Strategy

The Flügger Organic strategy maintains the core attitude of being a 'co-creator of a greener industry.'



Additionally, the strategy clarifies Flügger's position in the market with commercial choices aimed at organic growth that contributes to overall increased profitability. Flügger Organic consists of five strategic areas:

• Nordic
• International
• Brand
• Simplification
• Robustness

Nordic

Flügger's Nordic markets, where it holds a leading market position, are stable but experience cyclical fluctuations that follow market trends. The number of small and medium-sized professional painter customers needs to increase through own sales channels. This will be achieved by strengthening relationships, providing product and application training, and enhancing data and digital services availability to make daily work easier. Specifically, in the Swedish market, there is an effort to adapt to market conditions. During the new strategy period, Flügger's position will also be expanded through collaborations with professional hardware stores that cater to professional craftsmen.

International

In recent years, Flügger has grown significantly outside the Nordic region through acquisitions and exports, as well as through its own stores and production in Poland. The plan for Poland and Lithuania includes opening additional Flügger stores. For exports, several potential new countries have been identified to start operations based on a well-defined plan. Additionally, initiatives with local distributors have been established for existing export markets, depending on whether Flügger is entering new markets (product and concept training), developing markets (support for expanding the local dealer network and new product categories), or mature markets (assistance with adding channels such as online and architects/designers).

Brand

To support organic growth in both the Nordic and international markets, Flügger's brand is used as a strategic tool. Flügger represents good master painter quality and thoughtful surface solutions with consideration for the surroundings. Specifically, the Flügger brand will be introduced and spread to professional hardware stores, the store format will be rethought to meet the needs of core customers, and a marketing platform will be created so that both own units and local distributors can easily reuse and replicate marketing efforts across markets.

Simplification

To better serve core customers, leverage Flügger's core competencies, and increase profitability, the right focus is needed. This includes closing business units that do not significantly contribute to the core business and strategy, gradually adapting and merging labels and recipes to harmonize across customer groups, and streamlining contract principles for hardware stores and DIY chains to align with the value chain.

Robustness

The operational infrastructure must support commercial choices. This includes IT systems that support the customer journey, as well as ensuring production, logistics, and warehousing to secure product availability when expanding to new markets and partnerships. For warehousing and logistics, a 'center of gravity' analysis will be conducted to reduce transportation and handling costs.

Overall Rationale for the Strategy

With its original business model, Flügger has reached a natural ceiling in the Nordic markets. With rising costs, it is essential to scale the business in other ways. The idea behind Flügger Organic is to expand market potential by entering structural partnerships with professional hardware stores as well as growing internationally to achieve the right scale advantages and increased profitability across all markets - in an organic way.