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The Nature of Whirlpool’s Domestic and International Business Environments. The manufacturer of home appliance firm. Manufactures washers, dryers, refrigators, dishwashers, freezers, rangers, compacters and microwave ovens.
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The Nature of Whirlpool’s Domestic and International Business Environments
The manufacturer of home appliance firm. • Manufactures washers, dryers, refrigators, dishwashers, freezers, rangers, compacters and microwave ovens. • Sells these in 170 others under brand names such as Whirlpool, Maytag, Magic Chef, Jenn-Air, Amana, Kitchen Aid, Kenmore Brastemp. • In 2006, Maytag Coorporation joined to Whirlpool Coorporation.
Whirlpool is located in Michigan in U.S.A • It has a global market in all over the world. • Whirlpool established the intranet sites in 2001-2002.
GLOBALIZATION is the only solution on marketing for all the firms
WHIRLPOOL’S ACTIVITIES WITHIN INTERNATIONAL BUSINESS ENVIRONMENT
General Overview of Whirlpool Whirlpool manufactures & markets a range of appliances & related products primarily for home use; • laundry appliances, • refrigerators, • cooking appliances, • dishwashers, • mixers, • other small household appliances(driers, microwave ovens, etc…) • hermetic compressors for refrigeration systems • 70.000 employees, • Manufacturing Areas located in 12 countries under 13 brands;( KitchenAid, Bauknecht, Roper, Maytag, and Magic Chef) Geographic Area that Whirlpool operates are; • North America( 60%), Europe( 20%), Latin America(15%), Africa, the Middle and Asia(5%) • Major Competitors; Bosch Siemens, LG, Samsung, and Haier
Advantages that the firm utilized through International operations Factors driven the global expansion • Reduces R&D, Manufacturing by locating low cost regions • Flat, declining sales in US • Standardazation of existing products, parts in world-wide to make the company globally recognized brand
The company took advantage of International Operations by; Driving Major forces are; cost reduction and productivity initiatives, increased sales volume, brand names, innovation, lower price/mix North America( high sales volume, lower price, lower costs) Sales in US rose 4% to $2.6 billion, driven by an 8% increase in unit shipments The region reported an operating profit of $136 million (2009) compared to a loss of $20 million in the previous year(2008) Unit shipments in U.S. industry to increase between 2%–4% in 2010
The company took advantage of International Operations by; Europe (lower costs and higher price/mix, lower sales volume) • Sales gained 2% (currency effect), sales declined 9%, • Overall industry unit demand during the quarter decreased 8%. • The region reported an operating profit of $19 million compared to $2 million in the previous-year • The company expects industry unit shipments for 2010 to be close to the 2009 levels
The company took advantage of International Operations by; Latin America (high sales volumes, productivity and favorable foreign currency fluctuations, lower monetization levels of certain tax credits and lower price/mix) • Sales shot up 52% to $1.2 billion;( (currency effect ) excluding currency effects, the increase was 28%. • The company anticipates appliance shipments in Brazil to go up 5%–10%.
The company took advantageof International Operations by; Asia (higher unit volume, lower price/mix) • Sales advanced 34% to $188 million; excluding currency effects, the increase was 27%. • Operating profit increased $3 million to $6 million from the prior year. • The company anticipates industry unit shipments in Asia to increase by 3%–5% in 2010.
Expectations for 2010 /demand side regarding regions • In 2010 sales is expected to be driven heavily by replacement market for appliances • Revenue expects industrywide sales of refrigerators, dishwashers, washing machines and other appliances in the U.S. to increase by 2% to 4% • New housing starts in the U.S., one of the primary drivers for appliance demand, will rise about 27% from 2009, while existing homes to increase about 7% from 2009. • In Europe, Whirlpool predicted industry-wide appliance sales in 2010 will be flat with 2009. • Whirlpool expects sales in Brazil--a key market for the company- -to increase by 5% to 10% and sales in Asia to rise by 3% to 5%.
