Case Study Electrolux

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Table of Contents Electrolux. Summary of the case study 3 Identification of the problem 3 Alternative solutions for solving the problem 4 Solution 1. Advantages and disadvantages. 5 Solution 2. Advantages and disadvantages 5 Solution 3. Advantages and disadvantages 6 Selecting the optimal solution. A cost-benefit analysis 6 Implementing the optimal solution 8 Resources needed. 8 Diminishing the disadvantages 8 Implementation steps 8 1. Electrolux - summary of the case study The study of the Electrolux Company is very interesting, taking into account its world share of sales, its expanding strategy and the decisions that were made by its managers over the years. The wish of the managers to obtain economies of scale was highlighted by the fact that Electrolux expanded its global strategy by acquiring smaller companies that produced household equipment even if these companies had different product lines. Its main product was vacuum cleaners until the 1960s, when the firm managed to expand by creating its very own plants of production of vacuum cleaners. The next decade of its expansion, Electrolux started acquiring smaller companies such as Facit, Tappan, Arthur Martin, Therma, Husqvarna, companies which were producing other types of electrical appliances and thus, Electrolux invested in them in order to enlarge its portfolio of clients. In the 1980s, Electrolux shifted from horizontal expansion to the vertical one by acquiring Granges, Sweden’s biggest metal producer and fabricator, an acquisition that was highly debated between economic analysts, because of the size and the total diversified profile of this company. Even so, Electrolux succeeded in taking over a company which was also a target for competitive companies. Besides becoming a raw materials supplier, Electrolux managed to self-supply itself
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