Management Essay： LG集团概况 
Overview Of The Lg Group

 

在LG的历史中，他们已经适应其所面对一些变化的战略。低成本战略（1947-1987）已经成为竞争优势。LG的竞争与其他跨国企业相同，利用韩国的低成本劳动力和政府补贴的资本成本。该战略是在竞争对手的产品可以接受的，虽然不是优越的质量。在上个世纪80年代中期，LG需要改变战略的推力，成为价值战略（1987-1995）。他们把一些因素，包括韩国的消费者比他们之前更复杂以及生活标准的提高增加了韩国人对更高质量的产品和服务的需求，使大部分韩国消费者的能力不再是追加底价且低质量的产品；韩国政府开始放松贸易壁垒使外国企业更容易与LG在韩国竞争；

 

On February 22, 1995, Bon Moo Koo, took over the helm of the LG Group. Like a newly re-commissioned ship, LG had recently undergone significant renovation and appeared to be in great sailing shape. After steering through some stormy seas from 1985 to 1991, the clouds had cleared and LG's future looked sunny and bright. Group revenues had increased each year from 1991 through 1994, when they stood at a record US$38 billion. In 1995, Chairman Koo announced "LEAP 2005," his vision of the future. Of all the different elements of this vision, the goal of increasing revenue 10 times become US$380 billion by 2005 with fifty per cent coming from international sales was the most challenging.

 

In the history of LG, they already made some change in their strategy to adapt the situation they face. Low Cost strategy (1947-1987) was becomes the competitive advantage they focused on. LG competed with other multinational corporations by leveraging Korea's low cost labor and government-subsidized cost of capital. The strategy was under-pricing competitors with product of acceptable, although not superior, quality. By mid-1980s, it was clear that the strategic thrust of LG needed to change, became Value Strategy (1987-1995). They transformed for some factors reason such as, Korean consumers were more sophisticated than they before and also the rising standard of living increased the ability of Koreans to afford higher quality products and service that makes most Korean consumers were no longer happy with low quality, even if it did come at a low price; the Korean government began to relax trade barriers that made easier for foreign companies to compete with LG in Korea; as wage rates increased in Korea, low cost labor began to erode as a source comparative advantage.

 

Some refurbishing to the ship had performed by LG to respond the sales dropped by US$1 billion and 18 per cent decline on profit between 1986 and 1987.

 

"Management by self-control" was implemented as new management approach on its decision-making style. LG had a history of relatively centralized decision making and a top-down management process. It allowed for much greater autonomy than had ever existed in the group, but many lacked experience with it. LG was restructured in 1987, LG's various affiliated companies were divided into 21 "Cultural Units" that consisted of multiple Strategic Business unit (SBUs) grouped together by common 'cultural' characteristics.

 

By 1994, the results of these efforts were beginning to show. Sales had increased each year from 1991 through 1994. Net income was up nearly 800 per cent, rising from US$128 million in 1991 to US$965 million in 1994.

 

New Face and Image

Mr. Bon Moo Koo took over as chairman in 1995. Re-commissioning occurred on January 1, 1995. Lucky-GoldStar Group officially changed its name to the LG Group with a new Group logo - "The Face of the Future" with 5 keys concept were: The World, The Future, Youth, Humans and Technology.

 

Growth was the center of his new vision for the LG. He charted a course in his LEAP 2005 initiative that would take LG on a journey from being a leading company in Korea to being a leading company in the world.

 

To achieve the general objectives of Leap 2005, Chairman Koo articulated a basic philosophy:

 

Compete from a global perspective

Compete with world-class companies in the global market

Secure global management system to be competitive on a world and regional basis

Secure and utilize people, finance, and technology from a global perspective to create world class business systems

Create maximum value for customers, employees, and shareholders

Conduct business with integrity

Contribute to social development as a corporate citizen