The trajectory of LG Electronics, its growth and diversification, has always been grounded in the company ethos of making our customers' lives ever better and easier-happier, even-through increased functionality and fun.
Since its founding in 1958, LG Electronics has led the way to an ever-more advanced digital era. Along the way, our constantly evolving technological expertise has lent itself to many new products and applied technologies. Moving forward into the 21st century, LG continues to on its path to becoming the finest global electronics company, bar none.
GoldStar, the dawning of the myth
It was 1957, one spring day when Koo In-Hwoi, the founder and chairman of the company (president of Lak Hui at the time) and other employees, managers and executives gathered in a small office at the company. "These days, I spend my nights listening to the radio. "Yoon Wook-Hyun planning director opened the conversation. At the time, radios were attracting interests as embodiments of civilization,
bringing news of the world to their listeners. The instant he heard Yoon Wook-Hyun's opinion, the possibility of a new business opportunity came into Koo In-Hwoi's mind. "We could make it." "I wouldn't say it's impossible, but our technology is too far behind." It was not only Yoon Wook-Hyun; most of the staff attending the reunion were too skeptic to face Koo In-Hwoi's proposition. But Koo In-Hwoi's hope was already rushing toward the new electronic industry era. "We could certainly deal with it. If we need to learn, we'll go abroad and learn; if we can't, we'll invite foreign technical experts. I say let's unveil the electronic industry within us."
Koo In-Hwoi went on with his sole challenging, pioneering spirit. That radio Koo In-Hwoi once dreamt to make with his own hand later became the footstone which led Korea into today's biggest electronic
industry nation. Hence in 1958, GoldStar(now LG Electronics) sowed seeds of electronic industry to the land where traces of recent war still lingered. Truly, it was the dawning of the new Korean electronic
industry era. GoldStar initially founded in October 1st 1958 eventually grew into today's global company, LG Electronics.
In July 1959, for the first time in both LG Electronics history and Korean electronic industry's history, LG Electronics committed itself in the development of the radio. Neither the company nor the nation
had developed other electronic devices prior to the commitment, and most looked upon doubtfully. In spite of the much apprehension, however, LG Electronics' determination to produce a first-ever domestic radio went on unaltered. Considering the situation of the company and its low technology standard, importing radio components was more practical than risking in-house development. But GoldStar chose to develop and provide domestic components to their radios. For a company which had barely started toddling, developing domestic components was folly enough. From its beginning, LG decided to take a risk that no
other Korean electronics maker was willing to pursue. Rather than sourcing parts for its radios from foreign makers, LG – then GoldStar – chose to make its own components. This decision helped lay the
foundation for the company to become a world leader in technology. LG was successfully using its own parts to build radios, the first electronic products made in Korea, within a year of starting the
project. From the switches, transformers and sockets of long ago to today’s most advanced electronics, LG is a true success story.
Not only it was the first Korean radio, but it was also the first product to include more than 60% of domestic components; up to today, LG Electronics' first radio is regarded as the hallmark of the new Korean
electronic industry era. Considering that the Korean electronic industry barely began in 1958 with the foundation of GoldStar, manufacturing a domestic brand product with our own technology within less than a year was more than a historical event.
The development of the radio is only one among LG Electronics'(GoldStar at the time) countless achievements. Most of the electric appliances that surrounds our everyday life began with LG Electronics. This is precisely why we can declare, that LG Electronics history 'is' the Korean electronic industry. First among the Korean companies to establish a foreign branch, first among the private companies to
establish a general R&D laboratory, first in the industry to achieve and surpass 100 million dollars exportation, first in the industry to provide a consumer consulting office, first among the Korean companies
to establish an overseas production plant, first in the industry to establish a design laboratory... Undoubtedly, the many achievements of LG Electronics have been writing the Korean business management history anew ever since its foundation.
