Strategy case study: Electrolux

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Strategy case study: Electrolux

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Abstract

Strategy is an allocation of resources, which the organization engages in the long term, by setting its parameter of activity with the aim of responding to stakeholder expectations, and achieving a competitive advantage. In the case of Electrolux, we have established a strategic intent aimed at long term development.

The various problems within the organization so the strategy: The VIP model will allow us to answer three questions:

- Value: The company wants to strengthen the Electrolux brand image through marketing actions. It invests 2% of its turnover on an annual basis. The group with multiple brands such as AEG and Arthur Martin has brought together all these brands into one in order to be stronger: Electrolux. Thus, the firm increases its price but also its margins. We find that consumers are willing to pay more if the brand is recognized.

- Imitation: In order not to be imitated, Electrolux injected 2% of its annual turnover in order to invest in the production of new products with advanced technology to meet the needs of consumers.

Tags: Electrolux resource allocation, VIP model, case study of Electrolux

Electrolux Strategy
1. Value
2. Imitation
3. Scope
Corporate Strategy
Strategy by activity
Operational strategy
Environment
Strategic capability
Stakeholders' expectations
The historical and cultural influences
Strategic choices
1. In terms of business segments
2. At the enterprise level
3. Internationalization
4. Development
Strategic deployment
1. Marketing
2. Strategic levers

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[...] - Internationalization in Asian markets, South America and Eastern Europe - Consolidation of distribution with package agreements with major distribution chains (The Home Depot and Loewe's) - Polarization of the market following the emergence of distribution networks - Consideration of the ecological growth - Global industry • Strategic capability: - Innovation is an important criterion for the brand to continually invest in new products. - Possession of a wide range of products that represents a force. - Strong global geographical coverage. Electrolux is a brand that displays a recognized reputation. - Efficiency at the cost management with the relocation of production facilities. • Stakeholders' expectations: - Electrolux wants to maintain good relations with its suppliers. This intent is represented by a group at the brand. [...]

[...] In the case of Electrolux we are in a long term strategic plan. The VIP model will allow us to answer three questions: - Value: The Company wants to strengthen the brand image through Electrolux Marketing. It invests of its turnover on an annual basis. The group has multiple brands such as AEG, Arthur Martin. The Company brought all these brands together in order to be stronger. Thus, the firm increased its price as well as its margins. We can see that consumers are willing to pay more if the brand is recognized. [...]

[...] The strategic choices include the selection of future strategies for Electrolux. Group should make choices in many levels: - In terms of business segments Electrolux develops its competitive advantage in offering products of high quality. In addition, the organization is at the forefront of innovation through its investments. Finally, the response to needs expressed by the customer is their priority. - At the enterprise level: The Company reduced its business scope by focusing on its core business that is house hold appliances. [...]

[...] Therefore, working on marketing the brand can increase the turnover as well as strengthen the brand. Thus, customers are willing to pay more, this can result in the margin's increase. - Strategic levers: we saw that talent management was a key success factor for the group. In short, the strategic deployment can result in failure if the strategy can't implement all necessary means. For example, outsourcing can lead to tensions among employees (strike pay).Therefore, it should strengthen the brand so that it reflects a good image. [...]

[...] The strategy comes at three levels in an organization, a situation that is found in the case of Electrolux. - Corporate strategy: the group's purpose is operations management that is insufficiently profitable. We noticed that the U.S. production of air conditioners was deficit. The company outsourced it to China. Also, Electrolux refocused its operations in the core of its business (household appliances) and proceeded with the sale of outdoor products. - Strategy by activity: It involves identifying the key success factor in a particular market. [...]

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