Course: 1 Strategy Formulation - The company case for the assignment is Liliana SRL - Argentina (Consumer Appliances in Argentina).

Course: 1 Strategy Formulation - The company case for the assignment is Liliana SRL - Argentina (Consumer Appliances in Argentina).

Name of the university

Name of the student

Executive Summary

The report will include a detailed analysis of the market of Argentina, especially focusing on the company Liliana SRC. This company specialises in small kitchen appliances as well heating and cooling appliances in outdoor and garden area. Operating for 75 years, they have excelled in their manufacturing processes, and also through their eco-friendly processes that contribute to the betterment of the society and environment. However, recent urbanization and technological advancement are bringing changes in consumer tastes and preferences. Therefore, the sector, industry, and environmental analysis will be done incorporating effective tools such as pestle, 4P s of marketing, and Porters five forces analysis. The report will analyze the situation of Argentina, and how Liliana can develop based on current trends and customer preferences that help them in acquiring profit and competitive advantage.

Table of Contents

TOC o "1-3" h z u Introduction PAGEREF _Toc159336203 h 41. Industry Analysis PAGEREF _Toc159336204 h 41.1 Industry and Sector Performance Analysis PAGEREF _Toc159336205 h 41.2 Macro environmental analysis PAGEREF _Toc159336206 h 51.3 Competitor analysis PAGEREF _Toc159336207 h 101.4 Industry Forces Analysis PAGEREF _Toc159336208 h 112. Opportunities and Threats PAGEREF _Toc159336209 h 11Conclusion PAGEREF _Toc159336210 h 12Reference List PAGEREF _Toc159336211 h 13Appendix PAGEREF _Toc159336212 h 15Appendix 1: Industry and sector performance PAGEREF _Toc159336213 h 15Appendix 2: PESTLE Analysis (Highlights) PAGEREF _Toc159336214 h 17Appendix 3: Competitor analysis PAGEREF _Toc159336215 h 24Appendix 4: Industry forces - Porter's five forces analysis PAGEREF _Toc159336216 h 26Appendix 5: Corporate governance issues identification PAGEREF _Toc159336217 h 26

IntroductionLiliana is one of the leading companies in Argentina selling, manufacturing, and distributing electric devices, especially kitchen items and devices targeting women within the age range of 20-60 years old. A private company specializing in kitchen items selling blenders, mixers, graters, purifiers, etc. Good presence in the Argentina market and sustaining for 75 years make it the number one choice for household items among consumers (Electrodomsticos, 2024). The report will analyze and determine the industry the company is operating in and its performance throughout the decades. The analysis will include industry and sector performance analysis, macro environmental analysis, competitor analysis, and industry forces analysis adhering to effective tools such as PESTLE, Porter's Five forces, etc.

1. Industry Analysis

1.1 Industry and Sector Performance AnalysisLiliana has a massive presence and acceptability throughout Argentina, which they acquired through their excellent product engineered with care. Initially, the company commenced its activities by focusing more on manufacturing and improving kitchen appliances by mixing and matching various matrices and materials. The company is consumer-oriented, launching innovative products every year and also catering to ethical approaches to operating. The reason for their sustenance for nearly 75 years is their strict adherence to environmental policies, manufacturing and quality standards, and having a strong social responsibility policy. According to statista.com (2024), household appliances market revenue is quite remarkable, projecting a growth of US$3.87 billion in the year 2024. In comparison to China, Argentina is lacking in acquiring revenue in the household appliances market, as China generated near about US$160 billion in the year 2024. In this case, it can be stated that based on household revenues, there is a chance that Argentina can generate nearly US$250.60 in the year 2024(statista. com 2024). The comparison states that the market of household appliances in Argentina is continuously growing which helps in generating huge profits for companies like Liliana. According to scholars, energy-efficient household appliances are preferred by consumers (Bhutto et al.,2020). They want companies to become environmentally sustainable and provide them with products that save energy and are reasonable in price.

