STRATEGIC MANAGEMENT

Case Study PresentationOn

Maytag CorporationJ. Devid Hunger

Presented By:

Zehra Abdul Aziz Waqar Ameen Nauman Uddin Khan Syed Ahmed Ali

Industry’s Dominant Features

o Market Growth Rate And SizeThe market growth rate was very high at its early maturity but now it is

on it maturity stage so the growth is steady but the size of market is much expanded due to global competition

o Scope Of Competitive RivalryThere is big scope of competitive rivalry because the big companies in

this industry has already doing business globally its mean they are already mature at their parent country so the competitions in this country will increase.

o Number Of RivalsThere is several numbers of rivals in this industry because there are lot of

global regional and local companies is in this industry.

o Learning And Experience CurveThe existing companies was available in the market from-1980’s so they

are more experienced and skills as compare to new rivals. They improving their R & D and cost efficient through learning and experience curve.

o Economies of scaleAll of the major home appliances manufactures were heavily engaged in

renovating and building production facilities improve quality and reduced Labor and material cost to gain Economies of scale.

o Pace of technological change

o Product innovationU.S appliances manufactures were moving towards a stronger product-oriented market. They designed product for customer satisfaction

as per the need of customer. They Introduce energy saving appliancesWhirlpool‘ GE‘ Maytag and other company design their product as energy saving and efficient uniquely differentiated

Pace of technological change was very high companies were competing through technology they introduce SMART products.

o Buyers needs and RequirementsUS buyer’s needs sophisticated machinery which they can present in their

small threats, they also need full kitchen solution which is filled by the Global companies.

o Degree of Product DifferentiationAs this Companies Focus on Differentiation, Then there technology

became same and they lost their differentiation and the price competition increases.

o Vertical IntegrationAB Electrolux, Siemens, Whirlpool, form the B2B electronic market place for European Households Appliance maker, Distributor and retailers for the convenience of Dealers

Porter’s Five Forces Acting On Industry

The Major Drivers Of Change

First Driver : Product Innovation

In 2002 U.S appliances manufactures were moving towards a stronger product-oriented market. They designed there product for customer satisfaction and as per the

need of customer. They introduce energy saving appliances. Whirlpool, GE, Maytag and other company design their product as energy saving and efficient and uniquely

differentiated. A survey of 500 residential found that roughly 25% of the population said that they would be willing to pay 15% to 25% above the standard price for higher

energy saving appliance.

Second Driver: Technological Change And Manufacturing Process Innovation

In 2002 manufacturer were introducing “SMART” appliances with increasingly sophisticated electronic controls and self diagnostic features. ”Smart

Appliances” were being connected to the internet. These appliances could call for service, download programs, contact security providers in case of gas leaks or fire, pay utility bills, and be programmed remotely to start and stop when

needed.

The Major Drivers Of Change (Cont…)

Third Driver: Changes in cost and

efficiencyThe basis for effective competition had been producing the fewer basic components necessary in the most efficient plants. Although individual

designs might vary, the components inside the appliances were becoming more universal and were being produced highly automated plants, using computer-integrated manufacturing process. Fewer parts mean simple

manufacturing and less chance of break down. The result was lower manufacturing cost and higher product quality.

The Major Drivers Of Change (Cont…)

Forth Driver:Increase in Globalization of

the industry:

The industry diversifies globally in 2002, the Korean and Japanese company were come in the industry they were broadly diversified and well

established globally and U.S markets become globalize.

The Major Drivers Of Change (Cont…)

Strategic Group Map

Key Success Factors For The Industry

 

Technology Related: It will help in introducing innovative product according to the demand of the customer,

and it will lower down production cost and improve quality of the product.

Manufacturing Related:It plays a great role as the entire major home appliance manufacturers were heavily

engaged in renovating and building production facilities to gain scale of economies by reducing labor costs and manufacturing cost.

 

Distribution Related: Distribution plays a vital role in success because when and where to market is very critical

in the home appliance industry. It product is not distributed properly then the company will lose buyers. Firms must have strong presence in the distribution channel.

Key Success Factors For The Industry (cont…)

Product Innovation: Product innovation is one of the major success factors in the home appliance industry.

Different companies coming with different and innovative product like automatic washing machine, 2 door refrigerator, stylish and compact appliances that can be put in the

kitchen etc.

Marketing Related:The key component of marketing related factor of key success is Brand Name. Brand

name plays an important role in selecting the product. Whenever consumer reached to a retailer he always has brand name in his mind especially in home appliances, which is

created through experience.

Competitive Profile Matrix

Strategic Factors

Weightage

Whirpool Company

Rating

Whirpool Company Weighted

Score

GE Company

Rating

GE Compan

y Weighted Score

Maytag Company Rating

Maytag Compan

y Weighted Score

Technology Related:

0.4 4 1.6 4 1.6 4 1.6

Manufacturing Related:

0.2 3 0.6 3 0.6 3 0.6

Distribution Related:

0.2 3 0.6 3 0.6 2 0.4

Product Innovation:

0.1 4 0.4 3 0.3 3 0.3

Marketing Related:

0.1 3 0.3 2 0.2 2 0.4

Total 1.00   3.5   3.3   3.3

Thank You

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