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MARKETING EXCELLENCE

Electrolux has been a global leader in: Home appliances Professional appliances Small domestic appliances

Headquartered at Stockholm, Sweden.

Electrolux was formed in 1919, after merger of AB Lux and Svenska Electron AB.

How did it become a global leader?

THROUGH

VISION AND STRATEGYThe Electrolux vision is to be the best appliance company in the world as measured by customers, employees and shareholders.

It has based its strategy on four pillars:

Electrolux developed six SBUs( Strategic business units) consisting of 4 major appliance divisions ,a small appliance division and a professional products division.

Core markets are:Western Europe, North America,Australia

Almost 65% of group sales comes from Japan and New Zealand.

Markets characterized by low population growth and high replacement product sales.

MARKETING INNOVATIONElectrolux has followed Porters generic strategies of overall cost leadership , differentiation and focus.

Innovation triangle at Electrolux encourages cooperation between Marketing , R&D and design to ensures faster reach to the market based on consumer insight.

Same product architecture, differentiated design helps develop global modularized platforms.

Platforms facilitate planning across divisions by spreading successful launch in all markets delivering greater customer value .

They aim to increase sales by 50% by introducing innovative product offerings.

Their tagline Thinking of you increases their brand value significantly through these cleverly designed print ads.

OPERATIONAL EXCELLENCERestructured production across divisions globally to increase efficiency.Shifted 60% of manufacturing from Western Europe and North America to low cost regions.

PROFITABLE GROWTH

It constantly innovates to enhance current products and penetrate existing markets.

Mergers and acquisitions are a major aspect of their strategy to strengthen global positioning .Examples: Zanussi - EuropeAEG -Germany Frigidaire , Kelvinator, White Westinghouse - North America Refripar - Brazil Olympic Group - Middle East &North Africa

NOWLets analyze some insightful questions

Evaluate Electroluxs strategy in light of its vision and the global trends in the household industry?

Electroluxs vision is to be the best appliance company in the world as measured by its customers, employees and shareholders.

Strategy based on 4 pillars of: innovative products, operational excellence, profitable growth and dedicated employees.

Production efficiency has increased by restructuring of the firm.

Indulged in horizontal integration for integrative growth.

Global trends incline towards sustainable products. Their line of ultra silent products helps prevent noise pollution.

They have followed same product architecture, differentiated design to produce local variations for different markets.

Global presence, consumer insight, professional legacy, sustainability, Scandinavian heritage and wide product range give them a competitive edge.

What benefits will Electrolux receive from the acquisition of 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 greater global dominance?

Benefits by acquiring General Electric appliance business include:Control over GE appliances kitchen and laundry products which makes more than 90 percent of sales in North America.

Access to GE appliances own distribution and logistic network.

Additional 48.4 percent shareholding in Mexican company, Mabe which manufactures products for GE.

Gave company additional financial horsepower with greater business opportunities around the world.

For greater world dominance:Set newer goals and excel in sustainable product development.Brand portfolio increased by developing quality products for price conscious customers.Invest in emerging markets like China, India.Develop long term strategies and downsize older business to develop newer fresh ones.Develop marketing advertising channels to attract more customers.It fits well with Electroluxs strategic direction. Electrolux believes in profitable growth through merger and acquisitions.Product line length has increased.Develop more innovative products in newer categories.Operational efficiency by own distribution network

ELECTROLUX RANGE OF PRODUCTS

SummaryElectroluxs vision

How did it become a global leader?

Four pillars of strategy

GE appliances merger

Future Scope

DISCLAIMERCreated by Shruti Sinha, DTU DELHI, during a marketing internship by Prof. Sameer Mathur, IIM Lucknow.