Figure 1: the revenue collection in household appliances in Argentina

Source: statista.com (2024)

As suggested by Letelier Carvajal (2023), the development in the household appliances sector in Argentina helped in changing gender roles, as it made kitchen tasks easier and simpler. The Argentina Government is continuously supporting companies like Liliana in case of making energy-efficient and cost-effective household appliances, especially to modernize lower- and middle-class families. The market structure in the kitchen appliances segment is divided into two parts, major appliances and small appliances. Major appliances are refrigerators, dishwashers, washing machines, cookers, and ovens, and smaller include small kitchen appliances such as electric kettles, microwaves, grills roasters, etc. The demand for small appliances is increasing considerably as shown in Figure 1, and is expected to grow to nearly US$40.15 in the year 2024. The demand for small appliances has increased considerably during the lockdown caused by COVID-19 as home cooking and baking increased. Liliana has a recipe section showing easy baking and cooking items which also makes the company website attractive and creative.

1.2 Macro environmental analysisIn the case of political aspects, the Argentinean Government is stated to be very reliable on international policies and has maintained a positive relationship with the UN. Apart from that, it has a Federal republican Government and a comprehensive legal system. Worker's unions are prominent and helps in increasing the wages of employees but high taxes limit foreign investment in Argentina. Development in aspects of business is continuous and has very positive results. The presence of double taxation treaties, and tax information exchange agreements with many other countries with Argentina have provided a positive growth environment for businesses. Especially there is an estimation that the small appliances market, eCommerce, and electronics market are estimated to have a growth of 5% by the year 2029. This growth is observed in Argentina even if most of the population in Argentina is dependent on exports for cheaper items. Therefore, companies like Liliana must produce cost effective products so that they can experience sales growth. A positive relationship with China has helped Argentina to acquire a trade surplus and boost its economic growth (Bekerman Dulcich and Gaite 2022). Apart from that, the social factors of Argentina are also favourable with high standards of living, people seeking proper education and urbanization is continuous. However, it has been observed that Argentina schools and colleges also experience a high rate of dropouts resulting in an unskilled workforce (worldbank.org, 2024). This will negatively impact the companies operating in the country, unskilled workforce and unemployment will cause hindrance in productivity and workforce eventually impacting productivity. Liliana must consider these factors to effectively operate and expand as a kitchen appliances company. They must incorporate more e-commerce strategies, and produce cost-effective products (Hondroyiannis and Papaoikonomou 2017). On the other hand, companies often invest in research and development processes to bring out more innovative products. In the case of surviving the situation of unemployment and an unskilled workforce, they can offer training programs. In the case of technological development, Liliana is quite advanced, and actively working with various technologies and also have an active presence on social media such as Facebook Meta, YouTube, Instagram, etc. This can help the company in attracting tech-savvy customers, working women and men especially comfortable in aspects of e-commerce shopping (builtwith.com 2024).

Argentina has acquired significant growth in technological innovation where people are tech savvy and prefer ecommerce shopping processes. This is also observed in the case of the chosen company, Liliana. Liliana has advanced technology in their company, 4 machine centers that help them in effective manufacturing. Technological efficacy has helped Liliana to develop an efficient industry model plant.

As indicated on the company website, Liliana has excelled in her commitment to contribution to the environment which is quite remarkable. The company is focused on social responsibility which compelled them to install a water purification system in their manufacturing plants that also uses reverse osmosis effectively in reusing wastewater and saving water to a greater extent from being over-exploited. Liliana is involved in segregating and recycling adhering to multiple methodologies in case of managing their non-hazardous waste such as wood, cardboard, polythene, etc. They operate with utmost transparency with their customers and provide effective recreation and amenities to employees within the workplace environment so that they can work healthily and effectively (linkedin.com 2024). Recently, they have adhered to an Integrated Management System Policy, that helps them become more sustainable and socially responsible (Electrodomsticos 2024). This is because the policy helps the company to produce and manufacture eco-friendly products, through minimizing the utilization of hazardous products, activities, and services. They adhere to effective standards to secure the Environment, Occupational Safety and Health of its staffs, consumers, and the entire community they are operating.

Political Stable political environment: Argentina has always maintained a stable political environment, that has helped Liliana to sustain itself in the competitive market.

