Electrolux

ELECTROLUX: MERGER EXPERTS         

Problem Summary

Electrolux is a multinational company, which has reached its current size by an aggressive horizontal expansion strategy. Although experts in mergers, this case demonstrate the difficult process of uniting two with vastly different managing cultures and style. The core problem facing Electrolux, is how to integrate and motivate the gathering of 150 renegade middle managers who are hindering the advantage of their merger.

Analysis

At the core of Electroluxs evolution is an aggressive strategy of expansion done acquisition. In the beginning, mainly acquisitions of Nordic firms were established to strengthen their condition of leader of household appliances in its traditional market. Eventually, they engaged in deals of acquisitions in Europe to broaden its presence, coupled by a desire to develop products for new markets.

Part of Electroluxs ideology of merging was that they never chose a company; they only waited for the right fortune to appear. However, thither was a basis for each merger to be move: a) generally buying competitors in its core business, and selling of trifling assets; b) acquiring new business for future growth; c) to pay less that the total asset of the company.

Several characteristics of Electrolux include a loyalty to decentralised organisation, with a small corporate headquarters.



Furthermore, HQ component in the company was limited to dealing with strategic issues such as investment programs and product range decisions. All practicable matters are centralised to the subsidiaries. Structural organisation is relatively directly; quoting Scharp: we have at least two hierarchical levels less than other companies of the same size

Zanussi merger

With more than 200 acquisitions in 40 countries in their record, Electrolux amassed a fairly robust experience with external mergers. In such fashion, they tried to treat each opportunity individually and as a unique case. Zanussi was an...

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