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AB Electrolux
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Essay Subject:
Discusses the Swedish manufacturing company AB Electrolux. Topics include: History, product profiles, finances, & outlook.... More...
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Paper Abstract:
Discusses the Swedish manufacturing company AB Electrolux. Topics include: History, product profiles, finances, & outlook.

Paper Introduction:
As exhibit A indicates, Stockholmbased Electrolux produces a wide variety of goods (Hoover's, 1996, 204). Within the category of Outdoor Products are the subcategories of forest and garden equipment, including agricultural implements. These products would be chainsaws (30% world share), lawn mowers, garden tractors, lawn trimmers, and leaf blowers. Operations are run through the Husqvarna and Flymo subsidiaries in Europe, and through American Yard Products and Poulan/Weed Eater in the U.S. (Electrolux Home Page, 1997). The industrial products category overlaps into the commercial appliances category. The former contains food service equipment, kitchen and bathroom cabinets, industrial laundry

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Electrolux Home Page. In 1992 Lief Johanson,president and CEO of Electrolux said: Environmental protection is a long-term question of survival for individuals, companies, and society. AB Electrolux's profitability was down in 1996 incomparison to 1995. Electrolux Home Page. This applies on an in-home,commercial, and industrial level (Commercial, 1997). What Electrolux has done is to step up the efficiency of their worldwide manufacturing operations and integrate into a tighter operation.Their focus has been on reducing fragmentation in their operations andmaking Electrolux as a Group, a more cohesive unit. Of the 5% difference in overall sales, ($16,634,2 to$17,9 3, ), changes in the exchange rate accounted for -6%, acquisitionsand divestments accounted for +4% and volume and price/mix accounted for-3% (Consolidated results, 1997). Electrolux Home Page.http://www.electrolux.se/corporate/map. Headquartered in Stockholm, Sweden, AB Electrolux owns 625companies in 5 countries. Electrolux has taken seriouslythe label applied to them as The Global Appliance Company. Electrolux employs a method termed the Electrolux EmploymentMeasurement System (EEMS) in assessing employee-management relations. . As exhibit A indicates, Stockholm-based Electrolux produces a widevariety of goods (Hoover's, 1996, 2 4). New Growth markets. Also reportedwithin the 1996 consolidated results were a number of internal changesaimed at strengthening the groups competitiveness and financial position.By investing strongly in new growth markets Electrolux has achieved anincrease in productivity of 5% (Consolidated results, 1977). White goods, 1996, 1-4.Http://www.electrolux.se/corporate/map. Granges, 1-2.Http://www.electrolux.se/corporate/map. New market conditions are addressed in a number of ways. Electrolux dominates their marketregionally and internationally, effectively controlling a certain aspect ofthe competition. EEMS isalso a model for evaluating management via the people impacted; theworkers. Group operating income after depreciation declined by 16.2% whichcorresponds to 4% of sales. Within the category of OutdoorProducts are the subcategories of forest and garden equipment, includingagricultural implements. Http://www.electrolux.se/corporate/map. In addition joint ventures in ASEAN countries, Eastern Europeancountries, India, Brazil, China, and Russia demand a considerable amount offlexibility and creativity in producing functioning reliable products. Of course the difficulty that Electrolux has run into in becoming moreefficient is that corporate culture has become their saving grace. Our efforts of recent years to broaden the group's geographical base and expand in new growth markets have been successful, and must be maintained. The goals of H.R. In 1991 Electrolux boughtLehel, Hungary's leading refrigerator maker. Exhibit A[pic]Source: http://www.electrolux.se/computer/group/old_business.htm) The commercial appliances category contains air conditioners(compressors) and sewing machines. (1997). References AB Electrolux (1995-1996). Professional. For instance, the name Electrolux-Wascator refers to Electrolux's product lines in commercial laundryequipment. Electrolux Home Page. Another example is Husqvarna's1996 development of the E-tech motor. European operations are handled through Electrolux's own name or anumber of brand name subsidiaries. New growth markets.,1997, 1-4. As noted, Electrolux is constantly in the process of improving theirtechnologies through R & D and company acquisition. In a few years, when the economic climate shifts, Electrolux willmake other strictly business decisions, which will bring the samequestions. In addition, thedividend should normally correspond to 3 -5 % of net income. . The competition consists of AlliedSignal, Black &Decker, Deere, General Electric, Ingersoll-Rand, Maytag, Raytheon, Sanyo,Sharp, Siemens, TRW, and Whirlpool. In reality, EEMS is a system for Electroluxteam members to voice their opinions about Electrolux policies. Electrolux understandsthat they are operating from a position of relative strength