Over-dependence on international policies: Although, over-dependence on UN, reliance on international policies is creating a low economic situation, which limits Argentinian big companies to target market expansion. This is because of dependence on international policies that compelled Argentina to face low economic growth, and high inflation rates. This is a major hindrance for Liliana to expand their market to international grounds, or increase their manufacturing processes to big appliances like fridges, in-built microwaves, freezers, etc.

A good relationship with UN: Argentina has been successful in maintaining a good relationship with the UN, which will help in future development in the country, especially in aspects of the science and tech industry.

Economic Leading developing country: Argentina is considered the second largest national economy in South America. A developing country with leading production in agriculture, import export business, and progressive development in manufacturing.

Manufacturing is the largest sector that contributes to the GDP of the country, which is near about 15 % (Peyr and Etcheber 2021).

A positive trading relationship with the Chinese Government, can help companies like Liliana to import hardware parts to build big appliances or set up their manufacturing center in China. Effective foreign relationships can help in internalization as Liliana has already stabilised their business in the local market.

Social The living standards in Argentina is quite high and people are increasingly becoming tech-savvy.

Although, they have an aging population and an increased dropout rate, that will endanger the workforce in companies operating in the country.

An unskilled workforce will lead to decreased productivity.

Technological Energy crisis: Argentina is still in the process of commissioning large centralized energy generation and transmission projects. This can be an issue for Liliana to enter to big appliances manufacturing sector. As stated by irena.org (2024), Argentina's renewable energy technologies are untapped and barely exploited.

Growing e-commerce market: In the year 2019, 80 percent of the population were digital buyers using credit cards to buy things (wto.org 2024).

Legal Federal republican Government with a comprehensive legal system.

Workers unions are present in Argentinian companies, which is a positive aspect that helps in increasing wages of employees.

The high taxation rate is causing foreign investors to be sceptical of investing in Argentina companies.

Environmental Degradation of natural resources is high in Argentina; constant development is done in the case of generating biofuel and clean energy.

PESTLE Analysis

Source: Created by the learner

1.3 Competitor analysis4ps of Marketing

Liliana SRC product strategy: The product strategy of the company is focused on two aspects, one, engineering new and innovative products, and second, they are currently shifting towards meeting consumer needs so that they can stabilise their local markets and expand in untapped areas. Current adaptation to the lifestyle needs of their consumer has led them in specializing in small kitchen appliances, that can make life easy, especially for working couples, single working men and women, etc. In the year 2021, Liliana SRC also acquired MEdA certification, which provided appreciation to the company having operational excellence and is also contributing to the betterment of society.

Pricing strategy: The pricing strategy of Liliana is quite reasonable and equally profitable for the company. Therefore, it can be stated that Liliana uses competitive pricing based on the situation of the market and consumer demand. However, Liliana can utilise penetration pricing to attract more consumers enter other competitive markets, and raise the price later based on demand (Nagle and Mller 2017). Penetration pricing will be ideal for the current market of Argentina, where inflation rate is high and economic stability is low after covid-19.

Place strategy: the distribution strategy for the company focuses on selling their products from their curated stores and distributing them in other local electronic stores. This has helped the company to operate effectively for 75 years, but improvising their distribution strategy to an ecommerce strategy can help in popularising their products to a greater extent. The loopholes of Liliana are that they refrained from developing their website, they are not active on social media and investment in developing their social media is also minimal. Argentina consumers are extremely tech-savvy and are rapidly shifting towards e-commerce-oriented shopping. E-commerce strategy can include search engine optimization (SEO), social media campaigns and advertising processes, and PPC (pay per click)(Weideman and Kritzinger 2017).

Promotion strategy: the promotional strategy of Liliana is traditional, focusing on market campaigns and advertisements through Television commercials. They have YouTube updates, although they are not regular. The company image is good which they have acquired through maintaining positive public relationships helping them to acquire operational excellence for decades. However, technological advancement in the case of promotional aspects must be adapted by the company, especially by hiring a social media strategist which will be effective in forthcoming years for international expansion.

