Frigidaire Case Analysis

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Frigidaire Case Analysis

Problem Definition

Frigidaire had problems with the difference in the front loading and the top loading machine with the big difference being the price. Consumers wasn't willing to pay the high cost that Frigidaire had for the front loading machine verses the top loading washing machine. The major problem is the price of one unit and the lack of price savings from this energy/water savings over time to compensate for this higher price point.

Analysis of Case

Frigidaire intended to use the front loading washing machine to expand its position in the market and wanted to establish itself as the industry leader in energy-saving, environmentally sound front loading machine. The initial sale for the new front loading washing machine dropped below the forecast according to (exhibits 6 & 7). Consumers didn't become interested in the front-load machine until the price lowered. The team wanted to give incentives to the consumers and dealers. Their researched showed that a close relationship would be the key to gaining market share and highlight the advantages of the front load washing machine over the top load washing machine to the consumers as well as the dealer.

Develop Alternative Solutions

Frigidaire should invest more money in the research of the front loading washing machine to get the price down to the top load washing machine price. By investing more in research and development for the front loading washing machine this will help produce lower production cost that will help increase the market share. Frigidaire should negotiations with Sears to help take advantage of their section of the market. This will help increase the front loading market share as well, based on the fact that Kenmore has the largest percentage in market share as of 1996 (exhibit 3).

When the DOE delayed the release of the regulations about the energy-efficient appliance this decreased the demand for the front load washing machine. This...
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