Main Case

Whirlpool was founded in 1911 as The Upton Machine Co.
in St Joseph,
Michigan, to produce an electric motor-driven wringer washer. The company
merged with The Nineteen Hundred Washer Company in 1929 and began to
sell their first automatic washing machine through Sears, Roebuck & Co. in
1947. The Whirlpool brand was introduced in 1948 and steadily built a strong
retail relationship with Sears. Through a series of acquisitions and mergers,
the company emerged as a leading force in the U.S. appliance industry with
annual revenue reaching $2 billion in 1978. Whirlpools headquarters was in
Benton Harbor, Michigan. As of 1998, Whirlpool Corporation claimed to be the
worlds leading manufacturer of major home appliances. The company
manufactured in thirteen countries and marketed its products under eleven
major brand names to over 140 countries. Whirlpools sales were $8.2 billion
in fiscal year 1997.
They considered restructuring the company financially or diversifying into
related businesses but eventually settled on further global expansion for two
main reasons: the company wished to take advantage of less mature markets
around the world and it did not want to be left behind by its competitors, which
had already begun to globalize. Whirlpools first international investment was
in 1957 when the firm acquired an equity interest in Multibras S.A., a Brazilian
manufacturer of white goods. In 1969, the company entered the Canadian
market by purchasing an equity interest in Inglis Ltd. and acquired sole
ownership in 1990. By the mid-1980s, Whirlpool saw that, despite increasing
efficiencies and product quality, its profit margins were rapidly decreasing in
North America. Top management believed that if the company continued to
follow its current path, the future would be neither pleasant nor profitable.
In 1989, Whirlpool Corporation (Whirlpool) embarked on an ambitious global

expansion with the objective of becoming the world market leader in home
appliances. Beginning with the purchase of a majority stake in an appliance
company owned by Philips, the Dutch electronics firm, Whirlpool purchased a
majority stake in an Indian firm, established four joint ventures in China, and
made significant new investments in its Latin America operations.
However, by the mid-1990s, serious problems had emerged in the companys

international operations. In 1995, Whirlpools European profit fell by 50% and
in 1996; the company reported a $13 million loss in Europe. In Asia, the
situation was even worse. Although the region accounted for only 6% of
corporate sales, Whirlpool lost $70 million in Asia in 1996 and $62 million in
1997. In Brazil, Whirlpool found itself a victim in 1997, and again in 1998, of
spiraling interest rates. Despite the companys investments of hundreds of
millions of dollars throughout the 1990s to modernize operations there,
appliance sales in Brazil plummeted by 25% in 1998. Whirlpool expected that
1999 would be the third straight year of declining sales for the Brazilian
subsidiary.
Approximately 120 million home appliances are sold in developed countries

each year. The appliance industry is generally classified into four categories:
laundry, refrigeration, cooking, and other appliances. Appliances are
constructed in capital intensive plants, and design usually varies among
countries and regions.
Although it was estimated that 46 million appliances were sold in North

America annually, the market was expected to grow little in the late 1990s.
Saturation levels were high, with virtually 100% of households owning
refrigerators and cookers and over 70% owning washers. Because of the
limited growth opportunities, competition was fierce. In the United States, the
industry had consolidated in the 1980s, leaving four major competitors:
Whirlpool, General Electric, Electrolux, and Maytag. These four firms
controlled about 80% of the market. Each firm offered a variety of products
and brands segmented along price lines.
With limited growth opportunities and a handful of major players in the United
States, it was critical that firms focus on cost reduction, productive efficiency,
and product quality. Product innovation was also critical, although few major
innovations had occurred in recent years. The appliance firms segmented
their products according to different consumers needs, and each strived to
achieve greater economies of scale. Still, by the end of the 1990s, the
competitive landscape remained unattractive. Profit margins continued to

decline for most firms.
There were approximately 350 producers of household appliances in Europe.

With consolidation in the industry, by the late 1980s the number had shrunk to
about one hundred. By early 1995, it was estimated that five of the
companies, including Electrolux (with a 25% market share), Philips
Bauknecht, and Bosche-Siemens, controlled over 70% of the market.
The European market consisted of more than 320 million consumers whose
preferences varied by country and by region. For example, Swedes preferred
galvanized washing machines to withstand the damp salty air.7 The British
washed their clothes more often than the Italians did, and wanted quieter
machines. Distribution of the appliances in Europe was different than in the
United States. Most appliances were sold through independent retailers, who
had become organized in buying groups or as multiple store chains. A smaller
channel was through independent kitchen specialists who sold complete
kitchen packages, including appliances.
Asia, the worlds second-largest home appliance market, was also the fastest
growing market of the 1980s. By the mid-1990s, it was growing at a rate of
between 8% and 12% annually, a rate that was expected to continue well past
the year 2000. The industry was highly fragmented, consisting of
manufacturers primarily from Japan, Korea, and Taiwan. Matsushita, the
market leader, held less than 10% market share outside Japan.
Asian consumer preferences were different from those in Europe or North

America. Kitchen appliances needed to be smaller to fit in Asian kitchens.
Lack of space sometimes required the consumer to store the appliance in an
outside hallway and transport it into the kitchen for use.12 Therefore, high
value was placed on appliances that were portable, usually lightweight and on
wheels, and easily hooked up to electrical and water supplies. Refrigerators

also tended to be smaller and more colorful. Indeed, when Asian countries
first began to experience significant economic growth, some East Asians
viewed their refrigerators as status symbols and liked to display them
prominently, perhaps even in the sitting room.
The economic stability in Latin America in the 1990s made the region an
attractive growth proposition. The appliance makers hoped that the days of
hyperinflation and economic mismanagement were over, and they were
pleased to see that governments were reducing tariffs. Distributors in Latin
America were generally responsible for marketing a companys appliances to
small independent retailers in the region. In 1994, there were over 65
competitors in the Latin American market, many of them subsidiaries of U.S.
parents.
Whirlpool was founded in 1911 as The Upton Machine Co. in St Joseph,
Michigan, to produce an electric motor-driven wringer washer. The company
merged with The Nineteen Hundred Washer Company in 1929 and began to
sell their first automatic washing machine through Sears, Roebuck & Co. in
1947. The Whirlpool brand was introduced in 1948 and steadily built a strong
retail relationship with Sears. Through a series of acquisitions and mergers,
the company emerged as a leading force in the U.S. appliance industry with
annual revenue reaching $2 billion in 1978. Whirlpools headquarters was in
Benton Harbor, Michigan. As of 1998, Whirlpool Corporation claimed to be the
worlds leading manufacturer of major home appliances. The company
manufactured in thirteen countries and marketed its products under eleven
major brand names to over 140 countries. Whirlpools sales were $8.2 billion
in fiscal year 1997.
Whirlpools first international investment was in 1957 when the firm acquired
an equity interest in Multibras S.A., a Brazilian manufacturer of white goods.
In 1969, the company entered the Canadian market by purchasing an equity
interest in Inglis Ltd. and acquired sole ownership in 1990. By the mid-1980s,
Whirlpool saw that, despite increasing efficiencies and product quality, its
profit margins were rapidly decreasing in North America. Top management
believed that if the company continued to follow its current path, the future
would be neither pleasant nor profitable. They considered restructuring the
company financially or diversifying into related businesses but eventually
settled on further global expansion for two main reasons: the company wished
to take advantage of less mature markets around the world and it did not want
to be left behind by its competitors, which had already begun to globalize.
David Whitwam joined Whirlpool in 1968 as a marketing management trainee

and rose through the sales and marketing ranks to succeed Jack Sparks as
CEO in 1987. Although Whitwam admitted that he had never actually run a
multinational company until Whirlpool bought Philips in 1989. He believed that
the only way to achieve his vision of an integrated international company, or
one company worldwide, was through intensive efforts to understand and
respond to genuine customer needs and through products and services that
earn long-term customer loyalty.
Whitwam talked about his vision of integrating Whirlpools geographical
businesses so that the companys expertise would not be confined to one
location or product. He forecast appliances such as a World Washer, a single
machine that could be sold anywhere, and he wanted to standardize the
companys manufacturing processes. Given this view that standardization
should be the focus, Whirlpool planned to base all its products, wherever they
were built or assembled, on common platforms. These platforms would
produce the technological heart of the product, the portion of the product
which varied little across markets.
The products could then be diversified to suit individual and regional
preferences. In this way, the parts that the customer seesthe dimensions of
the appliance, the metal case, and the controlscould be varied by segment
or market to fulfill consumers needs. Whitwam believed that the platform
technology would bring a $200 million annual savings in design and
component costs by the time it was fully implemented in the year 2000.
Recent industry forecasts indicated that approximately three-quarters of the
growth in domestic appliance sales between 1995 and 2000 would be in East
Asia (including Australia), Eastern Europe, and South and Central America.
According to the forecasts, by 2000 these three regions (excluding Japan)
would account for about 34% of sales. In 1989, Whirlpool bought a major
stake in N.V. Philips, a struggling Dutch appliance operation, and then
purchased the remaining equity in 1991 for a total of $1.1 billion.19 Whitwam
believed that the U.S. and European markets were very similar and hoped
that Whirlpool would be able to replicate their successes in the United States
in the new market through implementation of a pan-European strategy.
Whirlpool management also believed that the European market was

becoming more American. Research performed by the company indicated
that European integration was making it more difficult for smaller companies
to survive and that the industry was ripe for consolidation. Whirlpools plan
was to be one of the big players following this consolidation, and Whitwam
was expecting a 20% share of the $20 billion market by the year 2000. The
European subsidiary, Whirlpool Europe BV (WEBV), created a brand portfolio
segmented by price. Bauknecht (Philips German brand) served as the
companys high-end product while Ignis served as the lower-end, value brand.
The Philips/Whirlpool brand filled the middle range. However, the company
decided to heavily market the Whirlpool brand name at the expense of
managing its other European brands. Managers at Bauknecht in Germany
saw their marketing budgets slashed and Bauknechts market share fell from
7% to 5%.
By 1995, however, consumer research showed Whirlpool to be the most
recognized appliance brand name in Europe, despite the fact that many
Germans, Italians, and French had a problem pronouncing the name.
To better manage sales and service throughout the region, Whirlpool set up
two centralized distribution centers: one in Cassinetta, Italy, and one in
Schorndorf, Germany. Operations were streamlined in order to achieve
reduced costs through economies of scale, and considerable efforts were put
toward product innovation and increasing operational efficiency. This strategic
focus was overlaid with a global outlook, and managers were regularly rotated
between Europe and the United States.
The rotation generated a crossover of ideas but annoyed retail clients who felt
that they had no continuity when dealing with senior managers.Across the
industry, European plants doubled their output from 1990 to 1998 and cut the
time needed to build a washing machine from five days to eight hours.
Companies embraced computeraided design techniques to speed the
development of products. In 1997, it was reported that a new washing
machine could move from the ideas stage to the shops in just 2-1/2 years,
twice as fast as only a few years before. The value gap which existed
between appliances in the United States and Europe also closed by an
estimated 15% to 20% for all appliances.
The state of the retail sector also changed. Traditionally, the producers had
determined price in the European appliance industry. These producers had
been able to reduce their costs through greater operational efficiencies and
had allowed the retailers to keep their margins constant. Recession in Europe
also caused consumers to become more cost-conscious, and brands such as
the low-price firm Indesit won considerable market share.
The company initiated a major restructuring in 1995 and laid off 2,000
employees. The restructuring did not solve the problems and in 1996, the
companys European operations recorded a loss of $13 million. Between 1995
and 1997, the company also witnessed a rise in materials and labor costs.
Exhibit 3 shows Whirlpools stock prices versus the S&P 500. Exhibits 3 and 4
show Whirlpool corporate and business unit financial information.
In 1995 with various acquisitions and joint ventures in both India and China,
Whirlpool bought controlling interest in Kelvinator in India, combined it with
Whirlpool Washing Machines Limited, and renamed the new entity Whirlpool
of India (WOI). Whirlpools strategy in Asia consisted of five main points:
partnering to build win-win relationships; attracting, retaining, and developing
the best people; ensuring quality in all aspects of the business; exceeding
customer needs and expectations; and offering four key products
(refrigerators, washers, microwaves, and air conditioners).
In addition to giving Whirlpool a 56% interest in WOI, the Kelvinator purchase

gave the company direct access to more than 3,000 trade dealers in India.
Between 1994 and 1995, the company also set up four joint ventures in
China, as it believed that Chinas market for appliances was likely to equal or
surpass that of North America within ten years. By 1996, Whirlpools
investment in Asia had reached $350 million and they employed over 12,000
people. In 1997, the Asian businesses generated over $400 million in sales.
Whirlpool announced in 1987 a full-scale cooperation with Daiichi, a

department store retailer in Japan, the company decided to focus its efforts in
Asia primarily on India and China. There were two main reasons for this
decision. First, recent changes in government regulations in both countries
made it possible for foreign corporations to own a controlling interest in a
manufacturing company. Second, the large populations of India and China
reduced the risk of establishing large-scale operations there.
Smaller Chinese companies were also seizing considerable market share

