Inimitability This is the ability of firm’s resources not be easily copied or replicated by competitors (Teece, 1997). Electrolux has established itself as a strong global brand with quite attractively designed and innovative products. As a consequence, the Electrolux brand has found its way into being positioned in the profitable mass premium segment on the global stage. The company’s highly talented and trained employees from diverse cultures also position the company not be easily copied by local Chinese manufacturers. Organization Structure Electrolux has a decentralised corporate structure in which the company’s operations are managed by business area boards. The firm’s presence in over 150 countries around the world ensures Electrolux has a better geographical coverage (Homesphere, 2015). Electrolux also has one of the most effective distribution systems which ensure that its products reach the intended markets in time. This structure offers Electrolux a competitive advantage over its local Chinese manufacturers. Electrolux Industry Electrolux generally operates in a fragmented industry. This is largely due to the fact that there is a variety of products that are produced with each suiting a particular lifestyle
AB ELECTROLUX CORPORATE STRATEGY 4 (Homesphere, 2015). Since Electrolux manufactures products in different categories, specialization is one factor that can enhance the organization’s competitive advantage. This can be achieved through training its different staff on the various product lines hence increasing their core competencies. Porter’s Four Generic Strategies Porter’s generic strategies were derived on the basis of a firm’s main competitive advantage in relation to its competitors. Porter (2008) argued that for an organization to ensure long-term profitability, the firm must pursue one of the generic strategies rather ending up being “stuck in the middle.” Cost Leadership Lower costs and cost advantages are often a result of process innovation, utilization of learning curve, and economies of scale just to mention a few. In order to obtain cost leadership, Gurău (2007) argues that a firm must essentially obtain a relatively high market share and this is often associated with large capital investment in product R&D. This strategy
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- Fall '13