Topic- Case1

Electrolux
Name: Fariha Kabir-

Humayun Kabir Shakil-1822161

Mashid Iram-1822028

Sanket Islam-1820247

Md. Rakayat Saoud-1820091

Tanvir Islam Hadi-1710123

Course ID: Mkt302

Course Name: Marketing Management

Course Instructor: Suman Saha

Electrolux has been one of the dominant international players in the home appliance industry.
Headquartered in Stockholm, Sweden and was founded in in 1919, as a consequence of merger
between AB Lux and Svenska Electron AB. Electrolux Group consist of 6 business division, 4
main appliance, a small appliance division, a professional product division. It has been
dominated up to 150 countries and serving to North America, Western Europe, Middle East,
Eastern Europe, Southeast Asia, Africa constitutes maximum sales. Thriving for an excellence in
terms of home appliance with innovation and comfort zone is what Electrolux strive for.
Electrolux’s mission statement-“ We reinvent taste, care and wellbeing and experiences for
enjoyable and sustainable living around the world” and its vision statement is to become world’s
best appliance in terms of customers, shareholders, employees. Roughly, the revenue raised was
about $14.5 billion and 61,000 employers were employed worldwide. Porter’s few generic
strategies were used that comprises of differentiation, cost leadership. In addition to, Electrolux
positioned out as fifth remarkable global dominance in home appliance industry along with
Whirlpool, the Haier Group, LG Electronics, Bosh-Siemens. Half of the profit has come up via
these companies. The major drivers of this company in the industry per capita income
proliferated, expenditure, life standard, housing activities, urbanization. The main reason of its
sustenance is due to its differentiation in product, corporate culture, people, leadership,
Scandinavian heritage, consumer insight, professional legacy.

As I have mentioned earlier in above it has used futuristic and low-cost strategy, now I will
provide you few illustrations. For instance- It paired up with seven other brands-Grand Cuisine,
Eureka, AEG, Zanussi, Frigidaire, Molteni, and Westinghouse. There are four concrete pillars on
what it lies on- profitable growth, operational excellence, dedicated employees, and innovative
products. Electrolux has close cooperation between with marketing, and it has solid consumer
insight. Enhancing operational efficiency causes production across divisions. In 2013, it has
launched exclusive products in North America and Japan. Moreover, it has tapped Chinese
market for kitchen and laundry appliances. Merger and acquisition strategies has commonly used
by Electrolux. For this illustration, Electrolux merged with GE in September 2014, which is one
of the prime leader in North America and generated 90 percent off its sales to run its logistics
and network. The acquisition accounted 48.4% Mexican Appliance Company. And horizontal
integration was used for brand portfolio increase.
 1) Evaluate Electrolux’s strategy in light of its vision and global trends in household
appliance industry? (Humayun Kabir Shakil)

In This case Electrolux followed three strategies:

 Corporate level strategy

 Business level strategy
 Operational level strategy

Corporate level strategy

Corporate strategy level brings the overall game plan for the management of a number of
companies. From the case study we know, they emphasize the corporate level, the larger
restructuring exercise performed with added value for the different parts of the business. The
relocation of high cost countries low-income countries launch of new products and product
development, as well as the branding of Electrolux products. And they better understanding of
customer needs and finally building strong brands. Larger restructuring exercise at different parts
of the business for adding value. Brand Management activities to make Electrolux a global
brand. All of these shows that Electrolux followed corporate level strategy.

Business level strategy

Electrolux is following business level strategy to strengthen the market position and to build
competitive advantage. They are removing market complexities and cutting cost in all aspects of
operations. It can be achieved through efficient purchasing and production systems. They are
increasing the product renewal based on consumer insight. And increasing investments in
marketing and brand building that will place Electrolux as a world leader in the industry. All of
these shows that Electrolux followed business level strategy.

Operational level strategy

Electrolux is following operational strategy. They are maintaining a more efficient production.
The systematic development of brands and staff by the intensified product renewals which are
implemented at the operational level and strategic decisions. These shows that Electrolux
followed Operation level strategy.

Electrolux is termed as one of the top 5 home appliance industry in the global dominance in
today’s world. Envisioning themselves as one of the best companies in the world is being
regarded by customers, shareholders, employers. This strategy utterly lies upon on 4 pillars
commonly termed as-1] dedicated employees (core asset) 2) ingenious products 3) profitable
growth 4) operational efficiency. Production efficiency increased by means of restructuring of
firm. It made its profit through integrative growth (horizontal, vertical, merger, acquisition). In
order to produce for local products by targeting middle-income (target segmentation-age,
income, geographic segmentation) for different market they followed same architecture with
differentiated design. It has good operational efficiency that leads to good distribution channel
and henceforth, has good supply chain. 4P’s are carefully made to provide excellence to its
intended users with user friendly, comfortable product. The following factors gives Electrolux a
surviving and a competitive edge- Scandinavian heritage, consumer insight, professional legacy,
global presence, sustainability, wide product range.

2) What benefits GE will receive from acquision from GE Appliances? How does it fit with the
strategic direction of the group? What other strategic options can Electrolux pursue for future
growth to achieve global dominance? (Fariha Kabir)

GE had an agreement via acquisition to have profit growth for either companies. A long-term
agreement with GE which positioned itself as one of the prestigious home appliance industry in
terms of laundry, kitchen products. Strong brand gives them a good brand equity in the market.
Reliance on strong, established products caught attraction to customer, purchasing power has
attained. Therefore, cost savings in now up to $300 million. Having own logistic and distribution
channel leads to better supply chain. Throughout 40 years of acquiring and merging strategies, it
has given them profitable growth to stand out as a remarkable one in industry. Lux GroupoSeitz
GroupoBluebird InternationaloJKS Lamage (diamond tool manufacturer)oMagnum Diamond &
Machinery Inc.oEmail Ltd (Australia)oDresdneroVideocon(India)oCTI company
(Chilean)oOlympic GroupoAustralian BBQ CompanyoDiamant BoartoItalian Metallurgical
PlantoChinese dishwasher manufactureroSouth African water heater companyoAnnova smart
kitchen appliancesoGrindmaster-Cecilware. Product Differentiation strategy- Continuously
merging with new companies, equipped with new technologies Diversifying product- Retention
of customer. Innovative Development- By joining different companies like GE gives them a
privilege to develop more products in different functional SBU’s of them or in product
categories. Acquiring new companies assist them to be firm in their commitment in terms of
attaining vision and mission statement. In addition to, new market share and branding can be
achieved to thrive forward for future growth of the company. Strategic fit was an important issue
to be considered. They serve for a niche market for particular segment. For this purpose,,
strategic decisions usually are trying to achieve any advantage for the organization. Talent
acquisition can be a considerable factor. Appointing right set of people by using pymetrics game,
Myer’s Brigg theory. Strategies need to be carefully planned and implemented based on context.
More latest technological infrastructure has to be there. Employee retention strategies- For
example- providing cafeteria benefits, provident fund, corporate functions to be arranged, fringe
benefit.