Running head: ELECTROLUX 1 Electrolux Victoria L. Langer ENTR311 Business Plan Foundations 15 December 2016 Professor Michelle Burton
ELECTROLUX 2 Electrolux With any company, it is important to decide whether or not globalization is a positive strategic decision. To decide this, the company must first assess the value added, how common or uncommon the resources and capabilities are, how easy the product is to replicate, and agree that the company is in a state of organization that will be supported in another country. At the same time, the company must look at the necessity for or against strategic alliances in this new country. In addition, it is always important to refer to Porter’s four generic strategies of cost leadership, differentiation, focus, and differentiation focus. Last but not least, it is imperative to pay attention to the five dimensions of culture and the strategic choices that need to be made based on different aspects of a country or region’s culture (Peng). Assuming Electrolux has thoroughly discussed their competitive advantage, methodically assessed potential alliances, decided on possible strategies, reviewed the generic strategies, and considered the effects of their corporate culture, then Electrolux is likely to be set up to attain sustained competitive advantage in personal and professional products in China. You may not realize it, but you likely own or at least use Electrolux products each and every day. Many of your typical household appliances actually have Electrolux bone structures underneath with another nameplate, on them when they are sold. With an increasing middle class and a correlating increase in ownership, there is more need and desire to purchase Electrolux products. Of course, there is always the possibility of globalization. According to the Electrolux 2013 Summary Report, 8 percent of Electrolux sales in the Asian Pacific area (2013).
ELECTROLUX 3 More specifically, China is in a portion of the world that Electrolux is seeing growth in sales. In 2013, according to the Electrolux summary report, a lot of capital was funneled into research and development to be able to compete in the consumer appliance market. From 2009 to 2013, there was a consistent increase in net sales. Electrolux released a big push of laundry and kitchen appliances in 2013 in China. Specifically, Electrolux stated their strategy was to push out premium products for China’s growing middle class as well as some focus on professional products for food and laundering service businesses. Electrolux has even moved manufacturing to other areas of the world, to include China. As of the 2013 summary report, Electrolux was in “over 150 countries” and there were over 300 million Chinese consumers in the middle class. With the high consumer possibilities, Electrolux made a strategic move and launched “60 new products for kitchen and laundry” in China alone (2013).
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- Business, Porter generic strategies, Electrolux