Friday, July 26, 2019

Electrolux challenges in the appliance industry Essay

Electrolux challenges in the appliance industry - Essay Example Moreover, reducing the cost always could be an efficient way for the Electrolux’s sustainability, the company has relocated approximate 60% of its manufactures to low cost countries like China, India, and Mexico, and it also has reduced its overall energy consumption. In addition, Electrolux has focused on few issues, such as climate change, sound business practices, responsible sourcing and restructuring (Hill & Jones, 2012). Those new strategies helped Electrolux to gain more customer, saved more asset for more investment, furthermore, the strategies helped company to receive more subsidize from the government, this was a major way helped the company’s sustainability directly. The strengths of Electrolux is that it is a well-established company who has kept their head above water and have emerged a greater threat in the market due to their cost efficiency strategy. Electrolux does encounter weakness in their market, mainly currency risk due to operating in dozens of separate counties. Due to their manufacturing utilizing 20% of raw materials they face a larger manufacturing cost as well (Hill & Jones, 2012). Electrolux’s major threats are their number one competitor Whirlpool, as well as increase in labor costs due to Asian wage rises. However Electrolux does have many opportunities they can capitalize on such as becoming the leading socially responsible company in their market. Also the rise in the middle class population suggests that appliances demands should rise which leads to an increase in sales revenue (see appendix A). To measure the efficiency of Electrolux, it is noticeable that the company is not efficient due to its low operating margin. To fix this problem, Electrolux should consider the economic recession and focus more on the inelastic products such as washers and dryers. Since they are a necessity, consumer will spend money on them regardless of

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