Shin Dong-bin says Lotte's business competitiveness has stagnated for 10 years

Lotte Group Chairman Shin Dong-bin called for stronger "fundamental competitiveness" at the group's second-half VCM (Value Creation Meeting, formerly the presidents' council), expressing concern that the group's business competitiveness had stagnated over the past decade.

According to Lotte Group, Shin chaired the VCM on Wednesday afternoon at Lotte World Tower, saying: "For the group's core businesses, which have entered a mature phase, to find new growth momentum, it is necessary to secure fundamental competitiveness rooted in the basics of each business."

The VCM brings together about 80 people — including Shin, the chief executives and division heads of Lotte Holdings, and the heads of each affiliate — to discuss the group's management direction and medium- to long-term strategy. It is held twice a year. At this second-half VCM, participants reviewed first-half business performance and shared key management priorities for achieving second-half targets.

Reflecting on the first half, Shin said, "The group's overall earnings have improved, but the view from external capital markets remains cold." He added that "in the second half, uncertainty stemming from global geopolitical issues will grow, and the pace of technological advancement — including AI agents — will accelerate," urging that "CEOs analyze the situation from multiple angles through the lens of PEST — politics, economy, society and technology — and manage accordingly."

Shin said the group's business competitiveness had stagnated over the past decade. He went on to stress the importance of strengthening fundamental competitiveness, centering his remarks on three themes: "selection and concentration," "continuous improvement and innovation," and "staying true to management basics."

More specifically, he said the group must improve profitability and competitiveness by streamlining non-core businesses that do not align with its strategic direction. For global competitiveness, he called for enhancing value around core brands. "We must stay true to management basics — putting customers first and generating profit," Shin said, adding that investments should be executed only after thorough feasibility and profitability reviews, and within the bounds of financial soundness.

Shin closed the meeting by introducing examples of innovation in traditional industries and stressing the need for innovation within the group to sustain growth. "Tradition should not be a ceiling that confines us, but a starting line for new innovation," he added. "CEOs must present a clear vision, continuously improve from the customer's perspective, innovate boldly, and evolve the organization."

Meanwhile, the VCM on Wednesday opened with a keynote address by Doug Stephens, a futurist and management consultant. Drawing on his experience advising leading global companies, Stephens shared insights on AI trends and global markets with Lotte's senior executives. It was the first time Lotte had invited a foreign speaker to its VCM.