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Individual Assignment #2 - Case Study Example

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The AB Electrolux is a global manufacture of appearance it focuses on developing vacuums cleaners that are less noisy and less costly compared to those offered by its competitors. The company envisages realizing its 90 years ago vision of ensuring each home has a vacuum cleaner…
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Individual Assignment #2
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Topic: INDIVIDUAL ASSIGNMENT #2 Discuss AB Electrolux ability The AB Electrolux is a global manufacture of appearance it focuses on developing vacuums cleaners that are less noisy and less costly compared to those offered by its competitors. The company envisages realizing its 90 years ago vision of ensuring each home has a vacuum cleaner. In addition, Electrolux has a strong basis of sustainability initiatives that include reducing energy consumption. AB Electrolux will be able to develop global initiatives to reduce the cost by reducing energy consumption in its operations in stores and offices. The reduction in the energy use leads to carbon dioxide savings hence allowing the company to save amounts of up to US$100 per year. The amount of money saved can then be used to increase speed and precision of product development. Through the company’s strong marketing, it can develop its products globally while reducing cost. A company can reduce the cost and at the same time develop products by using recyclable materials. Relocating of the company’s production plants to low-cost countries will help it reduce the cost, increase speed and precision of product development (Hunger, & Bamford, PP. 35-40).
2. How can AB Electrolux compete with local Chinese consumer manufacturers?
AB Electrolux focuses to relocate its proactive activities to low cost production areas such as China. The company can compete with local Chinese consumer manufacturers in the following ways. First the company is able to offer consumers with quality low cost vacuum cleaners, making it to be very competitive. In addition, the company has ability to use door-to-door sales strategy that will help AB Electrolux outdo Chinese consumer manufactures as this method will help increase sales. Consumers prefer a one to one relationship with companies and therefore AB Electrolux should implement personal contact with consumers. Due to increase in technology, the company should utilize e marketing to promote sales of their commodities and cope with competition. Apart from marketing, the internet also gives price awareness to consumers. The company can also reduce prices of products in Chinese consumer manufacturers dominated areas to increase sales thereby improving their competition (Hunger, & Bamford, PP. 36-42).
3. How can they maintain their premium brand at premium prices?
The company should produce their products that are heavy and bulky near the end users to save cost of shipping and at the same time maintain their premium brand and prices. The company should invest in attractive markets where demand is high as well as income of individuals to be able to maintain premium prices. Ensuring products meet consumer needs will help maintain premium prices, as well as a premium brand. The company should also ensure they produce environmental friendly products that meet and exceed customer needs. The above will assist the company in maintaining premium prices due to quality. Investing in their target communities is also another way of maintaining premium brand and prices, which shows corporate responsibility (Hunger, & Bamford, PP. 39-42).
4. What are the advantages of shifting manufacturing to low-cost regions?

Various advantages are with shifting manufacturing to low-cost regions apart from the ability to reduce the price of commodities. Firstly, the company will be in a better position to reduce manufacturing cost. When the cost of low materials is low, cost of manufacturing will also below. Decreasing the cost of manufacturing will lead to a reduction of prices of the final product. Due to the products low and favorable prices, it could cause demand of the products to rise, which in turn will increase sales. Increase in sales will expand the market share of the company’s products hence increasing the yield of the company. Expanding the market share of the company will also help in diversification of the manufacturer’s risks. Finally, the high yield of the company will attract more investors thereby attracting more income (Hunger, & Bamford, PP. 38-46).
Works Cited
Hunger, w & Bamford, H. Strategic Management and business policy.2013 Print. Read More
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