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Case Study 10.1 – Electrolux Cleans UpThis case details how Electrolux, the world’s No. 2 maker of home appliances, rebounded in the face of rapidly rising costs, increased competition, loss of market share and faltering stock values. A considerable turnaround is discussed, attributing success to radical and innovative rebuilding strategies introduced by newly appointed CEO Hans Straberg in 2002. The methods employed are outlined and include: shifting manufacturing from high to lower cost locals; removing communication barriers between strategic departments; recruiting top executives with strong records of innovation; increasing R&D spending; emphasizing bold aesthetics in product design; and, moving away from traditional customer research in favor of tools geared toward gaining direct customer insight. Straberg’s initiatives achieved strong results and these are evidenced by an 8% increase in annual sales, operating income up by 42% and, the number of successful product launches rose by 50% year-over-year. 1) Electrolux COE Straberg broke down barriers and increased communication between departments by building cross-functional teams consisting of members from different functional departments. In this