Nature and risk present in international business environment of Whirlpool
The nature of international business environment of Whirlpool is purely dynamic and fluctuating. The globalization of supply chain, corporate mindset, markets and capital has made the international business environment of the company purely dynamic and susceptible to global changes. The international business strategies operate on the edge of such dynamism and demands subsequent changes in the event of any change in the global business environment.
The international business environment of Whirlpool is prone to various types of risks like political, export-import risks, varied forms of payments and receipts, exchange rate risk, risks related to regulatory compliances, and so on. There are also considerable differences in marketing and branding strategy of two countries, product planning, expenditure allocation, consumer preferences, technical requirement, availability of manpower, and so on. All these differences can pose risk for the international business dimension of Whirlpool in the coming time. The expansion of business internationally demands the enterprise to conduct a careful study and examination on various environmental variables playing dominant role in the environmental settings of respective countries (Travis, 2007).
Advantages of going international
Expanding business internationally can foster various possible advantages or gains to the Whirlpool. These advantages can benefit the company in improving the performance in the domestic as well as in international markets. Some of such identified advantages are listed below:
Economies of scale: Expanding operations worldwide offers opportunity to company to gain cost advantages. In the initial years, company has to spend adequate amount on establishing infrastructure overseas, but it will yield benefits in the long term. Locating and expanding business internationally also help the company in locating less expensive suppliers worldwide (Travis, 2007).
Boost sales and revenue figures: The international business environment offers the company with the immense opportunity of enhancing sales and revenue figures through remarketing existing products in the new markets. The marketing techniques appeared to meet with the expectations of one target market might offer good returns in another target market. In other words, international business environment adds versatility and flexibility to prevail marketing strategies and programs, thus enhances possibility of smoothening sales and revenue figures (Hill & Jones, 2009).
Diversification: The strategy of expanding business internationally adds diversification to the existing portfolio of Whirlpool. For instance, in case of weak customer demand in domestic market, the company can sell the existing products in the international market profitably. The small scale business can be diversified easily with the help of international business strategies.
Actions taken by Whirlpool to gain success in local markets
Whirlpool has tried to take best possible advantage of the opportunities available in the local markets to gain foothold in the immediate markets. The company has located research and development activities, production facilities in the lower cost countries like China, Mexico and Poland to take cost advantage and increase profit margin. The company has also employed the strategy of forming partnerships with the local players of overseas markets like Philips, Aspera, Kelvinator, and so on. The partnership with the local players has enabled the company to gain synergy benefits and expanding foothold in the other markets (Travis, 2007).
The company has also developed low cost version of popular models of various appliances in order to attract attention of the customers of low cost countries. Besides, subsidiaries are also being set up by the company in various countries like Bulgaria, Hungary, Romania, Russia, etc to facilitate immediate supply of products to the customers of respective countries. The appliance business of Whirlpool is regional rather than global. It is due to reason of decentralised management of the worldwide operations of the company. The decentralised management prevents the company from establishing a global integrated supply chain to gain cost advantages and minimising risk (Ajami & Goddard, 2006).
Strategies for competing effectively with rival firms
The company needs to bring some changes in the existing international business strategies respond more effectively in the local as well as in foreign markets. There is need to stimulate marketing and advertising efforts to establish remarkable presence in the local and foreign markets. The advertising and publicity programs should be customised in accordance with the needs of target audience of respective markets. This is due to reason that marketing programs worked effectively in the local markets might be ineffective in foreign markets and vice-versa.
In this regard, company needs to allocate resources towards marketing research programs. The marketing research programs will help the company in gaining idea about the needs of target audience and designing appliances accordingly (Hill & Jones, 2009).
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