away from the multinational foreign competition. Haier, a Chinese producer of
air conditioners, microwave ovens, refrigerators, and dishwashers publicly
announced plans to become a global brand by 2002 and had already
expanded into Indonesia and the Philippines. In addition, the Chinese
government was strongly encouraging consumers to buy Chinese. Too
many producers were making similar goods, and production soon outpaced
demand. For example, although Whirlpool believed it would take
approximately five to six years for the market to become saturated, the
refrigerator and air conditioning markets were deemed saturated just two
years after Whirlpool established its joint ventures in China. In addition, the
companys Asian operations produced products of poorer quality than its
Japanese rivals.
Our lower cost structure and focus on the remaining majority-owned joint
ventures in China, combined with our strong market position in India and AsiaPacific sales subsidiaries, leave Whirlpool well positioned for future growth
and profitability in this region Our growing knowledge of Asia and ability to
draw on the other global resources of Whirlpool will lead to continued
improvement in our operating performance in 1998 and beyond, especially as
we manage through a difficult market and economic environment.
Whirlpool Corporation is the world's leading manufacturer and marketer of

major home appliances. It is headquartered in Benton Charter Township,
Michigan, United States. The company Whirlpool was founded in 1911. Its
main products include home laundry equipment, dishwashers, refrigerators,
freezers, ovens, ranges, room air conditioners, and mixers and other small
household appliances. . But some problems arise during their operations.
They are listed below:
I.
In 1995-1996, European profit margin fell by 50% and $13 million loss;
it caused a huge effect on Whirlpool.
II.
Reducing restructuring cost by 10% Global workforce caused problem

for the company.
III.
At first, Whirlpool management team thought that they can get a huge
skilled labor force from Asia. In reality, they got a huge labor force but it
was unskilled. So, their overestimation caused them difficulty.
IV.
There were only one major design center for all products design in
different countries.
V.
European market was ripe for consolidation.
VI.
Whirlpools major internal problem is that the new technology used in

the water filtration process will mean that their repair technicians must
be brought up to speed on how to go about repairing and replacing
parts on defective units.
VII.
The Companys profit margins have been trailing the industry average
in recent years. In the five year period 2001 2005, the companys
operating margins was 5.5%.
VIII.
Increasing raw material costs would raise operational costs for

whirlpool. . In the fiscal year 2006, the base metal price and higher oil
costs added $150 million to the companys operation costs.
IX.
The Waste Electrical and Electronic Equipment (WEEE) Directive of

European Union (EU) makes producers of electrical and electronic
goods financially responsible for the specified collection, recycling,
treatment and disposal of past and future covered products
X.
Whirlpool lacks of qualified workers in some countries
XI.
Lack of distribution channels is another major problem, especially in

China and India.
XII.
They are suffered operating losses in Asia and Europe
XIII.
Whirlpool faced huge competition, over capacity problems due to

overestimated the size of the market
What strategic measures should Whirlpool Corporation consider in order to

sustain the existing stronghold in the market over arising competition and
initiate multinational expansion at the same time?
Relationship with the case:

Whirlpool has a strong brand image in the home appliances industry
worldwide. The Whirlpool Corporation started its business in 1911 but
introduced its brand name whirlpool in 1948. Since the beginning they
provided quality products to their customers and became one of the major
players in the North American home appliances industry. Later they also
became major player in the global market. People all around the globe
knew their name even though they could not pronounce the name
correctly. People all around the globe trusted the brand name of Whirlpool.
Justification:
Brand name is very important to the customers at the time of purchasing
any products. The brands which can build trust inside the customers mind
always get preference at the time of purchasing. Generally life time of a
home appliance is long and most of the times it is costly. So trust becomes
important for the customers. The brand Whirlpool was able to create trust
inside customers mind. So, the strong brand image is strength for the
company.

Whirlpool has offered a huge product variety and price variety to its
customer worldwide. Whirlpool offered products from all four broad general
product categories. They are laundry, refrigeration, cooking and other
appliances. Whirlpool had different models of home appliances in all the
categories. They had not only different products only based on design but
also based on different product categories. They had home appliance
product for each and every types of customers.
Justification:
Every people in the world are different from each other. They had different
choices and different preferences. Their needs are also different. It is almost
impossible for a company to satisfy every customer by offering one type or fewer
types of standardized products. Whirlpool is able to serve every customer in the
market because they have wide variety of products to satisfy different needs of
different customers. So, it is strength for the company.

Whirlpool has achieved cost efficiency through increasing productivity and
reducing production cost. In the home county of the whirlpool which is
USA, the home appliances market was at the maturity stage and there
were high competition. As a result the company focused on achieving cost
efficiency and because of some innovation in the recent years the
company was able to achieve cost efficiency. Later whirlpool used those
techniques in the other countries outside USA to achieve efficiency.
Justification:
Attaining cost efficiency increases the chance to be profitable for every
company. Cost efficiency is also very important for sustaining the
profitability. By attaining cost efficiency a firm can reduce price to increase
sales unit or enjoy a higher profit by selling same number of units. Not only
this, the company can also use cost efficiency to defeat the competitors.
So, this is strength for Whirlpool.

Whirlpool adopted platform technology as the strategy of going global.
Today products are being designed to ensure that a wide variety of models
can be built on the same basic platform... Varying consumer preferences
require us to have regional manufacturing centers. But even though the
featuresvary from market to market, much of the technology and
manufacturing processes involved are similar. Given this view that
standardization should be the focus, Whirlpool planned to base all its
products, wherever they were built or assembled, on common platforms.
These platforms would produce the technological heart of the product, the
portion of the product which varied little across markets. The products
could then be diversified to suit individual and regional preferences.
Justification:
Through adapting platform technology whirlpool was able to both reducing
production cost worldwide and offering regional customized products
worldwide at the same time. They made different finished products with
large variety but they enjoyed economies of scale because of producing
large number of basic platform both leading them to have a competitive
advantage. Platform technology is strength for whirlpool.
Relationship with the case

Whirlpool Corporation started its operation back in early 20th century. Till
then they were growing. From the growing purpose the started undertaking
various domestic home appliances producers from various states. Their
first international acquisition was in the Latin American market in Brazil by
purchasing equity share of Multiparas S.A. They entered the Canadian
home appliances market through purchasing equity share of Ingles limited.
The company then started continuing growing through merger and
acquisition globally in Europe and Asia.
Justification
Sometimes a single company itself cannot grow very big by only doing
Greenfield ventures. It takes a lot of time to establish a totally new facility.
So it is easier for growing to undertake other companys facility which
saves time and ensures some experiences from the previous worker of
that company. Sometimes merging up with a strong company can create a
competitive advantage.

Whirlpool is a truly global corporation with having its operation in almost
every corner of the globe. To serve the customers from the different
geographical location the Whirlpool Corporation has established many
production plants in different part of the world. They have production
plants in the North American market, European Market, Latin American

Market and also in the Asian market.
Justification
People are different from place to place. So their needs are different. As a
result they demand different types of products. A product made for the
USA is not suitable for the Bangladeshi people. So, regional production
matches the regional demand of the customers. Not only for matching
demand the regional production facility also helps to reduce overall cost of
the company by cutting various transaction costs and transportation cost.

Whirlpool Corporation has a very poor distribution channel worldwide
especially in the Asian region. The company tried to establish a
standardized distribution channel globally worldwide but their strategy did
not work properly because of the differences among the people specially
differences in their purchasing preferences.
Justification
Distribution channel plays a very crucial role in marketing. Every company
delivers their products to the customers through the distribution channel. If
there is problem in the distribution channel it causes a company losing its
potential market share because the problem prevents the company from
delivering the product to the customers. So the poor distribution channel is
a weakness for the Whirlpool Corporation.

The CEO of Whirlpool Corporation Mr. David Whitlam who undertook the
globalization strategy for Whirlpool Corporation did not have any previous
experience of doing so. He joined Whirlpool Corporation as a marketing
management trainee and gradually over time he was appointed as the
CEO of the corporation.
Justification
Previous experience of any work increases the chance of success of any
work. There is a high probability of doing things wrong when a person
does it for the first time without having any idea about the work. A very
complicated task of going global by a company like whirlpool is not a piece
of cake. So some experience for forecasting is very important.

Whirlpool has global operation. They market their product indifferent
geographical location with different language. Whirlpools promotional
activities were efficient and successful as the customers of their covered
market area were aware of the company but the problem was the people
could not pronounce the name properly. People started pronouncing the
name differently in different country especially in the European countries.
Justification
A strong brand name is a very valuable and important asset for any
company in the world. The Brand names became the identity of the
organization and people actually buys the names sometimes not the
product itself. Different pronunciation in different countries made the
diluted and the brand lost its unit position as the name became different in
different locations of the world.

According to the case the Whirlpool Corporation thought that the North
American and The European market was very similar because of the
similar economic condition of the people. The company started rotation of
the managers between North America and Europe which resulted losing
continuity of interaction and transaction among the stake holders.
Justification
Customer relationship management is very important for attaining
sustainable success in the market. It is proven that the cost of attaining a
new customer is much more costly than serving the existing customers. It
is also true for every stakeholder. Changing persons frequently in a
process slows down the process because of uncomfortable interaction
among the stakeholders.

Whirlpool Corporation is a very big corporation worldwide with only one
product design center worldwide. Though the product design center was
computer aided but it was tough for them to design products for the whole
world with only one center.
Justification
People around the world demand different types of products. So
understanding the different demand of the customer form only one specific
location is very hard. Not only understanding but also one design center
resulted lack of innovation because idea came from only one place and
there were no possible way to compare the design and justify whether the
designs are good or bad.
Relationship With the case

Whirlpool Corporation has its established operations in Latin America and
Asian Market. Where Latin America Has the lowest market penetration
rate compare to the others part of the world having only 15% market
penetration rate. Beside this the Asian countries has large population
specially China and India also having low market penetration rate. This is
an opportunity for the company.
Justification
Low penetration rate means most of the household do not have any home
appliances. So there are a lot of customers waiting to make their first
home appliance purchase. A large US company like Whirlpool can easily
make the new customers as their loyal customers through their quality
products and strong brand image.

The economic stability in Latin America in the 1990s made the region
an attractive growth proposition. The appliance makers hoped that the
days of hyperinflation and economic mismanagement were over, and
they were pleased to see that governments were reducing tariffs.
Justification
Reduction in tariffs leads to cost reduction for every company which
means they can either cut the price and sale mor or increase the profit
margin. Both the situations are good for the company. As a low
penetrated market in Latin America a price cut for the products an
increasing the market penetration rate.

Asia, the worlds second-largest home appliance market, was also the
fastest growing market of the 1980s. By the mid-1990s, it was growing
at a rate of between 8% and 12% annually, a rate that was expected to
continue well past the year 2000.
Justification
Asia has half of the total population of the world. Among them China
and India have comfily more than 2 Billion population and the market is
growing. Whirlpool already has strong brand image in those regions
because of their quality products. So Whirlpool has huge opportunity to
capture the increasing market and sustain their profitability.

The company decided to focus its efforts in Asia primarily on India and
China. There were two main reasons for this decision. First, recent
changes in government regulations in both countries made it possible
for foreign corporations to own a controlling interest in a manufacturing
company. Second, the large populations of India and China reduced
the risk of establishing large-scale operations there.
Justification
Previously a foreign company could not have controlling authority in
China and India. Which means the foreign companies could not take
the decisions for their business benefit but the recent change in
government change has made it possible so now Whirlpool
Corporation can take their own decision and accordingly implement it.

Whirlpool has high level of strong competitors in every part of the world. In
the North American market there are 4 big players controlling the market
including Whirlpool Corporation. In Latin America there are 65 home
appliances company which has a US parent company. In Asia they are
about 350 competitors availed that means small companies are eating
market share. In Europe there are also big players playing in the Market.
Justification
Competition is always threat because there is a chance that anytime the
competitors can eat up your company. I most places the competitors are
big so they can any time beat Whirlpool Corporation with their power. The
problem with the large number of small competitors is that you cannot
mark any standardized plan to handle the competition.

America annually, the market was expected to grow little in the late
1990s. Saturation levels were high, with virtually 100% of households
owning refrigerators and cookers and over 70% owning washers.
Because of the limited growth opportunities, competition was fierce.
Justification
Home market is very important for any company. If a company cannot
survive in the home market it becomes very difficult for them to survive
overseas. As the market is almost covered then possible sales can
come from replacement purchase. It is very tough to satisfy an
advanced customer who has the experience of handling those
products.

In recent years the government of some countries especially the
government of China is encouraging the people to use domestic
products rather foreign products which causing decreasing sales for
the foreign companies on those countries. As a result there is a chance

of decreasing sales of Whirlpool Corporation.
Justification
Sustainable business of any company in the business primarily
depends on their loyal customers. If the customers are not loyal then it
becomes very difficult for the company to survive. Usually people have
a tendency to abide by the government. So when government runs
patriotic campaign and tells the consumer to use domestic products for
the betterment of the nation it becomes a huge problem for the foreign
companies.

Shortly after Whirlpool made these large investments in Brazil,
however, interest rates in the country began to climb. The Brazilian
government doubled interest rates in October 1997 and again in 1998.
As a result, the currency depreciated and the economy suffered. In real
terms, the real fell more than 50% in the six months prior to January
1999. Total foreign investment in Brazil slumped, and the country was
eventually forced to request a $41.5 billion credit line from the
International Monetary Fund in order to help rescue the economy.
Justification
Economic condition of any country can change any time. Like Brazil it
can change in any other countries where whirlpool has its operation. If
the home currency (in which country the business is) depreciates then
the company will face loss because when the will take back the money
in their own country there will be less money available in their hand
after the conversion of the currency.

