Ref: IMD-7-2151

Case study

Reference: IMD-7-2151

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Electrolux: Subscribing to growth

Howard H. Yu

By Ivy Buche and Professor Howard H. YuHoward H. Yu

Electrolux AB is the world’s fifth-largest maker of consumer appliances. In November 2018, Electrolux launched the trial of a subscription-based business model in Sweden for the Pure i9 – a high-end robotic vacuum cleaner. Within nine months, Daniel Wentz, VP Software Products, who had spearheaded the initiative, started seeing traction in the market. Daniel was convinced that there was a much bigger opportunity for Electrolux to create value with the new hardware-as-a-service concept for small appliances. But key questions remained: How to shift the organization from a hardware-first product-push comfort zone to software-first service-pull model? How could Electrolux create more value with the hardware-as-a-service model? How to scale up the subscription-based business model? What options might be considered? What kind of investment and leadership commitment would it take to succeed?

Learning Objective

1) Shifting a traditional product business to subscription-based model: opportunities and challenges.

2)Assessing capabilities required to drive hardware-as-a-service business.

3) Transforming the organizational DNA of a B2B company to become a consumer obsessed D2C enterprise.

4) Understanding the evolving role of data.

5) Risk of killing a promising idea due to lack of focus, prioritization and organizational inertia.

KeywordsChange Process, Driving Strategic Innovation, New Business Model, Strategy
SettingsEurope, Sweden
AB Electrolux, Consumer Goods, Home Appliances
2018-2019
TypeField Research
Copyright©IMD 2020
Related materialTeaching note, Video
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Reference: IMD-7-2151

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Reference: IMD-7-2151

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