Whirlpool in China: Travails

Published 01 Jan 2001
Reference 4950
Topic Strategy
Region Asia
Summary

Case A and B describe Whirlpool’s entry strategy for China in the washing machine, microwave, air conditioner and refrigerator markets. Only a few years later, faced with market share gains by local manufacturers, Whirlpool withdrew from the air conditioner and refrigerator sectors requiring it to fundamentally re-evaluate its strategy.

Teaching objectives

The case series allows a rich discussion of many of the issues associated with entry into the Chinese market by foreign competitors as part of globalisation. It brings into sharp focus the conflict between optimistic projections of more than a billion potential consumers and the realities of building a position in China on the ground. Key lessons are: not to under-estimate the power of local, Chinese competitors; that adaptation of a global formula to the Chinese market requires considerable and often subtle adjustments; and building an effective distribution and sales network is a critical and difficult hurdle to overcome.

Keywords
  • ENTRY STRATEGY
  • EMERGING MARKETS
  • GLOBALISATION
  • WHITE GOODS
  • CHINA STRATEGY
  • JOINT VENTURE
  • APPLIANCE INDUSTRY
  • LOCAL ADAPTATION