Refer to Appendix 4.3 Competitor analysis

1.4 Industry Forces AnalysisAs indicated by businesswire.com (2020), the smart kitchen appliances market has an estimated growth of CAGR of 29% from the year 2019 and 2024. Liliana is lacking in smart kitchen products as well as big appliances which will be an advantage for its competitors. Better customer service and lower prices are preferable components in the case of small appliances in Argentina. The changing market trends rapid urbanization and technological development can jeopardize stable companies like Liliana. Even though they have excelled in its operations, they considerably lacks in smart appliances like its competitors, LG and Whirlpool. Liliana needs to change their operational strategy, pricing strategy, promotional strategy, e-commerce strategy etc, to keep being the priority among Argentinians and eradicate customers switching to better options.

Refer to Appendix 4.4 Industry Forces - Porter's Five Forces analysis

2. Opportunities and ThreatsOpportunities: Liliana must expand its markets to the big appliance market and manufacture smart appliances. Product innovation and variation can help the company to acquire an increased competitive advantage and a strong hold on local markets. Apart from that, rapid technological development is required for a company to acquire the preferences of customers. In recent years, changes in customer taste towards more user-friendly and smart appliances have increased the competition.

Threats: the inflation rate and growing unemployment in Argentina can cause unseen damage to local manufacturers. This is because they are dependent on local resources and Argentina is still developing in the case of energy, and technology. Nevertheless, Liliana can go through degradation and products might become saturated due to extreme competition from LG and Whirlpool companies who sell low-priced smart kitchen appliances.

ConclusionThe above discussion provided a detailed scenario of the small appliances market in Argentina, adhering to the latest statistics, trends, and developments. The company chosen here is Liliana SRC, a manufacturer for 75 years, producing and selling innovative products related to kitchen appliances. The analysis includes industry and sector performance, industry forces analysis, and competitor and macro environmental analysis. The analysis has adhered to tools, such as PESTLE, 4Ps of marketing, Porter five forces, etc.

Reference ListBekerman, M., Dulcich, F. and Gaite, P., 2022. Argentinas economic relations with China and their impact on a long-term production strategy.CEPAL Review.

Bhutto, M.Y., Liu, X., Soomro, Y.A., Ertz, M. and Baeshen, Y., 2020. Adoption of energy-efficient home appliances: Extending the theory of planned behavior.Sustainability,13(1), p.250.

builtwith.com (2024)BuiltWith. Available at: https://builtwith.com/meta/liliana.com.ar (Accessed: 13 February 2024).

businesswire.com (2020). Available at: https://www.businesswire.com/news/home/20201008005520/en/Global-Smart-Kitchen-Appliance-Market-to-2024---Trends-Forecast-and-Opportunity-Analysis---ResearchAndMarkets.com (Accessed: 14 February 2024).

ceicdata.com (2024)CEIC. Available at: https://www.ceicdata.com/en/argentina/household-appliances-and-household-items-survey/hh-appliances--items-survey-sales-refrigerators--freezers (Accessed: 13 February 2024).

Electrodomsticos, L. (2024)Coccin: Lneas de producto: Liliana - Electrodomsticos para tu vida,Liliana RSS. Available at: https://www.liliana.com.ar/linea/coccion/ (Accessed: 14 February 2024).

Electrodomsticos, L. (2024)Empresa: Liliana - Electrodomsticos para tu vida,Liliana RSS. Available at: https://www.liliana.com.ar/empresa/ (Accessed: 5 February 2024).

Hondroyiannis, G. and Papaoikonomou, D., 2017. The effect of card payments on VAT revenue in Greece.

irena.org (2024). Available at: https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2022/Apr/IRENA_RE_Capacity_Statistics_2022.pdf (Accessed: 13 February 2024).

Letelier Carvajal, J., 2023.Modernizing Households: Gender and Consumption in Chile 19591973. The Promotion, Sale, and Acquisition of Household Appliances(Doctoral dissertation, UC Irvine).

linkedin.com (2024)LinkedIn. Available at: https://www.linkedin.com/company/liliana-electrodom%C3%A9sticos/people/ (Accessed: 14 February 2024).

mordorintelligence.com (2024)Argentina Home Appliances Market Size & Share Analysis - Industry Research Report - Growth Trends. Available at: https://www.mordorintelligence.com/industry-reports/argentina-home-appliances-market-industry (Accessed: 13 February 2024).

Nagle, T.T. and Mller, G., 2017.The strategy and tactics of pricing: A guide to growing more profitably. Routledge.

