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issue: August 2003 APPLIANCE Magazine

On Location in Velenje, Slovenia
Gorenje: Moving into the Fast Track - Part 2


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by Adite Chatterjee, New Delhi Correspondent

Innovation at the Heart of Product Focus

While flexibility allows Gorenje to introduce new models and variants of existing lines quickly in several markets, it's the design team that gives Gorenje its cutting edge. Janez Smerdelj, head of Industrial Design, tells APPLIANCE, "Our vision is to be flexible and our design philosophy is geared to this objective." The design team at Gorenje is focused on not just the aesthetics of the product lines, but also on making appliances that are user friendly - or "design that can improve the functionality of the product," as Mr. Smerdelj puts it.

It's a combination of "high tech and high touch" that Gorenje designers wish their products to achieve. High touch translates into greater user-friendliness, new forms, colors, finish, and an emotional appeal. The use of ergonomics is also an important element appliance design. Much research into consumer habits is initiated by Gorenje to understand trends in food habits and shopping. Mr. Smerdelj says, "The refrigerator has to be designed to meet specific buying habits of the people. Therefore, our product lines have to be such that they are tuned to the customer's needs."

Gorenje's Growth Plan: A Timeline

1950 to 1960
Established in a village of the same name, Gorenje began life as a producer of agricultural and construction machinery. In 1958, it started production of solid-fuel cookers. It shifted its premises to a nearby town, Velenje, where it set up its own production facilities.

1961 to 1970
Production of washing machines and refrigerators began during this period, and Gorenje soon became the largest manufacturer of household appliances in Yugoslavia. In 1961, it exported its first consignment of 200 cookers to Germany.

1971 to 1980
Gorenje's expansion program included the manufacturing of kitchen furniture, ceramic tiles, medical equipment, telecommunications, consumer electronics, and TV sets. Its operations were spread across the territory of Yugoslavia and it employed 20,000 people.

1981 to 1990
Investments in loss-making activities began to be reduced and Gorenje chose to focus on household appliances - where it had the most experience and good quality products. During this period, the company entered the Great Britain and U.S. markets.

1991 to 1996
The company underwent a complete restructuring of its business and ownership systems. Exports to foreign markets became crucial as a result of the loss of the local market and the break up of the former Yugoslavia. As new opportunities appeared in Eastern Europe due to the economic and political changes taking place in the region, Gorenje established companies in the Czech Republic, Hungary, Poland, Bulgaria, and Slovakia. Simultaneously it also established new companies on the territory of former the Yugoslavia.

1997 to 2002
A new phase of restructuring transformed Gorenje into a joint stock company. This period was one of infrastructure building as the company invested heavily in the expansion of its capacity, new markets, environmentally friendly technologies, and new product lines. The Intelligent Home by Gorenje

The Intelligent Home by Gorenje

Smart Homes are a buzzword among appliance makers. Though most appliance companies are developing prototypes of the "connected" appliance, few have answers as to what will work in the marketplace. According to Janez Smerdelj, Gorenje's head of Industrial Design, "The consumer does not want complex technical achievements but appliances and solution with clear and transparent additional benefits." Gorenje is therefore concentrating on three aspects:

  • Development of electronic controls based on a single platform so that there is no problem with interfaces
  • Development of intelligent household appliances
  • Development of appropriate communication interfaces as well as the integration of the system to create an intelligent home of the future.

Gorenje recently showcased some of its initial intelligent appliance solutions:

The Washing/Drying Solution: companies have long dreamt of building a single appliance that can perform both washing and drying functions to cut out the process of loading and unloading clothes from one machine to another. However, the problem with such machines that are currently available is that only about half of the laundry can be dried after the washing process is complete. Gorenje showcased a prototype that is capable of performing both functions in a single machine without interruption and with the full laundry load.

The Cooling Solution: extending the shelf life of perishable food such as lettuce or fish in cooling zones with various temperatures is not a new idea. However, users are rarely aware of what foods need to be stored between 0°C and 8°C. A Gorenje Refrigerator of the Future eliminates this problem by offering a large LCD display that suggests what types of food should be stored at what temperatures. Slideout baskets and shelves allow easy access. A display shows the expiration date of the food stored.

The Gorenje design team is now working on connectivity among appliances through a single display unit. This will enable appliances to communicate with each other and assist in performing key functions. For instance, energy distribution can be managed more evenly so that when the washing machine is on, the oven will get into a delayed start mode, or vice versa. This will be particularly useful for certain markets such as Italy, where energy costs are prohibitive.

Other features, such as monitoring house security systems and illumination through a centralized control panel, are also being implemented.

Gorenje's Market Strategy

Country
Market Size
Gorenje Market Share*
Marketing Strategy
Denmark
1 million units
10%

Germany
14 million units
5%
30% of all Gorenje sales are in Germany. About 50% are sold under its own brand name and 50% as private label and OEM brands.
France
10 million units
2%
Gorenje sells under 2 brand names: Sidex (at a lower price point) and Gorenje (in the mid-price segment).
Austria
1 million units
5%
Gorenje also sells kitchen furniture and is currently in the process of repositioning its brand in Austria.
Spain

The Gorenje brand was re-launched in 2002. A sales representative office has been established.
Italy

Sells Koting in the Italian market.
UK

The Gorenje brand was launched in this market in 2002.
Greece
10%
Koting is a well-established brand name in this market. The Gorenje brand was launched in 2002.
Czech Republic
1 million units
5%
Enjoys a good brand image.
Poland
2.6 million units
4%
Poland is the largest market in East Europe and the competition is intense.
Slovakia Republic
350,000 units
10%

Slovenia
60%
Market leader in Slovenian market.
Bulgaria
30%
Good position in this market.
South East Europe
60-70%
Market leader in this market.
Bulgaria
30%

Russia/ Ukraine

Important marketing and brand awareness activities are being done here.
Overseas Market (U.S./North Africa)
3%
Selling mainly to OEM buyers.

* Approximate figures.

Gorenje: Moving into the Fast Track Part 1

Suppliers mentioned in this article:
Gorenje
 

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