Case Study Whirlpool Corporation

Introduction: The case primarily focuses on the global strategy adopted by Whirpool Corporation. It looks into how after the market saturation in its home market it decided to opt for global expansion and whether it helped Whirlpool in increasing its sales and profits and what all challenges it faced while expanding and whether it was successful or not.

Appliance Industry:
As per the case, around120 million appliances are sold in developed countries each year. The appliance industry wasn’t global as the customers’ preferences were different for different region. Though the core idea remained same, the specifications into making the product varied vastly. For Europe specifically, the industry was highly regionalized, producing limited number

It adopted a series of acquisitions and mergers. It was performing good in its home market till mid-1980s. However, profit started declining despite increasing efficiencies and product quality due to market maturity in US. In other markets it could hardly do well. From exhibit 5, we can see that there was a decline of sales from 1996 to 1997 for North America (-0.89%), Europe (-6.05%) and Asia (-13.23%). The decline can be attributed to various challenges specific to an area.

Assumptions while expanding

US due to market saturation, Whirlpool thought of adopting a global strategy to venture into other markets. It did so because it wanted to exploit a less matured market and because its competitors were also expanding globally. It mainly focused on AA of the AAA Ghemawat’s ‘AAA’ global strategy framework. The 2 As are Adaption and Aggregation. Its adaption strategy was to tailor its business model to increase revenue by fitting to the local preferences. Its aggregation strategy involved the standardization of a portion of product which varied little across all the markets and then diversify the products to suit the consumers’ preferences. It helped to a certain extent as can be seen in the European expansion where sales and profits increased steadily during its early years and the company was able to do cost savings through the standardization process which it adopted. It also assumed that decentralizing its operations into regional and national divisions will help in understanding and meeting the requirements of the customers properly. It also went for restructuring which did not help and the company continued to register