Whirlpool and the Global Appliance Industry

8/17/2019 Whirlpool and the Global Appliance Industry

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Whirlpool and the GlobalAppliance IndustryXavier’s Institute of Management

By:

Soham radhan !

"#M$%&'()

Sri*eet Mishra !


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INTRODUCTION TO HOME APPLIANCE INDUSTRY:

,ome appliances mar-et include. /ashing machines0 dryers1 fridges andfree2ers1 co3ee machines1 air conditioners1 heaters1 45s1 recordingdevices etc6

4he global mar-et for household appliances can be split into t/o parts6%6 Mature markets (Western Europe, North America, Japan and

Australia/New Zealand) : opulation gro/th is lo/6

Sales are dominated by replacement products6

7onsumers are more conscious about Green aspects of every

product6(6 Growth markets (Africa, the Middle East, Eastern Europe, Latin

America, Southeast Asia and hina) : 8apidly rising standards of living6

Gro/ing middle class per capita income6

,igher economic gro/th6

GLOBAL MAOR HOME APPLIANCE PLAYERSWhirlpool 9G #lectronics

,aier SamsungBosch!Simens #lectrolu

MIdea

Com!a"# O$er$%ew: &h%r'!oo'

Whirlpool ;W,8< a "S based company 1is one of the /orld’s leadinghousehold appliance manufacturers1 /hich speciali2es in laundryappliances1 refrigerators and free2ers1 coo-ing appliances1 dish/ashers1miers1 and other portable household appliances6 4hese householdappliances are sold under various brand names1 including Whirlpool1Maytag1 =itchen Aid1 >enn!Air1 Amana1 8oper1 #state1 Admiral1 Gladiator1Inglis1 Acros1 Supermatic1 7onsul1 and Brastemp6

Whirlpool has largest mar-ets share in "SA6

"nder 4he guidance of 7#? Mr6 @avid Whitman1 Whirlpool could see theopportunities in gro/th mar-et and could conclude to control own destin! and shape the "er! nature of #lo$alisation%

VISION: 4o integrate geographical businesses so that the best

epertise can be transferred and leveraged upon all operations/orld/ide6

G'o(a' Strate)%es a*o!te* (# &h%r'!oo':

%6 #ntry Strategies :

Whirlpool and Global Strategy age (


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#urope: A+,u%s%t%o" of @utch consumer goods giant1 hilips

#lectronics6 Asia: o%"t $e"ture /ith ve Asian manufacturers for refrigerators1

/ashers1 air!conditioners and micro/ave ovens6

(6 Branding : Whirlpool prime motive /as to promote itself as single Global brand6

E): Spent %C& million in #urope for its branding after acDuiringhilips6

A successful single global brand /ill help in easy acceptability of ne/

products6

C6 7entralised urchasing :

It helped in controlling the price of the ra/ materials Eumber of suppliers /ere reduced by &'F ; from %'' to +''apan1"SA1#urope

H ,igh roduct Juality 9atin America >apan1"SA1#urope

& #cellent After slaes service 9atin America !

Whirlpool and Global Strategy age C


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4his helps global company to have broad positioning of their products andmode of service selection6

Be"e1ts 2rom )o%") G'o(a' Whirlpool has reduced its costs of 8K@1 manufacturing1 and service

by locating plants and other operations in lo/er cost locations suchas 7hina1 Meico1 and oland6

Management integrated the activities of regional subsidiaries so that

Whirlpool’s most advanced epertise in appliance technology1production1 and distribution could be shared /ith the rm’s division’s/orld/ide6

Whirlpool is a leading eemplar of ho/ globalisation revives declining

sales and optimi2es cost structures6 It has developed internationalvalue chains that minimi2e epenses1 leading to higher prots6

3uest%o"s

4- &h%r'!oo'5s market%") )oa' %s to 'e$era)e resour+es

a+ross (or*ers- How %s th%s e$%*e"t %" %ts market%")

a!!roa+h6

As evidenced on the Whirlpool’s international /ebsites1

A similar Lloo- and feel Lof high Duality is maintained1 and

satisfaction is consistently advertised6 ,o/ever1 products aredesigned specically to meet individual country and cultural

demands6 4he high standard for each particular demand is met through this

Lloo- and feel of Whirlpool6 Because of this similar overall structure of the product1 the basic

resources used in production /ill be the same across the board1although the individual functions /ill be slightly di3erent6

7- The +ha''e")e 2a+%") &h%r'!oo' %s "ot o"'# e8ter"a' %"

+ater%") to 'o+a' +ustomer5s "ee*s wor'*w%*e9 (ut

a'so %"ter"a' a'' the re)%o"a' a"* 'o+a' u"%ts ha$e to

;(u# %" ; to the )'o(a' $%s%o" -&hat t#!es o2 !art%+u'ar%ssues


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value to consumers1 WhirlpoolNs president said6 According to these/ords from ,enry ?6 Marcy1 /e can -no/ the internal factors