Innovation Differentiation of appliances market; • Among manfacturers it began to known as white business, in which appliances percieved by product leading lower price levels due to increased competition • Launched a Campaign to differentiate firm’s offerings by emphasizing value added and innovative aspects of products • cross regional R& D teams collobrate on innovations to adopt oferings to meet local demans in diverse international environment( italians often line dried their clothings, while the Danes spin dry their clothes • Developed a microwave ovens that grill stakes, bake pizzas • Invented a washer with a built in sensor making all decisions for the user automatically ( detects the size of the load and autimatically picks the water level, spin speed, ant the type of wash cycle)
Going Global But How? • Vision of Whirlpool : “Every Home… Everywhere… with Pride, Passion and Performance”
Going Global But How? • Without compromising geographical uniqueness, there is a differentiation of products being sold in each country. • “All roads to revenue lead to the customer.” The needs of customers are extremely important, innovative actions in direction of fulfiling those needs.
Global Local Markets • Culture is a distinctive factor that affects the consumer behavior at most. • After culture; • In appliance business climate is also a very important factor. • Family, • Lifestyle, • Economic Situation can be ordered.
Success In Global Local Markets • To reach success in the distinct local markets; • Deep Research • Strong Management • Contact with Households (Feed-back) is required. • Sustained growth of the corporation can be provided and maintained by a strong research and management. That’ s the priority of Whirlpool in creating a new product.
Brazil Case “Ideale” • Households in Brazil, especially ones with low income level, wanted a low-priced refrigerator. • Directors with a strong research method developed a low-cost, medium level refrigerator called “Ideale”. • This new product also sold in China and India the countries that show economic similarities with Brazil.
Examples of Local Market Products • In Spain customers care about the refrigerator’s capacity for meats.
Examples of Local Market Products • In North America, energy- and water-efficient washers developed.
Examples of Local Market Products • In Britain, people want a well-constructed refrigerator. Splited shelves and cells for each type of food is preferred.
Examples of Local Market Products • In India white color is the symbol of purity and freedom. People give importance to the clothes’ whiteness. That’s why the washing machines should clean the stain completely.
To what extent is the appliance business local rather than global? • Customized products, local responsiveness, minimized political and exchange rate risk are the advantages of localization. • Product customization and competition make the appliance business local rather than global.
Appliance Business: Local or Global • On the other hand, centralization of control, reduced costs, coordinated activities and quick product development are the advantages of globalization. • Maximizing the profits and decreasing the cost of production make the appliance business global rather than local.
Competition • Growing competitive Threat from Abroad • Haier, China’s largest appliance maker, established a production base and distribution centre in South Carolina in the US. • The worlds 5th largest kitchen appliance maker, Haier has captured nearly 20% & 50 % of the markets for window air conditioners and small refrigirators, respectively. • Now it is expanding into full size refrigirators. • Haier’s moves are especially troubling given that Whirlpool generates very little of its sales from Asia,the world’s most populous region, where Haier already has a strong presence. • Ironically, Haier’s South Carolina factory is creating new jobs in a state that witnessed a mass exodus of textile jobs to factories in China. • South Carolina recieves foreign direct investment from various countries and is home to four Japaneses and 18 European facilities.
Competition • Management wants to expand its sales in emerging markets while defending the home market from global rivals from China and elsewhere.. • The firm seeks to continue to leverage and enjoy all the benefits of international business.
Competition Industries Where Whirlpool Corporation Competes • -Appliances • -Consumer Products Manufacturers Current Situation • -Whirlpool’s share of the worldwide refrigerator and washing machine market stood at 15.5% and 16.5% respectively, the highest in the world • -By 2007, Whirlpool’s annual sales revenue in the Chinese market accounted for less than 2% of its global sales revenue.
Competition Actions for Competition Strategy • 2005 re-location of its China/Asia-Pacific headquarters to Shanghai • Joint-venture with Chinese local producers (venture with Hisense-Kelon ,900 million Yuan of investment) • Introduction with new products in the Asian Markets • Whirlpool enter with its air conditioners to the Chinese market when it signed an exclusive deal with Sunning, a leading appliances retailer in China.
