By Chris Nicholls
SEOUL: LG Electronics has unveiled plans to restructure its business and enter new segments as it moves to become a more ‘global’ company.
In a statement today, LG chief executive Yong Nam said LG aimed to be the best corporate brand in each of the 140 markets it operated in, and would do so by increasing its marketing spend and restructuring its business divisions.
“We want to make it completely unimportant to consumers where LG is headquartered; all that will matter is how they feel about our products,” said Nam.
LG cited its US$400 million marketing spend increase over 2007, of which $100 million was spent on its recent Scarlet TV launch, as an example of its marketing direction.
The company admitted, though, that money itself would not be enough, hinting it had undertaken “unique, aggressive campaigns” to help increase brand awareness.
According to LG’s figures, the spend may be working, with brand awareness in the US up from 65 percent in 2005 to 83 percent in 2007 and profits up in that market.
LG said the division restructure will occur over the next five years and include reorganising business units and divisions, expanding outsourcing and entering new areas such as energy, B2B solutions and healthcare.
As a result of these changes, LG said they hoped to increase sales by at least 10 percent, profit by six percent profit and have an asset turnover ratio of four times. It also intended to have ROIC of 20 per cent by 2010.
LG has hired a number of non-Korean executives recently to achieve its goals, including Reginald J. Bull as new chief human resources officer, former Pfizer executive Dermot Boden as chief marketing officer, former IBM executive Thomas Linton as chief procurement officer and HP’s Didier Chenneveau as chief supply chain officer.