ELECTROLUX

It is known that all strategic decisions, like for example entry in new business or become internationalized have one thing in common, and is that to make the company more competitive. It is the direction and scope of an organization in the long term, in order for them to achieve benefits; taking into account the company’s resources in a changing environment.

In the case study we can find different strategic issues that had used the CEO’s over the years.

Gaining advantage over its competitors: this is an important issue because Electrolux always tried to maintain low fabrication costs. The fact of having competitive production costs let the company to be in advantage in compared to its competitors. They relocated to low cost countries manufacturing in Mexico instead of the US. The appliances of Europe were manufactured in countries like Romania and Poland.

Long term direction of the organization: this means to think about the needs of the company before it happens. And also the objective was to accelerate the development of Electrolux and take advantage from the other companies.

In a changing environment Electrolux adopted some strategic positions explained further downward.

Political: the company took advantage of the situation in that moment and manufactured the right product and concurred with what people in that special time. For example after the Second War a change in the lifestyle. People started to buy dishwashers and washing machines and that was exactly what Electrolux was producing.

Social: as the society has changed with the time, and its need also changed. The company had to manufacture more and more each time. So the companies tried to find cheaper suppliers so their benefit increases. Beyond this another market emerged, it’s the retailers market; how to ship the products at a low cost.

Economical: with the effects of Globalization, the competitors just as Electrolux did, locate their manufactures in countries were the cost is not as high as in Sweden.

In another hand we have the strategic capabilities, strength and weaknesses.

Strength: the good advantage of Electrolux was its organization and its relation with the suppliers. It means that they tried to always maintain low fabrication costs.

Weaknesses: in the sixties, when Electrolux acquired other companies in Europe they found out that some of them had really high fabrication costs.

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