in a world ofdeveloping markets. Other sources of inspiration that defineElectrolux policy are the International Chamber's 16 principles forsustainable development, as well as The Natural Step Foundation's basicprinciples and systems conditions. Forexample, a new dishwasher launched in North America in the autumn of 1996was developed from a European product platform and has the lowest noiselevels and water consumption on the market. Net income as a percent ofsales is . Considering that Electroluxmanufacturers kitchen and laundry equipment of all kinds, this is bound tobe the case. Of course this category like industrialproducts overlaps into household appliances. Inthat, Electrolux joins other multinationals in doing what is necessary tosurvive. (washing machines) and production ofleisure appliances (gas cookers/grills) has begun in the Czeck Republic andSlovakia (New markets, 1997). 168. There is not a 1 % description of AB Electrolux's place within thewhite goods/compressor/consumer goods industry. Even though 1996 was not as profitable as 1995,Electrolux is staying in the game. Electrolux Home Page. Electrolux Home Page. The metals operations are handled through theElectrolux wholly owned subsidy, Granges (Electrolux, Granges, 1997). Electroluxhas continued to upgrade the group's product range, which has generatedincreased sales and market shares at the high end of the market. In the area of white goods on a commercial or household basis,Electrolux either controls or competes very favorably for major marketshare around the world. (New markets, 1997). This not onlyinvolves measuring efficiency with financial and other operational keyratios, but also evaluating customer satisfaction, employee satisfaction,and environmental concerns. In order to maintaintheir reputation Electrolux has presented a number of new product launches,concentrating on increased efficiency and environmentally friendly products(White Goods, 1997). Activities must be adapted to nature's own limitations in terms of resource use and pollution. The former contains food service equipment, kitchenand bathroom cabinets, industrial laundry equipment, refrigeration(compressors) and freezing equipment for food retailers, as well as vacuumcleaners and wet/dry cleaners for professional use. Efficiency. Professionalism include betterintegration of personnel management in business strategies and a higherlevel of business competence among personnel managers (Efficiency, 1997). The other companies control the rest of the market(Hoover's, 1996, 2 5). Just the same, Electrolux does not control all the manufacturing andsales in these areas. Http://www.electrolux.se/corporate/map. (1997). Current Chairman of the Board and CEO Anders Scharpremarked in the firm's 1996 consolidated results that Creating growth opportunities in traditional markets such as Western Europe and North America requires increased investments in new products and marketing. An oligopoly refers to a market situation inwhich the effective control of a market is exercised by a limited number ofcompetitive sellers. In the U.S. The industrial products category overlaps into the commercialappliances category. In addition, an ongoing as well as previously implemented restructuring will have a favorable effect on income (Consolidated, 1997, 1-17). Electrolux bills itself as the world's leadingproducer of laundry and kitchen equipment. In 1995 and 1996 Electrolux made a number of acquisitions and startedjoint ventures in Brazil, China, and Poland. They have cleaned up old, polluted sites that have beenacquired through company purchases (Professional, 1997). (1996). We are focusing on margins, which means that our goal is to increase the group's market share in terms of value rather than volume. While twenty to thirty other companies compete for market share in allof Electrolux's major markets (Europe and the U.S.), most are onlycompeting on a limited product basis (Hoover's, 1996, 2 5). These products would be chainsaws (3 % worldshare), lawn mowers, garden tractors, lawn trimmers, and leaf blowers.Operations are run through the Husqvarna and Flymo subsidiaries in Europe,and through American Yard Products and Poulan/Weed Eater in the U.S.(Electrolux Home Page, 1997). White goods. Since 197 Electroluxhas acquired over 3 companies, including National Union Electric, Tappan,Granges, Zanussi, White Consolidated and Roper. Commercial.Http://www.electrolux.se/corporate/map. In Poland a joint venture is under way with MyszkowEnamalware Works, Swiatowit S.A. These ventures were primarilydesigned to keep abreast of changing market conditions in developingmarkets (Consolidated results, 1997). Corporate culture at Electrolux is pervasive. (1997). Increases in productivity and efficiency at Electrolux fall into amixed bag. The remaining 8 % was purchased in 1994 (Hoover's, 1996,2 4). Electrolux operates through WhiteConsolidated Industries., Inc., in Cleveland, Ohio (Hoover's, 1996, 2 5). . As with most multinationals, Electrolux got caught in the economicdownturn of the last few years and has had to scramble to divest itself ofdivisions that were losers. Electrolux Home Page. EEMS has been touted as a means forpromoting empowerment and team development. In 1992 2 % of AEG Hausgeratewas purchased. ElectroluxConsolidated Results, 