Case Study: AB Electrolux

Week 8 Assignment
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Institutional Affiliation
Abstract
This assignment is an analysis of the global competitive strategies of AB Electrolux, specifically focusing on the Chinese market. Introduction: AB Electrolux manufactures and sells consumer appliances established in 1919. The company sells over fifty million appliances in more than one-hundred-fifty nations every year. Competing With domestic Manufacturers in China: Electrolux has a lot of experience, resources, and determination. For this reason, the company will favorably compete with the Chinese consumer companies. Besides, Electrolux’s decision to focus on a specific market would help the company's market share to grow, hence favorable competition. Three Leading Perspectives: The analysis of the company's leading perspectives is vital for determining the efficiency and competency of Electrolux. Moreover, the VRIO framework would be essential in ensuring thorough assessment of the organization’s internal resources. Porter’s Generic Competitive Strategies: These strategies include, low cost focus, differentiation, cost leadership, differentiation focus as well as cost leadership strategy. The most appropriate strategy for AB Electrolux would be cost leadership. Corporate Culture and Distinct Attributes: Electrolux's corporate culture bases on understanding the consumers' needs and support for the demands of the company. Electrolux’s unique attributes include diversity and development of leadership. Besides, Electrolux has stakeholders from various backgrounds and leadership programs that equip prospective managers with the necessary skills. Conclusion: Electrolux is a multinational company that has managed to emerge as a prominent consumer Appliance Company capable of competing with any rival organization.
Keywords: AB Electrolux, Porter’s strategies, Barney’s VRIO framework, Appliance manufacturers, China, multinational.
Week 8 Assignment
Introduction
AB Electrolux is a company that originates from Sweden established in 1919. The company manufactures world-class consumer appliances. Over the last couple of decades, AB Electrolux has been through significant regulations that have made the company grow, and it managed to emerge as a prominent player in the consumer appliance industry globally. Besides, it is the second biggest global manufacturer of consumer appliances, right behind its United States rival, Whirlpool. The company has offices in more than sixty countries across the globe. According to an annual report, Electrolux sells over fifty million appliances every year in over one hundred fifty nations, employing thousands of workers (Electrolux, 2014). Today, the company sells its products in over one hundred fifty countries. AB Electrolux's success stems from its groundbreaking business strategies, which enable it to produce and sell high-quality products at considerably affordable prices. Besides, the company utilizes Barney's VRIO framework as well as applying Porter's generic strategies, which enable it to evaluate its competence and then improve its service delivery to the consumers. Such plans allow the company to favorably compete or even out-compete all the other profound appliance companies around the world.
AB Electrolux’s Competition With Local Chinese Appliance Producers.
Electrolux is a well established and reputable company as it has been in existence for over one hundred years now, which is more than most, if not all, the Chinese Consumer Manufacturers, which implies that it has acquired tremendous experience in the appliance industry. The organization has obviously learned a lot from the past experiences and mistakes in this field. Over the past decades, many competitors have entered this industry and left. Electrolux persisted, and indeed, now it is capable of competing with any appliance company on the planet, including the local Chinese consumer manufacturers. When Electrolux had just started, it faced a lot of challenges, as many of its strategies ultimately failed to work as expected. However, its competitiveness spiked when it introduced itself to the world as a premium organization within the market.
Notably, the Asian market is a primary focus for Electrolux now because economists anticipate that the consumer market for domestic appliances on the continent will grow significantly in the next few years. Precisely, this is due to an increase in consumer power in Asia as the middle-income class continues to grow. Subsequently, many people can afford houses, and they purchase certain consumer appliances. In 2016, China overtook the United States as the world’s biggest middle-class country (Kharas, 2017). For this reason, AB Electrolux has made a lot of investments in development and research so that it would attain innovations in the Asian market, especially China. Without a doubt, this will avail Electrolux with a significant competitive advantage over the domestic appliance producers in China. Besides, the determination and focus on a distinct target market significantly contribute to the growth of AB Electrolux's market share. Therefore, all these aspects justify that Electrolux would without a doubt find its place in the Chinese market and compete favorably.
The Three Leading Perspectives and their Effect on Electrolux
In determining the efficiency of any organization like Electrolux, assessment of the company's leading perspectives is essential. Barney’s VRIO framework is crucial in ensuring a thorough evaluation of a company’s internal resources. AB Electrolux's internal resources are a part of these three leading perspectives on strategy. The VRIO framework poses specific questions on whether the organization is valuable, rare, and imitable, as well as whether the company is utilizing all the various resources. Indeed, AB Electrolux's strategy tripod ensures that the company explores the multiple resources available, which helps to determine the organization's competence. Electrolux focuses on the assessment of the global market, specifically China, since the demand for appliances is very high (Electrolux, n.d). Putting Barney’s VRIO framework into consideration will enable Electrolux to compete favorably with the domestic consumer producers in China. Besides, the company operates in a consolidated industry characterized by large companies that can determine the prevailing prices on the market. However, since Electrolux is a multinational organization, its competitive strategies seem to vary with each country.
Porter’s Generic Competitive Strategies
Porter's generic competitive strategies provide a platform for particular companies to acquire optimum profitability, and many of them have utilized these approaches to manage their business operations. For this reason, firms ought to cherish at least one of these strategies to succeed. These strategies as suggested by Porter include the following: differentiation, low cost, differentiation focus, as well as cost leadership (University of Cambridge, n.d). When it comes to the cost leadership strategy, this method involves targeting a wider market by lowering the prices of certain goods. The company could either decide to attain a larger share of the market when the prices are average or to kee...