Major Appliance and Whirlpool
Whirlpool The world is experiencing a third wave in the economy and many changes are taking place. One of these changes is the growing corporation that decides to go global. Most U.S. companies, both large and small, are rapidly acknowledging the necessity of global marketing. The demand for foreign products in the fast-growing economies of Europe, South America, Asia, and Pacific Rim nations offer one example of the benefits of global thinking. One company that has adapted to this new economy by globalizing has been Whirlpool.
In 1989, Whirlpool Corporation embarked on an ambitious global expansion with the objective of becoming the world market leader in home appliances. However, by the mid-1990s, serious problems had emerged in the company’s international operations. Whirlpool’s European profit fell by 50%, lost $70 million in Asia, appliance sales in Brazil plummeted by 25% although the company invested hundreds of millions of dollars to modernize operations. In response to these problems, Whirlpool began to question the problems and called for the global restructuring effort (Johansson, 2000).
What went wrong with Whirlpool’s global strategy? Did Whirlpool have enough understanding of how to create a global strategy? Was the appliance industry more suited for regional than global? What are some key success factors in appliance industry that Whirlpool did not have? Was it possible for Whirlpool to identify the problems and reacted earlier? In this case study, I intend to answer all of these questions that are mentioned above regarding to the appliance industry and Whirlpool Global strategies. There are four separate sections in this paper- the first two questions are related to the appliance industry in general and the last two questions regard to specific questions on Whirlpool global strategies.
1. To What extent is the appliance market regional rather than global?
During the last half of the twentieth century, many
In 1989, Whirlpool Corporation embarked on an ambitious global expansion with the objective of becoming the world market leader in home appliances. However, by the mid-1990s, serious problems had emerged in the company’s international operations. Whirlpool’s European profit fell by 50%, lost $70 million in Asia, appliance sales in Brazil plummeted by 25% although the company invested hundreds of millions of dollars to modernize operations. In response to these problems, Whirlpool began to question the problems and called for the global restructuring effort (Johansson, 2000).
What went wrong with Whirlpool’s global strategy? Did Whirlpool have enough understanding of how to create a global strategy? Was the appliance industry more suited for regional than global? What are some key success factors in appliance industry that Whirlpool did not have? Was it possible for Whirlpool to identify the problems and reacted earlier? In this case study, I intend to answer all of these questions that are mentioned above regarding to the appliance industry and Whirlpool Global strategies. There are four separate sections in this paper- the first two questions are related to the appliance industry in general and the last two questions regard to specific questions on Whirlpool global strategies.
1. To What extent is the appliance market regional rather than global?
During the last half of the twentieth century, many
References: Babyak, Richard J, “Strategic Imperative,” Appliance Manufacturer, Feb. 1995. C. Quintanilla and J. Carlton, “Whirlpool Announces Global Restructuring Effort,” Wall Street Journal, 19, Sept. 1997:A3, A6 Janesurak, Joe, “South American Sales Co.: Linking the Americas, Europe,” Appliance Manufacturer, Feb. 1995 Johansson, Johny, “Globalization Headaches at Whirlpool” Global Marketing, 2000, p85 Vlasic, Bill and Zachary Schiller. “Did Whirlpool gone Too Far Too Fast?” Business Week, 24 June 1996. Weiss, David D. and C. Gross, “Industry Corner: Major Household Appliances in Western Europe,” Business Economics, Vol. 30, Issue 3, July 1995: 67.