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Press Release

01/07/2006

LG Declares New Era of Blue Ocean Management

LG Electronics (LG), a leader in consumer electronics and telecommunications, today announced the launch of its first 'Blue Ocean* Management' campaign. Underlying its drive to beco

LG Electronics (LG), a leader in consumer electronics and telecommunications, today announced the launch of its first 'Blue Ocean* Management' campaign. Underlying its drive to beco
me a top three consumer electronics player by 2010, the program incorporates the understanding that only flexible companies that adapt to lifecycle and industry changes will enjoy continued growth.

Further, LG plans to double its sales volume, profit and shareholder benefit by 2010 with 30% of its sales volume and 50% of its profit being derived through so-called 'Blue Ocean Products**.' The criteria of Blue Ocean Products are growth potential (based on sales performance), market leadership (based on market share) and its contribution toward profit.

"This paradigm management-style shift will not only allow LG to double revenue and generate higher profits while enhancing shareholder value." CEO S.S. Kim said. "LG will also strengthen its overall capabilities to deliver quality, premium products enhancing its offering to consumers around the world."

Philosophies of customer-oriented management, competitive advantage in technology and increased management efficiency are central to this initiative. Additional initiatives of this campaign are strengthening business capabilities, enhancing brand value and developing next-generation high-tech business.

While all marketing plans continue to be designed from the viewpoint of its customers, LG will strive to create value for consumers and the market.

* The Concept of Blue Ocean

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. For LG, it is the significant choice for the leap to become one of the global top 3 electronics and telecommunications b
y 2010.

** The Blue Ocean Products

Products or services which create a mass market or significantly increase market shares, profit by offering differentiated values in view of customers.

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