7 Summary Whirlpool Coporation’s Global Strategy
Introduction case
1989 Ambitious global expansion emerged:
• Objective: becoming the world market leader in home appliances.
• Purchase of a majority stake in an appliance company owned by Philips.
• Purchased a majority stake in an Indian firm.
• Established four joint ventures in China.
• Made new investments in its Latin America operations.
1990 Serious problems emerged in the international operations:
• 1995 European profit fell by 50 percent.
• 1996 Reported $13 million loss in Europe.
• 1996 Whirlpool lost $70 million in Asia.
• 1997 Lost $62 million in Asia.
• 1997/1998 Victim of spiraling interest rates in Brazil.
• 1998 Appliance sales in Brazil plummeted by 25%.
• 1999 Third straight year of declining sales in Brazil.
1997 In response to these problems, Whirlpool began a global restructuring effort:
• Announced that it would cut 10 percent of its global workforce over the next two years.
• Pulled out of two joint ventures in China.
• In Latin America 3,500 jobs were abolished and significant investments were made to upgrade plants and product lines.
What went wrong with Whirlpool’s global strategy?
Appliance industry in the late 20th century
The appliance industry is in general classified in 4 categories being laundries, refrigeration, cooking and other appliances, usually varies among regions. An overview of the regions US, Latin America, Europe and Asia: