Koo Bon-moo, chairman of LG Group said, "LG must pour effort into procuring manpower and investment and also build creative, self-regulating group culture" on February 20 of this year, the day commemorating fifteenth anniversary since he took over LG group. The company's sales have quadrupled and market capitalization has increased by 10 times. Also, Koo is cherished for reorganizing the company into a holding company while inheriting LG tradition and building stronger management system and corporate culture.
At the crux of LG's ever growing accomplishment was Koo's underlying management ideology, ‘LG Way' that orchestrated its success all along. He laid down LG's own distinctive way of management style in 2005, which made possible for LG Group to remodel itself to a holding company. LG Way is used as a basis for LG Group employees' thoughts and behaviors and its utmost importance is on putting customers on top of everything else, respecting their value.
Putting lavish appraisal aside, Koo brought revolutionary change after he took office. He changed the company's original name, Lucky-Goldstar, into today's LG and strived to improve its image. Then, he unified once dispersed subsidiaries into one whole piece under the new name, LG, in which strengthened the company's identity and he also outlined fresh future plans that target global corporations.
Koo not only changed the general image of the company but also the structure that in turn conveys Koo as a down-to-earth person. In 2003, Koo tackled the long-standing, chronic problem of investing within subsidiary circles, in which he became the first among conglomerates to establish a holding company. To that end, LG affiliates were able to grow professionalism and their own specialty. From 1999 LIG Insurance Company was first established and followed LS Group in 2003, GS Group in 2005, and other subsidiaries that specialize in electronics, chemicals, and telecommunication service.
Ever since Koo took office, he tried to unify LG Group under his ideology LG Way but at the same time, give separate tastes and colors to each subsidiary. Koo developed electronics and chemical sectors as the two main pillars of the company. He also drove the new enterprise efforts such as display, telecommunications service, and green business. Today, LG Group excels mostly in all sectors; for instance, LG TV is currently rated number two in the world, cell phones are ranked third in the world and LCD Panel sales retained number one spot in the global market. LG Electronics sales, especially, skyrocketed by ten times from 5 trillion won in 1994 to 56 trillion won in 2009. LG Chem's secondary cell placed third in the world ranking and its polarizing plate is the best, again, in the world. LG Group's success does not stop there; the company is currently expanding its territory in combined wire-wireless services, solar cells, LEDs, electric car batteries and green businesses.
As for this year, Koo has an even more ambitious plan of raising KRW135 trillion in sales and 75 percent of it from overseas. Thus, for the first time, his proposal claims KRW100 trillion that accounts for foreign sales. Likewise, there will be many difficult tasks and tough decisions ahead for Koo and his employees to undertake and confront with. In order to surge foreign sales by that amount, not only would LG have to raise brand awareness limited to only advanced markets like America and Europe, but also in emerging markets such as China, India, Russia, Africa and elsewhere uniformly. More specifically, LG Group has geared to improve its brand awareness by selecting 15 countries- America, Britain, India, China, Russia, and South Africa- that has high-growth potential. Besides, LG Group must be able to face Chinese companies who enter the market with cheap and affordable prices in LCD, home appliance, and petrochemical products.
LG Group's sales quadrupled from KRW30 trillion in 1994 to KRW125 trillion in 2009; export, also, increased by three times from US$14.8 billion to US$46 billion and market capitalization grew tenfold over 15 years from KRW6.8 trillion to KRW73 trillion. Due to the separation and restructuring of subsidiaries, their business domain has shrank a bit but more specialized affiliates such as LG Electronics, LG Chem, and LG Telecom have developed; currently there are 55 LG affiliates. Foreign branches have increased from 90 to 150.
