LG, South Korea’s cuddliest chaebol, wants a sharper edge

BEFORE LG EXECUTIVES mull a new product, corporate types in South Korea like to joke, they first ask themselves: “Has Samsung already done this?” Only if the answer is “yes” does the country’s fourth-biggest conglomerate, which makes everything from consumer electronics and cosmetics to chemicals and health-care goods, move ahead with the plan.

The gibe says a lot about how LG is perceived on its home turf. Unlike Samsung, South Korea’s largest chaebol, which has been mired in scandal, LG oozes reliability and law abidance. When the government urged large groups to unwind their convoluted cross-shareholding structures, LG was one of the first to do so. But cuddliness may have blunted LG’s innovative edge. After years of profit growth the group’s performance has started to show cracks. LG Electronics, its flagship affiliate, has been struggling with plunging earnings in its mobile-phone division, where it faces fierce competition from Samsung, as well as Apple and China’s Huawei. Many are wondering if the “follower” strategy that has served LG well is still fit for purpose.

Koo Kwang-mo, the group’s chairman, may be among them. The 41-year-old took the reins in 2018 after the sudden death of his adoptive father, himself a descendant of the conglomerate’s founder. Although he keeps a similarly low...



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