Electrolux Assignment over Strategy
Assignment for the first date over the text Electrolux from the exploring corporate strategy book
Third of september, 2010
Question1 : Refer to section 1.2.1 and explain why the issues facting Electrolux were strategic. Try to find examples of all of the items cited in that section.
First of all, strategic decisions are long-term decisions and so they will not bring results in a few months or faster and therefore you will not know if they will bring success to your company. So Electrolux made some decisions that will show their results in the future. They decided to move a production facility from Greenville in the US to Juarez in Mexico. Through this step Electrolux will try to cut the costs at a remarkable rate. The decision to invest 2 percent of every years sales in developing new products is also a strategic decision because of the fact that Electrolux will never know what exactly will be developed and how the market will react on that. To invest two percent of the revenues in marketing, more precisely in brand-building, will also not show results in some months. Electrolux will have to control this investment in a few years and than they will have to decide wheather it was senseless or if it was helpful. All those points will have the purpose to become the number one again and to gain advantage over competitors, in this case to overtake Whirlpool again. Furthermore they decided to sell their outdoor sector what is, as a result, a concentration on what they really are good at and what is called a change in the business environment. The decision to move the production from the US to Mexico and in the future from Germany to a new location will help to satisfy the stakeholders because of the expected improvement of the costs. In the text it is mentioned that Electrolux has build some talent management processes which will help to find the best personnel if some is needed and will help to improve the level of the staff that is already there, this is called
Third of september, 2010
Question1 : Refer to section 1.2.1 and explain why the issues facting Electrolux were strategic. Try to find examples of all of the items cited in that section.
First of all, strategic decisions are long-term decisions and so they will not bring results in a few months or faster and therefore you will not know if they will bring success to your company. So Electrolux made some decisions that will show their results in the future. They decided to move a production facility from Greenville in the US to Juarez in Mexico. Through this step Electrolux will try to cut the costs at a remarkable rate. The decision to invest 2 percent of every years sales in developing new products is also a strategic decision because of the fact that Electrolux will never know what exactly will be developed and how the market will react on that. To invest two percent of the revenues in marketing, more precisely in brand-building, will also not show results in some months. Electrolux will have to control this investment in a few years and than they will have to decide wheather it was senseless or if it was helpful. All those points will have the purpose to become the number one again and to gain advantage over competitors, in this case to overtake Whirlpool again. Furthermore they decided to sell their outdoor sector what is, as a result, a concentration on what they really are good at and what is called a change in the business environment. The decision to move the production from the US to Mexico and in the future from Germany to a new location will help to satisfy the stakeholders because of the expected improvement of the costs. In the text it is mentioned that Electrolux has build some talent management processes which will help to find the best personnel if some is needed and will help to improve the level of the staff that is already there, this is called