1-17. Electrolux uses EEMS as a model for evaluating management insupport of corporate culture. . In the second half of 1996 Electrolux began production of CFC freerefrigerators in China. In regard to efficiency, Electrolux continues to look foropportunities to make their operations more cost effective. Electrolux has stated that the values comprising their environmentalpolicy are linked to the principles for sustainable development adopted bythe United Nations environment conference in 1992 in its Rio Declaration onthe environment and development. Corporate. Professional, 1-3.Http://www.electrolux.se/corporate/map. Employees of Electrolux are valued as a precious resource. (1996). In addition, Electrolux hassignificantly reduced emissions and hazardous waste from known productionprocesses. This gives the group a leadingposition ion terms of environmental design for portable garden equipment(Consolidated results, 1997). To that end, a number of corporate and regional programs,supporting job transitions throughout an employee's career, are in place(Efficiency, 1997). The other theme that relates to mission statement are the financialgoals of Electrolux. (1997). Additionally, a system of performance measurement has been developedcalled the Group Integrated Measurement System (GIMS). Reinvestment was necessary andElectrolux is doing this. Environmental care must be a cornerstone in our operations and characterize our daily work (New growth, 1997). Electrolux champions "a holistic view. . The term oligopoly bestdefines Electrolux's niche. .Credibility means we need a holistic view of the product life cycle - fromraw materials processing and refinement to usage and recovery" (New growth,1997). (1996). Granges. Electrolux is also producing appliances in India,several ASEAN countries, Mexico, and Saudi Arabia (Consolidated results,1997). TheEEMS is billed as a method for measuring motivation and efficiency withinthe Electrolux organization. Thecompany considers the time and money invested in employees as part of thebottom line. AB Electrolux had a combined sales of $16,634,2 or SEK 11 , .Net Income was $279,757 or SEK 1,85 , . Efficiency 1-2.Http://www.electrolux.se/corporate/map. Also included in thecategory are materials handling equipment such as aluminum extruders,plastic, paper and metals recycling equipment, and dyeing and textileprocessing equipment. The white goods operation in Europe involvestransportation of 5 , products per day from 3 plants to 1 differentlocations. The quality of Electrolux products seem to speak for themselves.Electrolux commercial and professional products such as laundry equipment,vacuum cleaners, and kitchen equipment are constantly rated among theworld's highest volume sellers (Professional, 1997). Reviewing material from Electrolux reveals two strong themes thatrelate to the company's mission statement. Net income after minority interests andtaxes amounted to $3.82 per share (Consolidated results, 1997). AB Electrolux has also expanded into ASEAN countries, Russia China,Brazil, Egypt, India, Indonesia, and Costa Rica. To its credit, Electrolux has sought outwinning combinations of new products, new divisions and new market growthin order to consolidate its leading position as a manufacturer of householdgoods, commercial, and industrial products. Consolidated results. Almost all the productsscheduled for manufacture in these countries are joint ventures dealingwith white goods, local manufacturing and Electrolux expertise (Newmarkets, 1997). The household appliances category includes sewing machines, airconditioners, refrigerators (compressors), stoves, leisure appliances andfloor-care products. Other pan-European brand names that specializein white goods are AEG Hausgarate (German) and Zanussi (New markets, 1997). Commercial. Although spoken some five years ago, current Electrolux documentsmirror a similar sentiment. More efficient logistics has enabled Electrolux to obtainhigher inventory turnover, while simultaneously reducing tied-up capital aswell as reducing the costs of sales and administration (Consolidatedresults, 1977). Electrolux Home Page. According to the consolidated Results of 1996AB Electrolux continues to aim at an operating margin of 6.5-7% and areturn of 15% on equity over a business cycle, on average. Hoover's Handbook of World Business, 2 4-5. For example, apan-European logistics function was set up in 1996 for white goods andfloor care products. A new project called HR Professionalism was launched in 1996 aimed athelping personnel managers become active partners in the business processwithin the product lines. Granges is Electrolux's European subsidiary that producesextruded aluminum products. (1997). Income after financial items fell by 19.1%,corresponding to 3% of sales. Electrolux has expanded its white goods manufacture and sales throughthe acquisition of Lehel in Hungary and all major central and easternEuropean countries. Decisions are madefrom the top down but managerial decisions are given a disproportionalweighting. Many of these goods are commonly referred to as"white goods." AB Electrolux operates on an international, national, and regionalscale. Tothis end, Electrolux is always experimenting with local market orientedconsumer goods.

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