Whirlpool Corporation faced a lot of problem in China because of the
distances among the big Chinese cities. Because of this reason the
distribution system of the products became complicated, more costly
and more time consuming and to some extent risky also
Justification
High cost and complexity in distribution channel leads to high price of
the product. If the prices goes up then according to the law of demand
the demand for that particular product decreases that means sales
decreases. If the company does not increase the price then the
company decreases the profit margin which results them to achieve
less profit. Both the situation is bad for any company and in the
meantime small local companies can also take the chance and eat up
the market share from Whirlpool Corporation.
The bargaining power of buyers is high in North America. In Asian Market

preference were different, they want it to be fit in their kitchen. They want
to invest as low as possible and get the best deal. In the Latin America a
lot of companies, as a result consumer can gain more power. Due to too
many companies the customers has more choice and they demand more
at a low price. Europe is same as the American market.
The companys customer has always the ability to keep the firm under
pressure. The customers sensitivity to price changes has a great impact
on the companys operation.
There are other big competitors. So buyers can anytime easily switch from
this company to that. This is a great threat for the company. So, buyers
bargaining power is high. Moreover, buyers have more information
available of the companies as there is competition.
Thus, considering all the factors, the Bargaining Power is good enough.
Since there is chance of more business to arise, it is going to turn higher.
The condition is same for everywhere. In Latin America competition is
increasing day by day. In Asia competition is increasing also.
The entire regions like Latin America, Asia, and Europe have fierce
competition and due to globalization the market has become more
competitive and productive. As a result the competition is very high.
The competition in this industry in very alarming and Whirlpool Corporation

has many competitors. Other competitors have several types of facilities.
Strong competition in the home appliance segment may have resulted in a
kind of price war and the unorganized sector was able to offer their
products at lower rates in a price-conscious market. There are many
consumers who are not price sensitive. In other segments, customer
satisfaction was also very important.
Competition to Whirlpool Corporation in the home appliance segment was

largely from the well reputed companies. In other segments, competition
came from foreign companies.So the number of competitors is large
enough. But Whirlpool Corporation has a growth rate which is also well
enough. So the threat of competitors is very much here and the market is
not free from competition.
The threat of new entrants is low in North America, European and Latin
America. In Asian Market the threat of new entrants is high in Asia Region.
Throughout the world the market is saturated as a result new company
coming into this business is very low.
This is a saturated Market. But other new comers also have options to
enter into the market. There are potentialities of that. Though there are
already some big giants, other companies can start business here with
enough capital and prosperous quality.
Still this is a growing industry; there are many companies who can wish to
come here. It is also not very difficult for starting a business. Still if any
new company wants to come in this business, then they need to have
enough capital to make a place in this region. Moreover labor cost is not
very high.
Moreover, all the new comers need to have idea about the government of
the country. Govern rules and regulations needed to maintain by the new
companies. There is a challenge to face all the government regulations.
Along with all these, they need to know all the distribution channels
properly.
The customer segments are also diversified. In Asian and Latin American
industry the threat of substitutes is not very high here as customer
switching cost is good enough because of product category. This product
is needed in various sectors. But someone can use other substitutes
instead of this.
Product differentiation facility will also not be able to gain by substitutes.

The allegiance of customers is effortlessly diversifiable thinking the
tendency of consumers is backed up by lower switching costs. The greater
the cost for customers to change to a substitute product the less the threat
of substitution. But, Whirlpool Corporation of Asia and Latin America has
an economically developing region with a consumer base focused on price
preferences making it easier for the substitutes to be available. But as this
is an essential in recent days for everybody in their daily life, so threat of
substitute is not an alarming number.
In North American and European industry the threat of substitutes is low.

Product differentiation facility will also not be able to gain by substitutes.
The allegiance of customers is effortlessly diversifiable thinking the
tendency of consumers is backed up by lower switching costs. The greater
the cost for customers to change to a substitute product the less the threat
of substitution.
The company initially had to rely on others for the supply but due to
globalization they have been able to create a whole chain as a result their
suppliers bargaining power is low. Moreover to reduce cost they also
lowered the number of suppliers. There are so many competitors in the
market and they are doing their business. As a result, the bargaining
power of suppliers is also low in the Latin America and Europe regions.
Whirlpool Corporation is a well-established company which has suppliers

to provide their products. The suppliers play noteworthy role in the
company and there is some specific information regarding the bargaining
power of suppliers.
The condition of suppliers, their switching cost etc. information is given in

the case. There must be needed of distribution channel for the products.
The sales personnel also interacted with the agents and customers in the
home appliance segment. So suppliers have not significant bargaining
power over the company.
The first concept which will be applied to the specialty of Kitchen, Laundry and
Home Appliance industry is the product lifecycle. This lifecycle is based on the
assumption that all industries pass through a number of generic stages.When
analyzing the specialty kitchen, laundry and home appliance industrys sales
growth from In 1995, Whirlpools European profit fell by 50% and in 1996, the
company reported a $13 million loss in Europe. In Asia, the situation was
even worse. Although the region accounted for only 6% of corporate sales,
Whirlpool lost $70 million in Asia in 1996 and $62 million in 1997. In Brazil,
Whirlpool found itself a victim in 1997, and again in 1998, of spiraling interest
rates. Despite the companys investments of hundreds of millions of dollars
throughout the 1990s to modernize operations there, appliance sales in Brazil
plummeted by 25% in 1998. Whirlpool expected that 1999 would be the third
straight year of declining sales for the Brazilian subsidiary.
In response to these problems, Whirlpool began a global restructuring effort.
In September 1997,
the company announced that it would cut 10% of its global workforce over the
next two years and pullout of two joint ventures in China. In announcing the
cuts, Whirlpools CEO David Whitwam said, We are taking steps to align the
organization with the marketplace realities of our industry. In Latin America,
3,500 jobs were abolished, and significant investments were made to upgrade
plants and product lines.
Approximately 120 million home appliances are sold in developed countries
each year. The appliance industry is generally classified into four categories:
laundry, refrigeration, cooking, and other appliances. Appliances are
constructed in capital intensive plants, and design usually varies among
countries and regions.
America annually, the market was expected to grow little in the late 1990s.
Saturation levels were high, with virtually 100% of households owning
refrigerators and cookers and over 70% owning washers. Because of the
limited growth opportunities, competition was fierce. In the United States, the
industry had consolidated in the 1980s, leaving four major competitors:

Whirlpool, General Electric, Electrolux, and Maytag. These four firms
controlled about 80% of the market.3 each firm offered a variety of products
and brands segmented along price lines. Distribution of these appliances was
generally through sales to builders for new houses or to retailers, such as
department stores and specialty resellers.
States, it was critical that firms focus on cost reduction, productive efficiency,
and product quality. Product innovation was also critical, although few major
innovations had occurred in recent years. The appliance firms segmented
their products according to different consumers needs, and each strived to
competitive landscape remained unattractive.
Profit margins continued to decline for most firms. Many analysts believed that
the market for Appliances was saturated and that there would be little
increase in growth rates. This saturation had left the distributors focusing
primarily on replacement purchases and purchases for new housing
developments.
In the early 1980s, there were approximately 350 producers of household appliances
in Europe. With consolidation in the industry, by the late 1980s the number had
shrunk to about one hundred. By early 1995, it was estimated that five of the
companies, including Electrolux (with a 25% market share), Philips Bauknecht, and
Bosche-Siemens, controlled over 70% of the market. The industry was highly
regionalized, with many of the companies producing a limited number of products for
a specific geographic area.
preferences varied by country and by region. Asia, the worlds second-largest home
appliance market, was also the fastest growing market of the 1980s. By the mid1990s, it was growing at a rate of between 8% and 12% annually, a rate that was
expected to continue well past the year 2000. The industry was highly fragmented,
consisting of manufacturers primarily from Japan, Korea, and Taiwan. Matsushita, the
market leader, held less than 10% market share outside Japan.
The economic stability in Latin America in the 1990s made the region an attractive
growth proposition. The appliance makers hoped that the days of hyperinflation and
economic mismanagement were over, and they were pleased to see that governments
were reducing tariffs. Distributors in Latin America were generally responsible for
marketing a companys appliances to small independent retailers in the region. In
1994, there were over 65 competitors in the Latin American market, many of them
subsidiaries of U.S. parents.
In this context, the Whirlpool Corporations former strategy was centered in

offering a quality product. The appliance industry is generally classified into
four categories: laundry, refrigeration, cooking, and other appliances.
Because of the limited growth opportunities, competition was fierce. In the
United States, the industry had consolidated in the 1980s, leaving four major
competitors: Whirlpool, General Electric, Electrolux, and Maytag. These four
firms controlled about 80% of the market. Each firm offered a variety of
products and brands segmented along price lines. Distribution of these
appliances was generally through sales to builders for new houses or to
retailers, such as department stores and specialty resellers.
States, it was
Critical that firms focus on cost reduction, productive efficiency, and product
quality. Product innovation was also critical, although few major innovations
had occurred in recent years. The appliance firms segmented their products
according to different consumers needs, and each strived to achieve greater
economies of scale. Still, by the end of the 1990s, the competitive landscape
remained unattractive. Profit margins continued to decline for most firms.
Many analysts believed that the market for appliances was saturated and that
there would be little increase in growth rates. This saturation had left the
distributors focusing primarily on replacement purchases and purchases for
new housing developments.
preferences varied by country and by region. For example, Swedes preferred
galvanized washing machines to withstand the damp salty air. The British
washed their clothes more often than the Italians did, and wanted quieter
machines. The French liked to cook on gas at high temperatures, splattering
grease on cooking surfaces, and so preferred self-cleaning ovens, while the
Germans liked to cook on electric stoves at lower temperatures and did not
need such features.
Distribution of the appliances in Europe was different than in the United
States. Most appliances were sold through independent retailers, who had
become organized in buying groups or as multiple store chains. A smaller
channel was through independent kitchen specialists who sold complete

kitchen packages, including appliances.
The industry of Asia was highly fragmented, consisting of manufacturers
primarily from Japan, Korea, and Taiwan. Matsushita, the market leader, held
less than10% market share
outside Japan. Asian
consumer preferences were
different from those in Europe
or North America. Kitchen
appliances needed to be
smaller to fit in Asian kitchens.
Lack of space sometimes
required the consumer to store
the appliance in an outside
hallway and transport it into
the kitchen for use. Therefore,
high value was placed on
appliances that were portable,
usually lightweight and on
wheels, and easily hooked up
to electrical and water
supplies. Refrigerators also tended to be smaller and more colorful. Indeed,
when Asian countries first began to experience significant economic growth,
some East Asians viewed their refrigerators as status symbols and liked to
display them prominently, perhaps even in the sitting room. Clothes dryers
and dishwashers were uncommon in most Asian countries, but most homes
had microwaves.
Appliances in Asia were traditionally sold through small retail shops. However,
the industry was beginning to witness a shift away from these small shops
and towards distribution through national, power retailer organizations,
especially in China and parts of Southeast Asia.
The economic stability in Latin America in the 1990s made the region an
attractive growth proposition. In the last years, the company is showing some
details that according to concept of product life cycle, the company might
enter in the maturity stage.
Although it was estimated that 46

million appliances were sold in
North America annually, the
market was expected to grow little
in the late 1990s. Saturation levels
were high, with virtually 100% of
households owning refrigerators
and cookers and over 70% owning
washers. Because of the limited
growth opportunities, competition
was fierce. So, in North America
they are in the maturity stage.
The economic stability in

Latin America in the 1990s
made the region an
attractive growth
proposition. The appliance
makers hoped that the days
of hyperinflation and
economic mismanagement
were over, and they were
pleased to see that
governments were reducing
tariffs.
So, in Latin America they
are in the growth stage.
Companies attempted to
improve customer service and
to create appliances that were
friendlier to the environment.
Such changes were not going
unnoticed, but the industry
appeared to be extremely
mature. Not only were new
entrants, such as Whirlpool,
GE, and Daewoo of South
Korea, and Malaysias Sime
Darby, trying to build up sales
from a small base, but the
traditional European
producers had become more
aggressive. Eastern Europe
was seen as the next great
battleground and Whirlpool
expanded its operations in
1996. So, in Europe they are in the maturity stage.
Asian market is a growing market for its

large population. Whirlpool continued to
invest money in India and committed
over $100 million to build a new plant
near Pune to produce
chlorofluorocarbon-free and frost-free
refrigerators for the Indian market. The
company began construction of the new
facility in 1997 and the factory began
commercial production
in the first quarter of 1998. So, in Asia
they are in the maturity stage.
The financial analysis emphasizes Whirlpools performance and its affiliations

financial analysis through different ratio calculations. The ratio analysis and
other financial analysis of Whirlpool is given below-
The liquidity ratio or the solvency ratio focuses on the current asset and
current liability. Here, we conducted the liquidity ratio of Whirlpool based on
the given data of year 1996, 1997 and 1998.
Current
Ratio
Current Asset/
Current Liability
3882/3276
= 1.18
4281/3676
= 1.16
3812/4022
= 0.94
Quick
Ratio
(Cash-Inventory)/
Current Liability
(38821100)/3276
= 0.85
(42811170)/3676
=0.85
(38121034)/4022
= 0.69
Cash
Ratio
Cash/ Current
Liability
636/3267
= 0.19
578/3676
= 0.16
199/ 4022
= 0.03
Justification:
Current Ratio:
The concept behind this ratio is to ascertain whether a company's short-term
assets (cash, cash equivalents, marketable securities, receivables and
inventory) are readily available to pay off its short-term liabilities. In theory, the
higher the current ratio, the better. Here the Whirlpool is decreasing its current
ratio which is bad for business.
Quick Ratio:
The quick ratio - aka the quick assets ratio or the acid-test ratio - is a liquidity
indicator that further refines the current ratio by measuring the amount of the
most liquid current assets there are to cover current liabilities. The quick ratio
is more conservative than the current ratio because it excludes inventory and
other current assets, which are more difficult to turn into cash. Therefore, a
higher ratio means a more liquid current position. Whirlpools quick ratio
position has decreased over the time period.
Cash Ratio:
The cash ratio is an indicator of a company's liquidity that further refines both
the current ratio and the quick ratio by measuring the amount of cash; cash
equivalents or invested funds there are in current assets to cover current
liabilities.
Inventory
Turnover
COGS/Inventory
9596/1100
= 8.72
8229/1170
= 7.03
8331/ 1034
= 8.06
Average
Collection
Period
Accounts
Receivables/
Average Sales per
Day
1711/26.94
= 63.51
1595/23.68
= 67.36
2356/22.68
= 103.88
Revenue/Asset
10323/7935
= 1.30
8617/8270
= 1.04
8696/8015
= 1.08
360/ Inventory
Turnover Ratio
360/ 8.72
= 41. 28
360/ 7.03
= 51.21
360/ 6.13
= 44.66
Sales/Accounts
Receivables
8617/1711
= 5.04
8523/ 1595
= 5.34
8163/ 2356
= 3.45
360/ Receivables
Turnover
360/ 5.04
= 71.43
360/ 5.34
= 67.42
360/ 3.45
= 104.35
Sales/ Net Fixed

