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Press Release

01/09/2004

LG Electronics Speeds up Building Strong Brands

- CEO S.S.Kim attends '2004 CES' and calls for aggressive efforts toward global management

- CEO S.S.Kim attends '2004 CES' and calls for aggressive efforts toward global management
- Declare the organization centerpiece "LGE Way" to aim for "global top 3"
- Target an increase of 20% in global sales and a 15% growth in investment
- Create a dominant and assertive presence in the North American market

Seoul, Korea, Jan 9, 2004 - LG Electronics (CEO and Vice Chairman S.S.Kim / www.lg.com) is ready to accelerate global brand marketing activities in the North American market. This drive is aimed at fulfilling the corporate vision of ranking among the top 3 global firms in electronics, information, and communications by 2010.

CEO and Vice Chairman S.S.Kim attended the 2004 Internationfal Consumer lectronics Show (CES), the world's largest appliance exhibition held on January 8-11 at the Las Vegas Convention Center in the United States.
S.S.Kim also hosted a press conference disclosing the company's global anagement plans as well as its market strategy for North America.

"This year, tasked with responsibilities and obligations as the CEO of a global corporation, I will concentrate my efforts in transforming the LG brand into a world-class premium brand," S.S.Kim declared. He stressed that global management is "at the heart of our overall management activities."

LGE posted global sales of about 29 trillion won last year. This year, it seeks to achieve an ambitious 20% sales growth rate compared to last year. North America, as a major strategic region for the company, represents 20% of total sales. Thus, beginning this year, the company created and launched the comprehensive regional function for North America aimed at boosting sales in advanced markets.

In the North American market, LGE posted about US$ 6 billion in sales last year. By strengthening its brand marketing activities, the company expects to achieve an increase of 20% from the previous year. Toward this end, LGE is set to invest US$ 300 million in brand marketing activities in the next three years. The company also strives to improve the synergistic effect of enhancing its standing and presence in the North American market through efforts in product development, distribution, and organization restructuring.

Meanwhile, CEO S.S.Kim unveiled specific strategies to hasten LG brand marketing through the CES as part of its global management strategy.

- Strengthening of Brand Marketing

To implement its global brand marketing strategy fully, LGE headquarters created a new brand management team that will report directly to the CEO. The team will uphold the new slogan "Life's Good," which is aimed at consolidating LGEs brand identity. Thus, LGE is poised to promote aggressively the LG premium brand in the global market.

Likewise, beginning in a series of events that took place in New York Times Square in December, LGE is set to introduce a new brand campaign. The campaign embraces the theme "Life's Good" and presents a distinctly superior lifestyle created by LG products.

According to a Gallup brand survey conducted in 2003, LGE has achieved top brand image status in India, CIS, Middle East, and Africa; thus garnering 30% global brand recognition. Buoyed by this success, the company has made more concrete plans of focusing its efforts on boosting its brand image in North America, Europe, and other advanced markets.

LGE is preparing to promote a single LG brand in the global market as it embraces this strategy. The electronics giant will foster LG as a premium brand particularly in the United States, whereas Zenith will be used as a brand for base markets.

- Business Strategy for North America

Because of the rapidly growing North American market, which demands new display products such as PDP, LCD, and MDP (Micro Display Projection) (400,000 units in 2002, 2 million in 2003, and approximately 4 million in 2004), LGEs all-out brand launch in the 2004 CES this January will surely give the company an opportunity
to consolidate its business base at an earlier date.

Through the occasion of this important show, LGE will release on a grand scale beginning this year premium audio-visual products under the LG brand such as premium display products and wireless home theaters in the North American market. This strategic move will undoubtedly enhance the companys overall product lineup.
Thus, the company aims to capture over 10% market share in the category of PDP and LCD TVs.

In particular, LGE will release into the market PDP TVs mostly with screen sizes of 42 to 60 inches. In the second half of the year, the company will unveil its 71-inch PDP TVs. For LCD TVs, LGE will step up the lineup of 30 to 50-inch medium and large sizes, instead of small sizes. In addition, LGE will extensively release premium home theaters and sophisticated audio-visual products such as DVDR (Digital Versatile Disc Recorder) and HDPVR (HD Personal Video Recorder).

LGE is also preparing to fortify its selling and distribution strategies through the 2004 CES. The company invited to the CES the leading distribution channels specializing in high-end audio-visual products and major US chains such as Best Buy and Circuit City. The company seeks to strengthen partnerships among senior management and step up the strategy to transform the LG brand into a premium brand.

- Establishment of North American Headquarters

On the other hand, the company restructured its North American business units, which was divided into LGEUS (New Jersey), Zenith (Chicago), and LGEMU (San Diego), into an organization where organic cooperation can be achieved among business divisions and regions (East, Middle, and West) and where a comprehensive regional function can foster synergistic effects.

- Declaration of LGE Way and Management Policy for 2004

Meanwhile, LGE declared "LGE Way" in its annual New Year's business opening ceremony as a strong driving force that can powerfully push for change and innovation in order to achieve the "global top 3" goal by 2010.

The LGE Way embraces LGE's unique management methods necessary for attaining the No. 1 status as well as growth strategies that pursue fast innovation and fast growth as modes of corporate value, thinking, and behaviour to be shared and practiced by members an inculcated in the corporate culture. It also encompasses
field-based management methods, reliability-based leadership, "Right people" philosophy, innovation-oriented corporate culture, and other new paradigms that the company must adopt.

LGE upholds this year's management policies as follows:

1. Accelerating global management: LGE is gearing up this year to promote aggressively the LG brand as a world-class premium brand.

2. Fast Growth: LGE is set to enhance its cost competitive edge in each division and subsidiary and maximize its profitability.

3. "GCGP corporate culture"
Through the "Great Company, Great People" corporate culture, LGE is creating outstanding results and crafting a culture of passion and excellence where members of a great company grow professionally as great people.

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