The estimated $228.9 billion in the year 20092 global household appliances market can be described as a global industry in condition that the coordination and integration of sourcing, manufacturing, operations, research and development and marketing activities across multiple world regions and countries is accomplished. Enterprises capable of harnessing the benefits of strategic global locations and integrate them into one single global vision are the ones that can be described as global. The industry was invented and still dominated by European and American key manufacturers. However, Asian manufacturers from Japan, Korea, and China are enforcing a strong and rapid growing competition in the last few decades. In terms of global industry aspects, over 65 percent of the global appliances sales are through specialty retailers, the rest is divided between hyper markets, department stores and general merchandisers.
Multinational manufacturers experience high fixed and exit costs. The majority of manufacturers does not forward integrate and usually depend on large retailers to distribute their products while retailers tend sometimes to backward integrate. Shedding the light on the US, Europe, and Asia household appliances market, we find that the saturated and highly-competitive market in the US has washing machines, vacuum cleaners and dryers as the most frequently-bought categories. The oligopolistic market has consolidated into top four players; Whirlpool, General Electric, Electrolux, and Maytag with 80 percent market share for the four corporations combined. Other competition in the US includes Korean brands especially in specific categories such as microwave ovens. Japanese foreign direct investments in the US in the appliances and electrical machinery were aggressively competing in providing high quality goods for fewer prices than local manufacturers. Whirlpool led the American market and achieved a growing market share from 1995 to 2000 in categories including; dishwashers, Microwave ovens, and refrigerators. The company’s share is most threatened by Electrolux with growing shares in categories like; dishwashers, and ranges. In the world’s top home appliances market of Europe, Categories expected most to grow are microwave ovens and dishwashers; while the slowest are refrigerators and freezers. Many European manufacturers are shifting to lower-wedge countries to produce in order to save cost.In terms of competition and consolidation, Europe was moving towards an oligopolistic scene in the mid 1990s. Appliances market by unit was dominated by less than a handful of main manufacturers; Electrolux (22.5 percent), Bosch-Siemens (15 percent), Whirlpool (14 percent) in the year 1994. Mentioning few integration examples; Electrolux acquired White of the US, and Zanussi of Italy, Maytag acquired Chicago of the US, General Electric formed a joint venture with GEC of the UK which is the owner of the brand Hotpoint.
The new ambitious Korean entrants were adding to the tough competition and dominated the microwave ovens category, unlike the American market, European appliances market is highly regionalized with diversified preferences across countries. In Asia; the Asian financial crises occurred in the year 1997 affected most Asian economies with a downturn of consumer demand and trust in the area. Whirlpool’s competitors were also not far from this challenge. General Electric for example reported challenges in its Asian market due to currency exchange and interest rates in the region in its 1997 annual report. The world’s second largest and fastest growing home appliances market can be considered as a very attractive market to develop and penetrate. Estimated to reach $30.3 billion in 2003, the market is divided into six main categories; washing, refrigeration, and cooking appliances, dishwashers, heaters, and vacuum cleaners. Over a third portion of the market is with the cooking...
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