Whirlpool Case Study

1230 Words Nov 27th, 2012 5 Pages
Question 1: What is the nature of Whirlpool’s domestic and international business environments? What type of risk does the firm face?
Domestic market * Maturity of the US market in the 90s accompanied stiff competition, more demanding buyers which resulted in low profit margin and the need for management to consider internationalising.
International market * Fall of trade barriers, customer affluence grew and capitalism flourished. * Management was quick to understand that a more global approach would encourage economies of scale in the firm’s manufacturing and assembly operations. * The firm sought cost reduction mechanisms in R&D, manufacturing, and services by locating plants in lower-cost locations like China,
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Competitor risk * With fast rising competition in the industry, Haier being one of their biggest rivals in the global market as well as the domestic market, Whirlpool risk losing their market share. * With the lack of patents to their value added features, Whirlpool’s competitors are ever ready to replicate their efforts on innovation.

Question 2: How can Whirlpool benefit from going international? What types of advantages can the firm obtain? What advantages acquired abroad can help management improve Whirlpool’s performance in its home market? International Benefits * Increased focus on innovation – Internationalization increased the firm’s hunger for innovation as employees were trained and encouraged in DIY courses in innovation and knowledge management. * Regional Divisions integration – The Company integrated the activities of regional subsidiaries so that Whirlpool’s most advanced expertise in appliance technology, production and distribution could be shared with the firm’s divisions worldwide. * Value Added Services – From the knowledge management scheme, the firm developed some value added services to its business; microwave ovens that can grill steaks, bake pizzas or come in form of a drawer that slides out for easy access to large dishes. Invention of a washer with built-in sensor that detects the