Will Whirlpool Clean Up in Europe?

1) What are the advantages of consolidating production of product lines at single factories in
the EU? What are the disadvantages?

Consolidating the production of product lines at single factories in the E.U. have
advantages and disadvantages. The advantages include the lifting of trade barriers, and
the absence of border bureaucracy. The lifting of trade barriers within the EU allows
firms to concentrate production in one factory that can serve several markets throughout
the continent. The elimination of physical barriers at border crossing points and of
restrictions on trucking competition by national governments leads to productivity gains
in logistics and physical distribution management. The disadvantages are the member
nations’ varying level of economic development, and the cultural differences in the
continent. The member nations’ varying level of economic development calls for
adjustments as to how the products are manufactured. The cultural differences in the
continent also means that the production must adhere to what is appropriate in the given
region’s culture. There are adjustments or specifications the firm must adapt to be able to
cater to the need and demand of the region.

2) Should Whirlpool continue to produce and market in Europe its three product lines
(Bauknecht, Whirlpool, and Ignis), which span the entire white-goods market, or should
it focus on one market niche?

Whirlpool should continue to produce and market its three product lines in
Europe. This is because doing so would provide them with competitive advantage as well
as allow them to reach their target, which is to serve a wide range of customers and to,
ultimately, control the white-goods production in the continent.

3) What benefits will Whirlpool gain by broadening the Whirlpool brand name from a North
American one to a global one?
 Whirlpool will gain a lot of benefits in broadening their brand name to become a
global one. These benefits include gaining brand loyalty from their customers, avoidance
of a price war, and maintaining the brand consistency throughout the markets.
4) In light of aggressive responses of Electrolux and Bosch Siemens Hausgeräte, should
Whirlpool revive or abandon its European strategy?
Whirlpool should revise its European strategy. As mentioned in the case,
Whirlpool is not the only white-goods manufacturer that is looking to take advantage of
the no barriers in Europe. It has strong competitors who are doing everything they can to
turn the situation around to their own advantage. Despite that, Whirlpool still has an edge
compared to them as they already succeeded in establishing itself as the number 3 white-
goods manufacturer in Europe. However, to ensure that they would ultimately come out
on top, Whirlpool needs to revise its strategy, like keeping a close watch on its
customers’ preferences as well as its competitors and investing more in research and
development.
5) Do you think it’s possible to design and sell the same basic appliance around the world?
No, I believe it is not possible to design and sell the same basic appliance around
the world because manufacturing a one-size-fits-all product seems not feasible at all. It is
difficult to manufacture a product that can accommodate every specification required in
all countries. As mentioned before, countries have varying level of economic
development and language, there are also cultural differences, and, in some cases, there
are instability in some regions in the world, etc. All of these make it difficult to design
and sell the same basic appliance around the world.