LG Electronics CEO Outlines Ambitious Growth Strategy Fostering Speed and Innovation
On January 7, 2026, LG Electronics CEO Lyu Jae-chul presented a comprehensive strategic plan aimed at bolstering the company's profitability through rapid innovation and enhanced execution. During a press briefing in Las Vegas, he outlined a three-pronged approach designed to reinforce competitiveness in a fast-evolving market landscape, focusing heavily on speed and efficiency.
The strategy introduced by Lyu is anchored on three key pillars:
1. Reinforcing Competitiveness: This involves elevating quality, cost, and delivery (QCD) standards across the value chain, while also pursuing technology leadership through rigorous research and development (R&D) initiatives.
2. Accelerating Portfolio Transition: LG aims to pivot towards a higher-performance business portfolio that prioritizes sectors exhibiting robust growth potential, including business-to-business (B2B) opportunities like vehicle solutions and HVAC systems, as well as non-hardware services like subscriptions and direct-to-consumer (D2C) models.
3. Implementing AI Transformation (AX): The integration of AI in operational processes will be pivotal to improving overall speed and productivity, aiding in faster decision-making and enhanced organizational execution.
Lyu highlighted the necessity of 'flawless execution' in achieving a competitive edge. To strengthen its fundamental competitiveness, LG plans to establish an Innovation Drive Division directly overseen by the CEO. This division is tasked with enhancing product quality, developing superior cost structures, and fostering a culture of innovation throughout product development, manufacturing, and sales processes.
In research and development, emphasis will be placed on identifying and investing in 'Winning Tech'—technologies that present significant customer value and have strong business potential. By solidifying partnerships with leading global firms, LG aims to elevate its market position and ensure long-term sustainable growth.
The strategy also encompasses a significant shift towards a high-performance business structure. Lyu noted that LG has already seen a considerable increase in revenue from B2B and non-hardware businesses, with the latter's contribution rising from 29% of total revenue in 2021 to 45% by late last year. As LG continues to innovate and redefine its business models, the company's vehicle solutions sector is poised for significant growth due to increasing demand for AI-capable automotive technologies.
Additionally, the HVAC division is preparing to tap into future opportunities by providing specialized cooling solutions for AI data centers. LG’s subscription service model has also gained traction, surpassing KRW 2 trillion in annual revenues, while their webOS platform experiences sustained double-digit growth. The D2C segment has shown promising expansion, with sales climbing over 40% year-on-year in November 2025 alone.
AI transformation, termed AX, is expected to augment profitability by streamlining processes and enhancing overall productivity. Unlike typical digital transformation that focuses on optimizing individual tasks, AX is integrated and data-driven, allowing for swift decision-making throughout the organization. LG seeks a 30% productivity boost over the next few years, thereby freeing up resources to focus on innovation and high-value tasks. Already, AI technologies such as LGenie—a chatbot that has evolved into an enterprise-wide AI platform—are at the forefront of LG's operational improvements.
Despite uncertain global market conditions, LG plans on increasing its investment in growth initiatives by over 40% this year. This funding will be channeled towards projects such as AI Home solutions, smart factory advancements, AI data center cooling, and robotics. LG also intends to pursue strategic partnerships to maximize capabilities and foster new opportunities for innovation. Lyu concluded by reaffirming the importance of staying ahead in a rapidly changing industry landscape, emphasizing the imperative for LG to not just keep pace, but to lead the charge in innovation and execution.
LG Electronics remains a global leader in technology, consistently delivering state-of-the-art consumer and commercial products ranging from home appliances to advanced automotive systems. With an international workforce of more than 75,000 engaged across a multitude of sectors, LG is set on a path of transformative growth in the coming years, all while striving to deliver unrivaled value to its customers worldwide.
Key Pillars of the Strategy
The strategy introduced by Lyu is anchored on three key pillars:
1. Reinforcing Competitiveness: This involves elevating quality, cost, and delivery (QCD) standards across the value chain, while also pursuing technology leadership through rigorous research and development (R&D) initiatives.
2. Accelerating Portfolio Transition: LG aims to pivot towards a higher-performance business portfolio that prioritizes sectors exhibiting robust growth potential, including business-to-business (B2B) opportunities like vehicle solutions and HVAC systems, as well as non-hardware services like subscriptions and direct-to-consumer (D2C) models.
3. Implementing AI Transformation (AX): The integration of AI in operational processes will be pivotal to improving overall speed and productivity, aiding in faster decision-making and enhanced organizational execution.
Advancing Competitiveness and Innovation
Lyu highlighted the necessity of 'flawless execution' in achieving a competitive edge. To strengthen its fundamental competitiveness, LG plans to establish an Innovation Drive Division directly overseen by the CEO. This division is tasked with enhancing product quality, developing superior cost structures, and fostering a culture of innovation throughout product development, manufacturing, and sales processes.
In research and development, emphasis will be placed on identifying and investing in 'Winning Tech'—technologies that present significant customer value and have strong business potential. By solidifying partnerships with leading global firms, LG aims to elevate its market position and ensure long-term sustainable growth.
Shifting Towards High-Performance Portfolio
The strategy also encompasses a significant shift towards a high-performance business structure. Lyu noted that LG has already seen a considerable increase in revenue from B2B and non-hardware businesses, with the latter's contribution rising from 29% of total revenue in 2021 to 45% by late last year. As LG continues to innovate and redefine its business models, the company's vehicle solutions sector is poised for significant growth due to increasing demand for AI-capable automotive technologies.
Additionally, the HVAC division is preparing to tap into future opportunities by providing specialized cooling solutions for AI data centers. LG’s subscription service model has also gained traction, surpassing KRW 2 trillion in annual revenues, while their webOS platform experiences sustained double-digit growth. The D2C segment has shown promising expansion, with sales climbing over 40% year-on-year in November 2025 alone.
Embracing AI Transformation for Enhanced Profitability
AI transformation, termed AX, is expected to augment profitability by streamlining processes and enhancing overall productivity. Unlike typical digital transformation that focuses on optimizing individual tasks, AX is integrated and data-driven, allowing for swift decision-making throughout the organization. LG seeks a 30% productivity boost over the next few years, thereby freeing up resources to focus on innovation and high-value tasks. Already, AI technologies such as LGenie—a chatbot that has evolved into an enterprise-wide AI platform—are at the forefront of LG's operational improvements.
Commitment to Future Growth
Despite uncertain global market conditions, LG plans on increasing its investment in growth initiatives by over 40% this year. This funding will be channeled towards projects such as AI Home solutions, smart factory advancements, AI data center cooling, and robotics. LG also intends to pursue strategic partnerships to maximize capabilities and foster new opportunities for innovation. Lyu concluded by reaffirming the importance of staying ahead in a rapidly changing industry landscape, emphasizing the imperative for LG to not just keep pace, but to lead the charge in innovation and execution.
LG Electronics remains a global leader in technology, consistently delivering state-of-the-art consumer and commercial products ranging from home appliances to advanced automotive systems. With an international workforce of more than 75,000 engaged across a multitude of sectors, LG is set on a path of transformative growth in the coming years, all while striving to deliver unrivaled value to its customers worldwide.
Topics Consumer Products & Retail）
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