To achieve the Group’s purpose – Shape living for the better – and drive profitable growth, Electrolux uses a business model that focuses on creating Best-in-class Consumer Experiences. This is supported by a strong foundation of Operational Excellence and Talent & Teamship, as well as three important transformational drivers.
Innovations focus on what consumers can achieve through the Group’s products and solutions to create Best-in-class Consumer Experiences in Taste, Care and Wellbeing. The aim is to strengthen the overall experience of the offering — before, during and after the purchase of the product. Work targets three main areas:
Taste, Care & Wellbeing Innovation: Investment in innovations that are most relevant for creating the best consumer experience to make great tasting food, the best care for clothes and to increase well-being in the home.
Branded Star Products with Preferred Partners: Targeted growth and optimization of the product portfolio for the most profitable product categories and brands with distinct consumer benefits, in collaboration with preferred partners.
High-Quality Connected Ownership Experience: High quality and efforts to provide consumers with the best possible connected ownership experience to strengthen the offers and benefits after the initial product sales are also central to the process.
Electrolux focuses on operational excellence in all parts of the value chain. Efforts to optimize operations focus on modularization, automation and re-engineering investments in existing plants to ensure a competitive cost structure and best prerequisites for further growth. The foundation for this is a stable and focused organization that strives to minimize complexity and make work practices simpler to deliver products and services of superior quality and high delivery reliability.
Electrolux is committed to sustainable growth and efficient use of resources comprises a key component of this. Through the Green Spirit programme, targets are set to continuously reduce the use of resources.
Teamship is the Electrolux way of working. It’s about setting aligned goals that allow clear choices and continuous improvement. It’s about knowing how to collaborate. It’s about transparency and a learning organization. Finally, it is about engagement and passion for best-in-class consumer experiences.
The digital transformation is changing consumer behavior, the industry and the world at an accelerating pace. This offers substantial opportunities for streamlining operations and continuous interaction with consumers. The digital transformation affects all areas of Electrolux operations and includes several measures and projects in five core areas: connected appliances, productivity, supply chain, modularization/manufacturing and consumers’ experience of purchasing and using products.
Continuous improvements mean delivering higher customer value at a lower price. Electrolux works continuously to improve cost structures, and develops methods, processes, skills and the company culture to achieve this. Continuous improvement is about simplifying ways of working and create value by working smarter. Electrolux has several cross-functional cost-excellence programs and other initiatives to reduce variable and structural costs.
Sustainability leadership is crucial to realizing the Electrolux purpose, and to delivering Best-in-class consumer experiences. The Group’s sustainability priorities target nine main areas that combined contribute to: Better solutions, Better operations and Better society, read more in Sustainability reporting 2017.
To achieve sustainable profitable growth Electrolux applies a three-step model for all business areas. It starts with making sure that the business operates with stability and predictability in all key processes in combination with clear focus based on active choices to increase profitability.
The second step is about delivering this with sustainable profitability, meaning that the focused business model has resilience to external factors and clear competitive advantages that enable profitability over time.
Finally, when reaching the third step the business area can accelerate growth in a targeted way by leveraging its strength through selective investments with a clear return.
The prerequisites for profitable growth are falling into place, and the Electrolux Group has completed the second stage, Sustainable Profitability, on its path to profitable growth. This was achieved through a number of consistent priorities across the Group’s operations and Business areas:
Three business areas have reached the targeted growth step. All three remaining business areas advanced along the path during 2017. More information on the path forward and business model execution by Business area.