LG celebrates its 70th birthday with plans for a major overhaul

LG started back in 1947 as a small plastics maker. Now, 70 years later, it is South Korea’s second largest conglomerate. But, like its larger rival Samsung, LG saw its fair share of troubles in 2016, most significantly when LG Electronics failed to deliver a smash hit with its modular flagship LG G5 and various LG phones suffered from bootloop issues.

At an executive gathering in South Korea this week, LG chairman Koo Bon-moo told the assembled top brass that overhauling core business units and finding new drivers for growth are the group’s highest priorities in 2017.

The exact nature of that overhaul was not discussed, but LG Electronics’ mobile division was already due to have completed its “business improvement activities” by the end of 2016 in the wake of the G5’s failure to catch on.

Fortunately, the V20, LG’s second “flagship” of 2016 (although it can’t really be called that as it was not released globally), was twice as popular as the V10 in its first couple of weeks. That said, its sustained sales performance is as yet unknown. The Galaxy Note 7 recall may well have helped boost LG Electronics’ fortunes in the final months of the year though.

Chairman Koo did however mention a few more details on the new drivers of growth he’s expecting, stating that the company needs a new focus on innovation in order to “actively cope with the chaotically evolving global business environment.” Let’s just assume he’s not after new innovations like modularity though…

But there is much more to the LG Corporation than just its mobile division: LG dabbles in vehicle components, working with GM on the popular Chevy Bolt EV; it produces LCD panels for TVs and smartphones; makes chemicals, semiconductors, home appliances and batteries; is heavily invested in the telecommunications industry and even works in life sciences, health care and medicines.

Demanding innovation from business units as diverse as those might just sound like lip service, but at the very least, the same cost-cutting, streamlining activities LG Electronics underwent last year are likely to impact the group’s other divisions in 2017. For a company that morphed from a plastics manufacturer to one of South Korea’s largest companies though, adapting quickly to new challenges should come as second nature.