As to fulfill its reputation as the first Korean electronic company, LG Electronics continuously bore acknowledgements such as 'The first' and 'The best' during the past 50 years. The records LG Electronics
set were none other than the records which positioned Korea as the 'Number-one' nation. The first-ever Korean radio LG Electronics developed became the symbol of hope to every Koreans, living desperate lives within the ruins the war had left behind. The crown emblem a GoldStar radio bore signified dream and hope toward their future. Soon afterward, LG Electronics forged its way to become Korea's best electronic company by successively producing first-ever domestic products in most of the electronic appliances, including the first refrigerator, first television, first air conditioner and first washing machine.
LG Electronics is also proud to have been the first company to represent Korea worldwide, starting from 1962 when the first Koreanmade radios were exported to the USA . to be soon followed by other products, to other parts of the world, thus leading the 'Export Korea' motto into brilliant achievement. The efforts LG Electronics endeavored positioned the company as the first in the Korean electronic industry to surpass the 100 million dollars exportation, Showing confidence in the heart of every Koreans who considered
exportation as the only means of survival: 'We can do it' Global company, LG Electronics GoldStar's challenging spirit had fueled its determination to create electric appliances with our own hands in the
barren land devoid of any potential electronic industry. Its pioneering spirit had led the company to overcome the most difficult situations and bring forth the very first step toward the emergence of the Korean electronic industry. Beginning with the development of the radio, the company had gained
confidence with its 50 years of top-rank success in every areas of the Korean electronic industry. Today's global company, LG Electronics is forged upon these roots.
This success has required the company to continually take on new challenges and it will continue in this
pioneering spirit to achieve its future goals. In October 8, 1982, the first 'Made in USA' product bearing the GoldStar seal came out of GSAI(GoldStar America Inc., now LGEAI), Korea's first overseas production subsidiary located in Huntsville, Alabama. It was the 'CMA-2030', the first color television to symbolize the company's giant leap from the Korean market to the global industry. GoldStar had foreseen the need to secure a front-line overseas production plant in order to confront changes in the international trade order, and had established its first overseas production subsidiary in the USA . Soon, it was followed by a string of other overseas manufacturing and sales outposts in Europe, Central and South America and Asia, bringing forth the company's fully stretched step toward the global industry. The success of LG Electronics in becoming the global company of today with 83 overseas subsidiaries was mainly due to its globalization strategy.
In 1989, however, GoldStar faced the biggest challenge in its history of Korean leading company, hit by an unprecedented labormanagement dispute. The competitors did not miss the opportunity; GoldStar relinquished a considerable amount of the market share, its number-one pride deeply wounded. But as always, true leaders shine the most upon the darkest time. The conflict between the labor and management left a scar, from which the company learned to seek a stronger relationship. This resulted GoldStar to be once again selected as the top-ranking company in terms of labor and management collaboration, exemplifying the win-win relationship the company forged. In 1995, WTO (World Trade Organization) was formed and the world's trade order underwent radical changes. The subsequent globalization threw the business environment into an endless competition. The influence of the bloc economy grew stronger. Competitions for new opportunities toward the Chinese and Indonesian market were fierce, and the race to the emerging businesses, including the new multimedia industry, was reckless. LG Electronics responded actively to such changes, reformed its corporate mission and CI (Corporate Identity) and underwent a significant transformation into a more progressive, dynamic and future-oriented company. Henceforth in
January 1st 1995, GoldStar which led the Korean electronic industry for 37 years gave way to LG Electronics, face to the dawning of the new era. But in 1997, Korea faced the biggest economic downfall in its history when the IMF (International Monetary Fund), the foreign exchange crisis, hit the nation. Companies in every industry sought survivals with extreme reconstructions; exchange rates and interests soared, and the nation's economy froze. LG Electronics was not immune to the crisis. The company restructured its workforce and its organization to strengthen its competitiveness, and focused on customer-oriented researches and developments. By setting the priority to the customer, the company laboured in laying a foundation to gain confidence from
its customers. The strategy proved effective. Not only it had overcome the IMF foreign exchange crisis, the company had also succeeded in providing substantial background face to the emerging 21st century.
Up to the 1980s, the manufacturing and building industries shaped the Korean economy.
