Whirlpool Case Analysis
BACKGROUND
INTRODUCTION
The estimated $228.9 billion in the year 20092 global household appliances market can be described as a global industry in condition that the coordination and integration of sourcing, manufacturing, operations, research and development and marketing activities across multiple world regions and countries is accomplished. Enterprises capable of harnessing the benefits of strategic global locations and integrate them into one single global vision are the ones that can be described as global. The industry was invented and still dominated by European and American key manufacturers. However, Asian manufacturers from Japan, Korea, and China are enforcing a strong and rapid growing competition in the last few decades. In terms of global industry aspects, over 65 percent of the global appliances sales are through specialty retailers, the rest is divided between hyper markets, department stores and general merchandisers.
Multinational manufacturers experience high fixed and exit costs. The majority of manufacturers does not forward integrate and usually depend on large retailers to distribute their products while retailers tend sometimes to backward integrate. Shedding the light on the US, Europe, and Asia household appliances market, we find that the saturated and highly-competitive market in the US has washing machines, vacuum cleaners and dryers as the most frequently-bought categories. The oligopolistic market has consolidated into top four players; Whirlpool, General Electric, Electrolux, and Maytag with 80 percent market share for the four corporations combined. Other competition in the US includes Korean brands especially in specific categories such as microwave ovens. Japanese foreign direct investments in the US in the appliances and electrical machinery were aggressively competing in providing high quality goods for fewer prices than local manufacturers. Whirlpool led the American market and achieved a growing market share from
INTRODUCTION
The estimated $228.9 billion in the year 20092 global household appliances market can be described as a global industry in condition that the coordination and integration of sourcing, manufacturing, operations, research and development and marketing activities across multiple world regions and countries is accomplished. Enterprises capable of harnessing the benefits of strategic global locations and integrate them into one single global vision are the ones that can be described as global. The industry was invented and still dominated by European and American key manufacturers. However, Asian manufacturers from Japan, Korea, and China are enforcing a strong and rapid growing competition in the last few decades. In terms of global industry aspects, over 65 percent of the global appliances sales are through specialty retailers, the rest is divided between hyper markets, department stores and general merchandisers.
Multinational manufacturers experience high fixed and exit costs. The majority of manufacturers does not forward integrate and usually depend on large retailers to distribute their products while retailers tend sometimes to backward integrate. Shedding the light on the US, Europe, and Asia household appliances market, we find that the saturated and highly-competitive market in the US has washing machines, vacuum cleaners and dryers as the most frequently-bought categories. The oligopolistic market has consolidated into top four players; Whirlpool, General Electric, Electrolux, and Maytag with 80 percent market share for the four corporations combined. Other competition in the US includes Korean brands especially in specific categories such as microwave ovens. Japanese foreign direct investments in the US in the appliances and electrical machinery were aggressively competing in providing high quality goods for fewer prices than local manufacturers. Whirlpool led the American market and achieved a growing market share from