- Closing Case Whirlpool A Global Vortex Whirlpool Corporation Started Its Journey Back In 1908 With Same Year Whirpool 1 (85.72 KiB) Viewed 70 times
- Closing Case Whirlpool A Global Vortex Whirlpool Corporation Started Its Journey Back In 1908 With Same Year Whirpool 2 (80.52 KiB) Viewed 70 times
CLOSING CASE Whirlpool: A Global Vortex Whirlpool Corporation started its journey back in 1908, with same year, Whirpool's earnings increased by 38 percent. In just 15 employees, as a manufacturer of household equip 1992Whirlpool acquired Sapad of Argentina and Whirlpool ment. Over a century later, it is now one of the weeld's leading Hungarian Trading was established in Hungary manufacturers of home appliances, with 92,000 employees In the mid 1990's, under Whitwami's aggressive glo and annual sales revenue of approximately 521 billion balization strategy. Whirlpool formed JVs in China and in To meet the growing customer demands in the India to enter the Asian market. However, in 1996, despite United States, the
company's first merger was in 1929 with India and China being its largest markets, Whirlpool's rev. Nineteen Hundred Washer
Company, New York. The merger. enues from its Asian operations accounted for only 6 percent also known as the Nineteen Hundred Corporation, flourished of total revenues, and the
company incurred losses worth during the Great Depression, and allowed the companies to 570 million. Due to the losses incurred, and as a part of its experiment with new products and innovative technologies restructuring strategy, Whirlpool withdrew two of its JVs in It was in 1949, after World War II ended, that the owners Lou 1997. By late 1999. Whirlpool faced difficulties in driving and Fred Upton officially changed the
company name from growth in its global businesses. Despite adopting various Upton Machine
Company to Whirlpool Corporation. With operational initiatives to cut costs and achieve economies the brand's continued success, its product portfolio also grew of sale in its operations. Whirlpool's revenues, profits, and through mergers with various well-known brands like Seeger market share were stagnant Refrigeration
Company and RCA's air conditioning. In addi Whitwam believed that innovative products were the tion, Whirpool entered into a partnership with Brasmotor solution, and would command premium prices and build cus S.A., in Brail, its first foray into the foreign market. tomer loyalty. As part of the
company's competitive strategy Whirlpool's former CEO David Whitwam, through his he emphasized the need to develop an organizational cul determination to make Whirlpool a global brand, has been ture that would spur Whirlpool's growth through consumer credited with integrating the international businesses and focused innovation. And he did not want it to be limited to a Creating a truly global
company and not just a series of inde few people in the organization. Appointing Nancy T Snyder pendent operations by revising business goals and strategies as the vice president of leadership and strategic competency Taking over from his predecessor Jack Sparks, Whitwam's development at Whirlpool was a way to ensure all employ goal was to increase manufacturing productivity, reduce ces took part in the creative process. Snyder introduced the costs, and integrate new technology to appliance production.box"graphing tool to allow employees to demonstrate that When he took the helm of the
company, Whirlpool's primary their proposals were something that consumers would want. operations were in North America. But seven years later it backing their arguments with adequate market research expanded its market around the world, with manufacturing The I-box tool allowed the flow of ideas from employees to units in 11 countries. His business strategy was to leverage decision makers all its operations worldwide by bringing the best capabilities Innovation led to the introduction of more products, together in diverse geographical areas to gain competitive but integrating these products into all its markets was dif- advantage. In 1989, Whirlpool acquired N.V. Philips flour ficult and expensive. Whirlpool found that integrating the dering European appliance business worth $1 billion that best technologies and design processes for manufacturing resulted in catapulting Whirlpool to the number one position its products lowers costs. For each product group, it identi in the appliance business worldwide. Unifying the strengths fied the resources and skill sets required, and built develop of both firms, Whirlpool combined the resources and tech- ment centers for that product in the region that aligned to nologies to achieve a breakthrough performance in the global the requirements. It employed the latest technology to allow market. Under his leadership in 1990, Whirlpool formed a seamless communication between the development center JV with Japan's Panasonic Corporation, formerly known as and employees in other parts of the world. For example, the Matsushita Electric Industrial
