1. Discuss AB Electrolux’s ability to develop global initiatives to reduce costs and increase the speed and precision of product development? AB Electrolux has developed their global initiatives to the point where they manufacture at low costs and they increase the speed and precision of product development. This is due to one key feature, location. Their manufacturing plants are located in places where the costs of goods sold is reduced and especially the production of appliances. This is because there are several regions and countries of the world that allow this. They have plants in Poland, Hungary, Mexico, China and Thailand. This has opened up a global market and to save money, those plants deliver to their neighboring countries.
2. How can AB Electrolux compete with local Chinese consumer manufacturers? This becomes a difficult task to accomplish because AB Electrolux has a hard time selling their products in China. This is due to the low priced competition that AB has to deal with in China. What AB should do is accommodate to China’s needs. Perhaps build another manufacturing plant in China that makes products with lesser quality perhaps but with low prices. Like that they can sell both low price and high price products. This might get results even though it might be pricey at first.
3. How can they maintain their premium brand with premium prices? This can conflict with my previous solution. But it is key that this technique stays unique to China because you don’t want people in other countries thinking AB sells a cheap product. In order to fully maintain this premium image they must continue to do what they are doing. Manufacture in these countries that reduce prices of manufacturing appliances. Like this, the money they save in manufacturing can go towards the making and materials of the products themselves. Innovation and quality are also key