Whirlpool Case Analysis

11031 Words Oct 28th, 2012 45 Pages
BACKGROUND

INTRODUCTION

The estimated $228.9 billion in the year 20092 global household appliances market can be described as a global industry in condition that the coordination and integration of sourcing, manufacturing, operations, research and development and marketing activities across multiple world regions and countries is accomplished. Enterprises capable of harnessing the benefits of strategic global locations and integrate them into one single global vision are the ones that can be described as global. The industry was invented and still dominated by European and American key manufacturers. However, Asian manufacturers from Japan, Korea, and China are enforcing a strong and rapid growing competition in the last few
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Korean manufacturers such as Samsung Electronics and LG Group, and small Chinese manufacturers were also trying to gain a small market share. GE is leading the Indian market where Electrolux is racing to have a stronger presence of nearly four percent in the year 2003 by covering both mainstream brand of Electrolux and the high-end German-engineered brand of AEG. Due to a highly-diversified level of maturity between Asian countries a great degree of product localization to specific needs where required.

After shedding the light on the global appliances industry and special characteristics for the US, Europe, and Asia, the paper analyzes first Whirlpool’s financial performance within the period of 1995-1998, then it goes deeper into analyzing the company’s global sourcing, entry and marketing strategies, and finally scans key macro environmental factors.

As seen in (Exhibit 2-6), the inventory turnover ratio dropped in the year 1996 which indicates a problem in distribution or a downturn in consumer demand. Another problem indicated in the days’ sales outstanding ratio which indicates a problem in collection due to an incorrect collection policy or lack of liquidity by buyers. An increase in debt in the year 1997 and 1998 shows the cost of interest due to aggressive investments or integration strategies. The company’s ability to meet its debt obligations drops significantly in the year 1996 due to closing the year at a loss, yet the company managed to control it

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