Essay Sample on Corporate Strategy of AB Electrolux

AB Electrolux is a world leader in household items such as fridges and is headquartered in Stockholm, Sweden. The company has continued to grow due to the numerous opportunities offered as a result of social and demographic trends. Corporate strategy is the highest plan for an organization which defines the goals of a company as well as how to achieve them.

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Company description

Electrolux AB deals with brands such as Anova, Znussi, AEG, as well as Westinghouse and Frigidaire. The company was founded in 1919 (Electrolux, 2013). The chief executive officer for the company is Jonas Samuelson. Most of the appliances for the company are manufactured in China and Hungary though its headquarters are in Stockholm, Sweden.

Barney's VRIO Framework

The components of VRIO framework include value, rarity, imitability, and organization.

Value

Electrolux AB Company is able to offer products that add value to its customers all over the world. Besides, the company has an effective management team that is able to exploit opportunities that come along as well as having the capability to fight competition from other companies that provide similar products.

Rarity

Electrolux AB is able to own something that is rare and difficult to find in the market yet in demand. The company has one of the best staff members with vast experience in home appliances thus making it unique. Besides, the company has scarce capabilities and resources which makes the company to have a competitive advantage over other companies (Electrolux, 2013).

Imitability

The company has a unique mechanism on how they manufacture their appliances thus making it difficult for other companies to imitate. Therefore, the procedures and policies of the company are expensive to duplicate since they are equally patented. Besides, due to the uniqueness of the products manufactured by the company, it is challenging to find an equivalent substitute to compete with Electrolux's home appliances.

Organization

Electrolux has a team of well-competent staff members in all their stores since they recruit based on merit. Besides, the company has organized management processes and systems which make it a competitive advantage over other organizations. Also, the company has a strong organizational culture which helps its staff members to focus on capabilities and resources thus making it the best in the market.

Competition with local Chinese consumer manufacturers

Electrolux AB competes with local Chinese manufacturers in various ways. Though the company has products of a higher quality than local Chinese manufacturers, it is disadvantaged because the Chinese government promotes their own industries thus giving them an advantage over Electrolux such as tax reliefs (Electrolux, 2013). The local Chinese manufacturers also offer competition to Electrolux since it is able to relate to the cultural setup of the Chinese people thus making them to have a competitive advantage.

Three leading strategy perspectives

Strategy tripod stipulates that the performance of a company largely rely on the conditions within an industry (Rahman, & Bhattacharyya, 2013). The external factors that influence a company play an essential role in determining the strategy of an organization. The three leading strategy perspectives include having creative and innovative people in an institution, as well as individuals with functional expertise. The other leading strategy perspective is having individuals who have frontline business experience (Ernest and Young, 2013). Electrolux AB is able to apply the three perspectives thus enabling it to remain a global leader.

Porter's four generic strategies

The generic strategies according to Michael Porter include cost focus, cost leadership, differentiation, and differentiation focus. Differentiation means that a company is able to target a broad market by creating a service or product with unique features. Cost leadership strategy means that an organization is able to work with a large customer base by offering them lower prices as compared to competitors. Cost focus strategy means that the organization targets a niche market with the aim of offering the lowest prices possible. Differentiation strategy is best suited for Electrolux Company where the company will continue to manufacture more products of high quality.

Corporate culture

The corporate culture of Electrolux Company comprises of a mission, vision as well as values. The corporate culture is market-oriented one which focuses on the productivity of employees as well as gaining competitive advantage (Ernest and Young, 2013). Integration and intensity are the two attributes of culture within any organization which Electrolux adheres to. For instance, the company has a strategy that focuses on synchronizing information technology with business culture thus leading to integration in the business.

References

Electrolux, A. B. (2013). Annual Report 2013.

Ernest and Young (2013). The Ernst & Young guide to total cost management. John Wiley & Sons.

Rahman, Z., & Bhattacharyya, S. K. (2013). First mover advantages in emerging economies: a discussion. Management Decision, 41(2), 141-147.