LG Electronics Case Study: Business Model & Strategy

LG Electronics is a name in the world of technology and innovation that has reinvented itself every decade. Starting with radios and home appliances, the company has grown into a global leader in smart TVs, AI-enabled home appliances, and electric vehicle components. In this LG Electronics case study, we’ll understand the company’s business model and how its marketing strategy established it globally and provide a financial analysis and in-depth SWOT analysis to reveal how LG is delivering on its “Life’s Good” brand promise today.

Company Overview— LG’s Legacy and Expansion

LG began in 1958 as GoldStar, a subsidiary of Lak-Hui Chemical Industrial Corp., founded in 1947 by Koo In-Hwoi. At that time, South Korea was still developing, and technology was still out of reach for the common man. GoldStar created products that became household essentials, which were simple yet effective appliances like radios, televisions, and refrigerators.

A few years later, it merged with another company, Lucky Chemical, to form Lucky-GoldStar, known to the world today as LG. This is the company that manufactured the first radio in Korea, and from there, its story of innovation began gradually. LG expanded its products to the global market and became a symbol of “quality and reliability.”

Today’s Position and Global Presence

Today, LG Electronics is not just a brand but a trusted name with a presence in over 150 countries. Its manufacturing units are spread across Korea, India, the United States, China, and Europe.

LG has Four Major Business Areas:

Home Entertainment: OLED TVs, soundbars, and display systems, whose quality is recognized worldwide.

Home Appliances: Refrigerators, washing machines, ACs, and smart kitchen devices, which have become integral to modern homes.

Vehicle Component Solutions: Infotainment and powertrain systems for electric vehicles—this is LG’s new growth engine.

Business Solutions: Data centers, HVAC, and smart building solutions, which are strengthening the B2B sector.

Leadership and Vision

LG Electronics is currently led by William Cho. His focus is to position the company as a “Smart Life Solutions Company” technology that adds real convenience and value to people’s lives.

William Cho has set LG’s strategy for 2025 on “Qualitative Growth” and “Structural Competitiveness.” He believes that LG’s biggest growth in the coming years will come from emerging markets like India, Africa, and Southeast Asia. LG is also serious about the environment. The company aims to become carbon neutral by 2030 and increase the use of sustainable materials in its products.

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LG Electronics Business Model – How LG Creates and Delivers Value

LG’s business model is based on the belief that technology is meaningful only when it makes people’s lives easier. The company doesn’t just make products but creates solutions that add value to every home, office, and vehicle.

1. What’s on offer for customers?

LG’s core promise is quality, reliability, and continuous innovation. Whether it’s OLED TVs, AI refrigerators, or EV components, every product is designed with the philosophy of “smart life” in mind. LG offers its customers not just a product, but a long-term, reliable experience.

2. Which customers are focused on?

The company operates in two segments:

• B2C (direct-to-consumer): Products such as TVs, washing machines, air conditioners, and kitchen appliances.
• B2B (business clients): Digital displays, HVAC systems, and EV technology for hotels, offices, data centers, and automobile companies.

3. Distribution Channels

LG has a strong distribution system. Its products are sold worldwide through retail stores, e-commerce sites (such as Amazon and Flipkart), and the company’s website. The company is also expanding its presence through B2B deals and OEM partnerships.

4. Revenue Streams

LG’s revenue comes from several sources:

• Sales of home and commercial products
• After-sales service and warranty extensions
• Technology licenses and patent royalties
• Revenue from B2B and automotive solutions

5. Innovation and Resources

LG’s core strength lies in its research and development network. The company invests approximately 5% of its total revenue in R&D each year. It has more than 20 research labs around the world, developing new technologies and designs.

6. Partnerships and collaborations

LG works with many global brands, such as Google for Android TV, Mercedes-Benz for EV parts, and supply chain partnerships with several local companies. These relationships have kept LG technologically ahead.

7. Spending and Investment

Most of the company’s spending is on R&D, production, marketing, and logistics. However, LG views this not as an expense but as an investment in the future. This is why it remains competitive in every sector, from electronics to EVs.