Asset
8617/
(7935-3882)
= 2.126
8523/
(8270-4281)
= 2.137
8163/
(8015-3812)
= 1.942
Current AssetCurrent Liability
3882-3276
= 606
4281-3676
= 605
3812-4022
= (-210)
Sales/NWC
8617/606
= 14.22
8523/605
= 14.09
8163/(-210)
= - 38.87
8
9
10
11
12
13
Total Asset
Turnover
Days Sales
in
Inventory
Receivables
Turnover
Days Sales
in
Receivables
Fixed Asset
Turnover
Net
Working
Capital
Net
Working
Capital
Turnover
Justification:
Inventory Turnover:
Inventory turnover is the indicator of Whirlpools cost of goods sold in respect
to their inventory. The higher the number the better inventory turnover is. It
means that Whirlpool is selling their inventory at a very good rate.
Average Collection Period:

This ratio is an indicator of Whirlpools ability to collect the payment for their
sales. The higher average collection period means they can collect payment
quickly which is best for business.
Average Payment Period:

This ratio indicates the time period which Whirlpool needs to pay for their
purchases. Lower average payment period is an effective way to run a
business.
Total Asset turnover

This ratio indicates the revenue Whirlpool generates in response to their
assets. This also indicates how efficiently the assets are used to generate
revenue.
Days Sales in Inventory

It is only a further addition to the inventory turnover ratio. This represents the
days needed to sell the entire Whirlpools inventory.
Receivables Turnover
This ratio indicates that how efficiently Whirlpool is generating profit and
selling their goods in terms of buying goods. A higher number in this ratio
means Whirlpool can effectively manage their business.
Days Sales in Receivables

It is only a further addition to the receivables turnover ratio. This represents
the days needed to collect the payment due of Whirlpools sales.
Fixed Asset Turnover
This ratio indicates the revenue Whirlpool generates in response to their fixed
assets. This also indicates how efficiently the fixed assets are used to
generate revenue.
NWC Turnover
This ratio indicates that how efficiently Whirlpool is generating profit and in
response of their net working capital. A higher number in this ratio means
Whirlpool can effectively manage their business.
14
Total Debt
Ratio
Total Debt/
Total Asset
15
Debt Equity
Ratio
Total Liability/
Equity
16
Times
Interest
Earned Ratio
EBIT/ Interest
17
Cash
Coverage
Ratio
(EBIT+
Depreciation)/
Interest
18
Equity
Multiplier
Total Asset/
Total Equity
19
Long Term
Debt Ratio
Long Term
Debt/ (Long
Term Debt
+Total Equity)
(3267+1087)/
7935
= 0.55
(3267+1087)/
(1918+83)
= 2.19
(325+209+56
4+260)/260
= 5.22
(325+209+56
4+260+3093)/
260
=17.12
7935/
(1918+83)
= 3.97
(3676+10774)/ (4022+955)/
8270
8015
= 0.57
= 0.62
(3676+10774)/ (4022+955)/
(1689+82)
(1845+81)
= 2.68
= 2.58
(-9-15(156+81+130
171+168)/168
+165)/165
= 3.22
= -0.16
(-9-15(156+81+130
171+168+2887 +165+2041)/
)/168
165
=17.02
=15.59
8270/
8015/
(1689+82)
(1845+81)
= 4.67
= 4.16
1087/(1087+1
918+83)
=0.35
1074/(1074+16
89+82)
=0.38
955/(955+18
45+81)
=0.33
Justification:
Total Debt
The total debt ratio compares Whirlpools total debt to its total assets, which is
used to gain a general idea as to the amount of leverage being used by them.
A low percentage means that Whirlpool is less dependent on leverage. The
lower the percentage, the less leverage a company is using and the stronger
its equity position. In general, the higher the ratio, the more risk that company
is considered to have taken on.
Debt-Equity
The debt-equity ratio is another leverage ratio that compares Whirlpools total
liabilities to its total shareholders' equity. This is a measurement of how much
suppliers, lenders, creditors and obligors have committed to the company
versus what the shareholders have committed. To a large degree, the debtequity ratio provides another vantage point on a company's leverage position,
in this case, comparing total liabilities to shareholders' equity, as opposed to
total assets in the debt ratio. Similar to the debt ratio, a lower the percentage
means that a company is using less leverage and has a stronger equity
position.
TIE
The TIE ratio is used to determine how easily Whirlpool can pay interest
expenses on outstanding debt. The ratio is calculated by dividing their
earnings before interest and taxes (EBIT) by their interest expenses for the
same period. The lower the ratio, the more the company is burdened by debt
expense. When a company's interest coverage ratio is only 1.5 or lower, its
ability to meet interest expenses may be questionable.
Cash Coverage
This is a further refinement of TIE. Here the depreciation of Whirlpool is added
with EBIT because it is a noncash expense and the cash remains to the
company. So it is a more realistic view on Times interest earned of Whirlpool.
Equity Multiplier
This is a more simplistic ratio which indicates Whirlpools asset position
relative to their equity. The more the ratio is the better because assets are
backed by the strengths of equity. It also symbolizes how well Whirlpool used
their equity.
Long Term Debt

This is a simpler view of total debt ratio. It only focuses on the long term debts
of Whirlpool. The less the ratio is the better for the company.
20
21
22
Gross
Profit
Margin
Operating
Profit
Margin
Profit
Margin
Net Profit
Margin
23
Earnings
per Share
Gross Profit/ Sales

Operating Profit/
Sales
Net Income/
Revenue
Earnings Available
for Common
Shareholders/
Sales
Earnings Available
for Common
Shareholders/ No.
of Common Stocks
Outstanding
(103239596)/10323
=0.07
(10323-959639-45)/10323
=0.062
(86178229)/8617
=0.045
(8617-8229377-160)/8617
= -0.017
(86968331)/8696
=0.042
(8696-833165-63)/8696
=0.027
325/10323
= 0.031
(-15)/8617
= - 0.002
156/8696
= 0.018
325/10323
=0.031
-15/8617
= -0.002
156/8696
= 0.018
4.06
-0.20
2.07
24
25
ROA
Net Income/ Total

Asset
325/7935
= 0.041
(-15)/8270
= - 0.002
156/8015
= 0.019
ROE
Net Income/
Equity
325/
(1918+83)
= 0.162
(-15)/
(1689+82)
= -0.008
156/
(1845+81)
= 0.081
DU Pont
Identity
Ratio
ROA* Equity
Multiplier
0.041*3.97
= 0.16277
(-0.002)*4.67
= - 0.00934
0.019*4.16
= 0.07904
Justification:
Gross Profit Margin
The gross profit margin is used to analyze how efficiently Whirlpool is using its
raw materials, labor and manufacturing-related fixed assets to generate
profits. A higher margin percentage is a favorable profit indicator.
Operating Profit Margin

Whirlpools operating income figure is the metric of investment analysts,
versus its net income figure, for making inter-company comparisons and
financial projections. This indicates how effectively Whirlpool generated profits
from its operation in respect to its sales.
Net Profit Margin

Investors can easily see from a complete profit margin analysis that there are
several income and expense operating elements in an income statement that
determine a net profit margin. It behooves investors to take a comprehensive
look at Whirlpools profit margins on a systematic basis enabling them to
make further decisions.
EPS
This is the ratio which indicates how successful Whirlpool is in generating
profit to each stock listed. The more the value is the better the situation is for
the company. Shareholders significantly value this number while investing on
a company.
ROA
This ratio indicates how profitable Whirlpool is relative to its total assets. The
return on assets (ROA) ratio illustrates how well management is employing
Whirlpools total assets to make a profit. The higher the return, the more
efficient management is in utilizing its asset base. The ROA ratio is calculated
by comparing net income to average total assets, and is expressed as a
percentage.
ROE
This ratio indicates how profitable Whirlpool is by comparing its net income to
its average shareholders' equity. The return on equity ratio (ROE) measures
how much the shareholders earned for their investment in Whirlpool. The
higher the ratio percentage, the more efficient management is in utilizing its
equity base and the better return is to investors.
The North American market was at maturity stage. The sales were
coming from the replacement purchases and some new housing
projects. Because of the limited growth opportunities, competition was
fierce. In the United States, the industry had consolidated in the 1980s,
leaving four major competitors: Whirlpool, General Electric, Electrolux,
and Maytag. These four firms controlled about 80% of the market.3
each firm offered a variety of products and brands segmented along
price lines. With limited growth opportunities and a handful of major
players in the United States, it was critical that firms focus on cost
reduction, productive efficiency, and product quality.
Product innovation was also critical, although few major innovations

had occurred in recent years. The appliance firms segmented their
products according to different consumers needs, and each strived to

competitive landscape remained unattractive. Profit margins continued
to decline for most firms. Many analysts believed that the market for
appliances was saturated and that there would be little increase in
growth rate
In the early 1980s, there were approximately 350 producers of

household appliances in Europe. With consolidation in the industry, by
the late 1980s the number had shrunk to about one hundred.5 By early
1995, it was estimated that five of the companies, including Electrolux
(with a 25% market share), Philips Bauknecht, and Bosche-Siemens,
controlled over 70% of the market.6 The industry was highly
regionalized, with many of the companies producing a limited number
of products for a specific geographic area.
In 1989, Whirlpool bought a major stake in N.V. Philips, a struggling

Dutch appliance operation, and then purchased the remaining equity in
1991 for a total of $1.1 billion. Whitwam( The CEO of Whirlpool)
believed that the U.S. and European markets were very similar and
hoped that Whirlpool would be able to replicate their successes in the
United States in the new market through implementation of a panEuropean strategy. Whirlpool management also believed that the
European market was becoming more American. Research
performed by the company indicated that European integration was
making it more difficult for smaller companies to survive and that the
industry was ripe for consolidation. Whirlpools plan was to be one of
the big players following this consolidation, and Whitwam( The CEO of
Whirlpool) was expecting a 20% share of the $20 billion market by the
year 2000.20 Whirlpools strategy was to focus on brand segmentation
and operational efficiency. It was believed that the company that
produced the most innovative products while reducing costs would
capture the market. They promoted Whirlpool Brand aggressively.
Their distribution center was centralized. The company rotated the
managers between North America and Europe.
Asia, the worlds second-largest home appliance market, was also the
fastest growing market of the 1980s. By the mid-1990s, it was growing
at a rate of between 8% and 12% annually, a rate that was expected to
continue well past the year 2000. The industry was highly fragmented,
consisting of manufacturers primarily from Japan, Korea, and Taiwan.
Matsushita, the market leader, held less than 10% market share
outside Japan. Whirlpools main strategy was to build a win-win
relationship with the stakeholders. They made centralized
headquarters and undertook acquisition strategy. Despite of continuing
loss they continued to invest money in the Asian market, especially in
India. Their product quality became poorer than the producers from
Japan. The small producers from China started to take market share
away from Whirlpool.
Latin America had lower appliance penetration rates than Europe and
the United States (e.g., only 15% of Brazilian homes owned
microwaves, compared with 91% in the United States), the region
appeared to be a good target for expansion. By the mid-1990s, Latin
America was beginning to achieve economic stability, and growth was
sure to follow. Consumers felt the same way. Many consumers were
now able to replace old and worn-out appliances using budget plans
and credit arrangements. The rivalry was also very high because there
were at least 65 companies who had parents form the US.

