Company Profile

Establishing LGEGF was an important step in the Growth strategy of the

company. As part of the global expansion of LG Electronics, the Middle East
has a very high priority and setting up LGEGF indicates enhanced
Commitment to the region.
The stable and growing markets of the area are also the reasons to open a
new subsidiary located in the Jebel Ali Free Zone.
Being in center of Dubai brings us close to local markets, which means we
can respond to customers needs and market changes immediately.
CORPORATE NAME: LG Electronics Gulf FZE
ESTABLISHED: 14th October 1996
PRESIDENT: Mr. Hyun Shik Paik
OUR BUSINESS UNITS
LG is comprised of six business units:
Home Entertainment
Home Appliances
IT Products
AE (RAC, CAC, Solar & Lighting)
Business Solutions

Mobile Communications

MAIN PRODUCTS
LED TV, Plasma TV, LCD TV, LCD Monitor, Commercial Monitor, CD-ROM
Drives, DVD-ROM Drives, CD Rewritable Recorder, VCR, DVD Player, DVD
Recorder, Portable DVD, Home Theater, Notebook, Air Conditioner,
Refrigerator, Microwave Oven, Washing Machine, Vacuum Cleaner,
Compressor for Air Conditioner, Compressor for Refrigerator, Air Purifies,
HomNet, Built-in Appliances.
OFFICIAL WEBSITES
http://www.lg.com/ae
http://www.lg.com/ae_ar
http://ae.lgworld.com/web.main.dev
OTHER LINKS
http://www.twitter.com/lggulf
http://www.facebook.com/lgfanclub

Company Background
LG

Electronics

Inc. (Korean: LG , KRX: 066570, LSE: LGLD)

Korean multinationalelectronics company

headquartered

is

a South

in Yeouido-

dong, Seoul, and a member of the LG Group, employing 83,000 people

working in 119 local subsidiaries worldwide. With 2013 global sales of USD
53.1 billion (KRW 58.14 trillion), the company operates its business through
five

divisions:

Home

Entertainment,

Mobile

Communications,

Home

Appliance, Air Conditioning and Energy Solution, and Vehicle Components.

[2]

CEO of LG Electronics is Bon-joon Koo, who assumed the role of Vice

Chairman of LG Electronics on 1 October 2010. In 2011, LG Electronics was

the world's second-largest television manufacturer.
History
19581960s
In 1958, LG Electronic was founded as GoldStar (Hangul:). It was
established in the aftermath of the Korean War to provide the rebuilding
nation with domestically-produced consumer electronics and home
appliances. LG Electronics produced South Korea's first radios, TVs,
refrigerators, washing machines, and air conditioners.[4] GoldStar was one of
the LG group with a sister company, Lak-Hui (pronounced "Lucky") Chemical
Industrial Corp. which is now LG Chem and LG Households. The Goldstar

corporate name had been changed to LG Electronics (Lucky-Goldstar) and LG

Cable in 1995, after merging with Lucky Chemical.

2000present
In order to create a holding company, the former LG Electronics was split off
in 2002, with the "new" LG Electronics being spun off and the "old" LG
Electronics changing its name to LG EI. It was then merged with and into LG
CI in 2003 (the legal successor of the former LG Chem), so the company that
started as Goldstar does not currently exist.
LG Electronics plays a large role in the global consumer electronics industry.
LG launched the LG Chocolate mobile phone in 2005 and is the secondlargest LCD TV manufacturer worldwide as of 2013.[6] By 2005, LG was a Top
100 global brand, and in 2006 LG recorded a brand growth of 14%.[7] Its
display manufacturing affiliate, LG Display, as of 2009 was the world's
largest LCD panel manufacturer.[8] In 2010, LG Electronics entered
the smartphone industry. Since, LG Electronics continued to develop various
electronic products, such as releasing the world's first 84-inch ultra-HD TV for
retail sale.[9]
On 5 December 2012, the antitrust regulators of European Union fined LG
Electronics and several other major companies for fixing prices of
TV cathode-ray tubes in two cartels lasting nearly a decade.[10]

