Electrolux, the world’s largest appliance maker, set up an ‘Asian Team’ as part of the Swedish company’s attempt to unify its marketing strategies in the region. The new business structure installs an Asian team, with 15 people from various countries, including Thailand, Malaysia, India and Sweden. The regional team’s role is to look after the development of a plans and strategy for regional product development, marketing, customer service to suit Asian culture, says Fredrik Ramen, president for Asian region. Moving away from the ‘country-based’ approach, Electrolux’s restructuring is also aimed at benefiting the opening of trade in the region in line with the Asian Free Trade Area (AFTA) agreement. ‘We want to offer the best business structure to the region, which will encourage us to provide better benefits to local customers in term of cheaper prices and faster service’, said Ramen. Ironically, Electrolux has taken the initiative while many other companies remain cautious over whether the ‘Asian culture’ actually exists. Car companies, for example, have witnessed a variety of tastes in each Asian country. (The pick-up truck, for example, is the No. 1 market in Thailand, while the saloon car leads in Malaysia, and the sport utility vehicle in the Philippines). Some analysts, though, point to different taxes in each country to account for the differences. Ramen said that setting up manufacturing facilities in Asia is not a primary target for the company. He said he believed in a good combination between sourcing products locally via sub-contract manufacturing and importing products from original factories. Electrolux has its own factories for appliances in Australia, China and India. The company has socalled collaborated factories in Thailand, Malaysia and Indonesia. Electrolux is dealing with four to five collaborated factories in Thailand for the production of refrigerators, microwave ovens, table-top gas cookers, and water heaters. Ramen said Electrolux is also collaborating with Toshiba both regionally and globally in supplying different products to one another. ‘We have many subcontract manufacturing facilities here so we need to be close with them. Our regional office in Singapore will look after for logistics works’, said Ramen. Electrolux achieved total sales of about US$1.2 billion (Bt540 billion) in the Asia Pacific last year, including about $100 million in Asian countries.
QUESTION
Is Electrolux’s Asian Team unit set up as a strategic leader, contributor, implementer or black hole? Explain your reasoning.