Review The Corporate Strategy Of AB Electrolux

Review The Corporate Strategy Of Ab Electrolux Found Herehttpgro

Review the corporate strategy of AB Electrolux: found here: As the social and demographic trends continue to evolve so do the opportunities afforded to Electrolux. The most significant demographic shift globally is the growing middle class in Asia, which includes families with incomes between US$6,000 and US$30,000. It is estimated that by 2030 there will be 3 billion more people in the global middle class than there were in 2013. (Ernst & Young, 2013) Correlated with rising incomes worldwide, homeownership has also increased at a substantial rate giving rise to increased demand for consumer durables such as refrigerators, washing machines, and dishwashers. (Electrolux, 2013) Electrolux (2013) Electrolux 2013 Annual Report. Retrieved from Ernst & Young (2013) Hitting the sweet spot. Retrieved from In a 2400 – 2800 word essay discuss the following: 1) Use Barney’s VRIO framework to analyze the competencies of Electrolux. Discuss whether AB Electrolux can compete with local Chinese consumer manufacturers. 2) Discuss the three leading perspectives on strategy, and how this strategy tripod influences Electrolux. 3) Identify Porter’s four generic strategies. Discuss which of these would work best for Electrolux. 4) What is the corporate culture of Electrolux? Discuss two distinct attributes of culture within the organization. This essay should be well-researched, appropriately documented and submitted in APA format. Unoriginal Content: Your essay may contain no more than 10% quotes from other sources. Paraphrase what you read instead of copying and pasting. You may not re-use work that you have submitted in previous classes. All work in this class must be original. Essays that contain more than 50% unoriginal content will not earn any credit. Essays that contain between 10% - 49% unoriginal content will receive a substantial point deduction. Paraphrase instead of copying and pasting. Please note there is a difference between unoriginal content and plagiarism. Unoriginal content is correctly quoted and cited. Plagiarized sentences and paragraphs are not correctly quoted or cited. Plagiarism will result in an automatic zero for this assignment. Grading Rubric:

Paper For Above instruction

Introduction

AB Electrolux is a leading global appliance manufacturer with a significant presence in both developed and emerging markets. Its corporate strategy has been shaped by changing social and demographic trends, including rising income levels and increased homeownership, especially in Asia. This essay critically analyzes Electrolux’s strategic position using various frameworks, including Barney’s VRIO, Porter’s generic strategies, and the strategy tripod. Additionally, the essay explores the organizational culture intrinsic to Electrolux, aiming to understand how these elements contribute to its competitive advantage.

Using Barney’s VRIO Framework

Barney’s VRIO framework assesses the internal resources and capabilities of a firm to determine sustainable competitive advantage. VRIO stands for Value, Rarity, Imitability, and Organization. Electrolux’s competencies include its brand reputation, extensive product portfolio, innovation capabilities, efficient supply chain, and global distribution network. These resources are valuable because they meet consumer demands for reliable and innovative home appliances and are organized to exploit market opportunities. Some of Electrolux's competencies are rare, particularly its brand equity and technological innovation, which provide differentiation in competitive markets.

However, the imitability of these resources varies. While Electrolux’s brand and innovation are protected by patents and trademarks to an extent, competitors, notably local Chinese manufacturers, are rapidly developing comparable capabilities, especially by leveraging lower manufacturing costs and localized knowledge. Chinese manufacturers often have advantages in cost leadership and customization due to proximity to the market and understanding of local consumer preferences.

Electrolux can maintain competitive advantages through continuous innovation and strengthening organizational capabilities that facilitate rapid adaptation. However, the threat from local Chinese competitors prompts Electrolux to focus on distinguishing its products through technological differentiation, superior quality, and customer service.

