LG shifts business focus to Europe

LG has met challenges in Europe which is dominated by competitors such as Sony and Samsung

LG Electronics has announced plans to shake up its European development programme by increasing investment in the region over the next two years.

The company will invest millions of dollars in marketing, design and increasing its European headcount through 2008.

Europe already generates 19 per cent of LG's global revenues, but the firm is driving a major shift in strategy which will see Europe playing a central role in its global roadmap.

"Europe is the ultimate test-bed for our new approach due to its diversity, the education and engagement of its consumers, its highly competitive markets and the fast-pace of change and adoption of new technologies," said global LG chief executive Yong Nam.

"The lessons LG learns about success and failure in its approach to the European market and its consumers will determine how we adopt and implement such strategies in other regions worldwide."

Despite significant success and impressive financial results, LG is adapting its global strategy to focus on regional investment in consumer insight and marketing.

The company is undergoing "seismic changes" that include the introduction of non-Korean executives from the UK, Ireland and France.

LG is currently number two in the flat-screen TV market and number four for mobile handsets globally, but the company has met challenges in Europe which is dominated by competitors such as Sony and Samsung.

Nam reckons that, despite the current economic climate hitting consumer electronics sales, the new strategy will see it secure between 10 and 15 per cent growth in Europe in 2008.

LG opened its European headquarters in 2004, which is now based in the UK, and has a further 14 sites across Europe.