Company, to produce vacuum development center for Whirlpool's refrigeration products is cleaners. In 1991, for the first time in the history of the com- in Benton Harbor, but employees from China and Italy, who pany, full-time employees were peovided stock options. In the are a part of that development center, can work remotely as
CHAPTER 12. STRATEGIES FOR ANALYZING AND ENTERING FOREIGN MARKETS 3 virtual teams--a concept that has proven to be quite success entirety. However, at Whirlpool, the development of strate ful for Whirlpool gies involves striking the right balance between regional and While a large product portfolio does meet the varying national business values to ensure effective and efficient run customer preferences, it poses a logistical issue as product of operations globally. Whirlpool aims to foster coopera- sizes are different and warehousing and shipping won't be tive business ethics among regional operations and enhance viable for all locations. Thus, regional manufacturing centers cross border teamwork to strengthen its position globally, is a crucial requirement for Whirlpool. It is able to ensure For example, the
company may use compressor technology that the core processes of manufacturing and technology from its Brazilian affiliates or insulation technology from its are the same even though the configurations, dimensions European businesses while gathering manufacturing and and features of home appliances like refrigerators, washing design expertise from its U.S. operations machines, and ovens are tailored to the individual markets. Whirlpool's strategy is to understand the customer and As a part of the global strategy. Whitwam began acquir. translate that understanding in the service offered in terms ing regions to understand customer preferences and offer of design, feature superior products and after sales support them the best appliances. To conquer the Southeast Asia Mare Bitzer, the current CEO, believes in rethinking and region, Whitwam implemented a central distribution system readjusting business strategies at regular intervals to ensure in Singapore. This center functions as a design, engineering that the nature of the business aligns to the needs of the cus and product development hub that has access to the opera tomers in a dynamic global business environment tions of all the manufacturing centers across Asia. In 2011, while setting up its operations in the Asia-Pacific region Whirlpool faced challenges such as cultural differences in case
Questions business ethics, availability of quality resources, and identify 12-27. What are the strategies used by Whirlpool in ing suppliers that matched the
company's criteria of 'Whirl- becoming a global
company? pool Supplier Quality System. It used the sourcing strategy 12-28. What are the reasons for the mergers and acquisitions development (SSD) process to find suppliers who would in the US and European appliance industries? match the
company's style of work and meet the
company's 12-29 Whirlpool's former CEO Duvid Whitwam encour quality and cost requirements aged low-cose strategies before going in for big Whirlpool's vision is to be represented as one global projects. Evaluate the
statement brand
company. Unifying focus of the brand's vision, mis 12.30. Discuss Whirlpool's strategic approach to world- sion, and objectives is communicated to every employee of wide expansion. Given the conditions of the exter Whirlpool across the globe. Whirlpool's key objective is to be in the top 25 percent of publicly held companies in terms nal environment, do you think this approach is correct? Explain of total returns. The drive of the
company lies in offering shareholders great value through given economic cycle. Sre Maraca, R. (1994) The Right Way to Go Global: An Interview Usually, top-level managers view an industry as an with Whirlpool CEO Duridhiwa." Hernand Business Reviewed assortment of various specialized businesses, cach with its March 10, 2019, Welcorp.com.bpwww.polcorp.com own pros and cons, and believe that firms cannot operate wyceed March 27.2049. Muller, A. and Hatch, N. (2012. Opera globally as a unified entity. Thus, while developing busi- innor help Whirlpool Cappottice discover new market opportu ties. Sy & Leader 4.36-42- Whirlpool Corporation (2016 ness strategies, regional managers tend to look at different Whirlpool AR 2018. pp. 15-80. Whirlpool's biggest challenge is aspects of the industry locally rather than the
company in its rapidly changes in global market CEO Belder, July 22, 2016,