EXPLAIN WHY THE ISSUES FACING ELECTROLUX WERE STRATEGIC. TRY TO FIND EXAMPLES OF ALL OF THE ITEMS CITED IN THAT SECTION.
Businesses are set with so many objectives. Some of these objectives relate toprofitability, productive efficiency, growth, technological dynamism, stability, self-reliance, survival, competitive strength, customer service, financial solvency, productquality, diversification, employee satisfaction and welfare, and so on. A company’s strategy consists of the combination of competitive moves and businessapproaches that managers employ to please customers, compete successfully andachieve organizational objectives.Strategy they say is the overall plan for developingresources to establish of gain a competitive advantages over competitors or a favorableplan in an organization. According to Johnson G./Scholes K./Whittington R in their book, “ExploringCorporateStrategy; 8th edition”, strategy is defined as “the direction and scope ofan organizationoverthe long-term, whichachieves advantage in a changingenvironmentthrough itsconfiguration of resources and competences with the aim of fulfilling stakeholderexpectations”.
Electrolux brand both globally and across all product categories. The achievement of advantage may be in different ways and interpreted differently. Fororganizations to take advantage of completion, it has to improve its cost positionstrategically through better coordination at the global level. Example is when Electroluxlaunched a project designed to drastically reduce the number of suppliers. The organization’s resources and competence is also an important feature of strategy.
The resource-based view of strategy is about exploiting the strategic capabilities of thefirm in terms of its resources and competencies to provide competitive advantage. Byresources, we mean financial, human and the organization’s resources which are moreimportant in the implementation of strategic decisions. For example, at Electrolux, agreat deal of time and effort were put in place to make production and logistics moreimportant as captured in their 2005 annual report.Also, Electrolux in their attempt toexploit the strategic capabilities of the staff, for example, established talentmanagement processes and tools to ensure group access to competence in the future.Strategies then need to be considered not only in terms of the extent to which theexisting resource –base of the organization is suited to the environmental opportunitiesbut also in terms of the extent to which resources can be obtained and controlled todevelop a strategy for the future. Values and expectations of powerful actors in and around the organization are a key to the characteristics of strategy.
The strategy of an organization will be affected not only by environmental forces andresource availability, but also by the values and expectations of those who have powerin and around the organization. In some respects, strategy can be thought of as areflection of the attitudes and beliefs of those who have the most influence on theorganization. Whether a company is more concerned with consolidation and where theboundaries are drawn for a company’s activities, may say much about the values andattitudes of those who influence strategy. i.e. the stakeholders of the organization. Thebeliefs and values of these stakeholders will have a more or less direct influence on theorganization. From the case study, one realizes that all CEOs who came pursued it interms of expansion. Others did it in terms of merging and acquisitions like HansWerthen when he took over in 1967 as the president of Electrolux. These actors, groups and individuals drive the fundamental issues that sharpen thedirection of the business. From the case study again, the stakeholders were demandingbasic products as a result of changing consumer preference, growth of global retailchains and greater global competition leading to polarization of the market. The keystakeholders of Electrolux are...
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