6.
Read the following case and answer the questions given at the end of the case.
Whirlpool's Dramatic Turnaround Through Internationalization
Home appliance maker Whirlpool Corporation, headquartered in Benton Harbor,
Michigan, generated over $19 billion in annual sales in 2006, an increase of 26 percent from the previous year. Key factors influencing this performance include the acquisition of the Maytag Corporation in 2006 and an increased global demand for its brands and innovative products. During the next several years, the company expects growth in
Asia and Latin America to be significantly higher than in North America and Europe.
Whirlpool employs more than 80,000 employees in over 60 manufacturing and technology centers world wide. The firm manufactures washers, dryers, refrigerators, dishwashers, freezers, ranges, compactors, and microwave ovens in 13 countries and sells them in 170 others under brand names such as Whirlpool; Maytag, Magic Chef,
Jenn-Air, Amana, KitchenAid, Kenmore, Brastemp, and Bauknecht. Whirlpool generates almost 60 percent of its sales from North America, 25 percent from Europe,
15 percent from Latin America, and just 2 percent from Asia.
International …show more content…
appliance market matured in the 1990s, Whirlpool faced intense domestic competition and more demanding buyers, resulting in lower profit margins. Meanwhile, international market trade barriers fell, consumer affluence grew, and capitalism flourished. Management realized that it could best deal with these threats and opportunities by undertaking a systematic program of internationalization. As a result,
Whirlpool engaged in a series of moves over the next decade.
Whirlpool acquired the appliance business of Philips in Europe, 65 percent of
Italian cooling compressor manufacturer Aspera, and purchased Poland's second largest appliance maker. In Eastern Europe, Whirlpool created subsidiaries to sell and service appliances in Bulgaria, Hungary, Romania, Russia, Slovakia, and the Czech
Republic.
In China, Whirlpool formed a joint venture to produce air conditioners and established a corporate headquarters and product development/technology center in
Shanghai. The company also opened regional offices in I-Iong Kong, New Delhi, and
Singapore. In Mexico, Whirlpool acquired Vitromatic, a former joint venture partner in Mexico. It also developed low-cost versions of popular models to target customers