Electrolux 2013 Annual Report Download - page 34

Products and services
All product development in the Group is based on in-depth con-
sumer insight. By performing extensive number of interviews
and home visits, Electrolux gains knowledge of consumer
behavior in the use of various household appliances and the
needs that exist. Based on this information, Electrolux can
develop solutions that facilitate the everyday lives of consumers.
The Group has also increased its culinary expertise to enable it
to create more innovative products for food preparation, food
preservation and cleaning. Key to the above is the transfer of
know-how from the Group’s professional business to consumer
products.
Accelerated product development
The process for consumer-driven product development is used
for all new products. Close collaboration between the Group’s
marketing, R&D and design functions – the Innovation Triangle –
increases consumer insight and market knowledge thereby
enabling products to reach the market at a faster pace and
ensuring that these products are preferred by more consumers.
Various teams within these functions currently exist in each
sector of the Group. The process also facilitates sales via new
channels, in new markets and in ventures into entirely new prod-
uct categories. In order for a new product to be launched, at
least 70% of the consumers in a test group must have
expressed a preference for it above similar alternatives in the
market. If this requirement is not met, the product is sent back
to the product development team to be reworked.
More research and development
Over a number of years, Electrolux has gradually increased its
investment into R&D. As a consequence, product quality has
been further improved, which, in turn, has led to reduced costs
for warranty spend. Since 2009, warranty costs have
decreased, essentially, in an amount that corresponds to the
increase in R&D costs, and the sum of these two cost items for
the entire period was about 5% of net sales. The aim is for this
trend to continue. The increased investment in new technology
is focused on the development of intuitive and user-friendly con-
trol panels as well as solutions with less environmental impact.
Strong global positions
Electrolux aims to develop winning products in various catego-
ries and regions by focusing on innovation and cost efficiency.
The strongest global position currently held is for cookers,
enabling, for example, the Electrolux cooking solutions for the
world’s best chefs and restaurants to be leveraged when devel-
oping consumer appliances.
Electrolux also commands a strong global position in vac-
uum cleaners and is growing rapidly in the area of small domes-
tic appliances by utilizing global economies of scale. Other
strong positions held by the Group include the market for front-
load washing machines and dishwashers, which are segments
with low penetration in most markets. Among adjacent product
categories, Electrolux identifies major global potential for
air-conditioning equipment and water heaters.
The Electrolux process for consumer-driven product development enables a high speed of
product development and, in parallel, development of products that will be preferred by
more consumers. The collaboration between marketing, R&D and design is a key factor.
–
30%
+
50%
–
20%
Reduce the time
from innovation to
launch by 30%
Increase investment
in product
development by 50%
Reduce the number
of product varieties
by 20% as a result
of modularization
Goals
32 ANNUAL REPORT 2013
Strategic development 2013 Innovation