America annually, the market was expected to grow little in the late
1990s. Saturation levels were high, with virtually 100% of households
owning refrigerators and cookers and over 70% owning washers. The
sales were coming from either replacement purchases or home

appliances needed for the new housing projects.
The European market consisted of more than 320 million consumers

whose preferences varied by country and by region. For example,
Swedes preferred galvanized washing machines to withstand the damp
salty air. The British washed their clothes more often than the Italians
did, and wanted quieter machines. The French liked to cook on gas at
high temperatures, splattering grease on cooking surfaces, and so
preferred self-cleaning ovens, while the Germans liked to cook on
electric stoves at lower temperatures and did not need such features.
The market was expected to be $2 billion and Whirlpool targeted to
capture 20% of the market by the year 2000.
The Asian region holds half of the worlds total population but their
economic condition is not very good like the western countries. There
is a tradition in Asia that the people do not change their home
appliances until the appliances become totally damage or useless. So
the company overestimated the market.
Latin America had lower appliance penetration rates than Europe and
the United States (e.g., only 15% of Brazilian homes owned
microwaves, compared with 91% in the United States), the region
appeared to be a good target for expansion. By the mid-1990s, Latin
America was beginning to achieve economic stability, and growth was
sure to follow. Consumers felt the same way. Many consumers were
now able to replace old and worn-out appliances using budget plans
and credit arrangements. When the Government of Brazil doubled the
interest rate the consumers quickly reacted with the change. They were
afraid that there will be job cuts and they stopped credit purchasing.
There was no information given about the related and supporting

industries inside the case.
There was no information given regarding factor conditions inside the

case.

case.
There were huge labor supply in the Asian industry but the problem
was that the Asian labor force was not efficient.

case.
Country Risk Categories and Measurements

Economic Risk
Exchange Rate Risk
Location or Neighborhood Risk
Sovereign Risk
Political Risk
Risk Analysis: Asia

Risk Condition: HIGH
Economic Risk
Excessive competition
Fast growing market saturation rate
Imbalance in purchase power in varies from country to country
Customers intention towards frequent purchase is less.
Exchange Rate Risk

Due to high trade barrier, transfer risk is high
Due to the population size, chance of transferring business is
low

huge geographical distances between Chinese cities
China and India lacked strong distribution channels in their
regions
Sovereign Risk
China can restrict business operations of Whirlpool due to its
communist policy
India opened its market in 90s but business restrictions were
common
Political Risk
Chinese government was strongly encouraging consumers to
buy Chinese
Smaller local companies are getting much preferences from the
Government
Risk Analysis: North America

Risk Condition: MODERATE
Economic Risk
Mature Market with very limited growth opportunities
Replacement purchase is more frequent than other regions
Exchange Rate Risk

This region is home region for Whirlpool Corporation so exchange rate
risk is irrelevant and there was no information given inside case
regarding exchange rate risk.

No information regarding location or neighborhood risk was given
inside the case.
Sovereign Risk
There was no business restriction in this region.
Political Risk
No information regarding political risk was given inside the case.
Risk Analysis: Europe

Risk Condition: MODERATE
Economic Risk
Growing market in Eastern Europe.
Mature market in Western Europe.
Customers intention towards frequent purchase is higher than Latin
America and Asia.
Exchange Rate Risk

Trade barriers in Eastern Europe had been withdrawn.
Italian Lira became strong so the company had to face loss.

Customers preferences vary a lot from country to country.
The company established centralized distribution centers in Germany
and Italy
Sovereign Risk
Previously communist countries in the Eastern Europe became flexible
and business friendly.
Political Risk
Sufficient information regarding political risk was not given inside the
case.
Risk Analysis: Latin America

Risk Condition: HIGH
Economic Risk
Excessive competition because there were 65 companies existing in
Brazil which had parent from US.
Lowest market penetration rate
High growth rate.
Customers react very quickly to economic changes.
Exchange Rate Risk

Due to doubled interest rate currency of Brazil depreciated. So
Exchange rate risk is high.

Sufficient information regarding location and neighborhood risk was not
given inside the case
Sovereign Risk
Latin American governments reduced trade barriers and business
became more flexible.
Political Risk
Sufficient information regarding political risk was not given inside the
case.
Human Resource Planning

Model
Forecasting Demand
This model helps us to forecast demand. To forecast demand we use the
following things:
Consideration:
Product and Service Demand:
The product of Whirlpool Corporation is highly demanded. The
company is a leading manufacturer, developer and marketer of
advanced membrane technology.
Technology:
Whirlpool Corporation produces hi-tech products. Their technology is
up-to-date in the highly competitive industry. Their infrastructure
solutions are not only technologically advanced but also costcompetitive. The new-high technology based company segmented for
the Human resource planning model as technology. Technology
determines the extent to which it affects the forecasting demand of
employees in an organization.
Financial Resources:
Infrastructure solution industry is very huge and it needs huge
investment. Whirlpool Corporation was established in 1911 and has
been operating since then. Its revenue was US$10,323million in 1998.
Its financial resources are well enough.
Absenteeism:
There is no information about the absenteeism of the employee of
Whirlpool Corporation.
Organizational Growth:
The organizational growth of Whirlpool Corporation is good, because
Whirlpool Corporation is operating in all over the world. Financial
resource allows Whirlpool Corporation to claim the worlds leading
manufacturer of major home appliances. The company manufactured
in thirteen countries and marketed its products under eleven major
brand names (including Kenmore, Sears, KitchenAid, Roper, Inglis,
and Speed Queen) to over 140 countries. Whirlpools sales were $8.2
billion in fiscal year 1997.
Management Philosophy:
Organizational Growth has a direct correlation in determining estimates
for forecasting demand of recruitments. An increase in organizational
growth level would lead to recruitment by means of full- time, part-time
or recalls positions. Product or service demand has a direct correlation
in determining estimates for forecasting demand of recruitments.
Techniques:
Trend Analysis:
As Whirlpool is having growth thus experiencing increasing sales in
international market, they can obviously forecast the number of labors
needed in order to expand their business from the current level. They
also focus on the performance out of the competitors and ensure that
proper forecasting is done to compete against the rivals in a proper
manner.
There is no doubt that this case provides sufficient information to
explain this organizational growth portion of human resource planning
model. So, there is a space for trend analysis in their managerial part.
Managerial Estimates:
There is moderate information about the management philosophy. If
management is not so strong then it is impossible to grow local to
international. They are doing well to get the maximum share of that
particular industry. But they need to do more about it according to the
management philosophy. Whirlpool is a name which can solve problem
in small time frame with their strong management team and top level
managers.
Having a wide spread management philosophy is very important for an

organization as it gives employees the overall idea about how to
control various firm operations and how to treat competition as well as
competitors.
Delphi Technique:
There is no information about the Delphi Technique of Whirlpool
Corporation
Forecasting Supply:
This model helps us to forecast supply. To forecast supply we use the
following things:
Techniques:
Staffing Table:
There is no information about the staffing table of Whirlpool
Corporation.
Markov Analysis:
There is no information about the Markov analysis of Whirlpool
Corporation
Skills Inventories:
The skills inventory of Whirlpool Corporation is much enriched.
Whirlpool Corporation produces hi-tech products. Their technology is
up-to-date in the highly competitive industry. Their infrastructure
solutions are not only technologically advanced but also costcompetitive. The new-high technology based company segmented for
the Human resource planning model as technology. Technology
determines the extent to which it affects the forecasting demand of
employees in an organization.
Management Inventories:
Organizational Growth has a direct correlation in determining estimates
for forecasting demand of recruitments. An increase in organizational
growth level would lead to recruitment by means of full- time, part-time
or recalls positions. Product or service demand has a direct correlation
in determining estimates for forecasting demand of recruitments.
Replacement Charts:
There is no information about the replacement charts of Whirlpool
Corporation.
Succession Planning:
There is no information about the succession planning of Whirlpool
Corporation
External Consideration:
Demographic Changes:
As Whirlpool Corporation is a multinational company; it has employees
in different locations. This explains about how much the demography is
diversified. Demographic changes in terms of population in China are
humongous. China has a very large market for appliances and any
other retail products. Hence government policies and demographic
changes would affect the labor market for the organization.
Education of the Workforce:

There is no information about the succession planning of Whirlpool
Corporation.
Labor Mobility:
Demographic changes have a direct correlation in determining
estimates for forecasting supply of recruitments. It also allows a good
estimate for the potential market for customer and labor. Northeastern
region of China is also been target by Whirlpool as the target market
due to its potential of having highest rising income level compare to
other regions of China. Labor Mobility is also a key indicator of

forecasting supply as labor laws and acts varies from countries to
countries.
Demographic changes in terms of population in China are humongous.
China has a very large market for appliances and any other retail
products. Once it had accomplished this goal, Whirlpool planned to
build its own manufacturing facilities in the region. Rising income levels
across different regions of the country is likely to boost sales volume of
appliances in the near future. Hence labor mobility and demographic
changes would affect the labor market for the organization.
Government Policies:
Government policies have a direct correlation in determining estimates
for forecasting supply of recruitments. It also allows a good estimate for
the potential market for customer and labor. Northeastern region of
China is also been target by Whirlpool as the target market due to its
potential of having highest rising income level compare to other regions
of China. Changes in any government policies affect the overall stance
of any business strategy.
China has a very large market for appliances and any other related
products. Hence government policies affect the labor market for the
organization. Changes in any government policies affect the overall
stance of any business strategy. The inclusion of government policies
to determine forecasting of labor supply allows a good estimate for the
potential market for customer and labor.
Unemployment Rate:
South America has a very large market for appliances and any other
retail products. Demographic changes have a direct correlation in
determining estimates for forecasting supply of recruitments. It also
allows a good estimate for the potential market for customer and labor.
Northeastern region of China is also been target by Whirlpool as the
target market due to its potential of having highest rising income level
compare to other regions of China. Hence allowing pub culture to
emerge through providing less government interruption should allow
Whirlpool to benefit a lot.
Do Nothing
The general trend for all the managers in the world is to basically do nothing
for the current case in the organization. This helps the organization to save
time, money and effort to avert the current problems. Let the organization run
like what it is right now and sooner or later all the situations will return to
normal. But there are lots of disadvantages if they practice this right now. We
will discuss this below.
If Whirlpool decides to do nothing in this situation, they would save a lot

of extra investment which would be otherwise spent on the changes
which is currently required by the company. Despite its investments,
however, the company suffered operating losses in Asia of $70 million
in 1996 and $62 million in 1997. In 1997, Whirlpool decided to
restructure its Chinese operations when overcapacity in the refrigerator
and air-conditioning markets drove prices down significantly. In 1997,
Whirlpool decided to find strategic alternatives for the two money-losing
joint ventures which catered to these two markets.
Time of the management would be saved if Whirlpool decides to do

nothing. There are many problems at Whirlpool right now and these
problems require a lot of time to be analyzed and rectified with proper
strategy. Hence, by just doing nothing, a lot of time would be saved by
the management. If Whirlpool decides to do nothing in this situation,
they would save a lot of extra investment which would be otherwise
spent on the changes which is currently required by the company.
Time of the management would be saved if Whirlpool decides to do

nothing. There are many problems at Whirlpool right now and these
strategy. Hence, by just doing nothing, a lot of time would be saved by
the management. If Whirlpool decides to do nothing in this situation,
they would save a lot of extra investment which would be otherwise
spent on the changes which is currently required by the company.
To better manage sales and service throughout the region, Whirlpool

set up two centralized distribution centers: one in Cassinetta, Italy, and
one in Schorndorf, Germany. Operations were streamlined in order to
achieve reduced costs through economies of scale, and considerable
efforts were put toward product innovation and increasing operational
efficiency. This strategic focus was overlaid with a global outlook, and
managers were regularly rotated between Europe and the United
States. The rotation generated a crossover of ideas but annoyed retail
clients who felt that they had no continuity when dealing with senior
managers.
If Whirlpool manages sales and service throughout the region,

Whirlpool set up two centralized distribution centers: one in Cassinetta,
Italy, and one in Schorndorf, Germany. Operations were streamlined in
order to achieve reduced costs through economies of scale, and
considerable efforts were put toward product innovation and increasing
operational efficiency. This strategic focus was overlaid with a global
outlook, and managers were regularly rotated between Europe and the
United States. The rotation generated a crossover of ideas but
annoyed retail clients who felt that they had no continuity when dealing
with senior managers. Time of the management would be saved if
Whirlpool decides to do nothing. There are many problems at Whirlpool
right now and these problems require a lot of time to be analyzed and
rectified with proper strategy.

managers. There are many problems at Whirlpool right now and these
strategy.
Despite its investments, however, the company suffered operating

losses in Asia of $70 million in 1996 and $62 million in 1997. In 1997,
Whirlpool decided to restructure its Chinese operations when
overcapacity in the refrigerator and air-conditioning markets drove
prices down significantly. In 1997, Whirlpool decided to find strategic
alternatives for the two money-losing joint ventures which catered to
these two markets. Competition and overcapacity were not the only
problems for Whirlpool. The company had overestimated the size of
the market. The Chinese middle class that could afford new home
appliances numbered only about 120 million and there was no tradition
in China of changing appliances that worked properly.

problems for Whirlpool. To better manage sales and service throughout
the region, Whirlpool set up two centralized distribution centers: one in
Cassinetta, Italy, and one in Schorndorf, Germany. Operations were
streamlined in order to achieve reduced costs through economies of
scale, and considerable efforts were put toward product innovation and
increasing operational efficiency.
Whirlpool planned to base all its products, wherever they were built or
assembled, on common platforms. These platforms would produce the
technological heart of the product, the portion of the product which

varied little across markets. The products could then be diversified to
suit individual and regional preferences. In this way, the parts that the
customer seesthe dimensions of the appliance, the metal case, and
the controlscould be varied by segment or market to fulfill
consumers needs. The products would also have to meet rigorous
quality and environmental standards to ensure that they could be used
in different countries around the world.
Despite its investments, however, the company suffered operating

losses in Asia of $70 million in 1996 and $62 million in 1997. In 1997,
the market. The Chinese middle class that could afford new home
appliances numbered only about 120 million and there was no tradition
in China of changing appliances that worked properly.

the market. To better manage sales and service throughout the region,
operational efficiency.
Whirlpool Corporation should form strategic alliances with

GE and Electrolux to capture maximum market share and
revitalize, restructure, and reenergize the whole management
and their philosophy from top to bottom.
Whirlpool attempted to improve customer service and to create appliances

that were friendlier to the environment. Such changes were not going
unnoticed, but the industry appeared to be extremely mature. Not only were
new entrants, such as GE, Daewoo of South Korea, and Malaysias Sime
Darby, trying to build up sales from a small base, but the traditional European
producers had become more aggressive.
The strategic focus was overlaid with a global outlook, and managers were
regularly rotated between Europe and the United States. The rotation
generated a crossover of ideas but annoyed retail clients who felt that they
had no continuity when dealing with senior managers. With all companies
becoming more efficient as producers, there was a shift towards product
innovation as the basis for competition. For example, Whirlpool increased the
size of the entrance of its front-loading washing machines, thus allowing
clothes to be pushed into the machine more easily and contributing to
increased sales. Companies also attempted to improve customer service and
to create appliances that were friendlier to the environment. Such changes
were not going unnoticed, but the industry appeared to be extremely mature.
Will be able to counter balance profitability.