Peyr, P. and Etcheber, E., (2021)Evolucin de la industria nacional argentina,gestiopolis. Available at: https://gestiopolis.com/evolucion-de-la-industria-nacional-argentina/ (Accessed: 13 February 2024).

Raszewski, E., (2022). Available at: https://www.reuters.com/business/retail-consumer/whirlpool-opens-factory-argentina-with-52-million-investment-2022-10-20/ (Accessed: 14 February 2024).

statista.com (2024). Available at: https://www.statista.com/outlook/cmo/household-appliances/argentina#revenue (Accessed: 5 February 2024).

Weideman, M. and Kritzinger, W., 2017. Parallel search engine optimization and pay-per-click campaigns: A comparison of cost per acquisition. South African Journal of Information Management,19(1), pp.1-13.

worldbank.org (2024). Available at: https://data.worldbank.org/indicator/SL.UEM.TOTL.ZS?locations=AR (Accessed: 10 February 2024).

wto.org (2024). Available at: https://www.wto.org/english/res_e/booksp_e/15_adtera_chapter_11_e.pdf (Accessed: 13 February 2024).

AppendixAppendix 1: Industry and sector performanceIncrease in sales of Big Appliances in Argentina

(Source: ceicdata.com, 2024)

Home appliances market analysis for 10 years and its growth in Argentina

(Source: mordorintelligence.com 2024)

Argentina consumer electronics retail market category segmentation: % share, by value, 20172022

Source: (Marketline, 2024)

Argentina consumer electronics retail market category segmentation: $ million, 2017-2022

Source: (Marketline, 2024)

Argentina consumer electronics retail market distribution: % share, by value, 2022

Source: (Marketline, 2024)

Appendix 2: PESTLE Analysis (Highlights)

Argentina A timeline of key political events

Source: (Marketline, 2024)

Key Economic Indicators

Source: (Marketline, 2024)

Argentina Key fundamentals

Source: (Marketline, 2024)

Argentina Population by gender (as a percentage of total population)

Source: (Marketline, 2024)

Number of patents granted

Source: (Marketline, 2024)

Argentina Total expenditure on R&D

Source: (Marketline, 2024)

Argentina Carbon dioxide emissions (million tonnes/%)

Source: (Marketline, 2024)

Appendix 3: Competitor analysisProduct portfolio

Kitchen small appliances

Processors

Mixer grinders

Blenders

Water purifiers

Cooking utensils

Graters

Other small products include vacuums, indoor ventilation, stand fans for garden or outdoor areas, etc.

Competitors of Liliana in Argentina

As observed in Figure 3, Samsung, Panasonic, Whirlpool, LG, etc are strong competitors of Liliana SRC which are international players (Raszewski, 2022). On the other hand, local companies include Metalurgica, and codice2.

Small kitchen appliances sold by Liliana in Argentina

(Source: Electrodomsticos 2024)

Manufacturing center of Liliana in Argentina

(Source: Electrodomsticos, 2024)

Appendix 4: Industry forces - Porter's five forces analysisCompetitive rivalry in the case of Liliana, competitive rivalry is medium. There are chances of growth in smart appliances in the near future, which can benefit Lilianas competitors such as LG and Samsung.

Supplier power: Liliana can have advantage in the case of suppliers because they have a reputation and goodwill. However, suppliers are also looking for better deals, and international companies in Argentina, which are also Liliana's competitors can take advantage because of it. supplier power is also medium.

Buyer power is high. Although Liliana have been selling small appliances for many years, they also present their credibility and expertise in manufacturing innovative products. The company is considerably lagging behind in advancement, especially in the case of technology and smart appliances.

The threat of substitution is low. This is because Liliana has proven its credibility and is one of the major manufacturers of home appliances in Argentina. They have acquired trust and goodwill through their contribution to society and for the betterment of the environment, which is difficult to replace by new entrants.

The threat of new entry is high. As Raszewski, (2022) has stated Whirlpool have opened their factory with a $52 million investment. Whirlpool already have a low-priced products and even smart appliances which can be a major threat to Liliana, and its profit margin.

