Electrolux 'Ice defeated' trip to China3068.doc
Electrolux 'Ice defeated' trip to ChinaFrom 1997 to China that day, a camel on the fate of the Chinese consumer electronics market has become a victim of knockout, a series of 'salvation of the war', but the total opposite has occurred, in February 2009, Electrolux, the world's all-powerful in the international forced to close its home appliance giant in China's largest production line - Changsha Zhongyi refrigerator base, was shrinking in the domestic refrigerator market, even in most of the city had disappeared. More than 10 years trip to China come to such find any, it is a result of a series of mistakes. Wallenberg family in the global business community can be described as all-powerful, Ericsson, ABB, Volvo, Scania Heavy Motor Company, SAS Airlines . . the largest shareholder of these companies is the same family, the Swedish Wallenberg family. The middle and late 1990s, the Wallenberg family in the Stockholm stock market share more than 40%, of its leading enterprises around the world with annual sales of Electrolux appliances have also stood at 1,380 billion yuan. In October 1996, Electrolux make soldiers into China's 'operational command'! First Board: appeasement of the disaster (1996 1997) In order to rapidly layout of China, the shorter the payback period, Electrolux's draw was a common practice in multinational corporations: acquisition of small competitive local refrigeration companies to obtain the rapid development in the short term, but also to circumvent policy restrictions. appeasement Italy In order to find a springboard to find Changsha Zhongyi Electrolux refrigerator factory. China and Italy at this time is a loss year after year, the brink of bankruptcy. 'One pot to fill, to fill a pot', do not charge anything for Electrolux to 400 million yuan will be easy to obtain Changsha Zhongyi 60% of the shares. Rely on this handy product line, Electrolux capacity rapidly. Unknown Italian refrigerator transformed to become world famous Electrolux, while, Electrolux launched a new static community refrigerator continuously flows from Changsha to the country, even up to 32% brand awareness. This situation did not last long. At this point the Chinese home appliance brand has many years of expeditions, forming a complete set of effective competition practices, Haier, Meiling and other domestic brands have been very good use of the concept of war, the function of war, the price war to deal with foreign brands. Meiling first to introduce the concept of nano-refrigerator, a new static community against Electrolux, Haier, followed by introduction of variable frequency refrigerator, Kelon will lose no time in playing cards ecological preservation. The new concept in fashion and excellence in the consumer's eyes, no less on the Electrolux's new realm. Haste is clearly not doing a good job of Electrolux brand showdown with local preparations. In response to the concept of local brands battle, Electrolux has taken the strategy to follow the old rival Siemens introduced Zhiling Jones series and power series. The face of Electrolux, local brands do not hesitate to start blocking. Haier the first use of electronic temperature control technology, has introduced a power consumption of only 0.48 degrees on the entire frequency refrigerator. The refrigerator is almost only half of the Electrolux refrigerator energy standards. Haier is also running around the large-scale 'noise by half, saving half of the' ad, from the overwhelming momentum of the Electrolux. Meanwhile, the new fly, Changling played one after another power-saving card. Electrolux since the adoption of the Italian production line, not enough time for technology upgrades and had to continue to use the mechanical temperature control technology, but this technology could not produce and Haier refrigerators than aware of the dealers have on the severity of the problem Electrolux to speed up the technical inputs to proposals. However, the war in Europe at this time is intended swing, Electrolux headquarters in no time to take into account the Chinese market. the beginning of the current crisis At this point, Electrolux will continue to expand production capacity, quality problems began to appear frequently in the narrow context of investment strategies, Electrolux refrigerator is not the technology upgrade. Despite the technical staff Electrolux nonstop, but the quality is still a brand killer. 