The strategic focus was overlaid with a global outlook, and managers
were regularly rotated between Europe and the United States. The
rotation generated a crossover of ideas but annoyed retail clients who
felt that they had no continuity when dealing with senior managers.
With all companies becoming more efficient as producers, there was a
shift towards product innovation as the basis for competition.
For example, Whirlpool increased the size of the entrance of its frontloading washing machines, thus allowing clothes to be pushed into the
machine more easily and contributing to increased sales. Companies
also attempted to improve customer service and to create appliances
that were friendlier to the environment. Such changes were not going
unnoticed, but the industry appeared to be extremely mature. Not only
were new entrants, such as Whirlpool, GE, Daewoo of South Korea,
and Malaysias Sime Darby, trying to build up sales from a small base,
but the traditional European producers had become more aggressive.
Moreover, new offered price segmentation (offering different prices to

different market segments) will increases overall revenues and profits.
with senior managers. There are many problems at Whirlpool right now
and these problems require a lot of time to be analyzed and rectified
with proper strategy.
Will be able to capture maximum market share.

As the market is already saturated, only new innovative management
policy and structure can now increase sales than other competitors.
Operations were streamlined in order to achieve reduced costs through
economies of scale, and considerable efforts were put toward product
innovation and increasing operational efficiency. With all companies
becoming more efficient as producers, there was a shift towards
product innovation as the basis for competition.
For example, Whirlpool increased the size of the entrance of its frontloading washing machines, thus allowing clothes to be pushed into the
also attempted to improvise the customer service and to create
appliances that were friendlier to the environment. Such changes were
not going unnoticed, but the industry appeared to be extremely mature,
that is why they need no make changes all over the company.
Will be able to expand globally faster.

If, Whirlpool Corporation introduce new demographical market under
new strategic policies, the new demographical market will provide
robust revenue to fuel Whirlpools growth. To better manage sales and
service throughout the region, Whirlpool set up two centralized
distribution centers: one in Cassinetta, Italy, and one in Schorndorf,
Germany. Operations were streamlined in order to achieve reduced
costs through economies of scale, and considerable efforts were put
toward product innovation and increasing operational efficiency. With
all companies becoming more efficient as producers, there was a shift
towards product innovation as the basis for competition. Companies
that were friendlier to the environment.
Increased capacity improved efficiency with

regards to production.
By forming strategic alliances with GE and Electrolux, Whirlpool
Corporation will get more capacity to produce more goods and can
provide more to their customers. In this way, they can be up to date

and also will be able to minimize production deficiency level. They can
offer their customers with more goods and services in proper time.
Sharing of risks and costs with a partner.

Due to the formation of strategic alliances with GE and Electrolux,
Whirlpool Corporation will be able to share their risk of production as
well as the cost of production. It will happen because previously, the
total production risk, marketing risk, financial risk etc. and the
production cost also handled by the Whirlpool Corporation itself. But
due to the strategic alliance, other companies will be bound to share
both the risk as well as cost in an equal ratio.
Access to greater resources, including specialized

staff, technology and finance and will be able to
cut down on cost with extended supply chain.
Whirlpool will face reduced marketing and admin costs serving a
specific target group because they need fewer resources to serve the
market. There was a shift towards product innovation as the basis for
competition. For example, Whirlpool increased the size of the entrance
of its front-loading washing machines, thus allowing clothes to be
pushed into the machine more easily and contributing to increased
sales. Companies also attempted to improve customer service and to
create appliances that were friendlier to the environment.

with senior managers.
There is a possibility of risk of investment here. Moreover extra

investment is needed to set up operational practices for maintenance
service. This strategic focus was overlaid with a global outlook, and
States. Investment in a company which is completely restructured can
be risky. The rotation generated a crossover of ideas but annoyed
retail clients who felt that they had no continuity when dealing with
senior managers. With all companies becoming more efficient as
producers, there was a shift towards product innovation as the basis for
create appliances that were friendlier to the environment.
By forming strategic alliances with GE and Electrolux, Whirlpool

Corporation might get facility but they also get different types of
managerial policies and process of working. So, it will be quiet
confusing to choose and decide for which one they should go for. That
is why, they might face complication and conflict between different
managers of different company. But if they work for the betterment of
the company, they have to focus on what is good for the company, not
what is good for the individual.
In terms of product and marketing strategies,

Whirlpool should concentrate on selling their products
on a different market segment and apply backward
integration in Asian industry
In emerging and fast-growing markets where Whirlpool still dont have solid
footsteps such as Asia, the company should continue its concentrated growth
strategy, yet reform it into a more focused approach growing in a single
category, then penetrating to another.

Moreover, if Whirlpool implements backward integration in Asian

market, than they will get assurance of pricing, quality and availability
of supply because they already known to market as a brand and every
supplier and middle man will deliver them what they want. Moreover,
they will also get enough facility in case of production because they
already have their factory set up.
This strategic focus was overlaid with a global outlook, and managers
were regularly rotated between Europe and the United States. The
There are many problems at Whirlpool right now and these problems
require a lot of time to be analyzed and rectified with proper strategy.

efficiency. With all companies becoming more efficient as producers,
there was a shift towards product innovation as the basis for
competition. Companies also attempted to improve customer service
and to create appliances that were friendlier to the environment.

There was a shift towards product innovation as the basis for

create appliances that were friendlier to the environment. If Whirlpool
manages sales and service throughout the region, Whirlpool set up two
centralized distribution centers: one in Cassinetta, Italy, and one in
Schorndorf, Germany. Operations were streamlined in order to achieve
reduced costs through economies of scale, and considerable efforts
were put toward product innovation and increasing operational
managers.
There is a possibility of losses of the investment. Moreover extra

investment is needed to set up operational practices for maintenance
service. This strategic focus was overlaid with a global outlook, and
States. Investment in a new and innovative product can be risky. The
With all companies becoming more efficient as producers, there was a
shift towards product innovation as the basis for competition. For
example, Whirlpool increased the size of the entrance of its frontloading washing machines, thus allowing clothes to be pushed into the
machine more easily and contributing to increased sales.
The strategic focus was overlaid with a global outlook, and managers
were regularly rotated between Europe and the United States.
Investment in a new and innovative product can be risky. The rotation
generated a crossover of ideas but annoyed retail clients who felt that
they had no continuity when dealing with senior managers. With all
companies becoming more efficient as producers, there was a shift
towards product innovation as the basis for competition. For example,
Whirlpool increased the size of the entrance of its front-loading

washing machines, thus allowing clothes to be pushed into the
that were friendlier to the environment.

the market. To better manage sales and service throughout the region,
As business strategists after much discussion we think that

alternative 2 should be the right path to take for Whirlpool.
As per the case it has been seen that Whirlpool has not focused on any
specific organization structure. If they do not focus on which, they actually
want to go then there will be problems for the implementation process.
Focusing on only one strategic plan will help them to do better autonomously
on that market segment.
As there is no problem of going for government or legal issues so, Whirlpool
can easily operate their own restructuring work. Because, the alternative we
have suggested is completely an internal factor for the company. Also there is
demand for the companys own benefit. So this will help increasing profitability
and efficiency which should lead to acquiring more profitability for the
company and market share.
We are suggesting this alternative as Whirlpool also attempted to improve
customer service and to create appliances that were friendlier to the
environment. Such changes were not going unnoticed, but the industry
appeared to be extremely mature. Not only were new entrants, such as
Whirlpool, GE, Daewoo of South Korea, and Malaysias Sime Darby, trying to
build up sales from a small base, but the traditional European producers had
become more aggressive.
We have chosen this alternative as the best one because there are many
competitors of Whirlpool in the current market and the market is also much
saturated with standardized products, hence only new, the total change in the
organization structure can make its way to high sales to new and existing
market.
We are recommending this alternative because Whirlpool is facing problems

with this issue. Their situation can be improved. To better manage sales and
service throughout the region, Whirlpool set up two centralized distribution
centers: one in Cassinetta, Italy, and one in Schorndorf, Germany. Operations
were streamlined in order to achieve reduced costs through economies of
scale, and considerable efforts were put toward product innovation and
increasing operational efficiency. With all companies becoming more efficient
as producers, there was a shift towards product innovation as the basis for
competition.
The strategic focus was overlaid with a global outlook, and managers were
regularly rotated between Europe and the United States. The rotation
generated a crossover of ideas but annoyed retail clients who felt that they
had no continuity when dealing with senior managers. All companies
becoming more efficient as producers. Companies also attempted to improve
customer service and to create appliances that were friendlier to the
environment. Such changes were not going unnoticed, but the industry
appeared to be extremely mature. Keeping these things in mind we have
selected this alternative as the best one.
The Do Nothing strategy would cost some heavy damage to the current
profitability of the company and would slower the process of gaining the
desired market share, or providing their product to the extent that they would
have liked. This would create ample opportunity for their competitors, and
other local manufacturers to occupy greater market share.
Competition and overcapacity were not the only problems for Whirlpool. The
company had overestimated the size of the market. To better manage sales
and service throughout the region, Whirlpool set up two centralized
distribution centers: one in Italy, and one in Germany. Operations were
streamlined in order to achieve reduced costs through economies of scale,
and considerable efforts were put toward product innovation and increasing
operational efficiency. For example, Whirlpool decided to restructure its
Chinese operations when overcapacity in the refrigerator and air-conditioning
markets drove prices down significantly. Then Whirlpool decided to find
strategic alternatives for the two money-losing joint ventures which catered to
these two markets.
Moreover, the rotation generated a crossover of ideas but annoyed retail
managers. The strategic focus was overlaid with a global outlook, and
managers were regularly rotated between Europe and the United States.
In the previous section we have identified some problems that are Whirlpool
Corporation currently having and also recommended some suitable strategic
solutions aligned with organizational goals respectively for each of them. And
now in this part we are going to implement the most aforesaid
recommendation we have discussed in the previous part. Our planning and
recommendation are of no use unless they are properly implemented and
utilized to the full extent. Without implementation planning is only wastage of
time, money and labor. Therefore, effective and timely implementation of
suitable plans is essential to make them successful.
So, implementing the parts that have been recommended is the vital most
part of any given situation. Without the implementation part, we can never
achieve our goal, thats why implementation is the most important part to
proceed. In this part of our paper, we would like to talk about the
implementations that should be done for the recommendation, in order to fulfill
the main issue of the case.
Without a sound framework and without a healthy work environment, even the
best ever plans will fail. Therefore, an appropriate organizational environment
must be in place that will foster the effectiveness of our proposed
implementation plan. We have come up with some realistic implementation
plan that will foster the company to the highest extent to achieve the
forecasted market share not only in the local market but also globally. All
those plans are described below one by one along with their problems and
proposed solutions: Therefore, effective and timely implementation of suitable
plans is essential to make them successful.
In implementation section of the case solution, we have to answer some
subsequent questions regarding the implementation process following our
identified problems along with their solutions. We will discuss elaborately in
this section the General implementation of our mostly recommended solution
and some Core Functional implementation as well including the Operational
Implementation, Marketing Implementation, Financial Implementation, and
HR Implementation. After covering all these aspects of the implementation
one by one hopefully we will be able to implement our plan timely and
effectively.
In this stage the company should give a look in some matters which can be
beneficial for them. By looking and analyze these things the company can get
a better result than they have. Management of Whirlpool will decide why it is
considering the alliance other company and decide whether the reasons make
a good argument to do so. After that Whirlpool can go step by step in the
implementation process.
The First step should be to evaluate about present market share then
off course the future market share position.
Then compare the present and prediction whether it is beneficial for the
company or not. If it is yes, then the company should go for the
strategic alliance.
Revitalize is a huge process for any company. Keeping that in mind the
Whirlpool should concentrate on inspection about it. Because, it is
always better to fail in planning rather than to fail in work.
Restructuring is highly costly decision from every perspective of the
company. Though the company is well established to handle this, but it
should also keep in mind that, their position not so comfortable in the
market.
Research several articles written by independent analysts that provide
information and comments on both companies.
Determine why the company being in the position of doing so.
Research whether the other company has a huge amount of debt that
would need to be settled.
Look up whether the mentioned company is a liability risk, such as
whether it has any pending lawsuits.
Evaluate whether the alliance adds any value to Whirlpool, such as
name recognition or a good reputation for customer service that could
be passed on.
Collect information about the increase its labor, office space or other
services that might add an additional financial burden to it.
Determine whether there would be severance expenses associated

