Electrolux

Summary of the Case: Electrolux:

• Being a leading global company in home and professional appliances that includes refrigerators, cookers, dishwashers, washing machines, vacuum cleaners, air conditioners, and small domestic appliances, Electrolux finds its own way to profitable success.
• The Electrolux group consists of six business divisions, including four major appliances divisions, a small appliances division, and a professional products division.
• Electrolux made its name more popular when it became one of the top five global players in household appliances in the year 2013.
• Electrolux Group envisions to become the best appliance company in the world as measured by its customers, employees, and shareholders.
• Electrolux has restructured its production across divisions globally by maintaining strategic emphasis on increasing operational efficiency.
• Electrolux continuously innovates to enhance its current products and ranges to penetrate existing markets by pursuing its strategy of profitable growth.
• With its growing portfolio, Electrolux is all set to establish greater dominance in the global home appliances industry.

Case Question Answer:

1. Evaluate Electrolux’s strategy in light of its vision and the global trends in the household appliance industry.

• To be the best appliance company in the world as measured by its customers, employees and shareholders is what Electrolux envisions.
• Its strategy is based on 4 pillars namely: innovative products, operational excellence, profitable growth and dedicated employees.
• By restructuring of the firm, production efficiency has increased.
• Electrolux is indulged in horizontal integration for integrative growth.
• Their line of ultra-silent products helps prevent noise pollution as their global trends incline towards sustainable products
• In order to produce local variations for different markets, they have followed “same product architecture, differentiated design”.
• The following factors give Electrolux a competitive edge: Global presence, consumer insight, professional legacy, sustainability, Scandinavian heritage and wide product range.

2. What benefits will Electrolux receive from the acquisition of GE Appliances? How does it fit in with the strategic direction of the group? What other strategic options can Electrolux pursue for future growth to achieve greater global dominance?

Benefits gained through acquisition of General Electric appliance gave Electrolux control over the Kitchen and Laundry products. Ninety percent of the sales will be with Electrolux and running its own Logistics and Distribution Network in North America while 48.4% shareholding in Mexican Appliance Company. Through this acquisition Electrolux will have more financial strength and more global business around the world.

How does it in with the strategic direction of the group?

• By experiencing growth with acquisitions as done in the past.
• Product list and diversity in products increased.
• The company is not well-versed with the beginning of newer markets.
• Increase global reach and operational efficiency under the company’s banner.
• Paving a path to the Vision or the Goal the company wants to achieve.
• Company’s technological advancements.

What other strategic options can Electrolux pursue for future growth to achieve greater global dominance?

• Targeting emerging markets like India and other markets with population
• Being price conscious as per the country or place selling in.
• Aim to know the customers requirement and start working towards those by a strong market research program.
• Market research program includes the prices and giving some offers to attract more customers.
• Create more awareness towards the brand and highlighting the specialty of the product as part of the improvement of market channeling.

What did the company do right/wrong marketing – wise? 3-4 bullets only

• The seven other strategic brands of Electrolux such as Grand Cuisine, AEG, Zanussi, Eureka, Frigidaire, Molteni, and Westinghouse are one right marketing wise of the company.
• The industrial triangle that made Electrolux close cooperation between its marketing that helps to ensure faster feedback to the market industry from the consumers is also a right marketing wise of the Electrolux.
• Another right marketing wise is through maintaining strategic emphasis on increasing operational efficiency that made Electrolux popular in its global divisions.