Change at Whirpool Corporation

8/12/2019 Change at Whirpool Corporation

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Change at Whirpool Corporation (A)

Widya Wardani | 29112003

Malendra Rusni | 29112031

Sabrina Desinta | 29112301

Seto Kusparyanti | 29112306

Reska Putri Praslita | 29112512

Syndicate 1

MM6013 Leading and Managing Organizational Change


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General Analysis

P

ESTELANAL

YSIS

Political Different policy in each country of Whirpool branch caninfluence its strategy

Economical Macroeconomic condition affect buying ability ofconsumer that will impact the company directly

Social In several countries, own luxury stuff lead to increase insocial status which is prospective for company

Technological Rapid changes in electronic appliances tech. need tobe concerned since it leads to innovation among player

Environmental Environmental issue should be taken into account esp.in manufacturing process

Legal Safety and workplace policy in every countries have tobe considered


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Industry Analysis

INDUSTRYOVERVIEW Began to emerged industry in early 20th

century by theintroduction of electric washing machines, householdrefrigerators, and temperature-controlled stoves (19061915)

Market penetration came to significant increase after worldwar II.

Early players : Whirpool (top loading automatic washer),Frigidaire (refrigerator), Maytag (washer with auto agitator andclothes dryer), Raytheon (microwave)

CONSUMERS In the late 90s, majority are new residential construction (25%of total demand) and replacements (75% of total demand)

Consumers characteristic are a diverse lot, depends on thehouse condition, appetite, etc


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Industry Analysis

DISTRIBUTIONCHANNELS In 1960s, specialty appliance stores had sold over 50% of allappliances (US). Mass Merchant : Sears, Montgomery Ward,J.C Penney

Late 1990s, independent appliance stores diminished, most ofmass merchant were struggling and some faced bankruptcy

PLAYERS During 1980s and 1990s, trend were consolidation andacquisition among players

By 1998, 93% of US major home appliances were

manufactured by Big Four : General Electric, Electrolux,Maytag, Whirpools


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Industry Analysis


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Industry Analysis

Threat of SubstitutesDue to the rapid changes of technology,innovation is on the track. It leads toinvention of better product even newsubstitutes. However, Life expectancy isvery high and Perceived value doesntexist as there is no any close or directsubstitute of home appliance products.

MEDIUM

Bargaining Power of Buyer Easy to switch if find more

quality and reliable product

HIGH

Bargaining Power of SupplierOnly few suppliers of particular input arepresence in the market. Due to theconsolidation in the market only fewsuppliers are available in the homeappliance industry, so it would be littlebit difficult for the buyers to switch fromone supplier to another.

HIGH

Threat of New EntrantsNew entrant cannot be easily entered

the industry because existing sellers arereally active in launching fresh moves toboost their market standing andbusiness performance

LOW

Rivalry Among Competitor Compete with several strong

competitors which own strongbrand as well

Strong players : Whirlpool,Maytag, GE and Elextrolux

HIGH


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Company Profile

Roots lay in the Upton Machine Company,headquartered in rural Michigan

Offered first electric and motor-driven wringerwasher in 1911 and began to expand rapidly in1916 when Sears, Roebuck offered Uptonswasher in its catalogue under the trade name

Allen. In 1929, merged with the 1900 Washer

Company and became the Nineteen HundredCorporation and renamed to Whirpool (1950).

By mid 1980s, became the 2nd-largest whitegoods maker in US, market leader inrefrigerators, washers and dryers.

1987, appointed new CEO : David Whitman (joined company since 1968, VOsales in 1983, CMO in 1985).


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Problem Identification

GLOBALIZATION

Triggered by domestic competition and Electroluxsmoves into US.

August 1988, Launched new Strategy guided by vision Reaching Worldwide to Bring

Excellence Home, to establish a strong presence in all major world market

European Expansion, Purchased a majority stake in Philips European

Appliances Business.1989 - 1991

1990s Brazil and Asia Expansion, Long standing alliances in Brazil, Joint

ventures in Asia

1998Operated 44 significant facilities in 13 countries, sold products in 170countries under 21 brand names. Revenue reached $10.3 billion, 46%

from outside of North America


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GLOBALIZATION

Effort to leverage expertise across locations and to develop

common technologies were beginning to take hold i.e touted aBrazilian-built microwave oven that used Swedish design and aChinese product platform

Effort to increase market share in

Europe had met with stiff resistance Unprofitable joint venture with a Chinese

Firm had been shuttered Had incurred heavy loses in Asia and

Latin America


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ORGANIZATION, BRANDS, AND PRODUCT LINES

During Whitwam era, Profit-and-Loss (P&L) Responsibility switched fromProduct Categories to Individual Brands

The flagship Whirpool Strong brand in laundry room

line of washers, dryers, refrigerators, freezers, ranges, and dishwashers in the middleto high end segment.

Kitched Aid

Emphasis on Kitchen Appliances, middle to high end segment

The Roper Brand

Similar to other brand, low end segment

The Kenmore

Owned by Sears but the featured product manufactured by Whirpool


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ORGANIZATION, BRANDS, AND PRODUCT LINES

Products are sold through different channels

KitchedAid and Whirpool :Independent Appliance Chains, HomeImprovement Stores, Warehouse Clubs and Mass Merchants

Ally with strong retailers only : Sears, Lowe and Costco

ISSUE

Sears, which accounted for 17% of Whirpoolsglobal sales and 35% of USsales, received special attention which led to occasional complaints frommanager of other accounts and of non-Kenmore Brands


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SUPPORT FUNCTIONS

Company Culture Situation

Midwest or small town likeFriendlyEthical

DeterministicIntegrity

RespectTeam Decision Making

Cost containment and qualitycentered

Everyone can say no, riskaverse

Lack of alignment andconsistency

Too many programs andprojects

Not-invented here syndromeChange Averse

Not customer centeredSilo mentality

Internal or trade only focused


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Analysis of Change

BACKGROUND SITUATION

Challenges in facing globalization

Problems in manufacturing and product complexity

Unbalance strategy between separate brand

Problem in culture and value


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Analysis of Change

TYPE OF CHANGE

IncrementalTransformational /

discontinuous

Proactive(Anticipatory)

Fine Tuning Re-orientation

Reactive Adaptation Re-creation

As we look at the future, we realize that this is going to be a very different, verythough industry. Many people in the company think, Theonly way to drive change isout of crisis There is no crisis at this time. There is no burning platform. But Ivealways felt you can drive change if you paint a picture of a better tomorrow

-Dave Whitwam, 1998-


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Analysis of Change

Brand-Focus Value Creation

+

Innovation

CORPORATE LEVEL STRATEGY

Brand Oriented

+

Consumer Focus


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Analysis of Change

CORPORATE STRATEGY :BRAND-FOCUSED VALUE CREATION

1989,Whirpool started to focus in brand

1993, Company launched the Dominant Consumer Francise (DCF) : give final

consumer a compelling reason beyond price to desire its brands.1997, launched new corporate vision Every Home Everywhere with

Pride, Passion and Performance

July 1998, Launched BrandFocused Value Creation


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MM6013 Leading and Managing Organizational Change

Documents

Change at Whirpool Corporation