New strategy and organization for Miele

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Miele announced the beginning a of company transformation 120 years after its inception. The objective, according to what the society declared, “is to expand its leading market position in the premium segment for domestic appliances and commercial machines whilst at the same time sustainably securing the economic standing of the entire Miele Group”. The next initiative will be focus on new business units, a more powerful format for worldwide sales, a new location for digital marketing and sales and the entry into new business fields. This realignment will result in clear savings in terms of business costs which will also impact staffing levels: by the end of 2021, around 1.070 jobs are to be shed worldwide, thereof approximately 240 in Germany. This is to be done in a responsible manner, with the least possible social impact, and in close collaboration with Works Councils.
The Gütersloh family-owned company reported around 4.16 billion euro turnover and more than 20,200 employees in its 2018/19 financial year. This corresponds to turnover growth of more than 30% and an increase of more than 17% in staffing levels with reference to the last five years. And, the first quarter of the current business year points to further growth.
“At the same time, however – they say from Miele press office – account must be taken of far-reaching changes in the marketplace and in consumers’ habits which present huge challenges to the entire branch of industry.Urgent need for action, but above all enormous opportunities, result for instance from strong growth in the significance of digital channels and mobile devices to the way customers obtain information and communicate. This is further exacerbated by the increasingly price-aggressive behaviour of Asian corporations. Furthermore, economic prospects in important markets are greatly subdued. This situation is triggered by familiar geopolitical conflicts and risks to which no end is in sight.”
In this changing situation, Miele continues to rely on the strength of its brand, its claim to quality and its compelling innovations. This will be accompanied by a greater focus on new business fields and on increased speed and flexibility in developing new products and services. At the same time, the company will realign in the fields of administration and sales with a view to greater growth, optimise its processes in all areas and hence achieve greater latitude in terms of costs and prices.
In order to unlock potential for greater growth and identify cost efficiencies for the entire Miele Group and derive concrete measures, the company launched its Design2Excellence (D2E) programme a year ago.
In order to promote a sense of entrepreneurial accountability within the organisation, the operative business is to be bundled in eight business units. The management of individual units will be given full decision-making powers with respect to their value-creation chains. These are answerable to the Executive Board with respect to turnover, costs and profitability. This gives greater power to managers and makes for shorter lines of command and decision-making. With respect to commercial machines and in the field of medical technology, it is also planned for the respective business unit to assume responsibility for worldwide sales and service at foreign sales subsidiaries.
Moreover, in order to exploit the potential of markets to the full and to cash in on regional synergies, Miele is to restructure its sales units worldwide. China, the USA and Canada, for instance, will in future report directly to the Executive Board.

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