Appendix 5: Corporate governance issues identificationIssues identified in Liliana, Argentina

Gender equality, hiring for female employees in manufacturing and production departments

Remote working processes

Corruption-free work processes

Flexible working

Assessment Case

The company case for the assignment isLiliana SRL - Argentina (Consumer Appliances in Argentina).

Assessment Application

In Assessment 2, you will be required to take the key learnings from Assessment 1 and lay out strategic recommendations for the previously nominated assignment to leverage and build capabilities that will allow the organisation to exploit the identified opportunities and mitigate risks from threats.

Please review the specific assessment instructions for details of both assessments to fully appreciate what is required of you in completing each assessment.

Project

Project Overview

For your graded assessment, you will need to prepare a written report of~ 2,500words that require you to examine and apply the key concepts and tools of strategic capabilities.

Project Structure

For this project as well, you have to analyse the same case which was used in the first course. This time,you have to assume the perspective of a strategy consultant retained by the senior management of the organisation. Your brief is to provide an analysis of the companys current strategy, evaluate its capacity, and recommend areas of improvement.

Your report should respond to the following questions:

What external environmental conditions is the organisation facing?

Provide a brief overview from course 1 on this organisation in order to provide context.

What are the organisation's internal environmental conditions?

Reflect on the organisation's strategic and dynamic capabilities. You should refer to the value chain. Capabilities may, but not necessarily, include culture, operations, marketing, service, logistics.

How does the organisation currently build a competitive advantage through its business and corporate-level strategies?

Consider the type of business-level strategy that is being pursued, and whether this is sound given the current environment. Review any corporate-level strategies in place. Do these make sense, and are they working?

How does the organisation's design enable these strategies?

You may want to consider recent organisational structural changes, level of centralisation, horizontal structural characteristics, and the appropriateness of the structure for the strategy being pursued.

What recommendations can you make to improve the organisations strategic prospects?

Depending upon your analysis in the preceding questions, options could include strengthening or changing its business or corporate level strategies. You could consider recommendations arising from the application of the strategy clock. Your recommendations might also include building, leveraging or stretching capabilities if the organisation faces current weaknesses.

Word Count

How much above or below the word count may I go?

You can be no more than 100 words above or below 2,500 words.

What all words are counted in word count?

The word count is focused on the body of your report.Therefore, the word count does not include:

Title page

Table of contents

Executive summary

Graphs and tables in the body of the report

Reference list

Appendices

Where do I put the Cover letter in the report?

The cover letter should be at the start of your submission.

Referencing and citation FAQs

Is it essential to apply Harvard referencing?

Yes!

While Deakin understands that most students already work in senior management positions, it is essential students present their work applying the required academic referencing style including the use of correct in-text citation and a reference list.

Where the student is unsure, please refer students to the Deakin Guide for Referencing:https://www.deakin.edu.au/students/studying/study-support/referencing.

Important to know:

Presentation marks will be deducted where correct referencing is not applied.

How many references should I have?

It is expected the work demonstrates the synthesis of work meaning arguments are underpinned through the support of analysis and application of frameworks and theories. Therefore, it is expected that there would be multiple authors in developing the argument.

A good benchmark for postgraduate study is

10 references for every 1,000 words (ie word count is 2,500 therefore 25 references)

references are from a good cross-section of reference types (texts, journal articles, industry reports, etc.

Acceptable reference sources?

There are multiple acceptable reference sources:

Deakin Library Databases

Journal Articles

Industry Reports

Company Reports

Text EbooksGovernment Websites,

A variety of credible and relevant websites such as brand owner websites, competitor sites, etc.

Unacceptable reference sources?

There are multiple unacceptable reference sources that you must avoid using in your assessment submission - below are just a few:

Any wiki (sites edited or maintained by volunteers or individuals) ie. Wikipedia

Question answering services ie. Ask.com, About.com, Infoplease.com, Answers.com

An individual's website

When unsure if the reference is credible, a general rule of thumb you could apply is if it was not peer-reviewed OR cannot be verified as a credible source, question whether there is another source you could use. If you can't prove it, then skip it and find a different source.

Important to know:

Applying non-credible reference sources diminishes the strength and position of your argument. Therefore, using non-credible reference sources has a direct impact on the outcome of your result.