After the 1990s, however, the electronic information technology was the primary factor inciting the development of the Korean economy. The electronic information technology played an essential role in developing the Korean economy. On top of the governing electronic industry, 'Digital LG' was the leading company. With the word 'Digital' emerging as the new subject at late 1990s, LG Electronics pronounced 'Digital LG' as the new vision of the company and set out its long march toward the global-leading company of the digital era. Never satisfied in being the number one in Korea, LG Electronics had challenged the world for the 'Global number-one' position. The company's endeavor resulted in remarkable outputs, including the world's first terrestrial DMB phone supporting the WCDMA platform, the world's first Plasma TV with built-in DVR(Time Machine TV) and the world's first terrestrial DMB notebook among others. In 1998, four years after its introduction, LG Electronics' CD –ROM drive (optical storage) scored number one in the global market share.
Soon after, the company saw its products entering the global market's premium brand category. Air conditioner, microwave oven, vacuum cleaner, CDMA WLL terminal... LG Electronics' products were now
securing the top-rank in the global industry. The acknowledgements LG Electronics bore remained unaltered. Simply, 'The first' and 'The best' were now coupled with 'The world' instead of 'Korea' where they had been previously. LG Electronics had seen a considerable growth in its capacity had surpassed the Korean market boundary and was now leveling with the global competency.
Starting from the year 2000, LG Electronics' global competency exhibited a steep growth and was soon level to the word's premium quality products, including the mobile phone, Plasma TV , LCD TV, optical storage and other home appliances. In January 2004, LG Electronics announced its new 'Global top 3 by 2010' vision and focused all its energy in creating first-quality products and technologies, a quality indispensable for the global market competition. The company's ambition was high; it had decided to seize the top-rank position not only in the home appliance industry where the company was already competing globally, but also in the next generation mobile communications and in the digital display industry. The past experiences had taught the company that only the number one could survive in this battle. Combined the innovative spirit and the business capability the company had aggregated, the global number one position was not merely attainable; it was an achievement the company was expecting in the near future. The 'Global top 3 by 2010' was, by itself, representing the company's resolution. From its analogue roots in the 1950s, LG Electronics grew quickly as it brought a number of firsts to the Korean market, starting with the first-ever domestic radio, and extending now in the digital era to groundbreaking mobile phones, televisions and home appliances.
This helped LG Electronics become the first Korean electronics company to surpass USD 100 million in exports. Today, LG Electronics is boldly pursuing its goal of being a global top three electronics player by 2010. For LG Electronics, the year 2008 is yet another starting point for the incoming 50 years. In these days of turbulence where the world's economy is suffering from low exchange rates, high oil price, financial crisis due to US-initiated sub-prime mortgage and global inflation threats due to the Chinese market, the global economy is mostly feared to have reached its limit. Even in the electronic information technology where LG Electronics holds the most advanced position, the business environment is harsh as well.
The FTA (Free Trade Agreement) is urging toward open-economy structure; Korean currency is revaluated upward; technology protectionism is strengthening; and most of all, the international standardization is yet to be settled. The company now faces new challenges such as acquiring core technologies, expanding its market and alleviating its restrictions to once again lead the global Korea. The history of 'Digital LG' is still ongoing. The electronic information technology initiated by LG Electronics in 1958 has long expanded to the global industry, with LG Electronics in its centre. North America, South America, Europe, China, India, Asia, Middle East and Africa. LG Electronics is leaping beyond the world's boundaries and up to the future. In its vein is the challenging spirit, the pioneering spirit, the pursuit of the number one in the market which keeps up the company since its very foundation. It is the soul, the conscience that drove LG Electronics to what the company is undeniably today. To revive its soul and maintain its conscience is by far the company's most precious asset in accomplishing the 'Global no.1 LG' for the dawning 21st century. And the history will remember. It will remember that LG Electronics was always on its own, leading undefeated paths to become the number one in its industry. And the history will tell, the tradition which forged the company will once again flourish and become myth anew, to the present and up to the future.