1997 11 12 months, the quality of complaints once reached 11.2%. Substantial increase in cost of quality, but also exacerbated the Electrolux brand low-end of the negative spread. The choice of production materials in the refrigerator, the Electrolux also appeared omission, as measured coefficient of thermal expansion and contraction Liner materials are not allowed to, materials were not accepted, refrigerator frequent Liner cracking phenomenon, which not only lead to water leakage, rust , but also led to power surge in a time, complaints everywhere. Unworthy of the name brand and quality, leading to Electrolux reputation plummeted, and even the market was once considered to be a power not to work, only to waste the year 1997, Electrolux sold 1 million refrigerators, a loss of 150 million yuan. Electrolux trouble. Second Board: a comprehensive 'Chinese' (1998 2003) In December 1997, Electrolux has made the decision to withdraw from China. The cost of withdrawal for at least another 65 million U.S. dollars invested in order to clean up the mess. Faced with this肉包子打狗 type of investment, the Wallenberg family unceremoniously rejected. At this point, placed in front of Electrolux China is only one road losses for the win, but can not get a penny of investment in the context! Last Stand, Electrolux selected the then-Pepsi Food (China) president Liu Xiaoming. Returning the favor, Liu Xiaoming to the Electrolux headquarters of a commitment, not a penny the Wallenberg family, to ensure that so Electrolux energized! The two hit it off instantly. Liu Xiaoming selected because there is only one China market needs a person familiar with the Chinese local culture, to working hard. Liu Xiaoming of the most aware of their social status, his request: the market, he is fully responsible for sales of 4 percent annual fee of Electrolux brand usage fees. Harsh conditions, but trapped in the quagmire of the Electrolux market has been a lack of bargaining power of capital. give up high-end, to keep the market In Liu Xiaoming view, Electrolux has been the poor quality of the minds of consumers formed the impression, back-end Quewu funds, sailing against the current than yielded to the sales center of gravity shift from a central city two, three markets, in the low-end market for new way forward. In January 1998, Liu Xiaoming announced his marketing programs: the use of the brand potential to tap low-end market value. No choice but to Electrolux headquarters acquiesced Liu Xiaoming strategy. In order to achieve the low market share advantage, Electrolux first conduct a channel change. Haier, Electrolux hesitate to dealers of other brands is higher than more than 5% of the year-end rebates, and to ensure that dealers have access to refrigerators for more than 8% of net profit. Electrolux at the international brands to the dealer rebate is the industry's highest. The temptation to rely on a huge rebates, Electrolux and the National United States signed the first 20 billion in orders, followed by Haier, the new flight number of brands such as Electrolux dealers also dragged into the agent camp. From EMKT in marketing strategy, in order to meet the low consumption group in the cultural psychology, Electrolux used for the second and third line market, kinship-based, civilian-oriented line, introduction of 'value abandoning the old, the old refrigerators discount Electrolux vacuum cleaner or electric kettle action replace it ', or even send drinks, sending electricity a year and get shopping discount cards. The price strategy, Electrolux did not hesitate to cut prices to reposition itself in the banner. Electrolux refrigerators average selling price will be reduced to 20% cheaper than the Siemens 30% level. This is for those who prefer foreign brands to consumers, this is unimaginable price. For a time the store's buying spree after another. Ones who enjoy, civilian-oriented, price war, the three major strategies so that Electrolux has been dreaming of market expectations, from 1997 to 1999, Electrolux substantial increase market share, the annual growth rate of 100%. triumph, multiple expansion In 1999, through the initial difficulties, the Electrolux in China, triumphantly. Tasted the sweetness of a full delegation of authority, the Wallenberg family in the following days selected stand. Liu Xiaoming's policy is extremely pragmatic: Multi-selling, multi-dominate the market. On Electrolux's brand driven industry, developed by IBM in the fridge, after Liu Xiaoming think we should continue to tap the Electrolux brand potential, to maximize the benefits. In order to achieve this goal, Electrolux China for large-scale mergers and acquisitions and joint ventures, the rapid expansion of production capacity. Liu Xiaoming introduced into Hong Kong Venture Capital, to 38 million yuan acquisition of Nanjing Bole Refrigerator Factory, has leased production line, OEM production of washing machines, small appliances and the whole kitchen. In 2000, Electrolux has signed with Hangzhou toho air conditioning joint venture agreement to increase the air-conditioning business. Diversified expansion of Electrolux has been a good market returns, in the rare case of investment have been expanding product lines, product categories are continuously enriched. In 2000 its market share in refrigerator up to about 6.5% in 2001, is a whopping 8.9%. 