White Goods Case

Topics: European Union, Profit margin, European Economic Area Pages: 4 (1185 words) Published: August 3, 2013
European ‘white goods’ market is ideally large but its fragmented into many different small markets. The difference comes in the form power connections, consumer tastes etc. The only constant aspect is the product size , that is, its relatively small in consideration to U.S and Australia. There is a significant change in the tastes of consumers but the size is small. With the emergence of European Union(EU) as a single market, the ‘white goods’ industry is equipped with:- * Standardization which in turn cuts cost .

* Reduced barrier to internal trade.
* Reduced difficulties in cross border advertisements.
Whirlpool which holds a market share of 13% is seeking to increase its markets share in the European market. It has a clear view of the European white goods market. The market is characterized by consumers who spend significantly on appliances and the profit margin is much lower when compared to U.S and Australia this is due to cost inefficiencies due to individual national markets. The key strategy adopted by Whirlpool is the acquisition Philips Industries which brings in cost benefits due to Philips Industry’s production facilities and distribution systems. Through the acquisition the company has got products for each segment, namely, Bauknecht, a premium product brand ; Philips Whirlpool, a middle segment product brand ; and Ignis, its low–price product brand, apart from the brand Whirlpool. The company also bought in many changes in terms of logistics, production facilities, consumer service operations. The main competition comes from Electrolux which had also acquired AEG. Through this acquisition it increased its market share by 6% and equals Whirlpool in the global white goods market. It also competition from General Electric and Maytag. IDENTIFIED PROBLEMS

* Primary problem:
The main problem is that the company is facing...
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