preview

Maytag Case Analysis Essay

Decent Essays

Case Nineteen: Maytag Corporation 2002: Focus on North America

In the beginning, Maytag was extremely competitive and popular. The company made its mark as the high quality, high price home laundry appliance maker. They were successful with making themselves leader in washing machines. As time passed, Maytag began to lose their competitive advantage. Maytag was slow to develop new innovations and models which cost the company to lose its leadership of the industry. This loss was very hard to recover from due to new competitors beginning to arise in this industry.
At the Maytag shareholders’ meeting held on May 9, 2002, many shareholders were anticipating an interesting meeting. There were many questions that needed to be answered and …show more content…

Stock prices was at a high of $70 in mid 1999 but dropped to under $30 during the fourth quarter of 2000. Currently the stock was selling at $46.07. This fluctuation had the shareholder worried. These changes over the years were due to many things. Maytag tried to become an international competitor, but it was not as successful as they had hoped. Also, Maytag had acquired many companies during its acquisition of companies such as Amana, Magic Chef, and Jenn-Air. These companies had to be converted to be a Maytag company. Some changes, renovations, and improvements had to be made with the companies which cost money. For example, when Maytag acquired Hoover, the U.K. facilities needed to be modernized. Top management of Maytag committed millions of dollars to renovate the laundry and dishwasher plant. By having to pay for the acquisition of Hoover, management had increased long term debt to its highest level and had to increase the sell of stock. This then caused lower corporate profits and decreasing earnings per share. These kinds of decisions had shareholders concerned and put doubts in their minds about management.
Maytag can succeed in an increasingly competitive industry. If the company continues to follow its three key initiative, quality, product development, and cost reduction, then it will be able to better reposition itself in the industry. Currently the industry is dominated by a few major players and Maytag continues to

Get Access