Competition with Local Chinese Manufacturers

Chinese consumer appliance manufacturers have gained significant market share due to their cost advantages and deep understanding of local consumer preferences. Electrolux competes in this environment by emphasizing quality, brand recognition, and innovation. Its global scale allows it to leverage economies of scale, but localized competition requires tailored strategies. Electrolux’s ability to innovate and maintain premium brands gives it a competitive edge against cost-focused Chinese manufacturers. Nevertheless, to sustain growth, Electrolux must further adapt to local demands and possibly integrate more cost-efficient manufacturing processes without compromising quality.

The Three Leading Perspectives on Strategy and the Strategy Tripod

The three perspectives on strategy—deliberate planning, emergent strategy, and positioning—collectively form the strategy tripod. Deliberate planning emphasizes systematic analysis and premeditated strategic choices, exemplified by Electrolux’s long-term investment in innovation and global expansion. Emergent strategy recognizes the importance of flexibility and learning from real-world implementation, allowing Electrolux to adapt quickly to market changes, especially in dynamic emerging markets like China. The positioning perspective focuses on creating a unique value proposition in the market, which Electrolux achieves through branding, product differentiation, and operational efficiency. This tripod encourages a balanced approach, blending strategic planning with adaptability and market positioning.

Porter’s Four Generic Strategies and the Best Fit for Electrolux

Michael Porter proposed four generic strategies: Cost Leadership, Differentiation, Focused Cost Leadership, and Focused Differentiation. For Electrolux, a differentiation strategy appears most suitable as it emphasizes innovation, quality, and brand reputation to command premium pricing. Electrolux’s diverse product offerings and commitment to sustainable innovation align well with differentiation. While cost leadership might be a challenge due to high-quality standards, cost-focused strategies could complement differentiation in emerging markets where cost sensitivity is high. Focused strategies might also be relevant for targeting specific segments such as premium or eco-conscious consumers. Ultimately, differentiation combined with strategic focus on key segments can sustain Electrolux’s competitive advantage.

Electrolux’s Corporate Culture

Electrolux’s corporate culture is centered on innovation, responsibility, and sustainability. A key attribute is its emphasis on innovation-driven growth, fostering a culture of continuous improvement and technological advancement. This culture encourages employees to pursue creative solutions that enhance product quality and consumer value. Another attribute is its commitment to sustainability, evident in its corporate responsibility initiatives and eco-friendly product designs, which resonate with global consumers increasingly conscious of environmental issues. These attributes support Electrolux’s strategic goals by aligning organizational values with market expectations, fostering loyalty, and attracting talent committed to innovation and sustainability.

Conclusion

In conclusion, Electrolux’s strategic capabilities, as analyzed through VRIO, position it favorably against local competitors in its emphasis on innovation and brand strength. The strategy tripod highlights the importance of flexibility and market positioning in a highly competitive environment. A differentiation strategy, supported by a culture of innovation and responsibility, appears best suited for Electrolux to sustain its competitive edge globally, especially in emerging markets like China. Cultivating a corporate culture that emphasizes continuous innovation and sustainability will be crucial for maintaining long-term success in the evolving global appliance industry.

References

  • Barney, J. B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120.
  • Electrolux. (2013). Annual Report.
  • Ernst & Young. (2013). Hitting the sweet spot. Retrieved from https://www.ey.com
  • Porter, M. E. (1980). Competitive Strategy: Techniques for Analyzing Industries and Competitors. The Free Press.
  • Grant, R. M. (2019). Contemporary Strategy Analysis. Wiley.
  • Prahalad, C. K., & Hamel, G. (1990). The Core Competence of the Corporation. Harvard Business Review.
  • Johnson, G., Scholes, K., & Whittington, R. (2017). Exploring Corporate Strategy. Pearson.
  • Kim, W. C., & Mauborgne, R. (2004). Blue Ocean Strategy. Harvard Business Review.
  • Harvard Business School. (2015). The Strategy Tripod. HBS Publishing.
  • Hamel, G., & Prahalad, C. K. (1994). Competing for the Future. Harvard Business School Press.

Related Assignments