I Situation Analysis
Whirlpool Corporation is a worldwide manufacturer and marketer of home appliances. It manufactures and markets mainly appliances and appliance-related products, primarily for home use. The Company has manufacturing plants in 13 countries, and is also an owner of eleven brand names. Whirlpool sends its products to distributors and retailers in more than 170 countries. Its principal products are laundry appliances, refrigerators and freezers, cooking appliances, dishwashers, and other small household appliances. Approximately 10% of its unit sales volume is purchased from other manufacturers for resale by the company. Whirlpool also produces hermetic compressors and plastic components, primarily for the home appliance and electronics industries. Market in the US is mature, and corporation is trying to expand and gain larger market share in regions such as Europe, Latin America, and Asia. Here are the short summaries for the industry of those regions:
In the early 1980s, there were approximately 350 producers of household appliances in Europe. With consolidation in the industry, by the late 1980s the number had shrunk to about one hundred. By early 1995, it was estimated that five of the companies, including Electrolux (with a 25% market share), Philips Bauknecht, and Bosch-Siemens, controlled over 70% of the market.
Latin American Industry:
The economic stability in Latin America in the 1990s made the region an attractive growth proposition. The appliance makers hoped that the days of hyperinflation and economic mismanagement were over, and they were pleased to see that governments were reducing tariffs.
Asia, the world's second-largest home appliance market, was also the fastest growing market of the 1980s. By the mid-1990s, it was growing at a rate of between 8% and 12% annually, a rate that was expected to continue well past the year 2000.
In Europe its main competitors are Electrolux, Philips Bauknecht, and Bosch-Siemens. Overall, it global competitors include Maytag and also General Electric. Some of Whirlpool's American competitors are moving more production to Mexico. General Electric has moved production of some low-end models to its joint venture partner in Mexico; Maytag is shifting some refrigerator production from a factory in Illinois, which will close, to a new one in Mexico; and Electrolux will close its refrigerator plant in Greenville, near Grand Rapids, to move production to Mexico. This is why expansion is closely looked at as an option for expanding.
The appliance industry is a very dynamic environment. It is not very easy to enter the market because there are already many huge companies, which are playing main role in this type of the business. In order to be successful, Whirlpool has to be costumer oriented, which means that, it has to be innovative and has to produce as high quality products as possible all the time.
II Opportunities and Challenges
Whirlpool was founded in 1911 as The Upton Machine Co. in St Joseph, Michigan, to produce an electric motor-driven wringer washer. The company merged with The Nineteen Hundred Washer Company in 1929 and began to sell their first automatic washing machine through Sears, Roebuck & Co. in 1947. The Whirlpool brand was introduced in 1948 and steadily built a strong retail relationship with Sears. Through a series of acquisitions and mergers, the company emerged as a leading force in the U.S. appliance industry with annual revenue reaching $2 billion in 1978. Whirlpool's headquarters was in Benton Harbor, Michigan. As of 1998, Whirlpool Corporation claimed to be the world's leading manufacturer of major home appliances. The company manufactured in thirteen countries and marketed its products under eleven major brand names (including Kenmore, Sears, KitchenAid, Roper, Inglis, and Speed Queen) to over 140 countries.