Whirlpool’s quest for global leadership
1. Do a SWOT Analysis of Whirlpool at the time of the case.
Strengths * Diverse product portfolio * Strong force in regional markets * Broad Global Presence * Global market leader | Weaknesses * Inadequacy of pricing strategy * Significant proportion of operations in maturing markets * Innovation without due consideration for cost and salability |
Opportunities * Increase market share of periphery products * Online retailing/advertising platform in advanced economies * Growth potential in Latin American and Asian markets | Threats * Raw material cost increases * Restructuring difficulties in Europe * Declining demand in North America and Europe |
2. What are the major strategic factors facing Whirlpool?
Manufacturing costs high (75% of operating costs), scale sensitive. Cost of raw materials increased. Expanding globally allows exploitation of other regions’ resource. Also domestic market was saturated (majority owned by major five competitors), with annual market growth being merely 3%. Highly competitive rivalry also.
3. What are the foundations of Whirlpools competitive advantage? Why was Whirlpool able to go from a position of “one in the pack” to that of a leader in its industry?
The Industry as a whole strives to reduce costs. The DCF approach -“When customers insist on our brands for reasons other than price, when they view our products as clearly superior to other appliances.” Ex: Super efficient refrigerator program. Also “building competitive advantage by continuing our expanding worldwide enterprise at all levels, and to leverage its best practices and Whirlpools cumulative size”. Innovation is also very important competitive advantage. Whirlpools were able to go to the position of a leader in its industry because of three things: Cost efficiency – focused plants, build relations – distribution, suppliers, research and development –improve technology,...