whirlpool-corporation

Businessmodel of Whirlpool Corporation

Customer Segments

Whirlpool has a mass market business model, with no significant differentiation between customer segments. The company targets its offerings at all consumers who need home appliances.

Value Proposition

Whirlpool offers two primary value propositions:  innovation and brand/status.

The company has embraced innovation throughout its history. Its lists of firsts include the following:

  • First electric wringer clothes washer
  • First bottom freezer refrigerator
  • First side-by-side refrigerator
  • First space kitchen developed for the U.S. government
  • First self-ventilated cooktop
  • First countertop microwave oven
  • First energy/water-efficient top load washer
  • First large capacity front-load washer in the U.S.
  • First top load laundry pair with a steam cycle
  • First induction double oven freestanding range

  • First 24-hour toll-free service support program The company has established a powerful brand due to its success. It is the #1 major appliance manufacturer in the world, with $21 billion in revenues in 2015. It operates in over 170 countries and its products are found in over 97 million homes. It maintains a number of prominent and popular brands, including Whirlpool, KitchenAid, Maytag, Consul, Brastemp, and Indesit; each has generated annual sales in excess of $1 billion. Lastly, it has won many honors, including the following:

  • Recognition as one of the Top 25 Most Reputable U.S. Companies by *Forbes *and Reputation Institute from 2008 to 2014
  • Recognition as one of Fortune’s Most Admired Companies in the Home Equipment/Furnishings category four years in a row
  • Recognition as part of the FTSE4Good Index Series every year since 2001
  • Ranking on the Ocean Tomo 300 Patent Index every year since 2005
  • Recognition in Newsweek’s Green Rankings every year since 2009
  • Ranking on Corporate Responsibility’s 100 Best Corporate Citizens list 12 out of 15 years
  • Ranking 13th globally on the 2014 Top Company for Leaders list by Aon Hewitt
  • Ranking as one of Fast Company’s Top 50 Most Innovative Companies
  • 2012 Silver Edison Best New Product Award – Whirlpool Ace ### Channels

Whirlpool’s main channels are the retailers, manufacturers, and distributors who resell its products. The company promotes its offering through its social media pages and advertising.

Customer Relationships

Whirlpool’s relationship is primarily of a self-service nature. Customers utilize its products while having limited interaction with employees. That said, there is a personal assistance component in the form of phone and e-mail support.

There is also a co-creation component. The company’s website invites visitors to submit patented ideas for consideration as product introductions or enhancements.

Key Activities

Whirlpool’s business model entails designing, developing, and manufacturing its products for customers.

Key Partners

Whirlpool’s key partners are the suppliers who provide it with raw materials and major components for use in the manufacturing of its products. They are given access to a Supplier Portal through which they can view helpful resources. The company also heavily depends upon the retailers, manufacturers, and distributors who resell its products in their outlets.

Key Resources

Whirlpool’s main resources are its physical resources, which include its collection of 70 manufacturing and technology research centers worldwide and its 14 manufacturing plants (nine in the United States, five in Mexico). It also depends on human resources in the form of its engineers that design, develop, and manufacture its products.

Lastly, it places a high priority on its intellectual property, considering the trademarks, licenses, and patents it owns to be valuable assets.

Cost Structure

Whirlpool has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is cost of products sold, a variable expense. Other major drivers are in the areas of sales/marketing and administration, both fixed costs.

Revenue Streams

Whirlpool has two revenue streams:

  1. Product Revenues – Revenues it generates from sales of its products to consumers.
  2. Licensing Revenues – Revenues it generates from the royalties it receives from the licensing of its trademarks to third parties to manufacture, sell, and service certain products bearing the Whirlpool, Maytag, KitchenAid, and Amana brand names.
Written on October 25, 2017