LG 2001 Annual Report Download - page 12

In the burgeoning PDP and
DTV industries LGE has
already secured a leading
global edge, and with our
reputation for quality we
stand to be the biggest
beneficiary in emerging
digital markets.
»12
LG Electronics Inc. The
43
rd Annual Report
Message from CEO
is key to success in changing markets. By identifying variables that may hinder future
growth, such as a slow global economic recovery, unfavorable exchange rates and rising
material costs, we can make preemptive adjustments and avoid possible damage. In
addition, we will continue our cost-cutting restructuring process, translating greater
efficiency into greater profits.
Last, we will focus on being number one. On the global scope, only number one can
enjoy growth and profitability. This is only plausible not only by introducing best product
and technology, but also by all participants in LGE becoming number one at each of their
duties. LGE will set up an environment where those who accomplishing high get
compensated accordingly.
Through these strategies, LGE will step ahead of achieving the “Digital LG Vision” as
well as accomplishing sales target of 17 trillion won with 6~7% operating margin in 2002.
Roadmaps to Global Leadership
LG Electronics reputation for reliability comes as a result of a varied business portfolio,
with companies such as Digital Appliance providing a solid earning base from which to
invest in future growth areas. For the past five years Digital Appliance has shown annual
growth of over 20%, with an operating margin of 12%. This kind of consistency has enabled
us to funnel resources into emerging markets. In the booming mobile equipment business
Digital Handset achieved over 40% growth last year, and 2002 promises a similar level. But
we have to think not only of tomorrow, but the day after tomorrow as well. We have
defined Plasma Display Panels (PDP), Organic Light-Emitting Diode technology (OLED),
IMT2000 and Digital TVs as our “must-win” businesses. In the burgeoning PDP and DTV
industries LGE has already secured a leading global edge, and with our reputation for
quality we stand to be the biggest beneficiary in emerging digital markets.
The future rewards the new, and in 1989 we first developed a strategy of innovation
that we call “Super A.” Super A projects, which stress innovation not only on a
technological level but in business practice as well, have been key to LGE’s success.
Take the Whisen Air Conditioner as an example. First introduced in 2000, it was the
result of a Super A project that took two years from development, through branding and
marketing, to product launching. The Whisen has since seized 45% of the domestic air
conditioner market and LGE now stands as the market leader on a global level as well.
LGE’s CD-RW is another Super A success story. Believing in the importance of
intelligent market analysis we developed a “scenario-based customer evaluation and target-
base” system based on extensive market research and product conceptualization. As a
result, we managed to boost our CD-RWs market share from 9th place in 1999 to 3rd in
2000 and finally to 1st in 2001.
Super A is also the reason why LGE’s I-Book Series handsets hit the market so
strongly, selling 2.5 million units in Korea. And by optimizing facility investments and
lowering material costs, Super A-inspired strategies pulled our videotape producing DRM
division out of the red and helped it achieve the highest profitability among its industry
peers.
With a commitment to innovation and quality LGE is not only developing digital