In 2014, LG Electronics began to a new typeface for the "LG" in its logo.
On June 11, 2015, LG Electronics found itself in the midst of a human rights
controversy when The Guardian published an article by Rosa Moreno, a
former employee of an LG television assembly factory.[11] Moreno reported
that she had lost her hands in an industrial accident, and that the factory
initially provided her only $3,800 for the devastating loss. Moreno has
continued to battle LG to find sufficient compensation for the loss of her
hands, and the company has been notably unresponsive and unsympathetic
to her case.
Products
LG Electronics' products include televisions, home theater
systems, refrigerators, washing machines, computer monitors, wearable
device ,smart appliance and smartphones.
Televisions
LG Electronics launched an OLED TV in 2013 and 65-inch and 77-inch sizes in
2014. LG Electronics introduced its first Internet TVin 2007, originally
branded as "NetCast Entertainment Access" devices. They later renamed the
2011 Internet televisions to "LG Smart TV" when more interactive
television features were added, that enable the audience to receive
information from the Internet while at the same time watching conventional
TV programming.

In November 2013, a blogger discovered that some of LG's smart TVs silently
collect filenames from attached USB storage devices and program viewing
data, and transmit the information to LG's servers and LG-affiliated servers.
[18][19]

Shortly after this blog entry went live, LG disabled playback on its site

of the video, explaining how its viewer analytics work, and closed
the Brightcove account the video was hosted on. By December 2013, the
page itself was removed from LG's website.
LG's remote uses Hillcrest Labs' Freespace technology to allow users to
change channels using gestures[22] and Dragon Naturally Speaking
technology for voice recognition.[23]
As of 2014, LG is using webOS with a ribbon interface with some of its smart
TVs. LG reported that in the first eight months after release, it had sold over
5 million webOS TVs.
Mobile devices
Mobile

LG G4 Global Launching

LG Electronics manufactures a wide range of smartphones and tablet

devices.[25] Other than the G3, LG officially unveiled the curved smartphone,
G Flex, on 27 October 2013. LG has released it in South Korea in November
2013, and later announced releases in Europe, the rest of Asia, and North
America. At Consumer Electronics Show in January 2014, LG announced an
U.S. release for the G2 across several major carriers. In 2015, LG has
released LG G4 globally in late May through early June.
Tablet
In 2014, LG revealed three new additions to the G series of tablets, which
each include LG's Knock Code feature, allowing users to unlock devices with
a series of taps. The tablets also feature Q Pair which allows tablets to sync
up with a smartphones, and for phone calls and text messages passed on to
the tablet in real time.[30]
Smart watch
LG Watch Urbane LTE
LG G watch R
LG and Google announced the Android Wear-based smartwatch, the LG G
Watch, that was in June 2014. In August 2014, the LG G Watch R that has a
round face (similar to the Moto 360) was released. The G watch urbane that
LG's third android watch has released in April, 2015. This is the first device to

support new features such as Wi-Fi, and new parts of Android

Wear's software interface, like the ability to draw emoji to friends.
Rolly Keyboard
In 2015, LG announced the first Bluetooth keyboard that folds up along the
four rows of keys that can be tossed in a purse or pocket. The rolly keyboard
is made of solid plastic. Two tiny plastic arms fold out from the end of
the keyboard to support a tablet or smartphone, and it can toggle between
two different Bluetooth-connected devices at a time. Battery life is an
expected three months on a single AAA battery.

Home appliances
LG manufactures and sells home appliance products such as refrigerators,
washers and dryers, vacuum cleaners, kitchen appliances, and residential air
conditioners. In June 2014, LG Electronics also announced the launch of its
smart appliances with HomeChat messaging service in South Korea.
HomeChat employs LINE, the mobile messenger app from Korean company
'Naver', to let homeowners communicate, control, monitor and share content
with LGs smart appliances. Users can send simple messages, such as "start
washing cycle," in order to control their washing machines.

