LG Electronics in attempts to counter the global recession and open up opportunities for the company, has today announced their long-term business plan and strategy.

The strategy includes cost reduction, growth of existing business and pursuit of new sectors.

LG Electronics CEO Yong Nam, has commented that the company will not reduce its investment in R&D, marketing, branding and design, if anything it could even increase.

“Every company, not just LG, has been affected negatively by the economic downturn, the poor performance of many global companies in the last quarter of 2008 was a wake-up call that we needed to take drastic actions, not just safe ones,” he said.

In order to increase their market share, LG have reorganised its business portfolio to focus on areas with longer-term growth potential and profitability. Areas such as solar power, commercial air conditioners and business (B2B) solutions will be heavily focused on.

LG also implemented a ‘Crisis War Room’ in late 2008, the purpose of this is to bring together LG’s five business units, eight regional headquarters and executives to implement and manage the company’s aggressive business plans.

“In just three short months the CWR, with collaboration of each of the company’s business units and company divisions such as supply chain management, marketing, procurement, human resources and finance – has identified 11 key action items,” said Nam.

The relevant business units have been instructed to establish teams to take responsibility for managing the cost-saving initiatives.

LG is targeting a reduction in expenses of KRW 3 trillion in 2009. This company-wide initiative, which includes headquarters and all 82 subsidiaries around the world, also applies to manufacturing and indirect costs.

LG’s efforts to improve its cash flow has already resulted in reduced inventory, increased liquidity, optimized supply chain management and a more consolidated, efficient purchasing process overall.

“These initiatives will enable LG to improve both growth and profitability over the long-term, regardless of the economic climate, becoming a stronger global brand will be a natural outcome of this effort,” commented Nam.