Whirlpool

Executive Summary

Whirlpool is a famous company across the world for the production, distribution and selling of home appliances. This company started in 1911 as a family business venture and has grown over the years to become a market leader across the globe. It ranks among the best companies across the world as of present. This company was started by three brothers – Louis, Frederick, and Emory. They first established the Upton Machine Company to manufacture wringer washers that were driven by motors and powered by electricity. This company merged with Roebuck and Company later on in 1916; hence it started selling its products faster than before. There then existed a relationship that was reciprocally valuable to both Whirlpool and Sears (Sydney et.al 471).

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Whirlpool’s development throughout the 1970s was steered by John H. Platts as the chairperson who began his career with this corporation in 1941. He was specially selected to take over from Elisha Gray II in 1971. During this period, John H. Platts focused on enhancement of goods for housing utilization. Six years later, the first automatic washing machine was introduced. One of the failures of this company during this period concerned manufacturing of ice-making appliances to be used by hotels and food suppliers. This product did not meet retailing objectives and was put up for sale in 1982.

Platts retired in November 1982 and Jack D. Sparks succeeded him as the new CEO and chairman. He was set to expand the focus of the company. Jack D. Sparks had vast knowledge and expertise in sales and marketing. This was critical for Whirlpool since it faced stiff rivalry in the US, industry consolidation as well as changing customer inclinations. Jack D. Clarks formulated a strategy that directed the company towards the development of the company’s line of products further than domestic devices and into associated end user long-lasting goods. In 1985, Whirlpool ventured into the rewarding kitchen-cabinet bazaar by obtaining Mastercraft Industries Corporation, and later purchase of St. Charles Manufacturing Company (Snyder and Duarte 498).

In 1987, Jack Sparks retired and was succeeded by David R. Whitwam as the new CEO. He then took over the accomplishment of corporation’s five-year international policy. Under his leadership, the company remained focused on escalating mechanized output and dipping overheads while applying modern expertise to appliance fabrication. Later on, Whitwam was replaced by CEO Jeff Fettig who is now the CEO of the company.

Whirlpool as a company leads globally in provisions of high quality services mainly concerning  home appliances. It produces and markets these products essentially across the world; something that has earned the corporation a long term reputation among its clients as well as other competitors. This company has branches in twelve countries across the world which produce fine appliances. It is estimated that the company employs a workforce of about 45,000. The company has its headquarters in Benton Harbor, Michigan and provides services to more than 140 countries in the world.

Arguably, it is the leading company dealing in home appliances which has established leadership position in Europe, South America, and North America with a drastic expansion in China. It all began in 1911 as a family owned business. As of now, surprisingly, it is leading as others follow. In the recent ranking, the company managed to appear among the best top 200 out of 500 best companies across the world. More precisely, it ranked 159 among a total of 500 companies sampled world over.

The company has a good vision that focuses on growth and progress. Basically, its vision is noticeable in its World Excellence System (WES), which is a blueprint for impending worth, unremitting development as well as clients. The World Excellence System was instigated back in 1911 and includes the best quality programs of Whirlpool across the globe, using the criterion of International Standards Organizations to institute a universal approach to matters of superiority, which perhaps devotes this corporation to quest for excellence and total client contentment.

The company works very accurately. It sells around 3000 to 4000 products in North America. All the products consist of thousands of components which are pulled together daily in one of its 12 main factories. These products are then stocked up in 28 warehouses. The company manages to sell over sixteen million appliances each year.

 

Goals, Vision/Mission, Constraints

Vision

The company has a vision that aims at transforming every home all over the world with lots of passion, pride and good performance. Its vision underpins that each residence is of its own importance, each client and buyer action form its prospect. This vision stimulates the zeal that the company maintains for its clients, pushing it to make available resourceful way out to exceptionally meet their requirements. The company brings this dream to existence through the supremacy of its exclusive international venture as well as its stupendous people. Working as a team remains its major desire all the time every place (Snyder and Duarte 472)

Mission/Goals

The company maintains a unique goal of being passionate and developing loyalty in clients all through the entire life of their business. The mission describes the commitment as well as what the company indulges in to build value. In its mission, Whirlpool is enthralled with building trustworthy clients. It has a goal of building loyalty in consumers in all contracts and products it offers.

Values

The company maintains values that are stable and describe the code of conduct of all employees of Whirlpool. These include:

Respect: the company fosters the culture of trust among individuals while valuing the abilities as well as assistance of each individual.
Integrity: the company insists that all characteristics of the company must be carried out with honor – hence the longtime Whirlpool principle that there is no correct means to accomplish an erroneous thing.
Diversity and Inclusivity: the company advocates for keeping of a wide assortment of people and thoughts in Whirlpool. Variety credits disparities, whereas inclusion lets each person to have a say. Combining these things in one, the company strives to generate value.
Teamwork: the company recognizes that pride results in working together to unleash everyone’s potential, achieving exceptional results.
Winning spirit: the company seeks to support itself in terms of traditions that facilitate teams as well as individuals to accomplish and take pride in unusual end results and also motivate the winning spirit within its employees.