4 years, Electrolux is really a turnaround. iceberg drainage In 1998 the first price war, so that Electrolux tasted the sweetness. In order to consolidate the conquests, Electrolux has decided to reposition itself in the banner of lower prices, but at this time Electrolux air-conditioning business began to enter the market, we need a good start. In July 2000, Electrolux in Beijing, Shanghai First released more water, air-conditioning the price drop of up to 35%, followed by the industry identified below cost price 2,300, Electrolux refrigerators are also reduced to an average price of 2450 yuan or so, Even some products dropped to 2,000 yuan. The face of provocation Electrolux, Siemens took the lead against the introduction of the mid-2000 to 3,000 air-conditioning; TCL followed by involvement of the market price of 180 liters refrigerator from 2000 yuan to 1580 yuan. Haier, Kelon, Meiling, the new market in the month flying under the threat of price wars there have been sharp fluctuations in Kelon month sales fell 3.3%. Respond to different local brands seem to give chance to rise Electrolux, Electrolux in 2002 the market size expanded to 30 billion yuan. The Prince Who Turns Farmer Into the second-tier market, price policies, and low-cost expansion knife, giving Electrolux Chinese companies to compete for a considerable market share. But the huge cost of sales actually swallowed Electrolux profit margins, expanding in size behind Electrolux 6 consecutive years of losses. In 2002, Electrolux sales of small household appliances went so far as a loss of 100 yuan for every 55 yuan. Not only that, Electrolux's market mode of operation, the product price level, corporate culture and brand image, which is almost second-tier Chinese home appliance brand is no different. In 2002, Electrolux high-end market fell across the board, Electrolux's image from the prince became a farmer. In addition, investment in construction of Electrolux washing machines and air-conditioning a huge loss to December 2002, air-conditioning loss of nearly 60 million yuan in 2003, a serious loss of air-conditioning plant of Hangzhou headquarters in Sweden, the direct intervention were closed. At this point, Electrolux has in fact failed expansion strategy across the board. The third set: High-End Redemption Lost profits to maintain share, rounded set of marketing strategies of the drawbacks of the brand continue to appear, Electrolux had to consider re-adjustment of the headquarters of China's market integration. Electrolux must return to the high-end international brand image positioning up. January 19, 2003, in the resolution of the Wallenberg family, the Liu Xiaoming resigned president. compression channels, high-end price increases security In February 2003, replacing Liu Xiaoming, president of Birch blog announced to abandon the price war. To cope with image-building, in the 'at all costs, improved market performed poorly or not generate sufficient value to the business' line of thought, the Electrolux hundreds of original brands integrated eventually retained only 6. In order to concentrate on shaping the image of the white birch in the channel, select the blog to tighten policy. White Birch out that the consumption power of medium and small cities is limited, and the Electrolux's image-building needs of conflict, Liu Xiaoming built in the earlier two, give up all three markets, but the main attack point on the Beijing and Shanghai, four municipalities, and 8 provincial capitals and major cities on similar products and the development of a 10% higher than the price strategy. In the high-end positioning is a high-priced, under the guidance Electrolux introduced the first Japanese power consumption 0.62 degrees, the price of 3,500 yuan of on-demand, two queen-chi refrigerator cold series. Electrolux hopes two new products to consumers in price caused by a high-quality impression. At this point in China's high-end market has basically been formed Haier, Siemens, two dominant strategic posture, Electrolux is undoubtedly Hukouduoshi high thrust backwards. Electrolux introduced two series of new products is less than half a month, Siemens sudden declaration of war, introduced a new concept of up and down 4,000 yuan-based broadband refrigerator, Zero refrigerator. Because the two stores basic overlap, but the choice Electrolux refrigerators, queen-chi refrigerator cold, both in appearance and feel inferior to Siemens refrigerator series, and consumers into the store was attracted to the Siemens booth, Electrolux seems desolate Very few people is inter
