Strong focus on consumer experience innovation through focused brands that drive mix
Focused and innovative product portfolio with proven consumer benefits
Our consumer-focused business model gives us a competitive advantage in today’s market where the consumers are in charge and very well informed about their options. Innovation is focused on three specific areas – Taste, Care & Wellbeing – and this provides differentiated, consumer relevant and globally applied technology and marketing platforms. Active product portfolio management has delivered SEK >2bn in operating income contribution for the Group during the last two years. Business area Major Appliances EMEA is in the forefront and its product portfolio management explains a large part of the business area’s strong operating margin increase during the last five years.
Read more on how premium laundry added >30% EBIT improvement
Well-established brands with strong innovation heritage
High brand awareness through 100 years’ of track record of relevant innovations is a competitive advantage in an industry where brand is getting more important. The brands AEG and Frigidaire have successfully been sharpened during the last three years to target specific consumer segments and a relaunch of the Electrolux brand was initiated in 2018. The three main brands represent 80% of total group Gross Profit and receives more than 90% of marketing, design and R&D support.
Read more on brands importance in driving profitable growth
Leading position in targeted areas
Electrolux consistent strategic focus on key segments has resulted in strong market positions. In Europe, Electrolux has a leading position in the premium segments built-in kitchen, cooking and laundry. In Southeast Asia, Electrolux is the market leader in front loaded washing machines and in Latin America, Electrolux has a leading position in innovation within core categories. In Western Europe, Electrolux has a leading position in the institutional and hotel segments for professional products.
Read more on how Electrolux gained front-load leadership in Southeast Asia
Leading position in sustainability is growing sales and lowering costs
Electrolux is a sustainability leader in the appliance industry and this is a competitive advantage in an industry where consumers, professional users, retailers and authorities pay more attention to sustainability. Sustainability leadership is crucial to delivering outstanding consumer experiences, and to drive profitable growth. In 2018, 21% of Electrolux products sold had leading environmental performance and accounted for 29% of gross profit. Consistent focus on resource efficiency has lowered energy cost by SEK 500m annually vs 2005.
Read more on how sustainability is a key business driver
Clear strategy to increase aftermarket sales
Today aftermarket accounts for ~5% of Group sales and the target is to double this profitable area by growing the offering in service packages, spare parts consumables, accessories and adjacent products. Electrolux has in recent years an aftermarket sales organization in place in each business area. This together with a large installment-base of ~400 million products gives high aftermarket sales potential. Connectivity is also an enabler to increase direct contact with consumer.
Read more on our execution in 2018 to drive aftermarket sales