Presentation done during Strategic Management class with professor Mostefa Ider at WSB-NLU by Aleksey Narko and Kun Chen

1. Electrolux: the acquisition
and integration of ZANUSSI
By:
Aleksey Narko
Kun Chen

2. Questions:
 What are the Electrolux and Zanussi?
 What are the key characters of E. and Z.
in 1983?(include strategy, organization,
performance)
 As Leif Johansson, would you recommend
the Z acquisition in 1983?
 What lessons, if any do you draw from E’s
approach to acquisition decision making?

3. Introduction
• Leif Johansson
• Electrolux has gone from a
massive loss of 120 billion
in 1983 to a tidy profit of 60
billion in 1987.
• Electrolux became the
largest producer of
household appliances in
the world.
• Electrolux acquired
Electro-Helios in 1962.

4. Growth through acquisitions
• A. the core strategy of Electrolux in 1983
• B. Electrolux never went looking for acquisition
and bankrupt companies.
• The subsidiaries were always considered as
profit center.

5. Electrolux prior to the
acquisition of Zanussi
• The general situation of Zanussi in 1983.
• Why Zanussi lost its position in the
market?
• It was a good deal for Electrolux to buy
Zanussi.

6. The three issues from the
Acquisition process
• Union and Workforce reduction.
• Prior commitments of Zanussi.
• Financial structure and ownership.

7. What can we learn
• From Electrolux’s approach to acquisition
decision making.
• From this case we can learn about the
acquisition integration approach.

8. Immediate post acquisition
actions
• capacity utilization.
• Cost-cutting in purchase.
• Revitalizing sales.

9. Strategic transformation:
building competitiveness
• Improving Production Technology
via investment.
1.100 billion invested in Susegana plant
2.200 billion ivested in Porcia plant

10. Strategic transformation(cont.)
• Innovation and new product development.
• Enhancing Product quality.

11. Organizational revitalization:
changing attitudes
• Statement of Mission ,Values
and Guiding Lines
• Management development
workshops.
• Middle Management Problems.
• Structural Reorganization.

12. Integration of the two companies.
• Forming the task forces:
• 2-each for components, product development
and commercial appliances.
• 1-each for the marketing function and
management development.

13. Integration of Production and
Sales/Marketing

14. Brand Positioning and Product
development.
• How to group brands if
the company has so
many acquisitions?
• To put them into
groups!
A.Electrolux
B.Zanussi
C.Other two to regroup a
number of local brands

15. Questions:
• What strategic and organizational
challenges remained for Electrolux in
1988?What are the main options?
• What should Leif Johansson do now?
• What’s the situation of the company now.
Which strategic orientation should the
company go?

16. Thank you for attention!