LG Elec separates new biz divisions into in-house entities

LG Electronics Inc., the leading global home appliance maker, has actively separated new business organizations into independent in-house entities, so-called companies in companies (CICs), to develop future growth engines by enabling quick decision-making and implementation of strategies amid the rapid evolution of new industries.  

The South Korean tech giant recently set up the Smart Cottage Company for the small modular home business and My Tasty Company for the capsule-based coffee machine Duobo, according to industry sources on Sunday.

LG launched the Smart Cottage, a housing solution business, that integrates the company’s eco-friendly technology such as heating and cooling systems without fossil fuels as well as energy-saving and management devices earlier this year.

The Smart Cottage attracted visitors to the IFA, Europe’s largest consumer electronics and home appliances trade show, in September. LG is scheduled to start selling the system next year in South Korea.

“Smart home solutions, which will be applied to homes in the long term, are incorporated into the Smart Cottage,” said Lyu Jae-cheol, head of LG’s home appliance and air solution division.

TARGETS HIGHER SALES FROM NEW BUSINESSES

The Duobo extracts two coffee capsules simultaneously, offering personalized blending experiences for users based on the temperatures and pressures they request.

LG separated the organization of the two businesses into in-house entities to actively support new sectors with strong growth potential by allowing them to quickly plan and execute strategies.

The company currently has about 10 in-house entities.

“Sales from three sectors – intangible businesses such as content, automotive electronics parts and new industries – are expected to make up more of our total revenue by 2030 than home appliance sales,” LG CEO Cho Joo-wan said in July.

Write to Ye-Rin Choi at rambutan@hankyung.com
 
Jongwoo Cheon edited this article.