GoldStar, the Electronics Industry Dream In 1957, Koo In-Hwoi saw the possibility of a new business venture as opportunities in the electronics industry emerged. Leading up to these changes were the private owned broadcasting station, CBS , the launch of cable broadcasting and the opening of a TV station. He was determined to exploit the tough, pioneering spirit to bring the much needed electronics industry to Korea, and he, therefore, decided to develop the first ever domestic radio. On October 1, 1958, the dream of a Korean electronics industry became a reality as GoldStar was born. In June 1959, even before the official inauguration of the company,
GoldStar's design laboratory at the Yeonji-Dong plant had already started designing the new radio model. Alongside efforts to develop the new radio model the laboratory was also designing domestic components in house.
On November 15, 1959, the first domestic radio A-501 came off the assembly line. GoldStar! Soon after this historical event in the Korean electronics industry, the word 'Electronic' first appeared in Korea's newspapers. GoldStar's radio manufacturing sowed the seeds of the electronics industry and heralded the beginning of the broadcasting era. The
government's modernization policy was also greatly strengthened. During the 1960s, GoldStar developed its second radio, the transistortype model, T-701, which had gone beyond the age of the vacuum tube, and utilized new cutting-edge technologies. However, the result was disastrous. The failure even put the company's existence at stake.
Market demand was very limited due to the fact that most people in Korea were on low incomes, and those who could afford radios, preferred foreign brands. In 1961, GoldStar had to seriously consider whether to keep or abandon the company. Fortunately, the situation did a u-turn when the 5.16 military government announced its decision to supply radios to rural and farming areas.
GoldStar had found a way to enter the market. The aggregate sales of radios, which at the time amounted to thousands in 1960, rose to over one million in 1961; in 1962, the company was recording 1,034,000 in sales. In the same year, Korea witnessed its first domestic radio exports. The exports provided the company with a considerable increase in income. Its technologies were also greatly enhanced. The newborn star of the Korean electronics industry, GoldStar, had finally taken off. The company, fueled by its recent success, challenged the communications industry with Korea's first automatic telephone in July 1961; with the company's establishment of the comprehensive electrical plant in Oncheon-Dong, Pusan, the 'Oncheon-Dong era' began in 1964. The production of Korea's first electric appliances soon followed the radio: monochrome TV , air conditioners, refrigerator, etc. GoldStar was gradually laying the foundation for the electronics industry. Because of the company's remarkable progress, the Korean electronics industry as a whole was beginning to flourish. However, on December 31, 1969, the founder of GoldStar, Koo In-Hwoi, who had sown the seeds of the electronics industry throughout the nation, sadly passed away. The company mourned, but despite its sadness, it had to carry on. The 70s was the decade the company was aiming for new progress and advancement. Symbol of the technology, GoldStar
The word that best represented GoldStar during the 1970s was 'Symbol of the technology, GoldStar'. The 1970s was the golden age of the Korean industry, with the average of 9.7% annual economic growth rate. GoldStar, the leading company of the Korean electronic industry, was actively pursuing both external growth and internal strength. Development of high technologies, establishment of large scale plants... The company ceaselessly exhibited astonishing outcomes as if to demonstrate its industry-leading position. Meanwhile, the Korean government had announced the electronic industry development plan in 1966, showing interests toward the electronic industry.
In 1969, the 'Electronic industry 8-year development project' was announced, providing ground for the electronic industry to grow steeply. In response to the government's vision, GoldStar was the first Korean electronic company to go public in 1970, hence becoming Korea's national company. GoldStar led the electronic industry by establishing three-stage facility construction plans and expanding the company’s manufacturing facilities. The company's manufacturing base grew nation-wide, starting from the establishment of Gumi plant in 1975 and soon followed by large scale plants in Changwon and Guro, among other regions. Through the establishment of the manufacturing bases, GoldStar laid the basis for upsizing, nation-wide expansion and internationalization. Recurring oil crises, resources nationalism, economic depression, pursuits of late coming companies... Despite of the many difficulties in the 1970s, GoldStar was marked with steady growth, recording 42.3% from its sales increase. The company's success was the fruit of the investment in equipments, installations and technologies in response to the domestic market competition, along with its multiple business strategies focusing in developing new products, improving technologies, acquiring effective sales techniques, expanding the sales network and streamlining management techniques.
