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Y About The Case«


Founded in 1911 as the Uptron Machine Co. in St Joseph, Michigan,
to produce an electric motor driven wringer washer..

It merged with 1900 Washer Co. in 1929 & began to sell their first
automatic washing machine through Sears in 1947.

Whirlpool brand was introduced in 1948.Through a series of


acquisition & mergers , it emerged as a leading force in US
appliance industry in 1978.

Industry classification- cooking, refrigeration, laundry & other


appliances.
V About The Case«
David Whitwam joined Whirlpool in 1968 as a marketing
management trainee, succeeded Jack Sparks as CEO in 1987

In 1989, planned for global expansion to become world market


leader in home appliances.
Whitwam¶s vision-
Standardize the manufacturing processes.
Integrate Whirlpool¶s geographical businesses.

In 1998, Whirlpool Co. claimed to be the world¶s leading


manufacturer of major home appliances, manufacturing in 13
countries, marketing products under 11 major brand names to
over 140 countries.
Ä Problems faced
In 1995, Whirlpool¶s European profits fell by 50%.
Lost $70m in Asia in 1996 & $62m in 1997.
Appliance sales plummeted in Brazil by 25% in in 1998.

It began a global restructuring effort.

In 1997, decided to cut 10% of its global workforce over the next 2
years & pull out of 2 joint ventures in China.

In Latin America 3500 jobs were abolished, & significant


investments were made to upgrade plants & product lines.
:
After the optimization of the early 1990s, what went
wrong with Whirlpool¶s global strategy?

‡ Inappropriate environmental scanning


‡ Due to large variation in demands in each country,
proper standardization could not be implemented.
‡ Gap between estimated & actual demand.
‡ Over ambitious, Competition from local brands,
Low margins(economical instability, interest rates,
preference for local brands, poor distribution
system in China,Labor problems in Asia).
±
Was the company overly ambitious?

Yes, there was overestimation of demands,


especially in Asia.
‡ 4 Joint ventures in China.
‡ Improper consumer behavior study. (Saving
economy, preference for local brands)
4
Was there a lack of understanding about how to
create an integrated global strategy? Or, were the
problems the result of changes in the competitive &
economic environments in Europe, Asia & Latin
America?
‡ There was a lack of understanding & the changes
were responsible for the problems in implementing
the strategy.
‡ Due to diversity in the requirements , they could
not find a way to standardize their product &
processes.
K
Should Whirlpool have foreseen the problems &
reacted earlier?

Yes, they could have standardized the processes


earlier.
‡ Should not have been over ambitious.
‡ More efficient marketing research (consumer
behaviour) should have been implemented.
‡ Could have planned for cost cutting earlier.
THANK YOU !