The main industry suffered a net loss for consecutive years and LG Electronics blew up the Korean crisis

When "vistism" suffers from "pragmatism," it is not surprising that LG Electronics continues to suffer losses and even faces bankruptcy and reorganization in the future.

A few days ago, LG Electronics, one of South Korea's electronics companies, released its 2011 annual results: As of the end of 2011, LG Electronics’ operating revenue was 28.1 trillion won and its net loss was 277.9 billion won (approximately 247 million U.S. dollars). Compared with the net loss of 635.9 billion won in the same period of last year, the loss of LG Electronics has slowed down, but the company’s marketing revenue has declined by 3.9%. This means that in 2011 LG adopted a passive strategy of "shrinkage hemostasis."

In the face of the deterioration of the global economic situation and the intense competition in the LCD TV and smart phone industries in 2012, LG Electronics' “3D TV and Android smart phone” strategy to ease losses and even seek profits is considered impossible to achieve. result. Excluding TV and mobile products, LG Electronics wants to seek "leaving, rapid stop-loss" in the future, and it seems that it cannot find any strategic fulcrum.

Even more deadly, the current market and consumers' understanding and understanding of the LG brand has deviated from the "internationalization, excellence, and forward-lookingness" baseline, and its product's appearance of luxuryism can not bring a comfortable experience. It planted a "crisis seed."

LG Electronics’ continuous loss is no accident. In the author's opinion, this is a strategic warning that Samsung and LG are in a dilemma for the development of the “bigheaded” Korean electronics industry in recent years. Quality, sacrificing product use experience, excessively pursuing performance profits, and overemphasizing the speed of development, this innovative development cannot be sustained.

Loss and loss of the main business At present, LG Electronics continued loss of mobile phone business, has been considered to miss the best time for external sales. Similarly, LG Display's LCD business is also facing losses. Since the second half of 2010, LG Electronics' liquid crystal display panel has experienced losses for more than five quarters, and there is currently no sign of a stop-gap.

In the Chinese market, what was once considered synonymous with LG Electronics is not electronic products such as mobile phones and televisions, but home appliances such as air conditioners, microwave ovens, and washing machines. LG air conditioners and microwave ovens were once the best-selling “foreign home appliances” in the Chinese market. This was the LG business strategy that benefited from the “local prices of foreign brands”.

LG Electronics, which consistently holds high tactics for “localization,” suddenly began to promote “first-class strategies” in the Chinese market, and eventually began to shrink its investment in China’s home appliance industry, seeking brand value through “price increase and shrinkage”. Regression, but also trying to reverse the previous "low-cost strategy" lost profits. At this time, Chinese consumers who have become accustomed to enjoying the local price of LG foreign brands began to choose to abandon LG. So far, LG has been proud of the "global air-conditioning sales first" performance has long been captured by the Chinese counterparts, the loss of the world's largest emerging market, China's LG appliance business, but also in the world into a period of low growth, while Haier from China has For the third consecutive year, it ranks first in global household appliances.

The scene of deja vu is revisited in the current market operation of LG Electronics. Although LG Electronics's home appliance business suffered a downturn, it quickly ushered in the global LCD TV market and the industry opportunities in the color-screen mobile phone market. As a result, LG Electronics eventually lost its reputation and won the global television market. And the continued growth momentum in the mobile phone business.

Good luck is not always behind LG. At present, the global LCD panel industry is declining to become a low-growth road cargo product. In addition, the deployment of Chinese companies in this area has begun to exert force. LG Electronics and Samsung Electronics, which originally used the "LCD panel + machine" integrated layout to win, are facing "The market demand for the whole machine has been unable to support expansion of LCD panel production capacity," and the Chinese market is about to enter a state of self-sufficiency. The shadow of losses will continue to be accompanied by LG Electronics.

Similarly, in the outbreak of personal multimedia terminals represented by global smartphones, LG Electronics has taken a step slower than Samsung Electronics. Although it is still the third largest mobile phone sales in the world, in the trend of smart phones replacing traditional mobile phones quickly, LG Electronics’ mobile phone market has been snatched by Apple and HTC. Video technology such as 3D naked eye can't shake the current " Application-based" smart phone format. In personal tablet products represented by PAD, LG Electronics has not yet established a corresponding competition system.

Rootless Surface Innovation With the rapid changes in global consumer demand, LG Electronics' main business has been sliding to the bottom. At present, LG Electronics faces not only the challenge of “main business is not green” in the course of market competition and business operation, but also the doubts of consumer trust and brand reputation brought about by “the lack of superficial quality.”

Incredibly, in the context of advocating innovative spirit in the global market, LG Electronics turned out to be a transnational electronics giant that lacks "core competitiveness" and has supported LG Electronics' rapid expansion in the global market over the past 10 years. It is also difficult to sustain in the current market environment.

At present, in the global 3D industry competition, the LG non-flash LCD panel, which once achieved 3D picture at a “low cost, low price”, seems to have won the top spot and seized market opportunities. With shutter-type LCD panels pursuing high-quality 3D graphics, they are in no hurry to "reduce cost and rapid expansion." In sharp contrast, LG Electronics is a bit impatient.

LG Electronics, which is good at "following and imitation" innovation, has been the biggest bargaining chip in the market and consumer acceptance for its amazing product appearance and refreshing industrial design over the past 10 years. However, during this period, LG Electronics is still a company that has constantly challenged consumers' questions about product quality and reliability. Such as LG air conditioners, mobile phones, plasma TVs, LCD TVs, microwave ovens, washing machines and other products, have encountered complaints from consumers of different sizes, and even require their public recall.

The reason is that LG Electronics is indulging in the surface innovation of various products, ignoring the concern and demand for the most direct factor in the consumer experience. The once sensational LG Electronics headquarters “refurbished door” incident systematically reflected the loopholes in LG Electronics’ supervision of product quality and business, and even launched a series of “Swarovski Crystal Panels” to pursue profits and avoid losses. Air conditioners, "chocolate style" mobile phones, patterned colorful washing machines and other products. Although it caught the eye of the market at the moment, it was ultimately lost to the user's product experience and lost in the instability of product quality.

The driving force that determines how far a company can go is innovation, but this innovation is by no means stuck to imitations and superficial industrial design innovations. It must be based on user needs and application experience with the best user experience.

Corporate security concerns people's livelihood. Currently, the company's continued healthy operations are not only related to the tangible interests of corporate shareholders and investors, but also closely related to the interests of many consumers in the market. From the author's point of view, for a multinational company, if it is said that "providing reliable products and supporting services" is only the basis for survival, then "guaranteing the healthy operation of the company and avoiding closing the doors" is a development strategy.

For LG Electronics, it not only supplies LCD TVs, mobile phones, air conditioners and other terminal products to the market, but also provides LCD TV panels and other key components to many TV and mobile phone manufacturers. Once LG Electronics is in trouble due to losses, many users' products Service, use safety, and the normal operations of downstream manufacturing companies will all be implicated and impacted.

At present, under the background of much concern for consumer safety, many multinational corporations represented by LG Electronics should, when they "grab market share, maximize profits and realize localization of operations," they should also look beyond market competition. Post-placement, pay more attention to user needs and industrial safety, create more healthy organizations for “sustainable management”, complete the transition from “business and business interests” to “industry and consumer interests”, and realize the goal from corporate security. Industrial security development.

It is undeniable that LG Electronics is a multinational company worthy of learning and learning from China's consumer electronics peers. In recent years, its own problems in market competition and product distribution have also warned all Chinese and foreign companies that innovation is not a panacea, based on user experience. Innovation is the key.