SUPPLY CHAIN MANAGEMENT STRATEGY

LG Electronics is continuously expanding green partnerships with its
suppliers which called Green Program Plus.
GREEN PARTNERSHIP
GREEN PROGRAM PLUS
First implemented in 2005, Green Program Plus (GP Plus) is a sustainability
management program for our supply chain. Not only does the program help
us respond to regulations on managing hazardous substances, but it also

enables us to identify risks existing in our supply chain and to promote our
suppliers competitiveness in sustainability management. This program has
now been expanded to parts procurement and GHG emissions, and includes
second-tier and third-tier suppliers as well as primary suppliers. LG
Electronics also validates and evaluates the green management system as
well as the capacity of our existing and new suppliers on an ongoing basis.
CERTIFICATION PROCESS
The certification examination only takes place at factories of companies that
have passed the LG Electronics' review along with verification of the
documents related to hazardous substances. For the company that passed
the examination, and actual business is initiated with conclusion of a parts
warranty.

DOCUMENTS FOR SUPPLIERS

LG Electronics distributes related information such as 'LG Electronics manual
of the hazardous substance management in parts and models' both online
and offline, so that its partner firms can easily adapt their operations to the
GP Plus. This manual also contains detailed LGE principles and standards
with regard to hazardous substance management in parts and models.

Click to download the latest version of 'LG Electronics manual of the

hazardous substance management in parts and models' in each language.
EnglishKoreanChinese
CERITIFICATION CRITERIA
All vendors have to secure the eco-friendly quality by renewal examination
continuously, after new approval.
SUPPLIER TRANING
In order to strengthen green partnerships with suppliers, LG Electronics
provides annual training on green technology, compliance response and GHG
emissions management to suppliers (staff members from environmental
management departments) and LGE employees in charge of the partnership.
In 2013, 239 supplier staff members (Green Expert Program) and 106 LGE
employees(Green Auditor Program) completed the training. We also
introduced new programs to foster experts in green equipment analysis
(Green Equipment Expert Program) and in measuring hazardous substances
(Environmental Data Collection Expert Program) in 2013, and conducted
training for the equipment testing operators of our suppliers, all in an effort
to improve the credibility of collected data and hazardous substance
management systems. In 2013, a total of 165 supplier staff members
completed the program, and we plan to expand training targets in 2014.

Global strategy of LG Electronics as a leading Korean company

Tomikazu Hiraga
Senior research Fellow
NLI Research Institute
Economic recovery in advanced countries including Japan is still sluggish,
although corporate financial performance has been recovering gradually. And
companies whose business activities in emerging countries experiencing an
economic boom account for a larger proportion tend to show better financial
performance. Leading Korean companies have a larger presence in the world
market and attract considerable attention.
I will focus on LG Electronics, Inc., a leading company ranking with Samsung
Electronics Co., Ltd. in the worlds electrical and electronics industries, with
the largest market share in home appliances markets in important emerging
countries, such as India, Brazil, and Indonesia, and relatively advanced
management methods including corporate governance, which are highly
valued, and will discuss features or important points of its global
management and personnel strategy in this article.
(Reference: Exchange rates as of August 5, 2010 were as follows. The
Japanese yen/Korean won foreign exchange rate was approximately 0.074

to the Korean won. The Japanese yen/Indian rupee rate was approximately
1.87 to the Indian rupee. )
Leading Korean zaibatsuThe LG group
The Korean zaibatsu (chaebol), a unique large companies group, is very
influential in Koreas corporate sector. Top 28 companies by market
capitalization other than public corporations account for 58 percent in the
aggregate market value (Korea Composite Stock Price Index: KOSPI) at the
end of 2009 and most of those companies belong to zaibatsu company
groups. Striking features of the zaibatsu are as follows:
1. Many zaibatu started as a family company.
2. Zaibatsu leaders and their relatives and affiliated companies are major
shareholders.
3. Share holding relationships are complicated.
4. Zaibatsu companies are engaged in businesses in diversified business
areas.
Table 1 shows changes of companies groups and the LG group has occupied
a higher position, although some groups failed or are downgraded due to the
Asian currency and financial crisis in 1997 and 1998. Also its LGs leader is in
the third generation ahead of other major zaibatsu and he introduced a

