Whirlpool Environment

It is currently a radically changing time in the business environment for Whirlpool. There are large deals taking place with Whirlpool and other companies that are changing the global appliance market. While Whirlpool begins more global expansion it faces a new competitor in the U.S. market, Electrolux. Whirlpool also has other troubles on the home front with a multiple lawsuits. As whirlpool deals with these adversities, they are still pushing forward to remain the major home appliance manufacturer; they have launched a new, authentic ad campaign to continue to earn trust here in its home market.

Industry

The Swedish company, Electrolux, has recently overtaken Whirlpool as the number one appliance supplier in the U.S. Electrolux just finalized a $3.3 billion deal purchasing GE’s appliance department.

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As seen in the graphic above, with the acquisition of GE, Electrolux has barely overtaken Whirlpool by just 0.9%. Whirlpool still surpasses Electrolux globally however, with $19 billion in annual sales; $3.1 billion dollars more than Electrolux with $15.9 billion. Whirlpool has declined to comment on the new competition which is detailed in the Wall Street Journal article titled “Electrolux to Buy GE Appliances Business for $3.3 Billion.” This article details the deal and its effect on Electrolux and the North American market.

Legal/Technological

        Whirlpool is facing other harsh conditions besides competition from Electrolux. Whirlpool is also a part of two lawsuits. The first is over a plant in Fort Smith, Arkansas. The plant was found to be leaking trichloroethylene or TCE, a carcinogen, into ground and water sources around the plant (Arnold). The lawsuit forced Whirlpool to completely close down the plant. Given the verdict, Whirlpool will have to pay at least $5,000 plus other possible money to the homeowners in punitive damages based on the deduction of property value and clean up from the leak. Whirlpool may also have to pay out perpetuity, given the event the contamination can’t be cleaned up. The other lawsuit deals with an inherently defective line of front loading washing machines manufactured since 2001 by Whirlpool. This class action lawsuit calls for Whirlpool to compensate for the purchase of the washers and a possible product recall. According to consumers, the washers grow a smelly mold within the machines. Whirlpool released a few ideas and a cleaning product to remedy the situation these however, didn’t solve the problem. There are over 200,000 units in question. Whirlpool is trying to prove that not all of the washers made have this defect.

Societal

        Not all is bad for Whirlpool; they have recently launched an ad campaign under the slogan: “Every Day, Care.” Whirlpool has spent $43 million on advertising so far in 2014. The campaign is meant to resonate with the modern family. The campaign was kicked off with a commercial that displays parents dealing with every day hassles and problems of a family, it then cuts to more pleasant moments. The commercial is meant to connect with the modern, harder working parent. A studied showed that only 28% of parents make their children do daily chores, compared to 82% in the past (Newman). Not only is the modern parent busier, but many families are also cutting back on their budgets. Since the economic crisis of 2008 there has been a major trend in families wanting more modest homes. The campaign has perfect timing giving the entrance of a foreign competitor and discerning lawsuits. Whirlpool plans to keep its position as a strong brand that can be counted on even in an economic downturn and other adversities. The Whirlpool mission states that they hope to “Create Demand and Earn Trust Every Day. This campaign will help further this mission and cement Whirlpool as the brand that has been trusted in U.S. homes since 1911. The commercial really conveys Whirlpool as a company that understands what it takes to care for a family. I believe Whirlpool hopes to show its U.S. market their products can be depended on day in and day out.