LG Electronics Exits the Smartphone Business
| Case Code: BSTR636 Case Length: 15 Pages Period: 2015-2021 Pub Date: 2022 Teaching Note: Available |
Price: Rs.300 Organization : LG Electronics Inc. Industry : Technology & Communications Countries : South Korea Themes: Business Failure, Organizational Crisis, Rise and Fall,Market Entry & Exit |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
Tough Times
In January 2015, Juno Cho (Cho), President of LG Corporation, was appointed president and chief executive of LG’s MC segment, while Park was moved to the newly created position of Chief Technology Advisor. In 2015, LG’s revenues were KRW 56.51 trillion. It posted an operating loss of KRW 48.3 billion in 2015 compared to an operating profit of KRW 316.1 billion in 2014. Meanwhile, LG launched a curved display smartphone, the G Flex 2, at the Consumer Electronics Show of 2015..
Exits Smartphone Business
Despite its strong presence in the US, LG’s MC division continued to post losses. Through the first quarter of 2021, LG apparently managed to sell KRW 998.7 billion (US$ 901 million) worth of phones through Q1 2021, which was roughly the same amount as it had sold in Q1 2020. However, its losses amounted to KRW 280 billion (US$ 252 million)..
What lies ahead?
Going forward, LG planned to focus its resources in growth areas such as electric vehicle components, connected devices, smart homes, robotics, AI, and business-to-business solutions, as well as platforms and services. LG planned to leverage its mobile expertise and develop mobility-related technologies such as 6G to help further strengthen competitiveness in other business areas..
Exhibits
Exhibit I: Top Global Smartphone and Mobile Handset Brands (2009-2011)
Exhibit II: Worldwide Smartphone Sales by Vendor (2014)
Exhibit III: Global Mobile Phone Market Share of LG Electronics (Q1 2009-2009 to Q3 2015)
Exhibit IV: Timeline of LG Mobile Phone Models
Exhibit V: LG Global Smartphone Market Share Trend (Q1 2017 to Q3 2020)
Exhibit VI: LG Smartphone Sales by Price Band (Q4 2020)
Exhibit VII: Sales and Operating Profit of LG’s MC Segment (2016 to 2020)
Exhibit VIII: Global Market Share of Top 10 Smartphone Vendors (2020)
Exhibit IX: LG’s US Patent Filings/Grants (2015 to 2019)
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