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Case

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by

Oksana Gerasymchuk

on 2 April 2013

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Transcript of Case

1911
Lou Upton pursue his vision in hometown, St. Joseph, Michigan and began to produce motor-driven wringer/washer
1940-1990
Changed name to Whirlpool to celebrate core product
Established first toll-free service line
Formed office for Environmental Control, focusing on social and environmental responsibility
2003-2006
Announced global green house gas reduction target
Acquired Maytag resulting in aligned organization enabling Whirlpool to supply to trade customer more efficiently History Whirlpool Brands Advertising 1954 1959 Advertising Art Deco Art Nouveau Pop Art Brazilian Modernism Modernism Surrealism Whirlpool's Global Expansion Financial Results Key Success Factors In the appliance business it is essential to:

cut costs
produce innovative goods
meet customer preferences Question 2 What seem to be the key success factors in the appliance business? Question 3 Are Whirlpool's difficulties with its global strategy due to internal factors or to external factors beyond its control? Question 1 To what extent is the appliance market regional rather than global? Question 4 To what extent does Whirlpool's experience suggest that globalization is not a good idea in the appliance business? Question 5 To what extent should Whirlpool adapt its global strategy? Whirlpool's Global Expansion Difficulties fragmented distribution network in Europe
different consumer needs and preferences
Whirlpool already was the dominant player in a fragmented industry
high costs due to tailored products in Europe and Asia
the innovation from the local R&D groups resulted in products that were R&D driven instead of market driven
external and internal factors (Question #3) External Factors Internal Factors Whirlpool failed to recognize the different competitors and distribution channels in Europe --> manufacturing inefficiencies
start-up costs associated with production of a redesigned mid-size refrigerator
restructuring of the pan-European sales force Appliance Market Regional Market Global Market products are customized for each market, local decision-making has huge impact on companies

Advantages:
product differentiation
local responsiveness
minimized political risk
minimized exchange rate risk centralized control with little decision-making authority on the local level

Advantages:
reduced costs
coordinated activities
faster product development Appliance Market Regional Global product customization and competition is in terms of reducing costs and maximizing profits British - well constructed
French - capacity to keep fruit and vegetables fresh
Spanish - capacity to keep meat
Italians - childproof safety features
Germans - environmental features Cultural Differences In Europe:
smaller than in the U.S.
have only one outside door
have standard sizes so they can be built into the kitchen cabinet
good for environment
In Japan:
have several doors in order to keep different compartments at different temperatures and to isolate odors
because houses are smaller in Japan, consumers desire quieter appliances
more colorful Customer preferences: Electrolux Approach one global brand Electrolux
three pan-European brands (Electrolux, Zanussi, AEG)
local brands:
Faure in France
Tricity Bendix in the UK
Zanker in Germany Branding Advertising Local Campaigns India Partnerships
4 Indian and 1 Chinese joint ventures
Products
Frost-free fridges and global washer platform
Processes
All aspects of quality are included
People
Foreign assignments of top management
Pan-Asian Approach
Commonalities built between many national markets Whirlpool’s Asian Strategy 5 P's highly developed
saturated with products
top 4 appliance companies had 55% of the market
300 local manufacturers
higher material costs
poor economic conditions
Whirlpool made many miscalculations about profit margin
Sweden's Electrolux dominates the market European Market Summing it up,
because of the different preferences of consumers in different markets, a purely global strategy with standard products is not appropriate.
Whirlpool should adapt its products to local markets, but maintain some global integration in order to realize cost benefits.

What is more,
for emerging countries, due to weak customer preferences, standardization and global product is more preferred;
for developed countries, which had strong customer preferences and competitions, adoption within regional culture is essential. Globalization Headaches at Oksana Gerasymchuk
Roksolana Bila Whirlpool Corporation is an American multinational manufacturer and marketer of home appliances headquartered in Benton Charter Township, Michigan, United States, near Benton Harbor, Michigan.
The company is listed in Fortune 500 and has annual revenue of approximately $18.4 billion, more than 70,000 employees, and more than 70 manufacturing and technology research centers around the world. Competitors Background Problem Solving Thank you for your attention Q & A time
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