LG Electronics
LG Electronics is a prominent South Korean multinational company and the second-largest electronics manufacturer globally, renowned for its diverse range of products, including televisions, multimedia devices, communication gadgets, and household appliances. Founded in 1958 by Koo In-hwoi as GoldStar, the company initially focused on rebuilding the nation post-Korean War by supplying essential electronics. Over the decades, LG Electronics evolved through various mergers and branding changes, adopting its current name in 1995 after merging with Lucky Chemical.
The company has made significant technological advancements, producing the world’s first 60-inch plasma TV and pioneering innovations in the smartphone market, though it recently exited this sector due to competition and financial challenges. LG Electronics operates through four main business units: mobile communications, home entertainment, home appliances, and vehicle components, the latter experiencing growth with the rise of electric vehicles. Committed to ethical management and sustainability, LG Electronics promotes fair labor practices and innovative product features, such as smart appliances and eco-friendly cleaning solutions. With a recent rebranding effort aimed at younger consumers, LG continues to adapt and expand its offerings in a rapidly changing technology landscape.
LG Electronics
Company information
- Date founded: 1958
- Industry: Electronics
- Corporate Headquarters: Seoul, South Korea
- Type: Public
Overview
LG Electronics is a multinational company owned by South Korean-based conglomerate LG Group. LG Electronics is the world’s second-largest electronics maker. It is known for televisions and multimedia products, communication devices, and household appliances such as washing machines and refrigerators. Affiliated companies in the group, LG Display and LG Innotek, produce electronics parts, such as display panels. Other related subsidiary companies provide specialty parts and services or oversee the worldwide operations of the company. LG Electronics was founded by Koo In-hwoi in 1958. Since it is a family-based company, In-hwoi’s family still takes the lead in the running of the company. Although the LG Group uses the slogan, “Life’s Good,” the letters LG really come from the historical background of the company’s forerunners, GoldStar and Lucky Chemical company.
History
In 1958, Koo In-hwoi founded the electronics company known as GoldStar. The company was active in rebuilding the nation in the post-Korean War years by supplying electronics to home consumers. GoldStar helped to produce the first domestic South Korean-built radios and TVs in response to the introduction of national radio and TV broadcasts. In addition, the company supplied the growing need for electronic home appliances, such as refrigerators, washing machines, and air conditioners.
In 1970, GoldStar went public, and by 1976, it was producing about one million TVs every year. Its first overseas factory was opened in 1982 in Huntsville, Alabama. In the mid-1990s, the company began to change its branding, adopting a new logo and incorporating this change in 1994. In 1995, the name of the company became LG Electronics after a merger with Lucky Chemical, as a shortened form of Lucky GoldStar. Lucky Chemical became LG Chem and LG Households. LG Cable was also created, but this affiliated company later changed its name to LS Cable in 2005. The same year, LG Electronics also bought US-based electronics manufacturer Zenith, and the brand was absorbed by LG Electronics.
LG Electronics has been on the cutting edge of developing technology. In 1995, LG Electronics was at the forefront of cellular phone technology. It produced the world’s first CDMA digital mobile handsets and the LGC-330W digital cellular phone. In 1998, LG once again took the lead in technology by developing the world’s first 60-inch plasma TV along with Philips LCD, which is now known as LG Display.
In 1999, affiliated company LG Semiconductor merged with South Korean memory semiconductor company Hynix. To create a holding company, LG Electronics split off in 2002 with the new company, retaining the name LG Electronics and the old company changing its name to LG EI, which merged into LG CI in 2003.
In 2005, LG Electronics was in the top 100 global brands. Its affiliate, LG Display, became the world’s largest LCD panel manufacturer in 2009. A year later, it entered the smartphone market. In 2012, LG Electronics produced the world’s first 84-inch 4K TV, which sold for about $20,000. The year 2012 also brought a ruling from the antitrust regulators of the European Union against LG Electronics and five other global electronics companies, including Technicolor, Panasonic, Philips, Toshiba, and Samsung. The charges were related to the price-fixing of cathode-ray tubes.
In 2018, Koo Kwang-mo, nephew of the founder’s grandson Koo Bon-joon, became the CEO and vice chairman of LG Electronics parent company LG Group. That same year, Brian Kwon became president, moving into the position from head of LG’s home entertainment division. In 2023, Koo Kwang-mo remained chairman and chief executive of LG.
