LG Focuses on Premium Products to Become Market Leader
May 19, 2005
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In order to increase global sales to U.S. $14 billion by 2007, LG Electronics is focusing its production and marketing efforts on high-end products to target the premium appliance market. This will help the company overtake competitors such as Whirlpool of the U.S. and Sweden-based Electrolux. In the Middle East, LG is aiming for overall regional sales of $2.8 billion this year, a 34-percent growth over 2004.
"We want to expand that portfolio to include large air- conditioning systems, drum-type washing machines, and side-by-side refrigerators. We are aiming for combined sales of $42 million in refrigerators in Oman, Qatar, Bahrain, and Kuwait," said K H Kim, president, LG Electronics Middle East and Africa Operations.
Since 1999, LG's Digital Appliance Company has been posting over 20-percent growth in sales every year compared to the 4- to 5-percent average growth rate in the global home appliances industry. LG has designated Plasma Lighting System (PLS) as the company's future product of focus.
PLS technology, commercialized for the first time in the world by LG, is a lighting system that uses magnetrons and microwaves inside a small bulb to generate visible light. This new initiative was aided by the company's core competency in magnetron technology, the technology LG developed for its microwave ovens. According to LG, this light is closest to sunlight and uses only 80 percent of the electricity consumed by traditional light bulbs. LG believes this next-generation technology can replace the traditional lighting systems used at sports stadiums and in streetlamps.
Other product innovations include the three door side-by-side refrigerator with an LCD monitor. LG invested $6 million over the past 3 years to develop this new refrigerator model; the Steam TROMM washing machine that sprays steam on laundry using a dual spray system for a cleaner wash; and the Roboking II, an automated robotic vacuum cleaner with motors for maximum suction power, infrared gyro sensors, and a long lasting lithium polymer battery.
Recent media and industry reports have also commended LG's production bases in China, India, Mexico, and Eastern Europe and its R&D investment levels, compared to competitors. LG recently held a ground breaking ceremony for its 'digital convergence R&D Center' in Seoul to lead the company's initiatives on convergence and development of premium appliances. Young-Ha Lee, the president and CEO of LG's Digital Appliance Company said the company plans to raise the ratio of overseas production to the 40 to 50 percent level by 2007 from the current 25 percent. (AME Info)
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