Innovating in itself is a challenge because it reDuires investment in

8K@6 ?f course1 increased investment is diOcult /hen the cost of manufacturing in regions li-e the "6S6 is so high6 ulling out some

more useful facts1 Some study revealed that eternal overhead costs eperienced by

"6S6 producers add at least ((6H percent to unit labor costscompared to "6S6 trading partners6 Another challenge is that astodayNs manufacturers try to branch out to other mar-ets1 certaininternational barriers ma-e it hard to compete6E): "6S6 manufacturers of hair clippers1 for eample1 canNt sell theirproducts to 7hina /ithout paying a H'!percent import tari31 /hile the"6S6 tari3 on the same product is only H percent1 he said6 Also1#uropean advocates are pushing to ban the use of ,u3s1 /hich

discriminate against American!style refrigerator designs that heavilyrely on the refrigerant6While challenges certainly eist in todayNs competitive landscapeP/hether on a global scale or at the local retail levelPMr6 Whitmanconcluded that it all comes bac- to innovation and di3erentiation6

Whirlpool has thrived through sensitivity and commitment to

consumers diverse cultural and economic setting around the /orld6 As part of its innovation strategy1 cross regional teams collaborate to

adapt Whirlpool o3erings to local mar-ets #amples li-e

Spanish /ant refrigeration capacity for meats6

British /ant /ell!constructed units6 $rench /ant refrigeration capacity for fruits and vegetables6

Germans care about environmental features6

@anes spin!dry clothing6

Italians line!dry clothing and care about child safety features6

Indians /ant a high level of cleanliness1 /hiteness Q purity6

4he appliance Industry can leverage global eOciencies in terms of

appliance technology1 production and distribution6 ,o/ever tailoringappliances to local mar-ets is also important1 as eemplied above6 4hus the industry demands the integrated approach R global and

local0regional6

>- NE& MAR0ET TRENS IN HOME APPLIANCE as !er HomeA!!'%a"+e Ma"u2a+turers-

4he belo/ mentioned products are not under the product portfolio of Whirlpool 6It has to further diversify itself to cater to the ne/ demand andopportunity6

I- Sma'' A!!'%a"+es : 7onsumers /ant appliances that are timesavers1 are convenient to use1 provide easy clean!up1 are stylish1

have multiple applications1 promote healthy coo-ing and maintain ahealthy environment in the home6

Whirlpool and Global Strategy age &


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4here is gro/ing trend to/ards the use of cordless electrics in the-itchen6,igh on trendy list are: (rea* makers9 r%+e +ookers9 sa"*w%+hmakers9 +o?ee )r%"*ers@m%''s a"* es!resso@+a!!u++%"omakers6

II- PERSONAL CARE : In the personal care category1 trends includethe introduction of a /ide selection of massa)ers9 !'a,ue1)ht%") e'e+tr%+ tooth(rushes a"* steam ha%r ro''ers-Massagers are the heavy hitters in this category since so manyhomeo/ners try to maimi2e leisure time /ith strenuouseercise0tness programs1 gardening and catching up on householdchores resulting in tired1 achy muscles6 ersonal care products are al/ays popular6 $rom hair care productsto irons1 they help improve your appearance1 pamper your body andsave you time6

III- /oo* &aste D%s!oser : #ach year in the "nited States1 millions of tons of food /aste is truc-ed to landlls6 ?nce there1 it Duic-lydecomposes and produces methane1 an environmentally harmfulgreenhouse gas that is at least (% times more harmful than 7?(6$ood /aste disposers provide a convenient and environmentallyfriendly alternative to transporting leftovers to landlls6 lus1capable /aste/ater treatment plants can even recycle food scrapsinto energy and fertili2er6 4hrough this environment benecial product can be easily promoted

to Green conscious customers6

Co"+'us%o":

4he Whirlpool 7orporation is a strong company /ith a solid strategy as itsbase6 $or many years Whirlpool has been a leading manufacturer andmar-eter of home appliances1 at home as /ell as abroad6 With the everincreasing globali2ation of our economy1 Whirlpool /ill need to treat eachof its foreign mar-ets as a separate mar-et /ith its o/n separate needsand identity6 4o gro/ and to remain successful and capitali2e on the manygro/ing /orld mar-ets1 Whirlpool has1 and must continue to epandglobally6 While epanding1 Whirlpool must continuously evaluate andassess its performance and direction so that it may continue as a globalmar-et leader in the appliance industry6

Whirlpool and Global Strategy age

Whirlpool and the Global Appliance Industry

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