Whirlpool Case Study Essay

Words: 1233
Pages: 5

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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* Synergistic approach – The mergers and acquisition is likely to help the company reduce the cross-regional risks and also helped create synergy within the organisation.

Advantages * Revenue surge – The system implemented by internationalising itself was projected to produce estimated revenue of $3 billion in annual sales. * Cost reduction advantages – The firm reduced its cost of R&D and manufacturing by locating plants and operations to lower-cost locations like China, Mexico and Poland. * Exchange rate benefit – This could go either way, but most likely to go in favour of Whirlpool if the company maximises low cost production sites. * Knowledge management – The Company has ability of retaining highly skilled and trained workers from the scheme.

Advantages acquired abroad * Integration of its local divisions in other to share the most advanced expertise in appliance technology, production and distribution within the home market. * The strategy of acquiring notable appliance businesses abroad can be replicated within the domestic market to make sure that the company has a clear advantage within its domain.
Question 3: What actions has Whirlpool management taken to ensure that the firm succeeds in local markets throughout the world? To what extent is the appliance business local/regional rather than global? * Adapting to trade liberalization by producing low