Constraints of Whirlpool

As a company, Whirlpool has faced so many constraints. As a major concern, these constraints have affected the company’s operations. The constraints this company has faced range from customer dissatisfaction, financial constraints as well supply as constraints. The supply constraints have been crucial to the development and working of this company hence affecting the profits made by the company. Moreover, the company faces several other constraints that affect its operations.

Water and electricity are very crucial factors of production for any company to operate and thrive well. In Whirlpool, there is shortage of both water and electricity supply needed to carry out its routine production. Since the two factors are scarce in the company, the company is strained a lot in production as it spends a lot of money to supplement for these two elements.

The company has yet another constraint relating to diversification to line of production. The company opts to diversify its line of production to manufacture other services other the normal home appliances. However, this decision is not easy. The company finds itself in an environment of stiff competition from companies already established in those particular lines of goods. As such, to keep pace with the high competitive environment, the company is engaged in activities that deprives it a lot of funds as well as intensive labor.

This as well results into physical constraints among the employees as they are required working extra hours. Besides these constraints, there are more other constraints relating to environmental conservation. The company is required to recycle CFCs as a measure of keeping the atmosphere clean. However, the company lacks the machinery to carry out this activity. As such this becomes a major constraint to the company (Chevalier and Mazzalovo 455).

External environment

Major opportunities

Whirlpool is a company that is in an area with a competitive environment that both poses threats to the company as well as opportunities. The Company enjoys a range of external environment from the customers, political will, rules and regulations, physical orientation, as well as being the only single largest company supplying domestic products across the world. As such, the company experiences little or no competition from other companies.

This makes grows and establishes across the whole world. In terms of customers, the company enjoys good customer relations as many clients prefer it to other companies. This is because the company has earned loyalty from consumers by providing the best quality services and goods. As a result, many consumers shop with the company hence generating lots of revenue for the company.

The company also enjoys a healthy external environment from political will. The laws set by the countries in which it operates are not so tough enabling this company to operate with less hustles. Besides this, the company also enjoys the geographical positioning as it is strategically located, hence it is easy to get customers for its products.

Major threats

Every company and business has to face threats at some point in its operation no matter what. In this case of Whirlpool, there are numerous threats that this company faces in the course of its operation. These threats include environmental pollution, competition from other major companies across the world dealing in the same line of business, loss of customers due to tastes and preferences. Other threats include internal management and operations.

Other bigger companies in the same industry as Whirlpool pose a big challenge to its operations. The management spends a lot of money and resources to keep the company in the lead. In addition, the company faces threats of the weak European financial situation (Reynolds 233)

General environment

Generally, the company operates in a healthy environment. The economic status of the European Union is not so bad. The market is big so the company is able to dispose of its products in volumes. Mores so, the political environment of the countries it operates in is stable providing a good environment for business to go on. Competition is stiff; however, Whirlpool is able to compete favorably to counter the threats posed by its rivals. In addition, the company has established a good relation with the customers, suppliers as well as the authorities thereby gaining a better environment to work in.

Major trends

Since its inception, Whirlpool has gone through major trends both favorable and unfavorable. The favorable trends include the diversification of its line of production to include other items apart from the domestic products it was known to chiefly produce. In other trends, the company is paying over $1 billion to put up its existence in Europe. This will in no doubt make it the largest company in the market of Eastern Europe. The company has also adopted the trend of producing appliances made of stainless steel.

Industry analysis

Whirlpool is a company which has undergone tremendous changes throughout the years of its operation. It has been able to make huge profit and has grown over the years to become the leading company in the appliances industry. Industry analysis shows that the company controls the largest share of European markets and other markets across the world.

Profitability – Whirlpool (market analysis as of Dec 2014)
Return on Assets

Industry Comparison

4.84%

Return on Equity

Industry Comparison

12.78%

Return on Capital

Industry Comparison

9.76%

Courtesy: Stock Market Insights (2015).

Industry lifecycle

The industry cycle of Whirlpool is well defined. It all started as a small business owned by family members. By then, it was producing small amounts of products in a limited market. The business then merged up with other bigger business to from a bigger company and increased its market share as well.

