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Electrolux Case Study

Summary of the Case: Electrolux:

  • Being a leading global company in home and professional appliances that includes refrigerators, cookers, dishwashers, washing machines, vacuum cleaners, air conditioners, and small domestic appliances, Electrolux finds its own way to profitable success.
  • The Electrolux group consists of six business divisions, including four major appliances divisions, a small appliances division, and a professional products division.
  • Electrolux made its name more popular when it became one of the top five global players in household appliances in the year 2013.
  • Electrolux Group envisions to become the best appliance company in the world as measured by its customers, employees, and shareholders.
  • Electrolux has restructured its production across divisions globally by maintaining strategic emphasis on increasing operational efficiency.
  • Electrolux continuously innovates to enhance its current products and ranges to penetrate existing markets by pursuing its strategy of profitable growth.
  • With its growing portfolio, Electrolux is all set to establish greater dominance in the global home appliances industry.

Case Question Answer:

Evaluate Electrolux’s strategy in light of its vision and the global trends in the household appliance industry.

  • To be the best appliance company in the world as measured by its customers, employees and shareholders is what Electrolux envisions.
  • Its strategy is based on 4 pillars namely: innovative products, operational excellence, profitable growth and dedicated employees.
  • By restructuring of the firm, production efficiency has increased.
  • Electrolux is indulged in horizontal integration for integrative growth.
  • Their line of ultra-silent products helps prevent noise pollution as their global trends incline towards sustainable products
  • In order to produce local variations for different markets, they have followed “same product architecture, differentiated design”.
  • The following factors give Electrolux a competitive edge: Global presence, consumer insight, professional legacy, sustainability, Scandinavian heritage and wide product range.

What benefits will Electrolux receive from the acquisition of GE Appliances? How does it fit in with the strategic direction of the group? What other strategic options can Electrolux pursue for future growth to achieve greater global dominance?

Benefits gained through acquisition of General Electric appliance gave Electrolux control over the Kitchen and Laundry products. Ninety percent of the sales will be with Electrolux and running its own Logistics and Distribution Network in North America while 48.4% shareholding in Mexican Appliance Company. Through this acquisition Electrolux will have more financial strength and more global business around the world.

How does it in with the strategic direction of the group?

  • By experiencing growth with acquisitions as done in the past.
  • Product list and diversity in products increased.
  • The company is not well-versed with the beginning of newer markets.
  • Increase global reach and operational efficiency under the company’s banner.
  • Paving a path to the Vision or the Goal the company wants to achieve.
  • Company’s technological advancements.

What other strategic options can Electrolux pursue for future growth to achieve greater global dominance?

  • Targeting emerging markets like India and other markets with population
  • Being price conscious as per the country or place selling in.
  • Aim to know the customers requirement and start working towards those by a strong market research program.
  • Market research program includes the prices and giving some offers to attract more customers.
  • Create more awareness towards the brand and highlighting the specialty of the product as part of the improvement of market channeling.

What did the company do right/wrong marketing – wise? 3-4 bullets only

  • The seven other strategic brands of Electrolux such as Grand Cuisine, AEG, Zanussi, Eureka, Frigidaire, Molteni, and Westinghouse are one right marketing wise of the company.
  • The industrial triangle that made Electrolux close cooperation between its marketing that helps to ensure faster feedback to the market industry from the consumers is also a right marketing wise of the Electrolux.
  • Another right marketing wise is through maintaining strategic emphasis on increasing operational efficiency that made Electrolux popular in its global divisions.

Summary of the Case: Emirates:

  • As on airline company, Emirates’ mission is to provide high-quality commercial air transportation services to its clients that would be a notable experience for them.
  • The company’s global strategy aims at efficient competition, exceedingly far beyond the limits of the Arabian Gulf and Middle Eastern markets.
  • With the quality it renders to its clients, it was awarded the prestigious Airline of the Year Award numerous times by Air Transport World, in addition to more than 400 other distinguished industry sector awards.
  • Due to its acquisition of the groundbreaking storage infrastructure in the Middle East, Emirates is looked upon as an innovative organization in terms of technology.
  • Its performance is attributed to its customer-oriented approach revolving around the provision of a quality product: exclusive grade-A manufactured Boeing and Airbus aircrafts, premium flight services, and traveling at a competitive price.
  • Emirates has been a threat to some airline companies in terms of corporate positioning that has spawned aversion from competitors.
  • Emirates is not always on the better side of success process. It receives criticisms and allegations from its competitors.

Case Questions:

How has Emirates been able to build a strong brand in the competitive airline industry worldwide?

  • The primary cause for the success of the Emirates airline is mainly because of its advanced and inventive ideas, dedication in pursuing in openings and solving problems, they maintain brand quality service in reservation of flights, boarding, facilities, using advanced technology with exceptional in-flight coziness for every customer, and flights is mostly safe. (Nataraja & Al-Aali, 2011).
  • Emirates has lower human resource and low-wage cost than other industry, by maintaining the brand that they have, they introduce also new products. Their outstanding services include being the pioneers of individual entertainment system in a profit-making craft.
  • Emirates has family rooms for executive client’s luxury, they are using also the divergence strategy that gives an opportunity for airlines to participate with them like aviation engineering and tour operator operations

References

Nataraja, S., & Al‐Aali, A. (2011). The exceptional performance strategies of Emirate Airlines. Competitiveness Review: An International Business Journal.

What are some of the apparent weaknesses with the company’s strategic direction? How can the airline address them?

  • They more careful or over monitored their company’s strategy.
  • Emirates are not part of alliances.
  • Emirates has a high confident of what position of the company now in aviation industry.
  • Emirates targeted only rich people or elite one.
  • Emirates just choose to not to bother competitions

With the decline of fuel prices globally, airline companies continue to reap the benefits. What impact will this have on Emirates’ business strategy in the future?

  • Because of the prices globally of fuel the Emirates attracts declining customers cost.
  • Emirate have a slow growth for the next coming because of high investments for new planes and premium-class services that begin to erode the profit margin.
  • When the price of oil is cheaper, the better advantage because they can go premium and its easy to hedge and protect when the price go up then they can still enjoy the potential of low oil price.

What did the company do right/wrong marketing – wise? 3-4 bullets only

  • The emphasis on product, equipment, and excellent service, and promotion of a quality image keep Emirates on the aggressive competition among the airlines companies which is one of the right marketing strategies the company did.
  • The remarkable financial returns of Emirates by expanding its destination within two decades is an added right marketing wise.
  • Despite many strengths, Emirates came to a point where it disregards the growing regional competition, Emirates overlooks very obvious flaws in its market strategy which then led to many disadvantages. Negligence is a wrong marketing strategy that the company did.
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