LG Electronics has announced a major organizational restructuring aimed at shifting from a product-focused strategy to a solution-driven approach. This strategic realignment seeks to drive sustainable business growth while bolstering the company's competitive edge.
According to ETNews, LG Electronics has undertaken a sweeping reorganization to support its "Future Vision 2030." The restructuring focuses on unlocking business potential, enhancing platform services, and accelerating business-to-business (B2B) growth to cash in on high-growth market opportunities.
This marks a significant departure from LG's traditional product-centric model, as the company adopts a solution-oriented strategy to meet its long-term objectives.
Synergy- and growth-driven restructuring
As part of its organizational overhaul, LG Electronics will consolidate its business divisions. The existing Home Appliance & Air Solution (H&A), Home Entertainment (HE), Vehicle Component Solutions (VS), and Business Solutions (BS) units will transition into four new segments: Home Appliance Solution (HS), Media Entertainment Solution (MS), Vehicle Solution (VS), and Eco Solution (ES). The reallocation of the BS division's functions aligns with LG's strategic goal of enhancing synergy to achieve its 2030 future vision.
Leadership across LG's newly established business units will remain largely unchanged, except for the newly created ES division. This strategy underscores LG's focus on fostering transformation while maintaining stability to achieve measurable results.
The HS division will integrate the LG ThinQ Smart Home platform, spearheading AI-driven home solutions. Additionally, the robotics business from the former BS division will merge with home robotics to enhance synergies and drive growth in the robotics sector.
The MS division will oversee IT (notebooks, monitors, etc.) and digital signage operations, merging them with the TV webOS platform. Meanwhile, the original Vehicle Component Solutions division will be simply rebranded as the Vehicle Solution division.
The newly formed ES division will manage LG's global B2B operations, including the pivotal heating, ventilation, and air conditioning (HVAC) business, previously part of the H&A division. Operating as an independent unit, the ES division is set to position LG as a leading provider of integrated air conditioning solutions worldwide.
B2B expansion and AI evolution in focus
To enhance its global B2B competitiveness, LG has created a dedicated B2B capability enhancement unit within its overseas business headquarters. Additionally, the Chief Strategy Office (CSO), acting as the company's strategic hub, has introduced an AI control tower to drive AI-powered transformation across its operations.
The Chief Digital Office (CDO) has been reorganized into the Digital Transformation (DX) Center under the CSO, with a focus on harnessing generative AI technologies to deliver measurable business outcomes.
Despite the extensive structural changes, LG Electronics has made only minor personnel adjustments, including integrating its home appliance and service divisions to expand its subscription business model.
Young-rak Kim, formerly Senior Vice President and head of LG's domestic marketing and direct-to-consumer (D2C) operations, has been promoted to president. The personnel reshuffle includes the promotion of four executive vice presidents, eight senior executives, and 33 directors, totaling 49 advancements company-wide.