Through all these steps, the company changed management who came in with new unique ideas and strategies. The company later grew and expanded into other parts of the world. It also ventured into diversifying its productions. As of now, surprisingly it is leading as others follow. In the recent ranking, the company managed to appear among the best top 200 out of 500 best companies across the world. More precisely, it ranked 159 among a total of 500 companies sampled world over (Snyder and Duarte 493)

Industry structure

Whirlpool is a well-structured company. It has built strong barriers into entry and exit of other companies in its market. The forces include high competition in terms of the quality of goods it produces as well the high overhead costs that push out other companies from this industry. This company is segmented to form branches operating in different countries. These segments include South American segment, Latin American segment, Europe division as well as the division operating in Asia.

Competitor identification

This company faces a lot of competition from other major companies. Among its major competitors include companies like Elextrolux LG electronics Samsung as well as Haier. These companies are identified on the bases of volume of sales and the market share they command.

Internal organization

Strengths

I. It is the largest seller of appliances in the world; major appliances maker by revenue

II. Focus on identifying exceptional customer insights and conniving super products
III. Caters to diverse markets and this multiplicity helps deal with depression in one section; for example, weak business in India led to inadequate sales turn down whereas augments were seen in North America.

Weaknesses

I. Remains a moderately unassuming player in Asia.

II. Has over reliance on North American locale. (About 50% of its net deals in worth were still available from the North American locale)

III. Being available in the real machines segment opens Whirlpool to low edges and huge operational danger.

Resources

The company has different resources that includes capital, large stocks of products as well human resources. All these resources contribute to the successful operation of this company. Essentially the machinery makes the work easier at the company.

Capabilities core competencies and comparison with competitors

Whirlpool has several capabilities and competencies that keep it a head of other companies. It is able and competent to supply to scores of customers all over the world something which other companies can hardly do. The company is also able to stand stiff competition since it has been through over such periods some time ago; many other competitors cannot do this. As such, it turns out to be the best and most competent global company.

Value chain analysis

Whirlpool has several channels of supply across the world. It has a supply chain from Europe to Latin America which finally links to Asia. This network enhances perfect communication among the segments as well makes it easy to move products from place to another (Snyder and Duarte 499).

Current strategy

Corporate strategy

The company has adopted a cooperate strategy that will move it to the next level. It aims at growing to greater heights and maintain its lead in the cooperate world. To achieve this, the company establishes good policies to govern its operations as well as strives to achieve a good image through quality gods and services. This builds its reputation and image to the external environment.

Business strategy

The company is determined to grow by diversifying its product line. It also faces competitors reasonably and does not engage in violent competition with its competitors. The company also considers merging with other companies in particular line of products so as to boost its sales hence good profit.

Performance

According to Snyder and Duarte (497), Whirlpool Company has performed pretty well in the past few years. It has been able to realize huge profits compared to its competitors. This performance is actually encouraging for the company. It has grown from one branch to several branches across the world. It has also diversified its line of production to include other products. Looking at the employee population, the company has tremendously increased its number of employees year by year.

SWOT analysis and Recommendations

Positioning
Mid priced in the best segment

SWOT Analysis

Strength

1. It is the largest producer of appliances in the world
2. It concentrates on high quality products for clients

Weakness

1. Remains a somewhat diffident player in Asia.
2. Over reliance on North American area.

Opportunity

1. Revival in the US housing market breeding to augmented use of domestic devices.
2. Improving order for these goods globally
3. Opening in India as result of forecasted increase in CAGR in end user appliances.

Threats

1. Lessening working profit margin over 3 years.
2. Slower development in chief markets like US
3. Rivalry from little cost Asian producers.

Competition

1.Elextrolux
2.LG Electronics

Conclusion

Whirlpool is currently a leading company dealing in domestic products. The company started low and gained momentum as it grew to become the best company in the world. Its aims and goals seem to be perfectly in tandem with its desire as a company. The company has had lots of changes since it was founded. These changes coupled with its strengths, competencies as well as clever strategies have enabled it to achieve bigger dreams despites starting small. This clearly shows that management can really impact on the success of any business or company. From its SWOT analysis, Whirlpool reflects a lot of strengths and opportunities which grabs with immediate effect. This shows clearly that the future of the company is bright. The company hopes to achieve bigger dreams.

Works cited

Chevalier, Michel, and Gerald Mazzalovo. Luxury Brand Management: A World of Privilege. Singapore: Wiley, 2012. Print.

Reynolds, Chris. Introduction to Business Architecture. Boston: Course Technology PTR, 2010. Print.

Singapore: John Wiley & Sons (Asia), 2008. Print.

Snyder, Nancy T, and Deborah L. Duarte. Unleashing Innovation: How Whirlpool Transformed an Industry. San Francisco: Jossey-Bass, 2008. Print.

“Whirlpool Corporation Is Aiming For Growth In Markets All Over The World – Whirlpool Corporation (NYSE:WHR) | Seeking Alpha.” Stock Market Insights | Seeking Alpha.
N.p., n.d. Web. 21 Apr. 2015.

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