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Whirlpool Corporation is the world's leading manufacturer and marketer of major home appliances. The company manufactures in 13 countries and markets products in more than 170 countries under major brand names such as Whirlpool, KitchenAid, Roper, Estate, Bauknecht, Ignis, Laden, Inglis, Brastemp and Consul. Whirlpool Corporation is also the principal supplier to Sears, Roebuck and Co. of many major home appliances marketed under the Kenmore brand name. Internal environment is critical: operation and employees management Internal Environment: Strength and Weaknesses Whirlpool Corporation structure is strategic business units.
It composed of the microwave oven business unit and the global air treatment. The other one is whirlpool financial corporation. In order to increase their profit, they try to reduce their cost. Some of their actions are they closed several plants and streamlined organization in several group. Though the culture of Whirlpool not mentioned explicitly, we assume that the culture of this company give a positive influence to company performance.
The other thing, their future product will be designs as an environmental friendly product in accordance to customer expectations. The marketing strategy of Whirlpool is market driven, and to gain competitive advantage, this company is leveraging a global presence in various regional markets. They also concern market mix of the company that differs of each country. They segmented the market by regional because almost every country has unique preferences that are influenced by environment condition, custom, economic condition, etc.
The goal of technology organization was to develop advance, innovative products and move them to market quickly and competitive. Several functions was organized to achieve that goal, such as: -Global Procurement organization: bought and organized the distribution of all materials and components needed by appliance production facilities. -The Corporate Technology Development: develop product and process technology capabilities and provided technical service to Whirlpool business -An Advance Product Concept unit: develop new product concepts that were identified through market research -The Advance Manufacturing Concepts team: bring new manufacture process, identify and develops simulation tools and best practices to be used on global basis -Strategic Assessment and Support organization: identify and evaluated non-traditional new product opportunities In 1988, Whirlpool has eight manufacturing locations and in 1995 they have 12 plants that located in 12 countries. There are some problems occurring in operation and logistic area, such as manufacturing inefficiency and increasing raw materials cost. In term of reducing cost, they closed some plants in several area and do reshuffled product line in some plants. One of their strategies is to be more customer focused. In order to support the strategy, HR team applied new approach employed cross-functional team within each function with product business teams at the center.
With the new approach they hope the structure will be inline with strategy. 5. SWOT analysis Table 1: Internal Factors Analysis Summary (IFAS) Internal factor Weight Weighted Score Comments R& D. 30 5 1. 50 Company success factor Company culture. 10 4. 40 Environmental friendly product Marketing strategy. 05 3. 15 Customer focused Financial position. 20 2. 40 Low liquidity Global positioning. 30 3. 90 Weak in Asia Manufacture facilities. 05 2. 10 Inefficient manufacture Total Weighted Score 1. 00 3. 45 6. Recommendations Strategy Analysis Whirlpool aims at globalization to obtain more market share in home appliance industry by expanding globally. Another strategy Whirlpool adopted, aiming at maintaining its position as market leader, is technology innovation which is ongoing all along with the development of the corporation. Globalisation Whirlpool develops this strategy in terms of expansion in manufacturing, distribution and enhancing market segmentation. 1). Issues of globalization -Potential benefits of globalization -Outcome of globalization -Actual process of globalization of Whirlpool (including problems occurred) Problems with orchestrating the strategy globally Asia: Five partnerships, products, processes, people and a pan-Asian approach, Three Phases start-up, building and market leadership, T- 4 refrigerators, clothes washers, microwave ovens and air conditioner.
Current operation in Hong Kong and Singapore (headquarter location) and efforts in China and India through JV (for the population). However, in spite of the efforts and huge amount of money Whirlpool invested in Asian market, the financial analysis indicates loss rather than profit. High cost of raw material could be a critical reason. Europe Latin America North America: the most profitable market. Technology innovation The supports from technology group including Global Procurement organization, the Corporate Technology Development group, Advanced Product Concept unit, the advanced Manufacturing Concepts team and Strategic Assessment and Support organization enable Whirlpool to stay on the top in home appliance industry. 2). Relationship between financial statement and strategy implementation -Indication of current and past financial statement -Company goals setting referring to financial analysis 3).
Assessment of strategy of Whirlpool according to our analysis -competitive strategies -functional strategies -major issues facing the implementation of the strategy -How does Whirlpool plan to survive and grow? (Suggestions) Strategic type: defender financial adjustment (investment) and marketing strategy According to our research, the financial strength of Whirlpool is found hard to carry out its task with current strategy. We consider Whirlpool is pursuing growth strategy because, although Whirlpool is already the market leader in home appliance industry, it is trying to be the world wide No. 1 with globalization strategy by emphasizing various markets globally. However, seen from the financial figures of previous years, the performance of Whirlpool was far from its expectation in 1994 and 1995, although the sales were increasing. In addition to several objective factors, such as rising raw material costs and regional economy collapse etc. , Whirlpool neglects some important issues during its expansion.
For instance, in Asia, where considerable perceived profit is located, Whirlpool invested hundreds of millions of dollars but continuing expansion triggered an operating loss. Asia is a promising market with great potentiality, where the population is huge while the labor is cheap compared with Europe and North America. We suggest Whirlpool make specific marketing plan in this market before they invest more money in vain. Whirlpool is suggested to put more efforts on its major markets (Europe, North America) to ensure its market position and profit, meanwhile, the investment in new market to support the globalization strategy should be undertaken cautiously and strategically according to the economy and resource condition and related cultural issues.
Bibliography Thomas L. Wheeler & J. David Hunger (2000) Strategic Management and Business Policy: Entering 21 st Century Global Society, 7 th edition, Addison Wesley Peter Wright, Mark J. Kroll & John Parnell (1996) Strategic Management: Concepts and Cases, 3 rd edition, Prentice-Hall John A. Pearce & Richard B. Robinson, JR. (1997) Strategic Management: Formulation, Implementation, and Control, 6 th edition, Irwin/McGraw-Hill Relative website web
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Research essay sample on Company Analysis Of Whirlpool Corporation
