths, the subscription business combines devices and services to provide greater convenience and flexibility, going beyond price-driven competition. Customers can use the products for the duration that best suits their needs and benefit from optimized care services, allowing LG to maintain closer customer relationships and generate recurring revenue.
LG is also strengthening its competitive advantage by improving on-site care services and diversifying sales channels. This year, the company is expanding its service to India, Singapore And Hong Kongafter successful launches in Malaysia, Thailand And Taiwan.
In 2024, LG’s revenue from subscription services grew more than 75% year-over-year (YoY), surpassing the company’s initial target (1.8 trillion KRW) to achieve total reconciliation 2 trillion KRW. LG aims to more than triple that figure by 2030, making its subscription services a key growth driver.
The brand’s data-driven online store is also growing rapidly, with sales up more than 80% year-on-year during last November’s Black Friday period.
Expand the platform-based services business through webOS
The platform-based services business, which contributes to the transformation of the company’s business structure towards a high-profit model, aims to increase its turnover by more than five times by 2030, to represent term 20% of LG’s total operating profit. This business model leverages hundreds of millions of LG products sold worldwide as a platform to generate revenue by providing customers with personalized content, advertisements and services.
A prime example of LG’s current success in this area is the company’s webOS smart TV operating system-based advertising and content business. Last year, the webOS-based advertising and content business exceeded its revenue target of 1 trillion KRW.
Starting this year, webOS will become a comprehensive content platform for various devices and solutions, including IT products and vehicle infotainment systems. It will also expand its scope to encompass AI-driven digital out-of-home (DOOH) solutions for advertisers, evolving into an “integrated media advertising platform” that delivers differentiated content experiences across various indoor and outdoor spaces .
To this end, LG initiated the integration of its display-based businesses – including TVs, signage, monitors and laptops – through an organizational realignment late last year. The company is also exploring various opportunities to secure additional capabilities through mergers and acquisitions (M&A) and partnerships.
Accelerated growth in B2B illustrated by CVC
To accelerate the growth of the B2B sector, the company is focusing on its heating, ventilation and air conditioning (HVAC) business, which is expected to grow rapidly in the AI era. LG has created a dedicated business division, LG Eco Solution (ES), to take its existing HVAC business to new heights. The HVAC business, alongside LG’s automotive components and smart factories businesses, will play an important role in the success of the company’s B2B businesses.
LG HVAC offers a comprehensive range of high-efficiency, high-performance solutions utilizing the company’s industry-leading core technologies. Its cutting-edge 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 cooling technology, which is now being applied to optimize energy efficiency in data centers – a critical backbone of AI infrastructure. Additionally, in key markets, LG is accelerating the establishment of a localized end-to-end business structure that encompasses R&D, production, sales and maintenance, and has the capacity to develop region-specific solutions. .
By 2030, LG expects its B2B business to account for around 45% of all revenue generated by the company. B2B revenue accounted for around 27% of total revenue in 2021 – a figure that rose to 35% at the end of last year.
Undertaking bold R&D initiatives to address future megatrends
The company is also reorganizing its future technology R&D portfolio to align with key strategic directions: maximizing business potential, expanding platform-based services businesses, accelerating B2B businesses, and rapidly commercializing new growth drivers. More than 75% of LG’s advanced R&D efforts will focus on enterprise technologies aligned with the company’s mid- and long-term strategies, and securing critical technologies in promising future areas.
LG will continue to focus on strengthening core technologies across eight core technologies: software, systems-on-chip, AI, robotics, materials and parts, standards, next-generation computing and cloud/data. Specifically, the company will apply CEO Cho’s principles”3B” – Build, borrow and buy – by fostering internal capabilities, leveraging external expertise and acquiring technologies. This approach includes forming partnerships with global technology giants as well as promising startups and universities In order to consolidate its technological leadership, LG will further strengthen its R&D efforts in high-potential future areas, such as quantum computing and space technologies.
CEO-led task force system to improve structural competitiveness
In addition to transforming its business portfolio, LG is focused on strengthening its structural competitiveness – represented by quality, cost and delivery – to face intensifying global competition.
This year, LG is implementing a new CEO-led evaluation system to drive these efforts. Each business division and headquarters organization will establish a task force to provide leadership in product and technology, manufacturing efficiency, R&D and operations, with CEO Cho personally overseeing their progress. The primary objectives of each working group include securing product and technology innovations, improving manufacturing capabilities, and enhancing R&D capabilities.
LG is also making meticulous preparations to improve its ability to strategically respond to external uncertainties. Working with internal and external experts, the company builds predictive scenarios for key issues and develops a “playbook” to identify optimal responses. This forward-looking approach should minimize the impact of external factors on the business and uncover new opportunities.
Sustained investment in future growth
Although the business environment will continue to face considerable uncertainty in the years to come, LG is committed to maintaining its strategic investments. Intended to guarantee the fundamental competitiveness of businesses and support future growth, these investments will be “maximized” according to strategic priorities.
In addition to investing in facilities and R&D, LG is actively exploring the strategic allocation of investment resources for equity investments and mergers and acquisitions to further accelerate the company’s growth. Previously, LG announced plans to inject more 50 trillion KRW by 2030 to drive portfolio transformation and qualitative growth.
About LG Electronics, Inc.
LG Electronics is a global innovator in technology and consumer electronics, operating in nearly every country and employing more than 74,000 people internationally. LG’s four companies – Home Appliance Solution, Media Entertainment Solution, Vehicle Solution and Eco Solution – combined for global revenue of more than 88 trillion KRW in 2024. LG is a leading manufacturer of consumer and commercial products ranging from televisions, home appliances, air conditioning solutions, monitors, automotive components and solutions, and its premium brands LG SIGNATURE and LG ThinQ smart phones are household names around the world. Visit www.LGnewsroom.com for the latest news.
SOURCE LG Electronics
