Electrolux Issues Facing Electrolux 1.

Globalization globalization presents opportunities for Electrolux to explore markets outside Sweden but it also poses different challenges. One particular challenge is the intensification of competition. Electrolux, in its effort to become global is now competing with different companies around the world. Because of globalization productivity has risen and companies are able to balance quality and quantity. 2. Market Polarization The combination of changing consumer preferences, the growth of global retail chains and greater global competition is leading to polarization of the market. 3. Consolidation of Retailers The dealer structure in the house-hold appliances market is beginning to crumble as traditional dealers start to lose market shares to large retail chains. These large retailers benefit from high purchasing power and wide geographical coverage. This gives them greater opportunities to keep prices low. Levels of Strategy Business Level Strategy The company streamlined its product lines by focusing on the production of indoor appliances and abandoning outdoor products. The business level strategy of Electrolux focuses on differentiation and cost leadership. Strategic Position 1. Environment
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Globalization Market Polarization Consolidation of Retailers

2. Capability The expectations of the management were achieved by:

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Continuing to cut costs and drive out complexity in all aspects of operations Increasing the investment in marketing and building Electrolux brand as the global leader in the industry.

3. Expectations The expectations of Electroluxs management is to be able to accelerate the development of Electrolux as a market-driven company, based on greater understanding of customer needs. Strategy Development Process

The first step in the strategy development process at Electrolux is the identification of the companys problems, its current position and where it wants to go (goals). Next, the top management generated options, policies and measures. After the presentation of options, the management appraise or measure the feasibility, effectiveness and acceptability of each option. When the best option was determined the top management designed a strategy to achieve its goals. Last was the implementation phase. The design lens that Electrolux is using is the design lens. The design lens promotes the idea that strategy is formulated by top management through careful analysis and planning and implemented down through the organization. TUI Underlying Forces in the Macro-Environment The underlying forces in the macro-environment are:
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Competition the competitive rivalry the exists between various businesses operating within the industry market place New Entrants the ease of entry for new firm into the market Substitute Products products or services that are produced through a different means or technology Suppliers relationship between businesses in the industry and the suppliers to those businesses Customers/Buyers the relationship between businesses in the industry and the customers of the businesses

Porters 5 Forces Analysis Threat of New Entrants (Medium) The tourism and travel industry is considered as one of the fastest growing industries in the world. As more and more people travel and as more and more countries are developing their tourist destinations, more and more travel agencies and similar businesses will surface. Bargaining Power of Buyers (High) The number of competing firms, increases competition thereby forcing firms to comply with the needs, wants and demands of the consumers. Firms are competing to attract consumers. Bargaining Power of Suppliers (Low) TIUs main offering is packaged tours with fixed prices. The arrangements made by TIU with its partners/suppliers are bound by contract and cannot be changed easily. Because of the companys size and market share it is able to impose on its suppliers.

Threat of Substitutes (High) Although world tourism is growing, Europe compared to other continents experience lesser growth. Other continents offer diverse attractions posing as threats to Europe. Competitive Rivalry (High) Competition in the travel and tours is very stiff. TUI competes head to head with other European firms Thomas Cook, MyTravel Group, ReweTouristik and First Choice Holidays. There are also other small firms that TUI competes with. Impact of Five Forces on TUI The five forces will impact the decision-making and the formulation of strategies of the company. Competition the strength of competition will influence how the company will compete and how the company will develop products and services that will give them competitive advantaged over their rivals. New Entrants the ease and the mode of entry of new entrants are examined in order for the company to prepare itself for new firms. New entrants most of the time offer innovative ideas and products that must be monitored. The lesser new entrants that will enter the industry, the lesser the competition. Substitute Products If there are many options for the consumers, and if these other options are better than what TUI offers, the company will find it hard to attract customers. Suppliers the relationship between TUI and its suppliers is very essential because the suppliers provide support to the companys operation Customers the higher the purchasing power of the buyer, the biggest probability that they will travel. The company needs to examine the trends and the shifts in the customers attitudes, needs and demands.