with the selling company's employees that may no longer be needed
after the acquisition. Decide whether the 2 companies are compatible
in their product line.
Evaluate whether the alliance streamlines any operations, such as
purchasing a company that supplies parts for Whirlpools product.
Find out the purchase price, which is usually provided to investors, to
determine whether it is reasonable.
Research the stock prices.
Determine how the new company will be paid, such as in cash or stock
From The Acquiring Company.
Determine how the stock earnings of Whirlpool will change by looking
at both company's earning history and projections by financial analysts
for future earnings after the companies merge.
Research the background of the other company to determine its inhouse cultures, worker types and operating procedures.
The goal of the preliminary review and Pre-Due Diligence is to identify dealbreaking issues (material misstatements in the financial statements, or
uncertainty regarding customer or employee retention) before too much time
and expenses are committed.
Valuation
The Seller's Discretionary Cash Flow (SDCF) approach indicates how much
benefit the business owner is realizing through profit, salary, depreciation,
interest expense, and perks. The SDCF after an acquisition should exceed
the required debt payments and minimum owner's compensation.
Negotiations will occur with the Letter of Intent and the Purchase Contract. In
the Letter of Intent, the basic terms of the acquisition are worked out. After the
Due-Diligence phase, the final terms are agreed upon.
There are dozens of methods and sources for financing. According to

business broker industry data, sellers finance part of the acquisition price in
about 85% of all acquisitions.
This can be the easiest step as everyone signs the closing papers, or it can
be the most frustrating step as everything falls apart at the last minute
because one of the first seven steps was not done properly
Whatever the product or service, without a good marketing strategy the

product or service would not be known. Marketing would require a lot of
creative thinking and successful ideas to be able to launch or re-launch any
goods.
Whirlpool needs to implement the recommended alternative from their
marketing perspective as well. The marketing implementation of this
recommended solution will be done in several steps. This will increase the
market value of the appliances and the way of being established as a brand
will be much smooth. Whirlpool is totally customer oriented. To sustain in the
market as well as a greater future expansion and profitability they need to be
establish themselves as a customer friendly brand. Marketing is the core
function to do so. A proper marketing plan can lead any company to the top of
the pyramid. In the marketing implementation we have to suggest them to
build a strong marketing team that can plan more efficiently and be able to
achieve the goal of the organization.
To allocate resources for the promotional activity, Whirlpool Corporation must

have a target budget and resources assigned to each element of the plan.
Costs for the billboards will be separately low than other tools. There will be
some cost incurred for training employees to incorporate the image shift within
their everyday work and cost of print and in-house promotional items. Online
marketing and marketing collateral incurs lower costs than other promotional
tools like bill boards, online marketing, public relation and marketing collateral.
Whirlpool needs to redesign their market positioning for a better brand image.
Positioning is a powerful tool that allows any service to create an image. And
image is the outward representation of being who you want to be, doing what
you want to do, and having what you want to have. Positioning a company
can lead to a better organizational fulfillment. Being positioned by someone
else restricts the companys choices and limits its opportunities. So to do
better business, Whirlpool must replace this stereotype with their new
positioning. They must position themselves as a better network provider;
otherwise it will never be possible to grab the targeted market share.
The integrated marketing implementation for planting the new image in the
customers minds is a great way. It requires use of its traditional mediums.
Whirlpool has to inform their customers about the new positioning. This would
ensure where Whirlpool wanted to appear. They can use below promotional
tools to attract and aware their customers.
To build an Integrated Marketing Communication (IMC) Plan Whirlpool must
follow the following development steps:
Review of Marketing Plan

Analysis of promotional program situation
Budget determination
Develop integrated marketing communication
program
Integrated and Implement marketing communication
strategies
Monitor, Evaluate & Control IMC program
Whirlpools IMC plan must have a target budget and resources assigned to
each element of the plan. Depending on the size of its budget, Whirlpool will
probably need to make trade-offs between methods to achieve its goals.
Costs for the billboards will be separately low than other tools. There will be
some cost incurred for training employees to incorporate the image shift within
their everyday work and cost of print and in-house promotional items. Online
marketing and marketing collateral incurs lower costs than other promotional
tools.
Whirlpool has been performing in the market for many years and now they
must start building a strong brand for long term perspectives. That would
ensure more brand knowledge in the target and help the company with
tangible and intangible benefits. In addition, as Asian people are more price
sensitive, so to attract them brand image is one of the most vital promotional
tool. Without strong brand image people will again shift their preferences to
other companies so, to build strong brand loyalty among consumers, needs to
do promote at this regards. For establishing new perception Whirlpool needs
to do potential marketing implementation.
Staging
Differentiatioato
r
Economics
Vehicle
Arenas
These five topics are very important to implement the strategy properly.
Staging, vehicle, arena economics and the differentiator are five strategy keys
to implement the marketing strategy.
This is the core of all element of strategy. It provides the reckoning how the
firm is going to obtain its returns. As, Whirlpool has moderate competitors in
the market it is a great chance to get more profit by replacing the old
technology. Another thing to be considered here that is the raw material is
locally available and cheaper so that will allow the firm to reduce its cost and
generate more profits.
The purpose of internal analysis is to pinpoint the strengths and weaknesses

of the organization. A firms strengths lead to superior performance whereas
weaknesses lead to inferior performance. It focuses on the quantity and

quality of the firms resources and capabilities and how to build unique skills
and company specific or distinctive competencies. Along with the external
analysis of the companys environment, give managers the information to
choose the strategies and business model to attain a sustained competitive
advantage.
Alliance is the recommended market penetration strategy.

Positive perspective of acquisition:
Consumes less time to launch
Effective local market knowledge
Utilize existing logistical support
Effective networking
Creates goodwill and brand value
Billboard
Alternative media( website, sending mail, Direct Marketing)
Installment payment option
Develop effective customer care service
Progress Reports
Timeline
Outcome Measurement
Operational Implementation
First of all Whirlpool needs to recruit efficient technical experts to run the
operational activities. HR department will be responsible for hiring the right
person in the right place. Unless they have high-quality technical experts, they
will never be able to get the desired operational performance. As the
operation of manufacturing company is quite complicated and it requires vast
technical knowledge it is better to have experts at any cost.
They need to train their managers and workers for more efficiency. As the
workers are solely responsible for the field work they must be well trained.
Otherwise those immensely expensive machines may get damaged and will
not work properly. The field workers need to be trained to be more responsive
to situations and should have the ability to make instant decisions.
Whirlpool needs to improve their product quality for the betterment of their
business. The ability to control and monitor the distribution of a product,
largely taken for granted in most industrialized countries, was still an immense
challenge in China.
The nature of the product made it difficult to link mass production with a welloiled distribution system to drive costs down. Household appliance has a very
short shelf life, and consumers preferred a freshly product. This effectively
limited distribution to within a 500-mile radius of the plant, creating a need for
a network of brewing plants that were suitably scaled to cater to a fairly small
and well defined market area. Second, provincial regulations were often
written to protect local manufacturers and keep tax revenues within the
provinces. Since appliances was taxed heavily, provincial governments made
it very difficult for manufacturers to ship their products across provinces.
They can also reschedule the operational process such a way that can give
more work efficiency. To increase the work efficiency they may change the
break time and give workers break in several small segments. This will
increase the work efficiency as well as the monotony of the specific task will
be reduced.
Finally their main focus should be on better distribution channel. They need to
complete every operational activity ahead of time which is quite impossible
without a proper operational and production plan. They need to reduce the
idle time of the workers without compromising the quality of the outcome.
HR Implementation
According to the result found from the HR analysis in the functional area
analysis Whirlpool has both surplus of employees and shortage of highly
skilled employees, which indicates that they need right sizing the company.
For supporting all these activities of Whirlpool, a Human Resources
Department must be engaged throughout the process that would implement
strategic human resources management planning process that would work as
a support system and go in line with the organizational culture, goal and
mission as a whole. Through this department, Whirlpool can resolve their
human resource issues easily.
In todays intensely competitive and global marketplace, maintaining a

competitive advantage by becoming a low cost leader or a differentiator puts a
heavy premium on having a highly committed or competent workforce.
Competitive advantage lies not just in differentiating a product or service or in
becoming the low cost leader but in also being able to tap the companys
special skills or core competencies and rapidly respond to customers needs
and competitors moves.
In a growing number of organizations human resources are now viewed as a
source of competitive advantage. There is greater recognition that distinctive
competencies are obtained through highly developed employee skills,
distinctive organizational cultures, management processes and systems. This
is in contrast to the traditional emphasis on transferable resources such as
equipment and technology.
The new HR role is to be viewed from the strategic perspective where in HR
plays an important and vital role whilst designing and delivering the HR
strategy for the organization. The approach of HR planning activity is no more

in isolation but very much aligned to the strategy of the organization as a
whole Delivering a strategic impact, the HR strategy needs to be in sync with
the business objectives and the systems and processes incorporated must
also support demonstrating the required results.
Whirlpool should also adjust in thorough due diligence assessment. The

company should also assist in developing HR practices for rapid learning and
knowledge transfer. It should also participate in planning and align it in the
pre-deal panning phase of acquisition. The planning should comprise of the
Human Resource model.
Strategic human resources management links with HR management directly

to the strategic plan of the company. Based on the strategic plan, Whirlpool
can develop a strategic human resource plan to support the future direction of
the organization. The overall purpose of the strategic human resources
management of Whirlpool would be
Ensure adequate human resources to meet the strategic goals and
operational plans of the organization the right people with the right
skills in the right place at the right time.
Keep up with social, economic, legislative and technological trends that
impact on human resources.
Remain flexible so that the organization can manage change if the
future is different than anticipated.
1. Organization
profile
Analysis of the
environment,
Development of
organizational
objectives
2. HR requirement
Forecast
4. Gap analysis
5. Planning
HR initiatives
3. HR availability
Forecast
Fig: Human Resource Planning Steps
The implementation phase of strategic Human resource planning process has

several steps and according these steps HR management has to do effective
HR planning:
There would be several human resources strategies for meeting

organizations needs in the future. Strategies that can be followed by the
Whirlpool are described one by one.
In the restructuring strategies part the consideration is to find out the supply
and demand of skills in Whirlpool. If there is an oversupply of skills, there are
a variety of options open to assist in the adjustment. Termination of
employees will give immediate results. Generally, there will be costs
associated with this approach depending on the employment agreements.
The organization must be sure to review the employment or labor standards in
the country to ensure that the organization is compliant with the legislation.
If there is a talent and skill shortage in the organization then it must recognize
the areas of the function that required focusing. The key to success is to
ensure that employees are satisfied with the arrangement and that it meets
the needs of the employer. Excellent communication is a prerequisite for
success. More resource areas are called for redeployment of workers to the
areas of shortage. The training needs of the transferred workers needs to be

taken into account.
The process to fill a vacancy would require the identification or confirmation of

a set of position descriptions and the relevant selection criteria and position
guideline for the vacant position. Preparation of an accurate statement of
duties and responsibilities for the position would be filled, and relevant
selection criteria, are the responsibility of the HR department and must be
authorized by the top management.
For implementing recruiting strategies the company must follow the following
strategy for recruiting. This would include:
External Recruitment means hiring from outside the organization. In order to

hire personnel from the outside the company needs to find some sources from
where it can hire people. The external sources of hiring the candidates include
several sources are Unsolicited, Employee referrals and networks,
Advertisements, Recruiting online, Colleges and placement offices,
Employment agencies, Executive search firms, Professional associations and
meetings, Outplacement services, Community agencies, Job fairs, Co-ops
and internships, Educational Institutions, Employee leasing etc.
Each and every organization possesses a different culture including shared

common beliefs, values, wisdoms, knowledge and attributes. In the
recruitment policy the level of adjustment of an applicant would be able to
make with Whirlpool. It would also help the organization to support when the
reformation in management strategy would occur.
Training and Development would help Whirlpool in different areas including

supporting the reforming strategies action. Training and development needs
can be met in a variety of ways. One approach is for the employer to pay for
employees to upgrade their skills. This may involve sending the employee to
take courses or certificates or it may be accomplished through on-the-job
training.
Many training and development needs can be met through cost effective
techniques. Training and development would come under consideration if and
only if training and development is the most cost effective way to improve the
situation and the employee condition.
Regardless of previous training and development process, there are certain
skills that have to be ensured to make them developed such as:
A better communicational skill with fluency and confidence in

speaking,
Develop the technical efficiency required for the process oil refining
and the technology.
Should be able to influence the customers for their new technology.
Should be able to retain the good relationship with the contacts that
are beneficial and profitable for the company
Whirlpool would help the new employed employees in career planning in the
organization that would include:
It is very important to identify the career of the employees at the beginning

