Electrolux 2008 Annual Report Download - page 38

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Growth areas
Achieving Electrolux goal for profitable growth requires a strengthened position in
the higher price segments, expansion of operations in specific product categories,
and higher sales in growth regions.
annual report 2008 | part 1 | strategy | growth
Although growth in the total market for household appliances is
limited in terms of value, several clear and powerful trends are
driving strong growth in specific product categories, regions and
sales channels. Identifying these trends, will enable Electrolux to
improve its product offering and thus create profitable growth.
Greater share in high-price segments
Growth in the market for household appliances is mainly in the
low- and high-price segments. The Group’s investment in product
development and marketing is aimed partly at increasing the
share of products sold in the high-price segments, which contri-
butes to higher average prices and margins. Electrolux launches
of innovative products in Europe and North America have
strengthened the Group’s positions in the high-price segments in
these markets. The prices of new products launched in the US are
on average three times higher than previous Group products in
the American mass market.
Rapid expansion in growth regions
Electrolux will increase sales in growth regions such as Eastern
Europe, Latin America and a large portion of Asia. The Group has
a strong presence in these regions in terms of sales and produc-
tion. In emerging markets, demand for modern appliances is sho-
wing vigorous growth as disposable income increases and a
middle class with strong purchasing power develops.
The Group’s local presence in the form of production facilities
and sales companies together with the wide experience of growth
markets generates opportunities for continued expansion. For
example, the strong position that Electrolux has achieved for
front-loaded washing machines in Southeast Asia is the basis for
expanding operations in terms of kitchen appliances.
New product categories are developing
Electrolux works continuously on identifying product categories
with potential for rapid and profitable growth. The Group’s long-
standing reputation for a proactive approach to sustainability con-
tributes to a successful launch of new products that consume less
energy and water. Sales and profitability for products with the hig-
hest energy-efficiency – the Green range – are closely monitored
and show a more profitable trend than Group products as a
whole.
In addition, certain product segments show much higher
growth than the corresponding product category in general. Over
the last few years, sales of frost-free freezers and front-loaded
washing machines have increased more than overall growth for
freezers and washing machines.
Household
appliances
Entertainment
equipment
Western
Europe
Central
Europe
North
America
Latin
America
Developed
Asia
Developing
Asia
50
40
30
20
10
0
%
Consumer are more interested in
new household appliances (30%
globally) than new entertainment
equipment (19%).
Source: GfK Roper Consulting, 2008.
Consumers prefer new household appliances
over entertainment equipment
34