Marketing Strategy of LG Electronics

1. True Identity: LG’s marketing begins with its core philosophy “Life’s Good.” This line is more than just an advertising slogan. It’s the philosophy the company connects to every product. LG wants to portray its brand as a friend, one who is in your home and a part of your daily life.
2. Speaking the Language of the People: LG’s uniqueness lies in its marketing in every country, using a language and spirit that people understand. In India, its ads focus on family, relationships, and trust, while in Europe and the US, they focus on design and technology. This is why its image appears different everywhere, but the trust remains the same.
3. Relationships forged through Social Media: LG doesn’t just appear on social media but connects with people there. Its campaigns are often lighthearted, genuine, and human like “Optimism Your Feed,” which connected people to both positivity and the brand. LG’s digital presence feels more like a conversation than a brand.
4. Building Trust Through Experience: LG knows that today’s customers want experiences, not just advertising. That’s why the company has created “LG Experience Zones” around the world, where people can try products in person. When a customer experiences the experience themselves, they no longer need to reaffirm their trust.
5. Building a New Identity Through Partnerships: LG has always moved forward with the future in mind. From tech partners like Google and NVIDIA to Formula E and eSports, each partnership has a common goal: to make LG a brand ready for tomorrow’s world.

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Financial Data of LG Electronics

Income Statement

Particulars	FY 2025	FY 2024	FY 2023
Total Revenue	246320	21557	20108
Total Expenses	21636	21557	20108
EBIT	2993	2065	1842
Net Profit	2203	1511	1348

Balance Sheet

Particulars	FY 2025	FY 2024	FY 2023
Fixed Assets	1404	1343	1367
Current Assets	9,540	6,658	7,164
Reserves & Surplus	5,291	3,659	4,243
Liabilities	5,546	4,725	4,634

Cash Flow Statement

Particulars	FY 2025	FY 2024	FY 2023
Cash Flow from Operating Activities	1,653	1,665	1,870
Cash Flow from Investing Activities	-27	-20	-274
Cash Flow from Financing Activities	-106	-2,185	-2,560

Key Performance Indicators

Particulars	FY 2025	FY 2024	FY 2023
Operating Profit Margin (%)	12.28	9.67	9.27
Net Profit Margin (%)	9.04	7.07	6.77
ROE (%)	36.90	40.05	30.87
ROCE (%)	45.23	47.90	38.45
Debt to Equity (x)	0.00	0.00	0.00

SWOT Analysis of LG Electronics

Strengths

• Strong brand trust: LG remains a name people trust blindly. The company has built its reputation on quality and durability over the years.
• Extensive product range: LG has a wide range of products—TVs, washing machines, ACs, refrigerators, and now even EV parts. This diversity has given it a place in every market.
• Innovation capability: LG continuously invests in R&D, ensuring technological improvements and design innovations in its products.

Weaknesses

• The end of the mobile business: Leaving the smartphone market has narrowed LG’s connection with younger, tech-centric consumers and reduced ecosystem stickiness.
• Pricing challenges: Some products are priced beyond the budget of the average consumer, reducing its presence in the mid-segment market.
• Supply network dependence: The company’s production is spread across multiple countries, making it vulnerable to any global crisis or policy changes.

Opportunities

• Electric vehicle and renewables: LG is scaling its EV component and energy storage operations, tapping into the fast-growing global electric vehicle and renewable energy markets.​
• Smart home and IoT: Expanding offerings in IoT and AI-integrated appliances can deliver new experiences and recurring revenue as the smart home segment is growing.​
• Emerging market expansion: There’s substantial growth potential in emerging economies—India, Southeast Asia and Africa—where demand for affordable technology is rising.​
• Strategic partnerships: Alliances with industry leaders (e.g. Google, Mercedes, Hyundai) enhance innovation and market reach.

Threats

• Intensifying competition: Brands like Samsung, Sony, and Haier are constantly introducing products with new features and lower prices.
• Raw material prices: Rising production costs could put pressure on the company’s margins.
• Changes in global policies: Fluctuations in tariff and trade policies could impact LG’s international sales.

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Conclusion 

LG Electronics exemplifies how a brand flourishes by deeply understanding people’s needs and evolving with the times. Today, LG is a trusted presence in households worldwide, synonymous with reliability, quality, and meaningful innovation. As it moves forward, the company’s journey is not only about expanding its business footprint but also about making incremental improvements that simplify and enrich everyday life. With its strong brand equity, continuous technological advancement, and commitment to customer satisfaction, LG is well-positioned to remain a household favorite and an industry pioneer in the years ahead.

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