Strategic Analysis of AB Electrolux: Competing in the Global Market

This report provides an analysis of AB Electrolux, a Swedish domestic company operating in the appliance industry, focusing on its business strategies and competitive advantages. The company, which has been in operation since 1919, has adapted to various market conditions and now serves both domestic and global markets, selling over 60 million products annually and employing over 55,400 employees. The report explores AB Electrolux's ability to compete with local Chinese consumer manufacturers through aggressive strategies like high-quality, low-cost products and strategic partnerships. It evaluates the leading perspectives on strategy, including the VRIO framework, and discusses how the strategy tripod influences Electrolux. Furthermore, the report examines Porter’s four generic strategies, concluding that cost leadership is the most appropriate strategy for Electrolux. The corporate culture of Electrolux, emphasizing high moral standards and principles, is also discussed, highlighting its role in competing with Chinese consumers and improving product quality across different regions. The analysis concludes that Electrolux utilizes various tools to support its performance, demonstrating innovation, operational excellence, and a stable cash flow over the past decade.

Running head: AB ELECTROLUX
AB Electrolux
Agustin a. Molinanavarro
American Military University
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AB ELECTROLUX
Abstract
AB Electrolux is the domestic company in Sweden and it operates within the appliance
industry. This company has been around since the early 1919 and has been through major
government regulation and companies coming together. However, this company has continued to
adapt within the appliance industry and now is serving domestic, and globally. According to AB
Electrolux 2014 report, in 2014, AB Electrolux sold more than 60 million products annually and
employed over 55,400 employees. Also, “Electrolux boasts a global reach, as its products are
sold in more than 150 markets” (AB Electrolux, 2018).AB Electrolux is the second largest global
maker of appliances right behind whirlpool. AB Electrolux has one of the most comprehensive
business strategies domestic and globally. One of the reasons AB Electrolux has been successful
over the years; it is because of their innovative strategies to provide high-quality products at low
cost to their customers.
AB Electrolux can compete with local Chinese consumer manufacturers?
AB Electrolux has been in business for a very long time and there have been many
competitors who have come and left business. This firm has been able to be successful due to
their aggressive business strategies such as high-quality, low-cost products and having partners
within this industry.“The firm, a top maker of household appliances worldwide, operates through
three main segments: Major Appliances, which is divided into four geographic regions; and
Small Appliances and Professional Products, which operate globally” (AB Electrolux, 2018).
Discuss the three leading perspectives on strategy, and how this strategy tripod influences
Electrolux.
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Evaluating the leading perspectives is very important for the company competences.
Barney creates VRIO analysis that helps in making sure that internal resources of the
organization are a good analysis. Internal resources of the Electrolux are one of the three
perspectives. The VRIO poses some questions regarding how the company is valuable, the pass
of the other competitors and the cost that is initiated in the company (AB Electrolux, 2018). The
firm strategy tripod influences the company by exploiting the resources. This helps in
determining the success or the fail of the company. The Electrolux is focused on the analysis of
the china global market. In a comparison of the VIRIO framework, the company will be able to
compete for the local manufacturers in China. Another strategy for customers in the company
since it is a cherished company by many of the customers following its high level of performance
and production of the quality services. The customers are well valued by the company by
providing them with better products every day without any form of the delay.
Porter’s four generic strategies
The Porter’s fours generic strategies have provided grounds for companies to maximize
their profitability and have enabled firms to understand how to go about it managing their
business. “Since the publication of this model in 1980, Porter has confirmed his belief that firms
should pursue one of his recommended strategies in order to succeed” (Ormanidhi & Stringa,
2008). Cost leadership, differentiation strategy, focus strategy differentiation and focus strategy
low-cost are the four Porter’s genetic strategies. In cost leadership, “Porter’s generic strategy of
cost leadership focuses on gaining competitive advantage by having the lowest costs and cost
structure in the industry” (Allen, Helms, Jones, Takeda & White, 2008) In the supply and
demand world, it does pays off to have the lowest cost of supplier and providing a low-cost
product to their customer. In the case of AB Electrolux, they are able to have suppliers deliver a
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high-quality product at a low-cost which enables them to provide an affordable product to their
customers.
Best generic strategy for Electrolux
Analyzing the various generic strategies, cost leadership seems the most appropriate
strategy for Electrolux Company to pursue. Firstly, the company commands a large market share
compared to its competitors. The company’s huge resources and drive for innovation allow the
company to make products at a relatively cheaper cost; consequently, the company can sell its
products and services at reduced prices and still make profits (Electrolux, 2011). Creation of the
key collaboration of them with other companies for the resources enables the company to be
among the profit competing ones. The company gives the application of the Barney’s VIRIO
framework as well as the porter’s strategies for the purpose of the innovation. It, therefore,
creates a mindset that is relevant for the rival of the consumers in China who get the same
materials manufactured.
What is the corporate culture of Electrolux? Discuss two distinct attributes of culture
within the organization.
The ideology culture in the Electrolux is the main support of the company demand an
understanding of the consumers. The company has a belief that enthusiasm in employees and the
outstanding leaders within the company. This is directed toward the maximization of the
company production and future concepts. Electrolux carries its operation around the globe and
therefore it believes in the culture of high moral standards and principles of operation. There are
two attributes of the culture within the organization (Ormanidhi & Stringa, 2008). First, it
contributes to the competition with the Chinese consumers and second competes with the
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manufacturers of the same product all over the world. The culture initiation of the completion
has helped the company have an improvement for its product quality across North America,
Asia, and Europe. The attributes have helped Electrolux improve its uniqueness and the
procedure of running. There is much of the important value for the corporate culture which
involves people from different backgrounds. The corporate culture of the company is just from
the way it operates from the early years. It has a culture of set goals achieve and that is why it
has been able to reach more than 150 countries across the world
Conclusion
The profitable and productivity of the organization like Electrolux makes use of any tool
for the support of its performance. The company used the VIRIO Barney for the evaluation of
the how the company has the capacity to cater for its internal resources and competitive
advantages of the company. It has increased the living standards and household numbers all over
the world. The innovation and operation excellence measures the continuous growth of the stable
cash flow of the company. Over the 10 years, Electrolux has a high level of returns and high
profitability. Electrolux has been doing business for quite a while and there have been numerous
contenders who have come and left business. This firm has possessed the capacity to be effective
because of their forceful business techniques, for example, excellent, minimal effort items and
including accomplices inside this industry. The firm, the best producer of family machines
around the world, works through three primary sections: Major Appliances, which is separated
into four geographic areas; and Small Appliances and Professional Products, which work
universally. This organization has been around since the mid-1919 and has experienced
significant government direction and organizations meeting up. In any case, this organization has
kept on adjusting inside the machine business and now is serving household, and all-inclusive.
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As indicated by AB Electrolux report in 2014, AB Electrolux sold in excess of 60 million items
yearly over the world. Additionally, Electrolux operates worldwide and its items are sold in
excess of 150 markets. AB Electrolux is the second largest global creator of machines directly
behind the spin pool. Abdominal muscle Electrolux has a standout amongst the most extensive
business methodologies local and all-inclusive. One reason AB Electrolux has been fruitful
throughout the years, it is a result of their inventive systems to give amazing items requiring little
to no effort to their clients.
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References
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Allen, R. S., Helms, M. M., Jones, H., Takeda, M. B., & White, C. S. (2008). Porter's business
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Electrolux, A. B. (2011). Annual Report 2010.
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