holding company system, aiming at clarifying the structure of owning and

controlling group companies.
Total assets of the LG group with 53 affiliated companies reach 78.9 trillion
won, the fourth largest in Koreas private sector (following Samsung, Hyundai
Automobile and SK) and combined market capitalization of the groups
leading four companies (LG Corp., (a holding company), LG Electronics, LG
Display, and LG Chem.) accounted for approximately seven percent of the
aggregate market value (KOSPI) at the end of 2009. LG Corp., a groups core
company, controls three large segments, that is, electronics, chemicals,
and telecommunications and services. Among these, LG Electronics plays a
central role in the electronics segment. However, the group expects LG
Chemistry to play a heightened role in its battery business, one of the most
important and promising business areas.
Management policy of Harmony and solidarity, Respect for human beings
Features of LG groups management policies are as flows:
1. Relatives including the zaibatsu leader, large shareholders, carried out
corporate management in collaboration
2. Its extent of diversification of business lines is relatively limited and
electronics and chemicals businesses have grown mainly.

3. The groups management has abided by its management policies of

considering human beings first (Harmony and solidarity, Respect for
human beings) and the group was the first zaibatsu to start recruiting
employees publicly. Thus it has actively wrestled with the appointment and
training of promising staff to be professional managers.
4. The group is said to have fewer relationships with politicians and less
reliance on them. As a result, it managed to grow its businesses and
concentrate management resources by its own policies and strategies.
In Korea, many companies face difficulties in dealing with unions and labor
strikes. However, both employers and employees agreed on a pay increase
for 20 years in a row without any offensive negotiations in LG Electronics
(NNA for March 9, 2009). The situation is different from Samsung Electronics
which does not have a labor union. The February 26, 2005 issue of the Toyo
Keizai describes corporate culture of the leading zaibatsu as Samsungs
management, Hyundais guts, and LGs harmony and solidarity.
LGE ranked fourth in its industry in Global 500
LGE has five segments: Home Entertainment (TVs and audio products),
Mobile Communications (cellular phones and handsets), Home Appliance
(home appliances), Air Conditioning, and Business Solutions (monitors,
commercial displays for hotels, equipment for automobiles, and security

solutions). LGE has expanded into approximately 80 countries and the

number of employees exceeds 80 thousand.
Its consolidated financial results (FY 2009) and position in the industry are as
follows:
Sales: 73.0 trillion won (a 15.3 percent increase year over year)
Operating profit: 4.2 trillion won (a 3.6 percent increase y-o-y), operating
profit margin: 5.8 percent
Net profit: 2.8 trillion won (a 145.0 percent increase y-o-y)
Total assets: 44.8 trillion won (equity capital: 17.2 trillion won)
LGE was ranked fourth in its industry in 2009 Fortune Global 500 in terms
of sales volume, behind first-place Siemens, second-place Samsung
Electronics, and Hitachi and ahead of Panasonic and Toshiba, which were
ranked fifth and sixth, respectively.
LGEs TVs or cellular phones market share and respective position in terms
of sales volume in 2009 in the world.
LGE had the second largest market share in terms of TV sales (the same 12.4
percent share as SONY. Samsung Electronics had the largest share of 23.3
percent.) and the third largest share in cellular phones sales(10.5 percent. It
was behind Nokia (38.3 percent) and Samsung (20.1 percent)). The company

is one of the companies with the largest market share with respect to
refrigerators, air conditioners, washing machines, microwaves in the world
and is the leading home appliance supplier in growth markets including India,
Brazil, and Indonesia.
Its overseas sales account for 88 percent in its overall sales and is at a
higher level in comparison to competing Japanese manufacturers (SONY: 74
percent, Panasonic:47 percent, and Sharp:48 percent). This is largely
because Koreas domestic market is not large enough for the company to
expand its businesses.
Strategic features of its global management are as follows:
1. Selection of growth markets based on long -range plans
2. Prompt and bold decisions to expand into new markets and concentration
of management resources
3. Decisions by local offices on development, locally designed products,
building a sales network and internationalization of headquarters
4. Effective sales promotions with emphasis on its brand name
Its main markets targeted for growth have been those of emerging countries
with large potential for growth and fewer strong rivals. LGE expanded into
India with the second largest population in the world and a younger age
structure and longer population bonus period in 1997 (establishment of LG

