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Case Title:

Electrolux's Growth Dilemma : Middle Market Strategy?

Publication Year : 2007

Authors: Vandana Singh Dadhwal, Amy Sonpal

Industry: Home Appliances and Personal Care Products

Region:Global

Case Code: GRS0186A

Teaching Note: Available

Structured Assignment: Available

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Abstract:
In 2006, Electrolux, a Swedish global leader in home appliances and appliances for professional use, sold more than 40 million products to customers in 150 countries. The company has key brands like AEG-Electrolux, Zanussi, Eureka and Frigidaire which cater to various consumer segments of the market. Electrolux had a major presence in the middle market. However due to the rapid polarisation of the home appliance market, middle market began disappearing. Globalisation which led to the entry of low-cost players radically changed the market dynamics at the low-end of the home appliance market. Also, the demand at high-end of the market rapidly grew in the wake of major shifts in consumer lifestyles. As a result Electrolux was forced to re-define its business model under which it focussed on both the value end and the premium end of the market. However in doing so, it was to face strategic challenges. How well Electrolux can identify and deliver distinctive value to both the ends of the market was yet to be seen.

Pedagogical Objectives:

  • To understand the concept of 'polarisation' in an industry
  • To identify the competitive dynamics of the industries that are getting polarised
  • To analyse the shifts in growth strategies of players in polarised markets
  • To discuss the challenges faced by players in participating across segments in such markets.

Keywords : Home Appliances Industry; Polarisation; Commoditisation; Globalisation; Business Model; Corporate Restructuring; Growth Strategies Case Study; Branding Strategy; Double Branding; Product Development; Market Segmentation; Value Proposition; Brand Positioning; White Goods; Business Strategy

Contents : 
Home Appliance Industry: A Landscape
Electrolux: Weighing Growth Options
Global White Goods Manufacturers Revenue
Electrolux’s Cost Structure
Electrolux Business Area and Competitors
History Time Line 1920s to 1970
Electrolux New Brand Portfolio
Electrolux’s Value Creation Model

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