LG Electronics’ MA deals (excluding affiliated companies) stopped after the company took over a smart TV platform, “the Web Operating System” from HP in 2013. Over the past four years, LG Electronics has focused on RD-oriented innovation. Although the importance of RD played a part, the company was concerned about the failure of MAs.
LG Electronics’ VC Business Division launched in the same year was a new growth engine prepared for more than 10 years including the RD period. Although the division still incurs deficits, the division is a future business item and is promoted via a differentiation strategy of LG Electronics. The division was one step ahead compared to Samsung Electronics which is LG Electronics’ archrival in the home electronics sector.
However, the situation has changed since Samsung Electronics acquired Harman, the world’s leading infotainment company last year. To take over Harman, Samsung Electronics invested 9.3 trillion won (US$81 billion), the largest amount in the history of Korean companies’ MAs and suddenly became a giant in the field of electronic auto parts. Samsung’s acquisition of Harman made LG Electronics’ roughly ten years of RD trifling.
Samsung’s acquisition of Harman made LG Electronics no longer say to shareholders that its electronic auto parts business was its future growth engines. Then, LG Electronics selected the aviation interior field as a new growth engine. LG Electronics’ entry into the in-flight entertainment and communication (IFEC) system business is interpreted as a clever move in this regard. This is because LG Electronics’ VC business is similar to
Article source: http://www.businesskorea.co.kr/english/news/industry/18724-new-business-development-lg-electronics-eyeing-ifec-sector-devoid-korean
