Essay about Electrolux Case Study

1323 Words Mar 12th, 2011 6 Pages
Electrolux Case Study

Introduction

The case study highlights the fact that in 2005 Electrolux was the world’s biggest producer of domestic and professional appliances for kitchen, cleaning and outdoor use. There were three important issues in the companies target markets that their strategies had to address, namely globalisation, market polarisation and the consolidation of retailers. The strategies adopted by Electrolux to deal with these issues are covered in detail in the answers to the questions that follow.

1. Explain why issues facing Electrolux were Strategic ● Long Term direction of an organisation – The definition of grand strategy (http://www.businessdictionary.com/definition/grand-strategy.html) being a
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● The Electrolux brand was also very strong and held in high regard in the industry, which gave them a definite advantage over there competitors. ● Expectations – Shareholders expectations of Electrolux was to continue to cut costs in production, intensify product development based on customer insight and increase marketing and strengthening the Electrolux brand.

Most important factors are to continue monitoring the changes in the environment and ensure the Electrolux have the capabilities to adapt to these changes and keep the shareholders happy.

4. Strategic choices for the company in relation to the issues ● At the business level Electrolux have targeted under performing units where profitability was too low, by out-sourcing the production to outside manufacturers. An example of this was the discontinuing in production of air-conditioners in the US to manufacturers in China. (Collaboration) ● On strategy at corporate level Electrolux made the decision to demerge their outdoor products division as Husqvarna enabling focus on indoor household products. They also made decisions to target lowering purchasing costs from suppliers by minimising the number of suppliers and by intensifying cooperation with them to cut costs of components. ●

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