Whirlpool's Dramatic Turnaround through Internationalization
Q1: The Whirlpool Corporation manufactures dryers, washers, refrigerators, freezers, dishwashers, microwave ovens, compactors and ranges in thirteen countries and trades them in almost 170 countries under the brand names Whirlpool, Magic Chef, Maytag, Jenn-Air, Kitchen Aid, Amana, Kenmore, Bauknecht and Brastemp. Whirlpool generated more than $19 billion in 2006 as the annual sales indicting an increase of 26% from fiscal 2005. This was due to increased international demand for its innovative products and brands. Whirlpool acquired Maytag Corporation in the same year in a bid to increase the sale levels. The company employs not less than 80,000 employees in more than 60 technology and manufacturing centers in the whole world. The firm generates nearly 60% of its total sales from the North America niche, 25% from Europe, 15% from Latin America and 2% from Asian markets.
Whirlpool suffers some risks which include low profit margins due to increase in the number of demanding buyers counteracted with high domestic competition. The domestic markets are at risk due to the competition from Haier, the largest appliances brand in China. This fifth largest appliance maker in the world has established a distribution centre and some production base in U.S specifically, South Carolina. Haier has recently established a subsidiary in New York, thus threatening Whirlpool's domestic market on various appliances targeting the locals. For example, Haier has taken 20% of market for window air conditioners and 50% of the markets for small refrigerators, and it's currently expanding to feature full size refrigerators niche. This is a huge risk for the Whirlpool Corporation because a risk involving another company investing in the local market threatens whirlpool's capacity for retaining local niche as well as sourcing for human capital (Hill, 1999).
Q2: Whirlpool enhances competitiveness in the domestic market by going international. Internationalization raises the level of profits by stabilizing the seasonal fluctuations in the sales volumes commonly associated with local demand. Internationalization helps curtail production costs and other related marketing expenses owing to economies of scale. Similarly, going international extended the potential sales of the products that existed and helped the company to gain greater global market share. The firm also takes pride in advanced technology associated with some global markets such as China, Poland and Mexico. As a result, this has helped in saving on costs associated with unnecessary technology transfers. Considering internationalization has boosted whirlpool ability in retaining high technology levels as well as skilled labor force sourced across nations. Going global enhances profitability levels owing to the perceived currency strength across nations (Brown& Gutterman, 2003).
Q3: Whirlpool integrated local subsidiaries operations in order to enhance its technology capacity locally and perhaps transfer this to the global market for competitive reasons. As result, processes such as production and distribution are easily shared with the company divisions in global niche. During this integration whirlpool acquired other appliance businesses from various regions in Europe, Italy, Poland, Bulgaria, Hungary, Russia, Romania, Czech Republic and Slovakia, in a bid to expand globally. This saw the firm open offices in New Delhi, Hong Kong, Shanghai, and Singapore to facilitate global operations. Major considerations have been made during these global operations. For example, the firm manufactured low-cost versions of the popular models in order to target the customers in the low-income areas such as China, Latin oor even in India. Continuous improvement on the product has seen the firm grow faster. For example, in technological improvement Whirlpool has manufactured a microwave oven that grills bake pizzas, steaks, and has drawers which slide out for easier access to the large dishes. The firm has also developed a washer that avails various usage options for consumers, since it has a built-in sensor to detect the load size and automatically select the spin speed, water levels, and the type of appropriate wash cycle. This helped in the company succeeding because consumers would opt to buy such appliances that are improved and easier to use.
Such a move assisted whirlpool in targeting all social classes globally. Additionally, whirlpool undertook training for nearly all job classification that lasted almost a year and conducted by some outside consulting group. This move boosted the firm's bid in obtaining local talents. Whirlpool has cross-regional R&D teams cooperating across the global in ensuring diverse clients' needs are identified and excellently met. Considerations made during productions assist in boosting firm's competitive edge. For example, whirlpool develops appliances depending on the climate of the local areas as the key driver for satisfying market needs. Whirlpool has blossomed through commitment and sensitivity to customers in the diverse economic and cultural settings in the world (Grosse& Kujawa, 2005).
Q4: Whirlpool can efficiently compete with Haier from China by introducing the advanced technological skilled and innovative employees. For competitive reasons, Whirlpool ought to undertake extensive and thorough training on its human capital in order to avert any cases of redundancy associated with obsolete skilled employees in terms of technology (Shaw & Onkvisit, 2004). Whirlpools advertise and effectively market their appliances in a way that they target their domestic niche. In order to easily build large customer base, Whirlpool ought to employ part of returns/ profits that they make in the international business to develop local market by perhaps opening more outlets or retails centers. It's also advisable for Whirlpool to perhaps use discriminatory pricing in their home market in order to compete effectively. The company ought to establish key relationships with local suppliers in order to possibly cut on production expenses. Similarly, seeking local talents and participating in community development issues through CSR (i.e. Corporate Social Responsibility) will boost the firm's bid in creating quality brand image. This goes along with increased sales.
Additionally, Whirlpool should strive to manufacture value added and innovative products in the local market. It is very hard to separate the local strategy from the global strategy because of the exposure of the different companies manufacturing and branding appliances. CRM (i.e. Customer Relationship Management) issues in global division have also been improved in the recent past, and therefore Whirlpool ought to use similar in enhancing local capacity (Dlabay, 2001).
Q5: Curently, there are job opportunities in HR department under HR generalists' office to be located in US-IA-Amana. Similarly, the firm is hiring Category Manager-Refrigeration to and Codes Project Engineer, all to be located in US-MI-Benton Harbor. Whirlpool is offering Product Engineer position to be situated at U.S-OH, Greenville, while that of Assembly Engineer is to be located in US-OH-Findlay.
Assembly Engineer position interests me a lot because it involves facilitating CCM/lean strategy implementation, and other tasks that concerns project monitoring as well as improvements procedures. As such, I would like to work in Whirlpool's international operations because their business is comprehensive in its scope and has the selling through trade, marketing, and servicing to consumers which interests me. Life at the organization offers me an opportunity to enhance my entrepreneurial as well as managerial skills in the business world. The company also offers presents a diverse business environment that will see me grow to be a global oriented business leader. Whirlpool is an international leader in the field of appliances and endeavors to deliver innovative designs which meet customers' needs and wants. Finally, I wish to work with the firm since it really cares about its employees y offering effective reward systems and compensation perks.
Brown, R. & Gutterman, A.S. (2003). A short course in international business plans: charting a strategy for success in global commerce. Florence, KY: World Trade Press.
Dlabay, L.R. (2001). International business. Morristown, NJ South-Western Educational Publishers.
Grosse, E.R. & Kujawa, D. (2005). International business: theory and managerial applications. Morristown, NJ: Irwin Publishers.
Hill, C.W. (1999). International business: competing in the global market place. London, UK: McGraw-Hill Publishers.
Shaw, J.J. & Onkvisit, S. (2004). International marketing: analysis and strategy. New York, U.S.A: Routledge Publishers.