Answer 1)
AB Electrolux has put themselves into a comfortable position because of which they can develop global initiatives to reduce the manufacturing cost and increase the speed of product development. The single most important factor that will assist the entity is the location of their plants. Important to note, the company is having plants in China, Mexico, Hungary and Thailand, and because of widespread manufacturing activity of the company, it is able to deliver the appliances to the neighboring markets by upholding the cost efficiency. For instance, while the Mexican manufacturing units serve North American market, Thailand based unit serves the Australian market.
Answer 2)
Over the history of its establishment, the company has always thrived on innovation and incorporating cutting-edge technology in its manufacturing process, however, the company has now faced the challenged of low-price competition from local Chinese consumer manufacturers, and in my opinion, the only way the company can compete with local companies is by taking the advantage of economies of scale and setting up yet another plant in China to reduce the average cost of production. The project also seems much viable as not only the company will be able to compete with local manufacturers, but will also be able to target Indian market, which is experiencing phenomenal growth in consumer spending .
Answer 3)
The foremost opportunity which the company can take the advantage is of the growing middle class in Asia and their need to have better appliances at home as they spend much less time in their homes now. However, these consumers are looking for appliances with high-end technology, which leaves minimal work responsibility on the consumer. Therefore, the company should invest in innovation and high-end technology to meet the demands of such consumers and that too under affordable price range.
On the other hand, the foremost threat being faced by the company is the low-price competition from local manufacturers. In order to tackle this situation, the company should enhance their production and take the advantage of economies of scale and lower down the production cost.
