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International Business cases - Van Hoof
Q
186
uickprinter Koningstraat 13 2000 Antwerpen www.quickprinter.be
2.90 EUR
International Business: Cases
Case 1: Whirlpool
Whirlpool’s Dramatic Turnaround through Internationalization Whirlpool exemplifies how internationalization can rejuvenate declining sales and optimize cost structures. Background Headquartered in Benton Harbor, Michigan, Whirlpool Corporation makes washers, dryers, refrigerators, dishwashers, freezers, and microwave ovens in 13 countries and sells them in 170 others, under brands names such as Whirlpool, Maytag, Magic Chef, Jenn Air, Amana, KitchenAid, Kenmore, Brastemp, and Bauknecht. In 2006, Whirlpool acquired competitor Maytag (horizontal integration) and its brands (Amana, Jenn Air, Magic Chef, and Maytag). Whirlpool generated over $19 billion in 2006 annual sales: 60 percent from North America, 25 percent from Europe, 15 percent from Latin America, and 2 percent from Asia. Operate with 60 manufacturing and technology centers worldwide and 80,000 employees. International Expansion Domestically: (1) The U.S. appliance market matured in the 1990s, and Whirlpool faced low profit margins, intense competition, and more demanding buyers, pressuring management to consider international markets. Internationally: (1) Trade barriers fell, consumer affluence grew, and capitalism flourished. (2) A “global” approach would yield economies of scale in manufacturing, assembly, appliance technology and distribution. (3) Whirlpool sought cost reductions in R&D, manufacturing, and services by locating plants in lower cost locations such as China, Mexico and Poland. Strategy Global expansion Whirlpool: Acquired the appliance giant Philips in Europe Bought 65 percent of Italian cooling compressor manufacturer Aspera Acquired control of Kelvinator of India Purchased Poland's second largest appliance maker Formed a joint venture in China to produce air conditioners. Established a
International Business cases - Van Hoof
Q
186
uickprinter Koningstraat 13 2000 Antwerpen www.quickprinter.be
2.90 EUR
International Business: Cases
Case 1: Whirlpool
Whirlpool’s Dramatic Turnaround through Internationalization Whirlpool exemplifies how internationalization can rejuvenate declining sales and optimize cost structures. Background Headquartered in Benton Harbor, Michigan, Whirlpool Corporation makes washers, dryers, refrigerators, dishwashers, freezers, and microwave ovens in 13 countries and sells them in 170 others, under brands names such as Whirlpool, Maytag, Magic Chef, Jenn Air, Amana, KitchenAid, Kenmore, Brastemp, and Bauknecht. In 2006, Whirlpool acquired competitor Maytag (horizontal integration) and its brands (Amana, Jenn Air, Magic Chef, and Maytag). Whirlpool generated over $19 billion in 2006 annual sales: 60 percent from North America, 25 percent from Europe, 15 percent from Latin America, and 2 percent from Asia. Operate with 60 manufacturing and technology centers worldwide and 80,000 employees. International Expansion Domestically: (1) The U.S. appliance market matured in the 1990s, and Whirlpool faced low profit margins, intense competition, and more demanding buyers, pressuring management to consider international markets. Internationally: (1) Trade barriers fell, consumer affluence grew, and capitalism flourished. (2) A “global” approach would yield economies of scale in manufacturing, assembly, appliance technology and distribution. (3) Whirlpool sought cost reductions in R&D, manufacturing, and services by locating plants in lower cost locations such as China, Mexico and Poland. Strategy Global expansion Whirlpool: Acquired the appliance giant Philips in Europe Bought 65 percent of Italian cooling compressor manufacturer Aspera Acquired control of Kelvinator of India Purchased Poland's second largest appliance maker Formed a joint venture in China to produce air conditioners. Established a