LG vice chairman wields magic wand
LG Group Chairman Koo Bon-moo, third from left, and Vice Chairman Koo Bon-joon, second from left, listen to research and development (R&D) achievements at the company’s R&D Campus in Yangjae, southern Seoul, March 8. The former is the elder brother of the latter. On left is LG Electronics CEO Jo Seong-jin. / Courtesy of LG Group
Koo Bon-joon brings success with timely investments
By Yoon Sung-won
LG Group Vice Chairman Koo Bon-joon’s long-term perspective on investment in future businesses and research projects is benefiting group affiliates.
In its preliminary earnings report, April 7, LG Electronics estimated it will post 14.66 trillion won in sales and 921.5 billion won in operating profit in the first quarter, up 9.7 percent and 82.4 percent year-on-year, respectively. This is the company’s best quarterly performance in eight years.
Market watchers said Sunday that LG Electronics’ emphasis on high-tech products, and a premium branding strategy led the performance.
“LG Electronics has expanded the proportion of high-tech products such as organic light-emitting diode (OLED) televisions, while promoting its super-premium “SIGNATURE” brand of home appliances,” an industry source said. “The company’s long-term vision and investment in high-end markets have led it to profitability.”
Among all LG Electronics TVs sold worldwide, more than 10 percent were OLED products last year. The company aims at extending the proportion to over 15 percent.
LG Electronics’ drive for premium brand and OLED TV started three years ago when Koo took charge of the company.
Koo launched a committee of design experts and top decision makers at the company in 2014 to leading the SIGNATURE brand. Launched in March 2016, TVs, refrigerators, washing machines and air purifiers were included in the premium brand.
The committee has suggested a new way of making electronics _ designing products as a whole first and developing technological details for them later.
Renowned industrial designer Torsten Valeur, who used to work with Danish premium audio company Bang & Olufsen, was also invited to the committee to consult for the SIGNATURE brand products, according to LG.
The SIGNATURE brand improved the image of LG Electronics’ products by receiving prizes at Germany’s iF design, the Red Dot and Japan’s Good Design awards.
Early this month, Koo visited the Milano Design Week 2017 to front LG’s design exhibitions for electronics, vehicle components and lighting.
“Koo’s visit to the design fair came as he seeks to expedite the growth of major businesses of group affiliates,” a Seoul analyst said. “He understands that strength in product design can build a premium image.”
As CEO of LG Electronics, Koo also made a bold decision to shift the focal point of the company’s TV business from liquid crystal display (LCD) TVs to OLED TVs in 2013.
Unlike LCDs, OLED displays do not need backlights because every pixel of the panel can light themselves. It has been considered as one of the most promising technologies for future TVs with its color production and contrast features.
LG Electronics released a 55-inch OLED TV in January 2013 for the first time in the world. Last year, the company became the world’s top provider of premium TVs that cost over $2,500.
The company has continued to increase investment in research and development (R&D) under Koo’s leadership since 2010. It invested 3.8 trillion won in R&D projects in 2015, up about 40 percent from 2.7 trillion won in 2010.
Backed by the investments, LG Electronics has developed new products such as the Twin Wash washing machine, which has separate dual drum washers in one body, and the Gram series of laptops, which weigh less than 1 kilogram.
Vehicle components business
The vice chairman also decided on the foundation of LG Electronics’ future growth businesses _ vehicle components.
Koo launched an LG Electronics vehicle components unit by integrating V-ENS, an automobile component design subsidiary of LG CNS, in 2013. He also opened the LG Electronics R&D campus in Incheon.
Koo has continued his push the competitiveness and profitability of LG’s vehicle component business.
In January, he visited Las Vegas to participate in the Consumer Electronics Show (CES) 2017. He paid extra attention to the automobile industry and visited exhibitions of global automakers as well as LG Electronics’ vehicle components section. As CES, the world’s largest consumer electronics fair, has increasingly been exhibiting future automobile technologies such as autonomous driving and electric vehicles, LG Electronics has also strengthened the promotion of its vehicle components business.
Koo also attended the North American International Auto Show (NAIAS) in Detroit, not just for the exhibition but also to meet with executives of major U.S. automakers such as General Motors and Ford to discuss cooperation, according to an industry source.
“Industrial boundaries between electronics and automobiles have continued to be blurred in recent years,” the source said. “Koo’s visit to the CES and the NAIAS earlier this year shows his interest in the vehicle components industry worldwide.”