Whirlpool Case Analysis

Whirlpool Case analysis

Question 1:

From the case, we can notice that Whirlpool is a one of the great home appliance makers in US. The company has established manufacturing centers to produce units in 13 countries and sells them in 170 countries all around the world. Whirlpool generates 60% of its sales from North America, 25% from Europe, 15% from Latin America & just 2% from Asia. 

The nature of international business environment of Whirlpool is highly competitive in nature. Due to the case, in the 1990s, and Whirlpool faced low profit margins, intense competition in domestic market, pressuring management to consider international markets. Therefore, Whirlpool can not jus only focus on developing its business in their country, the USA, but it must also try to expand their business globally. This mission was regarded as a tough and difficult task because it was the first time that Whirlpool began to do business internationally. It is clear that they have to compete with many rivals and opponents in foreign country in the same business area, home appliance maker. Despite the difficulties the company has met, they still tried to overcome the situation, making great business strategies and setting up the specific goals. Finally, as a result, Whirlpool has reached lots of achievement. The company acquired the appliance giant Philips in Europe, Vitromatic joint venture partner in Mexico and also took control of Kelvinator of India. Besides, this firm has bought 65 percent of Italian cooling compressor manufacturer Aspera, purchased Poland's second-largest appliance maker. Moreover, Whirlpool has developed low-cost versions of popular models to target customers in low-income emerging markets such as Latin America, China, and India, created subsidiaries to sell and service appliances in Bulgaria, Hungary, Romania, Russia, Slovakia, and the Czech Republic .

The decision of going on international business, of course, has brought a lot of oppoturnities to developing the business, it has also brought some risks for Whirpool. The first risk is culture risk. Each country has different cultures, that make the buying attitude of consumers different in each cultures. Whirlpool company have to manage to adapt with the new culture if they want to survive. The second risk is country risk. Trade barriers, legal systems, etc.. are the things which Whirlpool need to concern before doing business in one country. The third risk is currency risk. The currency value can change unexpectedly everyday, but the price Whirlpool give to the customer can’t act that way, so they should be careful with the currency value if they don’t want to make a huge loss. The final risk is commercial risk. This happens when the company offer credit to a buyer with no collateral or recourse.

Question 2:

 These are the benefits and advantages that Whirlpool company can obtain when going in an international market:

New Markets

The first benefit for Whirlpool company of going in an international market is the new markets. Naturally, new markets can, of course, boost revenues due to the greater number of customers. However, they can also be a danger if Whirlpool company does not properly understand about the culture, the legal systems,.etc as mentioned before. Whirlpool company should investigate more to make sure what they offering meets a need in that location and clearly understand about their consumers’ behaviors.