LG Electronics' 2025 Strategy: Emphasizing Competitiveness and Growth in Uncertain Times

LG Electronics' Bold Vision for 2025

In a recent press conference held in Las Vegas, CEO William Cho of LG Electronics (LG) outlined a comprehensive strategy aimed at navigating the challenges of an ever-evolving business landscape. With a primary goal to enhance structural competitiveness and foster qualitative growth, the plan is built on the company’s ability to adapt swiftly to the dynamic market conditions.

Adapting to Market Changes

Cho emphasized that the current business environment is marked by unpredictable uncertainties, necessitating refined execution strategies that can be adapted as global markets shift. These strategies are vital to reposition LG in a competitive landscape that is seeing increased complexities, particularly from Chinese rivals who are moving away from price-based competition to one focused on technology advancement.

Over the past few years, the global market has been slow to recover, with emerging geopolitical risks complicating trade dynamics. Recognizing this, LG has progressively shifted its approach by leveraging innovative business models, including subscription services and webOS-based advertising initiatives. These models not only demonstrate LG's agility but also align perfectly with evolving consumer demand.

The Subscription Service Model

The newly implemented subscription service model is a key element of LG's growth strategy. By combining devices with flexible service options, LG provides customers with enhanced convenience and fosters closer relationships. This model allows users to access products suited to their needs, while LG benefits from recurring revenue streams. The company saw an impressive year of growth, with subscription revenues soaring by over 75%, thereby surpassing original targets.

As this model gains traction, LG is expanding its reach into new markets including India, Singapore, and Hong Kong, following successful launches in other Asian territories. By 2030, LG anticipates tripling its subscription services revenue, making it a linchpin of its growth strategy.

Fostering Platform-based Services

Aside from consumer-facing services, LG is also placing significant emphasis on platform-based business models, particularly with its webOS technology. This segment is projected to be a substantial contributor to LG’s overall profitability, accounting for an estimated 20% of total profits by the end of the decade.

Last year, the webOS advertising and content business surpassed revenue expectations of KRW 1 trillion. This year, LG plans to further develop webOS into a comprehensive content platform that caters to a variety of devices, including IT and automotive solutions. By expanding into AI-driven advertising and content delivery systems, LG aims to create an integrated media platform that enhances customer experiences across numerous environments.

Strategic Focus on B2B Growth

As part of its strategy to accelerate B2B growth, particularly in its HVAC sector, LG has established a dedicated division called LG Eco Solution (ES). This initiative is vital as LG looks to capitalize on increasing demand for environmentally friendly technologies and services in the AI era. The HVAC business is diversified, ranging from residential air conditioning to advanced heating solutions, and aims to encompass a localized approach to better meet client needs.

With a goal to make B2B ventures account for around 45% of total revenue by 2030, LG's move into this sector illustrates the company’s commitment to sustaining growth and expanding service offerings.

Innovations in Future Technologies

To sustain its competitive edge, LG is revitalizing its research and development (R&D) initiatives, focusing on key technologies that bolster business opportunities. The company's strategy involves securing critical technologies in emerging sectors while enhancing capabilities across existing core technologies.

A significant portion of LG’s future R&D efforts—over 75%—will align with strategies maximizing growth potential, such as AI, robotics, and next-generation computing. Utilizing a “3B” strategy—Building, Borrowing, and Buying—LG aims to combine internal developments with acquisitions and partnerships to consolidate its technological leadership.

Conclusion: Commitment to Future Growth

Despite ongoing uncertainties in the business environment, LG is unwavering in its commitment to strategic investments aimed at securing future success. With plans to invest more than KRW 50 trillion by 2030, the company is laying the groundwork for fundamental competitiveness and sustained growth.

As LG embarks on its 2025 strategy, the focus remains firmly on delivering enhanced value to customers while navigating an increasingly complex market landscape. With strong leadership and a vision that prioritizes agility, LG is poised to transform challenges into opportunities in the years ahead.