What Is the Nature of Whirlpool’s International Business Environment? What Types of Risk Does the Firm Face?

Question 1: What is the nature of Whirlpool’s international business environment? What types of risk does the firm face?

Whirlpool’s international environment is very complex, dynamic and active. The company has a vast network of over 60 manufacturing and technology centers and over 80,000 employees all over the world. The company also has an aggressive global expansion strategy: buying up competitors in foreign market, partnering with other manufacturers, creating subsidiaries, opening regional offices oversea. The company also created new product line to suit with the regional taste and demand of customers and outsourced R&D, manufacturing and services in lower-cost country like China, Mexico and Poland. This aggressive international expansion can be contributed by the stagnant and low profit margin of the domestic market which force Whirlpool to find others market to grow.

However, a bigger market also means greater risk. Whirlpool faces all the risk that a global enterprise has like political risk, currency exchange rate risk, government regulatory risk, different culture risk, commercial risk, etc…. But the greatest risk that Whirlpool faces is from its’ own aggressive expansion. The quicker they grow the more complex and risky their operations get. All decisions had to be made with careful research and consideration but it seem that Whirlpool is managing to stay on top of the game quadrupling its revenue since 2003.

Question 2: How can Whirlpool benefit from going international? What types of advantages can the firm obtain? What advantages acquired abroad can help management to improve Whirlpool’s performance in its home market?

From going international, Whirlpool can escape the stagnant domestic market and thrive in the much bigger and more opportunities international market and gain 3 distinctive advantages. The first advantages that Whirlpool can obtains from going international access to a huge market and lots of potential customer. The second advantage is achieving economy of scale which mean more efficient production, distribution and R&D. The third advantage is product diversification. The international market forces the company to diversify its’ product line to meet customer taste and demand which can be used to cater for customer in domestic market and other foreign markets as well.

The 3 advantages