Electrolux Case Summary Essay

As the largest domestic harvest-tides manufacturer in the world, Electrolux has about 70000 employees all around the world in about 150 countries, making 14 billion euros in sales in 2005. However, an acquisition chance from its main competitor, Whirlpool, is challenging the ? rst place of Electrolux, at the time Electrolux has just decided to divest its outdoor division. A huge decrease in sales in the following years is expected. Starting from 1920s, Electrolux has been famous for its expertise in industrial design on products such as vacuum cleaner and refrigeration.The products quickly got commonplace not only in its home country in Sweden, but in other western countries such as Germany, France, USA and UK, due to the homogeneous culture of these countries. A major growth in demand after World War II contributed a lot to its growth. With a large totality of accumulated cash of the past decades, Electrolux decided to expand quickly through a number of acquisitions for mor e than than grocery store share and diversi? cation.In late 20th century, Electrolux discovered new markets in developing countries when the market in western countries was already very mature and was even showing a sign of going away down. It also went through a phase of restructuring the segmentations of products as well as abandoned some less(prenominal) important activities. Up until 2006, the connection has addressed its new strategies mainly on functional level to check into to the challenges. To maximize the pro? t, the production would be outsourced to developing countries with lower labor costs. More ef? ient logistics has made the globalisation more feasible and cost-saving. On the product market level, due to the market polarization, a more distinguishing product segmentation would be applied.While suffering the basic low-price products, Electrolux is launching a series of products with nobleer prices to receive the high-end market. On the other hand, 2% of sales w ould be put in R&D to keep a high rate of new products launches. The supply chain management has always been vital when it comes to consumer goods industry. When Electrolux is outsourcing more of the productions, it is also hifting the strategy of distribution channels. Instead of traditional dealers, big chains with large volume and high geographical coverage are brought up front because of lower serving cost. Above all these, the company keeps making efforts on brand-building by investing at least 2% of the sales every year. With more products are sold under Electroluxs name, the company is also improving its brand image by stressing more on their culture through internal and external relations among employees, suppliers and retailers, etc.