A07-00-0013
Whirlpool Corporation’s
Global Strategy
We want to be able to take the best capabilities we have and leverage them in all our companies worldwide.
David Whitman, Whirlpool CEO, 1994
Quoted in the Harvard Business Review
In 1989, Whirlpool Corporation (Whirlpool) embarked on an ambitious global expansion with the objective of becoming the world market leader in home appliances. Beginning with the purchase of a majority stake in an appliance company owned by Philips, the Dutch electronics firm, Whirlpool purchased a majority stake in an Indian firm, established four joint ventures in China, and made significant new investments in its Latin America operations.
However, by the mid-1990s, serious problems had emerged
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The four main players—Whirlpool, General
Electric, Maytag, and White Consolidated, which had been acquired by Electrolux—were beating one another up everyday.4
With limited growth opportunities and a handful of major players in the United States, it was critical that firms focus on cost reduction, productive efficiency, and product quality. Product innovation was also critical, although few major innovations had occurred in recent years. The apppliance firms segmented their products according to different consumers’ needs, and each strived to achieve greater economies of scale. Still, by the end of the 1990s, the competitive landscape remained unattractive. Profit margins continued to decline for most firms. Many analysts believed that the market for appliances was saturated and that there would be little increase in growth rates. This saturation had left the distributors focusing primarily on replacement purchases and purchases for new housing developments.
The European Industry
In the early 1980s, there were approximately 350 producers of household appliances
Whirlpool is the world’s largest producer and marketer of small and large home appliances such as mixers, food processors, washing machines, refrigerators, air conditioners, etc. Whirlpool also has a long standing relationship with Sears, which sells Whirlpool products under the brand name Kenmore. In addition to its North American presence (both manufacturing and sales), Whirlpool also has a strong presence in Mexico, and Europe. Being the largest producer in the world has helped Whirlpool to compete on lower costs through economies of scale and through its Global Procurement Organization (GPO). In addition, its large networks also help in
Since the early 1990s, the players in the market have copied each other's innovations and this has led to very little differentiation of products in the market. Customers in this industry are very price sensitive and little differentiation allows them to shop around for the best deal. In businesses, there was also a trend towards contracts with multiple suppliers and this further increased customer power. These factors combined have led to lower industry attractiveness since 1990.
Wawa was built on a commitment to their communities since day one, when the first store opened in 1964. The resilient company of Wawa, Inc. has made great strides at becoming a more sustainable company. The company has excelled in some areas such as transportation emission reductions with their delivery trucks and their led lighting. Wawa has even rolled out new trashcans back in 2011, when they unveiled a recycling program. These trashcans include dual compartments, which the left side is trash and right is recycled cans and bottles. The recycling program that once stood in place at the convenience store was removed about two months after the rollout transpired. With a moralist company such as Wawa, it is hard to believe the deception that they have created.
“First, I would like to start off with a brief introduction of the company that you will be helping increase sales for during this promotional time. Whirlpool Corporation was founded in 1911 in St. Joseph, Michigan. So with over 100 years of experience Whirlpool is the world’s leading global manufacturer of home appliances. Focusing on consumer needs fuels our growth and keeps us relevant in homes around the world. We exist to create purposeful innovation that keeps homes running smoothly so personal and family lives can flourish.”
Analyzing GE’s corporate-level strategy from 2001 – present with Jeff Immelt as CEO, GE focuses on the growth and development platforms. Technology is the key driving force for GE’s future and growth. Advancements in industries such as energy, health and aviation fueled demand for cleaner and more efficient energy production. GE identified new markets with potential high-growth that offered attractive returns through strategic mergers and acquisitions. As CEO, Jeff Immelt established a process for identifying projects that offered attractive growth potential which were then nurtured and treated as special projects or initiatives that were not subject to strict budget constraints. Immelt introduced GE’s three strategic imperatives as: (1) sustaining its strong business model, (2) strengthening the business portfolio, and (3) driving its growth initiatives. www.ge.com
Product Innovation – Innovation of new products had failed many times and MTI has lost reputation with Wall Street. This process had been placed on the backburner and when the CEO came on board there were only six products in the pipeline. Therefore, to be successful in the future, MTI needs to invest more in R&D and focus on delivering new products.
firms It has been suggested that the disappointing performance of U.S. firms during the 1980s in technology-intensive, global markets was from failure to improve upon products and processes. It has been cited that "the U.S. makes the breakthroughs, while other countries, especially Japan, provide the follow-through." Revolutionary innovation has been contrasted with less dramatic advancements. Incremental improvement can turn products over and get more, newer models out. This may all sound dull, but the achievements can be exhilarating. American firms may have failed to follow up on their breakthroughs with such continuous improvements. Where there were successes, they were built upon a combination of breakthroughs and incremental improvements. It is the subject of yet another discourse as to what constitutes an innovation: a breakthrough or an incremental improvement, or both, and/or everything in between. 4. To take advantage of opportunity It is no surprise that surprises, often disappointing surprises, are the seeds of innovation. Take the oil companies. It is no surprise that some oil companies are becoming oil-andgas companies. Why? Because gas is found more often and in greater abundance than oil
* GE wanted to build new businesses platforms based on technological leadership, commercial excellence and global expansion to gain market leadership.
As technology continue to refine how products and services are delivered to consumers, competition among industry participants becomes more refined. Organizations that are able to keep up with changing technologies become leaders while those that are not fall behind. Mergers and acquisitions are increasing while causing small businesses to sell out or seek partnerships and cooperatives in order to remain competitive and relevant.
In a highly competitive and dynamically changing market it has become imperative for the leading
1. What is the cause of Black & Decker 9% share and Makita’s 50% share?
A couple of countries identify with arrangements prospects. Others have opened up opportunities to deliver in the prospect country. Lincoln Electric has joint meandered in China to give snappy business sector area and a close-by base. This accommodated them lively section and business region to the detriment of complete control. Lincoln Electric has moreover acquired its course into business segments. The association reported seven acquisitions in its 2008 yearly report. (file:///C:/Users/Y400/Downloads/annualreport2008.pdf) (http://ir.lincolnelectric.com/phoenix.zhtml?c=100845&p=irol-reportsannual)
Haier is a Chinese electronical appliances producer and it decided to take a 20 per cent stake in Fisher & Paykel Appliances Company (F&P) which is a New Zealand company. According to their agreement, besides the stake, Haier will also take two seats on F&P’s board and also they will cooperate in various business functions, including product development, sourcing, manufacturing and marketing. This action brought win-win situation to both companies. For Haier, unlike its domestic acquisition strategy, this alliance strategy enabled access to well established
Innovation offers the companies a competitive advantage. Presently and within the future, more than any time in history, the key to competitive advantage is innovation. However innovation will facilitate businesses meet all of their strategic challenges, not simply competition; to illustrate, in confronting accelerating rates of change, globalization, apace advancing technology, a additional numerous workforce, associated a modification from an industrial to a knowledge-based economy. Meeting all of those challenges helps the firm attain competitiveness, and meeting these challenges suitably depends on innovation. Innovation allows a firm to workout its challenges in distinctive ways in which build competitive advantage either through relative differentiation, a relative low-priced position, or few acceptable level of each. Innovation cannot assure success, however success cannot be achieved within the end of the day without it.
These minor details are what set Electrolux apart from the competition. The company’s ability to function as a team allowed them to gain different perspectives and create in a shorter time period than the rest. The case study proves that when it comes to the consumers, they do not care about price as much as they do effectiveness. If the product gives the consumer exactly what they need and want, they are more than willing to pay the price. A company’s success depends solely on each department’s ability to function as one and without teamwork this task is impossible.