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Case
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Reference no. IMD-7-2151
Authors: Howard Yu; Ivy Buche
Published by: International Institute for Management Development (IMD)
Originally published in: 2020
Version: 11.11.2020
Revision date: 24-Nov-2020

Abstract

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?

Time period

The events covered by this case took place in 2018 - 2019.

Geographical setting

Region:
World/global
Country:
Sweden

Featured company

AB Electrolux
Employees:
10000+
Turnover:
SEK 119 billion
Industry:
Home appliances

About

Abstract

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?

Settings

Time period

The events covered by this case took place in 2018 - 2019.

Geographical setting

Region:
World/global
Country:
Sweden

Featured company

AB Electrolux
Employees:
10000+
Turnover:
SEK 119 billion
Industry:
Home appliances

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