Electronics India, LGEs fully owned subsidiary). Although many of its rival
companies including Japanese companies exported their products from home
countries to India at that time, LGE started producing products at its factories
ahead of the rivals and acquired a competitive advantage. LGE placed a
priority on strategic advantages of taking the lead and determined it without
hesitation, despite insufficient infrastructure with respect to operations of the
factories, product distribution, or representatives daily lives.
The company has marketed a series of products, fully taking into accounts
consumers tastes and regional needs or features, including TVs which work
in an unstable voltage situation, various kinds of colorful and flowery and
lockable refrigerators with large crispers for vegetarians and cooler cases for
womens cosmetics, TVs with on-screen display options in ten regional
languages, washing machines with a "sari" (a national female costume)
cycle, and microwave ovens with cooking menus including 77 kinds of Indian
dishes. Its products attract customers attention. Also it markets low-end
products, while marketing high-end products at the same time in order to
increase brand images, in relation to its brand strategy. Furthermore, it has
made efforts to establish sales and service offices, building a network of
offices across India.
Expatriates dispatched from Korea (around 30 people) are mainly involved in
the strategic matters or so ,and it has employed many talented local
employees who knew markets and consumers since its start of local

production. The company has actively made use of such local human
resources with respect to sales of products and customer service, or
development and design of products. (Its R&D center has 3,000 engineers
now and plans to hire 2,000 more engineers)
The organization has been operated by local staff over a long time and heads
of personnel and sales and marketing divisions are Indians. The company has
introduced an evaluation system on a performance basis which is understood
and acceptable by local employees and welfare program including welfare
facilities, trying to motivate such employees.
On the other hand, there are some points to be noted with respect to
representatives dispatched from Korea. First of all, the head of the local
subsidiary has held the position since the creation of the subsidiary over a
long time and made efforts to enable the companys business to take root
and expand from a longer point of view. Secondly, many Korean
representatives are accompanied by their families and it appears easier for
them to commit to their work, unlike Japanese representatives, many of
whom are employees working away from their families in Japan.
Furthermore, when it comes to marketing methods on raising companys
awareness or corporate image, LGE places more emphasis on concentration
and efficiency effects in each market than Samsung Electronics which seems
to address the methods worldwide. As a result, it becomes a sponsor for

cricket events which is very popular in India, as sports marketing rooted in

the region.
Additionally, LGE has two factories (It will start another new factory shortly.)
and one R & D center in India. Although the companys total investment
amounts to approximately 13 billion rupees, it plans to spend 15 billion
rupees to expand its production as a production and export base in
accordance with its worldwide strategy, not just for sales in India. Sales in its
Indian business stood at 130.9 billion rupees in 2009, accounting for
approximately six percent in LGEs total sales. It plans to increase the
percentage to 12 percent in 2015, which will exceed the proportion of Korea.

Operations Management Strategy

OUR

GOAL:

TO

LEAD

TECHNOLOGY WORLDWIDE

GLOBAL

ELECTRONICS

AND

INFORMATION

In order to sustain leadership among global electronics and information

technology companies, LG Electronics' R&D is driving the development of
"Great Products" and strengthening core technological capabilities through a
process of "select and focus" in key areas such as cell phones and digital
TVs.

In important business areas such as digital appliances and audio/video

products, LG is establishing global leadership in development by focusing on
premium

products

while

enhancing

R&D

capacities

in

new

product

categories.

Furthermore, in new-business areas such as home networking, GPS, and

mobile A/V, the company is directing its efforts toward developing
convergence products in response to the current trend of merging different
technologies and products. What's more, the company is leading the new
market by actively participating in pilot projects to develop new products
with various service providers.

ACHIEVEMENT THROUGH TOP TALENT RECRUITMENT AND R&D SYSTEMS

CONSOLIDATION

To achieve its lofty goals, LG Electronics continuously recruits new talent and
strives to increase its global business by consolidating R&D systems oriented
toward local markets in strategic countries such as China and India. The
company is also building international R&D capacity by pushing ahead on
strategic alliances with other major companies in regard to standardization
and

new

products.

LG Electronics operates a global R&D system that consists of more than 30

research centers around the world. Through this system, the company
facilitates open innovation utilizing innovative technologies from the outside,
in order to secure core technologies and the early identification of future
growth engines. In all these ways, LG is on target toward realizing its vision:
Top Global R&D.