Electrolux 2005 Annual Report Download - page 24
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Please find page 24 of the 2005 Electrolux annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.The new Electrolux
After the spin-off
of Outdoor Products, Electrolux will be totally focused on
indoor products for consumers and professional users.
The new Electrolux will have annual sales of more than
SEK 100 billion, and about 60,000 employees world-wide.
We will continue to be one of the most important companies
on the Stockholm Stock Exchange. But even more impor-
tantly, we will be one of the world’s biggest companies in our
industry, with leading positions in all the segments in which
we operate. Electrolux will grow in both the consumer and
professional markets.
Leading products
Our strategy for innovative product development and attrac-
tive design will be decisive for the future position of Electrolux.
Continued success in these areas requires systematic appli-
cation of our process for product development as well as
even greater investments in design. Our goal is to invest at
least 2% of sales in product development. We will continue
to launch new products at a high rate.
A strong brand
We will continue to work on building the Electrolux brand as
the global leader in our industry. Our goal is for our investment
in brand-building to correspond to at least 2% of sales.
Development of competence and leadership
In order to lead development in our industry, we will have to
act fast and dare to do things differently. This highlights the
importance of continuously developing the required man-
agement and securing competence, in combination with a
strong environmental commitment and good relations with
our suppliers. Talent management, which comprises pro-
cesses and tools for attracting, developing and securing
access to future leaders and competence within Electrolux,
will continue to have high priority for us.
Competitive cost situation
Maintaining competitive production costs is a prerequisite
for survival in our markets. That is why we will continue to
work on reducing costs. We will also work on improving
profitability either by divesting specific units or by changing
the business model. It is also important to continue relocating
production from high-cost to low-cost countries. The goal is
for these activities to be largely completed by late 2008, which
will improve our profitability by SEK 2.5–3.5 billion annually
from 2009 onward. As we announced previously, these
measures will involve costs of approximately SEK 8–10 billion.
Although our efforts to cut costs in purchasing have been
successful, there is a good deal still to be done. Among
other things, we are increasing the share of purchases from
low-cost countries and at the same time reducing the num-
ber of suppliers. I am convinced that there is still a large
potential for cutting the Group’s total purchasing costs.
Our future depends on how well we can combine a contin-
ued focus on costs with intensified product renewal and sys-
tematic development of both our brands and our personnel.
Looking ahead
Brand Talent
management
Product
Cost
20 Electrolux Annual Report 2005
In 2006 we will continue to work on strengthening the Electrolux
brand, launching new products, cutting costs and developing our
personnel.