Transition at Whirlpool Tatramat
Erin Gedeon
Project Three
Global Business Management
November 28, 2012
1. There were good points made in the case as to why Whirlpool decided to start a joint venture with Tatramat. These reasons were the global strategy of Whirlpool and the economic problems of Tatrmat. Though these are good reasons, I would have recommended that the two do not join in a joint venture. Instead I would have recommended the greenfield investment. A greenfield investment is when a parent company starts a new venture in a foreign country by constructing new operating facilities from the ground up. I believe this would have been a better route for Whirlpool because the goals of Whirlpool and Tatramat were completely different. The goal of Whirlpool was a gradual increase of its share in the joint venture with the aim of taking it over. Tatramat was already in a bad economic state so I don’t think Whirlpool should have taken that on. Whirlpool could succeed on its on because it is such a well known brand name and known for quality products. Many developing countries will offer tax breaks to companies involved in greenfield investments. Not only does it create new long-term jobs in the foreign countries by hiring new employees but the countries also offer subsidies and other types of incentives. This would have been a good route for Whirlpool instead of a joint venture with Tatramat. 2. In the decision making process, I would have recommended a direct acquisition of Tatramat for Whirlpool rather than a joint venture. Tatramat had less power in the joint venture to begin with, so Whirlpool should have just taken the company over completely from the beginning. Tatramat would only be allowed to nominate one person to the board of directors and two other board members while Whirlpool had double that amount. When the joint venture came together, the original Tatramat company split into three separate entities: the joint venture Whirlpool-Tatramat, Tatramat itself
Project Three
Global Business Management
November 28, 2012
1. There were good points made in the case as to why Whirlpool decided to start a joint venture with Tatramat. These reasons were the global strategy of Whirlpool and the economic problems of Tatrmat. Though these are good reasons, I would have recommended that the two do not join in a joint venture. Instead I would have recommended the greenfield investment. A greenfield investment is when a parent company starts a new venture in a foreign country by constructing new operating facilities from the ground up. I believe this would have been a better route for Whirlpool because the goals of Whirlpool and Tatramat were completely different. The goal of Whirlpool was a gradual increase of its share in the joint venture with the aim of taking it over. Tatramat was already in a bad economic state so I don’t think Whirlpool should have taken that on. Whirlpool could succeed on its on because it is such a well known brand name and known for quality products. Many developing countries will offer tax breaks to companies involved in greenfield investments. Not only does it create new long-term jobs in the foreign countries by hiring new employees but the countries also offer subsidies and other types of incentives. This would have been a good route for Whirlpool instead of a joint venture with Tatramat. 2. In the decision making process, I would have recommended a direct acquisition of Tatramat for Whirlpool rather than a joint venture. Tatramat had less power in the joint venture to begin with, so Whirlpool should have just taken the company over completely from the beginning. Tatramat would only be allowed to nominate one person to the board of directors and two other board members while Whirlpool had double that amount. When the joint venture came together, the original Tatramat company split into three separate entities: the joint venture Whirlpool-Tatramat, Tatramat itself