In December 1975, GoldStar established the Korean private company's first-ever central research laboratory. Back then, the Korean electronic industry was focused in labor-intensive manufacturing; the development of the technology was lagging behind. Owing to the challenging and pioneering spirits, GoldStar undertook the investment and incited the development of high-quality technologies. This event not only helped the company to grow; it was an historical turnaround for the nation's global competitiveness, too.
In 1977, GoldStar saw the production of its first color TV . At the time, it was unclear when the colour TV broadcasting service would start. Nevertheless, the company spurred in the development and succeeded in introducing Korea's first domestic color TV , 10 years after its initial production of monochrome TVs. From the establishment of production plants to the development of technologies, The company’s strenuous efforts to build the 'Symbol of the technology, GoldStar' finally paid off in late 1970s.
In 1977, the company was recording its historical sales of 100 billion wons; the next year, it had surpassed the 100 million dollars exportation. The 1973's oil crisis followed by the global economic depression, the rise in exchange rates, the economic emergency measures, GoldStar's achievement was more remarkable considering the political and economic turbulences the company had to overcome. Gradually, GoldStar was strengthening its position as Korea's best electronic company and stretching toward the world market. Korea's high growth period of the 1970s, the 'Miracle of the Han river' met the 1980s' new era of challenge among the much turmoil of the oil crisis.
In the late 1970s, the Korean economy was suffering from negative growth caused by the second oil crisis; the worsened political situation was severely impacting the social stability, too. Despite the domestic and foreign situations, GoldStar did not relinquish. From the beginning of the 1980s, the company started securing overseas production sites to step toward becoming a global corporation. This was an essential period for the company to confront the fast-changing international trade order and evolve to a highly-developed company. GoldStar went on a fast-paced organization of international subsidiaries including its sales bases and branch offices.
In 1982, the company was settling its outpost toward the global market in Huntsville, USA , by establishing the first-ever Korean foreign production site, GSAI (GoldStar America Inc.). Color TV , VCR,microwave oven... Boosted by the production of diverse home appliances, GSAI soon rose to truly represent the company's reputation, the 'International GoldStar'. The company's international expansion was followed by the establishment of the West Germany subsidiary, GSE (GoldStar Europe GmbH), in 1987; in 1988, another subsidiary, V-GS(Vestel GoldStar Electronics Sanayi Ve Ticaret A.S.), was built in Turkey. While focusing in the global expansion, GoldStar did not neglect the importance of keeping its technology up to date.
The company established Korea's first comprehensive design research laboratory to put efforts in design advancement and in high quality product development, providing a higher level of international competency. In order to secure the highest quality standard, the company established Korea's first product testing laboratory in November 1984.
The 1980s was also a period of intense competitions among the Korean electronic companies. The construction of the technology-intensive Pyeongtaek industrial site was part of the company's ongoing effort to keep up with the competition and successfully penetrate the global market. The company's sales record achievement of 1 trillion wons was particularly remarkable considering the economy's extreme depression. In 1984, the company's sales surpassed 1 trillion 295.6 billions. Despite the worsening market condition, the company had built its success through rationalized management strategies. Aggressive technology development, diversification of the products, strengthening nation-wide supply chain, diversifying the exportation structure... the accomplishments the company made through rationalized management were countless, once again demonstrating GoldStar's capability and competency among world-leading companies.
In late 1980s, the pressure of the developed countries urging the Korean market to further open its door was at its highest peak, and eventually, Korea would inevitably face the whole-opening of its market. Problems also persisted internally. The labour-management dispute which started in 1987 had severely incapacitated the company. Owing to Korea's political situation in 1987, pro-democracy movements spread nation-wide. The labour-management dispute hit GoldStar in full blast, and quickly propagated to the affiliate companies. GoldStar sought its way through swift management innovation, upturning the crisis into opportunity. Gradually and steadily, the company was growing in its quantity as well as in its quality toward achieving its status as a world leading company.