Elextrolux

Electrolux Case Case 1 ALMUDENA GUERRERO CANDEL Business Strategy HAMILTON Why are the issues facing Electrolux strategic' The issues are facing Electrolux are strategic because: -They are long term direction issues. Globalization, market polarization and consolidation of retailers are issues that have a process of happening. They are going to have consequences in the long term for company. The results of those changes are not going to be seen in the short run. -These changes are going to have impact on the organization activities because of the effect that the changes of the market structure has over the company one. The company has to adapt its structure to the needs of the costumers. The strategy of a company has to fit with the business environment where the company develops its activity and Globalization, Market polarization and Consolidation of retailers have much to do with the business environment of the company. - Another reason of why the issues facing Electrolux are strategic is that if the company get to be adapted to these changes the firm will obtain a competitive advantage and a privileged position in the market. What levels of strategic can you identify' First of all, Corporate-level strategy, these levels of strategy is the one that refers to the overarching strategy of the diversified firm. The kinds of decisions that are made in that level are the orientation of the firm toward growth, stability, and retrenchment, the industries or markets in which the firm is going to compete like the decision about product renewal. The second level of strategy that we can see in the case is Business- level strategy that refers to the aggregated strategies of single business firm or a strategic business unit in a diversified corporation. The case says “We have divested or changed the business, model for units…” that is a business-level strategy. The third level of strategy is the operational level which primarily is concerned with successfully implementing the strategic decisions made at Corporate and business unit level through optimal utilization of resources and competencies of the business unit. An example of this kind of strategy is the moving production to low-cost countries. The strategy of reducing cost is applied to the organization. Review the strategic choices Electrolux. Managing under-performance: This strategy is done to get cost efficiency. These business units that were not useful for the value chain of the company are going to be removed. Moving production to low cost countries and more efficient production and logistics: The cost efficiency is in those strategies too. Places where the wages are much lower than the developed countries can benefit the company. In the same way of the reduction of wastes like time waste, material waste… More efficient purchasing: The position of the company against its suppliers is going to affect the situation of the company in the market and the power of negotiation is going to put the company in a better situation than its competitors. Intensified product renewal: Once the company has a good position in the market has to try to maintain that and the best way is not being an stable company with no movement in its structure. The company has to be in continuous development of its structure and its products. Access to competence: The company has to be aware of the competitors. The situation of its competitors has to be monitor by the company because the firm has to take advantage of the bad situation of the other or try not to suffer too much when the others are in a good position. Starting to build a strong global brand: The building of a strong global brand is going to help the upcoming business of the company. The brand is going to be associated with a kind of quality product that will help the new product that the company will put in the market. What are the main issues that right determine the success or failure of Electrolux strategies' In my opinion the strategies that Electrolux is going to develop are good ones but the way of implementing these strategies is quite important. The company has to analyze the pros and cons of each strategy and the consequences that the way of implanting them is going to cause. The movements of the markets have to be taken into account too. The tendencies of the consumers are relevant. The company has to analyze the 5 forces of Porter and see the consequences of each strategy in the environment and the most important thing, the consequences in the firm.