Different Strategy
These days, both LG Electronics and Samsung Electronics are concentrating on automotive electronics to ensure their future growth.
In July 2013, LG Electronics acquired V-ENS, an auto parts designer, to set up its Vehicle Component (VC) Division. According to its explanation, however, LG Electronics has been engaged in the industry for over 10 years. “We have run an in-vehicle infotainment business unit in the Home Entertainment Division and the Energy Component Division has worked on inverters, compressors, motors for electric vehicles, etc.,” it said.
Samsung Electronics, which jumped into the industry as recently as in December last year, is striving to narrow its gap with industry leaders by means of M&A. For example, it announced an equity investment of 500 billion won in BYD last month and, more recently, news has leaked out that Samsung Electronics is planning to take over Magneti Marelli for US$3 billion.
The VC Division of LG Electronics is expected to achieve three trillion won in sales revenue this year along with a year-on-year sales growth rate of at least 50%. Nowadays, the division is focusing on qualitative growth in particular by, for instance, conducting year-round recruitment. As of the first quarter of this year, the number of VC Division employees is 3,625, way more than that of its counterpart in Samsung Electronics. Still, industry insiders are paying keen attention to Samsung’s strategy based on aggressive M&A expected to enable it to catch up with the VC Division of LG sooner or later.
The two companies are heading in different directions in the consumer electronics industry, too. Samsung Electronics acquired Dacor on August 11 in order to enhance its brand value and B2B side in the North American market. Samsung Electronics acquired SmartThings, Sigfox, Joyent and many more in the IoT and cloud computing sectors for the past two years.
Meanwhile, LG Electronics launched its LG Signature brand late last year and Signature Kitchen Suite more lately. The idea is to provide super-premium services covering a wide range of home appliances products at the same time. In the high-end TV market, Samsung and LG are concentrating on quantum dot and OLED, respectively.