Losses in the once-profitable cell phone industry began to affect the company by the 2020s. Although the company moved production of its smartphones to Vietnam to save on labor costs, by 2021, LG Electronics withdrew from the smartphone market due to financial losses to competition. In 2023, LG revealed it had rebranded itself with a more youthful visual image hoping to reach more consumers in the Generation Z age range. The company also unveiled new lines of televisions, laptops, and smart appliances.
Impact
LG Electronics subscribes to the “Jeong-Do Management” methodology. This ethics-based management system promotes high standards of honesty and transparency, which, in turn, fosters fairness and dignity toward its employees. LG Electronics is known for a more supportive and relaxed work atmosphere. The company also seeks to be a forerunner in innovation and sustainability with its various electronic products.
LG Electronics also has sought fairness in labor practices. In 2010, they instituted a Global Labor Policy based on the cultural principle of “Respecting Human Dignity.” This policy sought to protect workers’ dignity and to promote ethical and safe working conditions. It has been amended as needed to provide specific protections against child labor, limitations on work hours, and religious practices. In response to the COVID-19 pandemic in 2020, the company publicized the measures being taken globally among workers to provide a safe working environment. In addition, the company explored the possibility of contact-free automated store shopping experiences for consumers by opening several of these locations in South Korea.
LG Electronics consists of four business units: mobile communications, home entertainment, home appliances and air solutions, and vehicle components. The company was a pioneer in the early cellular phone industry. It was well-known for its popular G series Android smartphones, which started with the LG Optimus G in 2012. It was also involved in a partnership with Google, which resulted in the Nexus series of phones. Due to strong competition, sales of LG phones began to fall by the late 2010s, and LG Electronics shut down the manufacture of products in its LG Mobile division in 2021 to withdraw from the cellular phone market. Other personal electronic devices included in the mobile communications division produced by LG Electronics were tablets, headphones, and smartwatches. The company decided to switch its manufacturing focus from mobile communications to strengthen its market share in home appliances, which was much more successful.
The home entertainment division of LG Electronics has been an industry leader in TV manufacturing since the days of GoldStar. LG Electronics entered the internet-connected TV industry in 2007, and by 2011, the LG Smart TV with interactive web-based features became one of the most popular smart TVs on the market. It also launched a 3D TV used with shutter glasses this same year. LG Electronics also incorporated new technology into smart TVs as it became available. Some of this technology allowed users to change channels using gestures or voice controls. A 2013 investigation uncovered some controversy related to privacy concerns surrounding the company’s collection of file names from USB storage devices and viewing data. The company resolved to make its viewer analytics processes more transparent and to protect the privacy of consumers.
In 2013, LG Electronics incorporated a special component that repelled mosquitos into some of its products in India. This “Mosquito Away Technology” employed inaudible ultrasonic waves that kept the insects at bay in a consumer’s home. The technology was made available to the production facility in India in the hope of preventing mosquito-borne illnesses, such as malaria and the Zika virus.
LG Electronics has also been a global leader in home appliances, including refrigerators, washing machines, dryers, vacuums, microwaves, ovens, and air conditioners. Although LG Appliances started out as a budget brand, the company changed its focus in the mid-1990s and entered the luxury appliance market. The luxury line of home appliances is known as “LG Signature.” The brand competes with high-end home appliance brands, such as Viking and Sub-Zero. LG Electronics was also innovative in offering household appliances equipped with internet-connected smart features. LG rolled out its “HomeChat” feature in its line of smart products in 2015. The home appliance division also looks to promote sustainability. For example, one product announced in 2021 is a commercial-grade washing machine that uses liquid carbon dioxide to clean laundry instead of traditional detergent and water.
The vehicle components division of LG Electronics provides electronic parts used in the auto industry. With the expansion of the electronic vehicle (EV) market, LG Electronics's business in this sector grew exponentially. In 2020, 60 percent of its sales of auto parts from this unit of LG Electronics were related to infotainment in EVs. This included components related to audio, video, and navigation. However, the company plans to make a shift in manufacturing toward EV powertrain components in a partnership with Canadian auto parts company Magna International. These components include chargers, inverters, and electric motors. Other LG Group affiliates work with the EV industry, such as LG Display, LG Chem Ltd., and LG Energy Solution Ltd., which is a supplier of batteries to Tesla.
Bibliography
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