day of the job. For this employees needs to focus on
Career counseling
Career specific information
Employment opportunities
Whirlpool would provide skill-based training to the employees. It would both

benefit the organization by getting trained and skilled people and the
employee to improve and work more efficiently. Employees would be provided
training in many stages in different ways. The training options would be:
On the job training: Whirlpool would train its new hire employees
through making them to work practically to the store so that they can
learn while actually working on it. It would be more like learning by
doing.
Off the job training: The company would also focus on off the job
training. This method would include conference, lecture, workshop etc.
Workshop It would arrange workshops for the sales man for better
knowledge, sharing new ideas and make more compatible in the
industry.
Training under supervisors and expertise: The new technology of
producing hybrid product would require Whirlpools employees and
workers to learn the technique quickly, hence the employees needs to
be trained by people who are good at this technology handling.
Training and development is a continuous process to achieve continuous

improvement through learning and learning happens all the time whether or
not employees are fully aware of it. Employees can even go through incidental
learning. On the other hand, intentional learning happens when employees
engage in activities. Employee development requires approaching everyday
activity with the intention of learning from what is going on around them.
Compensation of employees is such a thing which can motivate people a lot

more than other instruments. For compensation, Whirlpool must follow the
following strategy. It would comprise:
The company can introduce variable pay based on the performance of the
individual, team, department, division, and/or company. Variable pay
compensation is often linked to employee performance, and giving the
employee a way to share in the reward for being productive and efficient.
Individual based pay system is on the extraordinary qualifications and

competence of an individual that is valuable for the organization. It motivates
the employees to build and show their competency level at different level of
their career and organizations function.
Through performance based pay schemes employees are transmitted the

message what results and effort is especially expected from them.
Company can introduce it on its factory level workers.
The decentralized pay system to put both the salary decision and the
resources in the hands of the same decision-maker. Ultimately this should
greatly streamline the salary setting process and allow units greater flexibility.
Financial Implementation
The financial implementation of this recommended solution will be done in several
steps. This will increase the feasibility aspects of the recommended alternative. For
any company finance can't be undervalued and can be said that it's the lifeline of a
business and is required for its well-being. It can be said to be a lubricant which
keeps the business running. Whether we have a small, medium or large business,
we will always need finance, right from the beginning to promoting and establishing
our product, acquiring assets, employ people, encouraging them to work for the
development of our product and create a brand name. In addition to that, a current
business may need finance for expansion or making changes to its products as per
the market requirements.
In this case, the financial implementation is immensely important because finance

ensures that there are adequate funds available to acquire the resources needed to
help the organization achieve its objectives, ensure costs are controlled, ensure
adequate cash flow, establish and control profitability levels. One of the major roles
of the finance department is to identify appropriate financial information prior to
communicating this information to managers and decision-makers, in order that they
may make informed judgments and decisions.
To ensure the proper functioning of the finance department, Whirlpool need dynamic
and reliable financial managers. HR will help them to find the correct person. After
the necessary recruitment and needed shuffling the finance department, it will be
ready to go hand in hand with the other departments of the company.
To execute every plan money is the primary requirement. Nothing can be done
without money. But at the same time we need to be careful about the proper use of
money. The finance department in a company is of utmost importance as they are
responsible for financial planning ensuring that adequate funds are available for
achieving the objectives of the organization. Moreover, it is the finance department
which makes sure that the prices are controlled, besides looking after the cash flow
and controlling profitability levels.
Saturated Market:
European
Emerging Market:
South Africa, India &
Other Asian Markets
Use the resources' in the emerging markets in strategic alliance (markets

where yet whirlpool haven't acquire) and in sector like R&D, T&D, Marketing
others.
Intellectual property
Assets and liabilities
Equity
Capacity
Cash flow
Working Capital
Financial Ratios (Net Present Value, Profitability Index, Internal Rate of
Return
Financial Ratios (along with regular financial analysis)
Net Present Value
Profitability Index,
Internal Rate of Return (IRR)
Discounted Cash Flow (DCF)
Weighted Average Cost of Capital (WACC)
Enterprise Value Sales ratio
Product & Placement Implementation

2 Goals of recommended R&D operations of Whirlpool for sustainable growth
and market penetration:
Step 1: Product Idea Brainstorming

Step 2: Evaluate the Ideas
Step 3: Market Evaluation
Step 4: Data Analysis
Step 5: Product Development
Step 6: Prototype and Marketing
Step 7: Market Testing
Step 8: Prepare for Launch
Board of Directors
Human Resource
Department
Marketing
Department
Process Department
Finance Department
In the integration part we will be focusing on how to effectively and efficiently

coordinate the Marketing department, the Human Resource department, the
Finance department to achieve the suggested alternative, thus creating a
strong value chain. This would bring bright future for Whirlpool in international
market through this alternative demands high level of integration among these
parts. That is why we will be designing the integration phase in such a way
that every departments works would be done by aligning with other
departments.
Integrated business planning (IBP) refers to the technologies, applications
and processes of connecting the planning function across the enterprise to
improve organizational alignment and financial performance. IBP accurately
represents a holistic model of the company in order to link strategic

planning and operational planning with financial planning.
By deploying a single model across the enterprise and leveraging the
organizations information assets, corporate executives, business unit heads
and planning managers use IBP to evaluate plans and activities based on the
true economic impact of each consideration.
Integrating marketing efforts with the finance, production & logistics

department and the process department is very important for a firm like
Whirlpool. Mainly the marketing efforts that are going to be taken in different
media and the communication line used in those ad media would be
integrated.
I. Marketing Goal
For goal of marketing implementation is to promote and brand the products of
whirlpool in the yet untapped emerging market of India, Brazil and South
Africa to ensure its global expansion and business sustainability.
II. Marketing Objectives
Create demand for home appliances and capture the major market share.
III. Target Market Segments
For our recommended solution we have selected to target market segment:
Market Segment 1: The Price sensitive customers from emerging nations like
India and Brazil.
Market Segment 2: Quality and innovation oriented customers from developed
nations of N. America and Europe
IMC is the coordination and integration of all marketing communication tools,

avenues, functions and sources within a company into a seamless program
that maximizes the impact on consumers and other end users at a minimal
cost. It aims to ensure consistency of message and the complementary use of

media. The concept includes online and offline marketing channels.
Online marketing channels include any e-marketing campaigns or programs
and they can get free access. A company develops its integrated marketing
communication program using all the elements of the marketing mix.
Integrating Human Resource Department

Integrating Human Resource department is the most important job for a
company, because the companies have identified the importance of retaining
a highly skilled employee or selecting and recruiting a huge number of
employees. The companies have seen that in todays highly competitive
business environment a firm can only achieve and sustain a competitive
advantage. And to achieve it all the departments of a company have to work
closely with HR and the integration level has to be very exclusive.
This covers salaries, bonuses, vacation pay, sick leave pay, Workers'
Compensation, and insurance policies such as medical, health and accidents.
The Human Resources Department is responsible for developing and
administering a benefits compensation system that serves as an incentive to
ensure the recruitment and detainment of top talent that will stay on with the
company. When an employee is hired, the company's Benefits Coordinator is
required to meet with employees one-on-one or in small group settings to
explain their benefits package. This often requires an employee to make an
informed decision and to provide their signature for processing purposes
should try to keep the employees happy by giving them good compensation
and benefits. It will increase the association of the workers with the
organization and will make them happy. A happy workforce can work more
efficiently and it will also help the organization to overcome the future risks of
strike, vandalism, and other unavoidable mishaps.
Incentives and benefits are not strictly monitored and are creating
dissatisfaction among employees at Whirlpools. It is the responsibility of the
management to take care that the basic benefits given to the employees are
of good quality. This will satisfy the employees and motivate them to work
better. They will feel that the management takes good care of them and that
they should also work with better efficiency and effectiveness. It is quite
difficult for any employee to move to solid performance directly from poor
performance. The performance appraisal is very rigid and therefore it
demotivates the employees on the whole since the scope for better
performance is very limited. This makes it very difficult for the employees of
Whirlpool Corporation to perform better and get promoted.
The management should evaluate the employees and give them the
feedback. It is very important for any organization. In this part, in the
performance appraisal system, previously, it is quite difficult for any employee
to move from scale 2 to 3. The gap between the scale 2 and 3 is also a
problem since it limits the scope of employees to perform better. It is quite
difficult for any employee to move to solid performance directly from poor
performance. The performance appraisal is very rigid and therefore,
discourages the employees on the whole since the scope for better
performance is very limited. The Human Resources Department is
responsible for developing and administering a benefits compensation system
that serves as an incentive to ensure the recruitment and detainment of top
talent that will stay on with the company. When an employee is hired, the
company's Benefits Coordinator is required to meet with employees one-onone or in small group settings to explain their benefits package. This often
requires an employee to make an informed decision and to provide their
signature for processing purposes should try to keep the employees happy by
giving them good compensation and benefits. It will increase the association
of the workers with the organization and will make them happy. It believes that
a qualified workforce can only be achieved by a dynamic Human Resource
Department, which will seek to attract the diverse organizational talents in
various innovative ways. Not to mention the need to recruit, select, train and
develop the employees, the responsibilities of HR department for Whirlpool go
beyond explanation.
Integrating Finance
Whirlpool would require an exclusive integration with the human resource
department, marketing department and the production department so that the
finance department could have more effect on overall strategy.
In the saturated market, whirlpool are having over-production which
result in ineffective use of resources both human and financial.
Cut down production as well as other activities from that region.
Financial forecasts are predictions of future events relating strictly to expected

costs and revenue costs for future years. There are five major expenditures,
which include
Research costs,
Technology development costs,
Product costs,
Promotion costs and
Distribution costs.
All this costs will have to be estimated by financial analysts to in order to
predict the future profitability of the strategy.
There are some other costs and some process for acquisition a company and
they are given below:
Total cost
Total cost of ownership
Procurement
Strategic alliance fee
Particular countrys Government alliance process
Generally finance related issues are dealt by the Finance Department. So,
this time as well when it came to forecasting feasibility it would be up to the
financial department to do the job properly.
The recommendation is likely to be implemented in the facilities of the

Whirlpool. But strategic alliance will be done with local companies in Asia,
Europe, and Latin America & North America.
This recommendation should be implemented as soon as possible at

strategically suitable time when both investments and opportunities of
expansion are available. But it should be soon as competition is rising.
Focus more Acquisition, T&D & R&D in emerging markets.

Cut down over production and Come up more innovative product in
saturated markets.
Introduce more cost efficient product for Asian Market as Asia is not
economical stable like Europe.
Building more productive Human Resources by applying Strategic
staffing (Recruiting & selecting, T&D, Renting Employee,
Compensation Plan and others).
Implementing Marketing strategy that aligns with Business strategy
which will help to grab market share in emerging market and
sustain in existing market.
Implementing Financial Management that aligns with Business
Strategy and help Whirlpool to acquire and invest in T&D and R&D.
While stepping foot in Acquisition, Laws, Rules, Regulation and
other Legal factors should be on account of Whirlpool
After taking necessary steps manage the performance of the
organization as prolonging in market depends on managing
performance into optimum level

Main Case

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Main Case

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Whirlpool was founded in 1911 as The Upton Machine Co.

In 1989, Whirlpool Corporation (Whirlpool) embarked on an ambitious global

However, by the mid-1990s, serious problems had emerged in the companys

Approximately 120 million home appliances are sold in developed countries

Although it was estimated that 46 million appliances were sold in North

competitive landscape remained unattractive. Profit margins continued to

There were approximately 350 producers of household appliances in Europe.

Asian consumer preferences were different from those in Europe or North

wheels, and easily hooked up to electrical and water supplies. Refrigerators

David Whitwam joined Whirlpool in 1968 as a marketing management trainee

Whirlpool management also believed that the European market was

In addition to giving Whirlpool a 56% interest in WOI, the Kelvinator purchase

Whirlpool announced in 1987 a full-scale cooperation with Daiichi, a

Smaller Chinese companies were also seizing considerable market share

Whirlpool Corporation is the world's leading manufacturer and marketer of

Reducing restructuring cost by 10% Global workforce caused problem

European market was ripe for consolidation.

Whirlpools major internal problem is that the new technology used in

Increasing raw material costs would raise operational costs for

The Waste Electrical and Electronic Equipment (WEEE) Directive of

Whirlpool lacks of qualified workers in some countries

Lack of distribution channels is another major problem, especially in

They are suffered operating losses in Asia and Europe

Whirlpool faced huge competition, over capacity problems due to

What strategic measures should Whirlpool Corporation consider in order to

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plants in the North American market, European Market, Latin American

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the foreign companies on those countries. As a result there is a chance

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The bargaining power of buyers is high in North America. In Asian Market

The competition in this industry in very alarming and Whirlpool Corporation

Competition to Whirlpool Corporation in the home appliance segment was

Product differentiation facility will also not be able to gain by substitutes.

In North American and European industry the threat of substitutes is low.

Whirlpool Corporation is a well-established company which has suppliers

The condition of suppliers, their switching cost etc. information is given in

industry had consolidated in the 1980s, leaving four major competitors:

In this context, the Whirlpool Corporations former strategy was centered in

channel was through independent kitchen specialists who sold complete

Although it was estimated that 46

The economic stability in

Asian market is a growing market for its

The financial analysis emphasizes Whirlpools performance and its affiliations

Sales/ Net Fixed

Current AssetCurrent Liability

Average Collection Period: