ies of scale. In Japan, there was already a strong presence of Japanese appliance manufacturers although Japan was also a site for potential growth. Whirlpool acquired Philips' Major Domestic Appliance Division, 47% in 1989 and the remainder in 1991. Initially, margins doubled as predicted. However, local competitors responded by better tailoring their products and cutting costs; Whirlpool's profits then began to decline. Whirlpool applied the same strategy to Asia, but GE was outperforming Whirlpool there by tailoring its products as part of its regional strategy (Johansson, 2000).In my opinion, the European countries may be fragmented, but there is evidence that there is increased future collaboration amongst the countries and their purchasing decisions. Furthermore, Whirlpool can cut costs by vertically integrating its components and changing only the exterior of the appliances if necessary. Moreover, I strongly believe that the joint venture with Phillips would benefit Whirlpool due to Phillips strong international presence and its strong appliance division. Whirlpool should consider concentrating on expansion in Europe and Asia with the solutions for these external and internal factors that caused the company complexity. 4. To what extent does Whirlpool experience suggest that globalization is not a good idea in the appliance business? Explain fully.There are many reasons why Whirlpool experiences suggest the globalization is not a good idea in appliance business. I mentioned many difficulties that Whirlpool faced in its globalization in the previous question. I listed some key points:Fragmented distribution network in EuropeDifferent consumer needs and preferences. For example, in Europe refrigerators tend to be smaller than in the U.S., have only one outside door, and have standard sizes so they can be built into the kitchen cabinet. In Japan, refrigerators tend to have several doors in order to keep different compa...
