Whirlpool is The Largest White Goods Manufacturer in The World - Essay Example

 1 Introduction Whirlpool is the largest White Goods manufacturer in the world. It has arrived at this position after a very difficult period during the nineties which saw a decline in consumer loyalty and mounting losses everywhere. For a turnaround the company adopted several strategies like introduction of Enterprise Solutions, realignment of databases and introduction of Knowledge Management. But by far the largest contribution came from its adoption of the theories and concepts of Innovations. This has proved to be the turning point in the company’s remarkable turnaround from losses to profits, from loosing market share to generating customer loyalty, and from cutting down jobs to increase in manpower. It has introduced the concept of Innovation from Everyone, from Everywhere and for Everyone that has proved to be a runaway winning idea. 2 Innovations People pursue good health and will do anything new that will help them to live a better life. Corporates too do the same by pursuing strategies of improvements and breakthroughs that create new products and new markets. This is a continuous exercise and any let up, in health or corporate endeavours will invite a decline. This then is the engine that persuaded the corporates to innovate. There is a delicate difference between innovation and invention although one leads to the other. Innovation is the first happening or germination of an idea for a new product or a process while the first attempt to make it or practice it is what invention is all about. Innovation is therefore creation of a new value and invention is the creation of a new product or service that offers this value to the customer. Sometimes additions to existing products are also called innovations as they enhance the value or are value creators and generate revenues. But a better way of describing an innovation is the discontinuation of an old value and replacing it with new value. As a consequence discontinuation becomes a source of an innovation. 3 Discontinuity Another name given to technological innovations is Discontinuity. Such technological breakthroughs help to create entirely new products or even new industries. This is the way the rules are re-written. It is part of corporate strategy to find new ways and means to improve products and services and discontinuation of one preceded the other. It is brain wracking exercise that brings about breakthroughs and they arise unexpectedly with experiments. Such results can bring about new or improved technologies. A technologically new product means that its technological features or projected uses are drastically different from those of former produced products or processes. Such innovations can involve basically new technologies or can be based on merging existing technologies for new uses, or can be an offshoot of the use of new knowledge. A technologically improved product would mean that current performance has been considerably enhanced or upgraded. A relatively simple product or process may be improved, in terms of either better performance or lower cost, through use of high-performing components or materials or a use of a complex product or process which encompasses a number of integrated technical sub-systems may be improved by partial changes to one of the sub-systems. Therefore discontinuous innovation means creation of new forms of customer value within existing or new markets and by pursuing discontinuous innovations, business creates new markets or displaces existing techniques of bringing value to customers. The source of innovation could be the technical idea to improve or replace a product or service. The object of innovation is to do something more or something else, to deliver better use or service to the customer and to create a new market or to increase market share. When this new product or service is successful it is the process of innovation at work. This is the result of the implementation of the innovation in the form of the new product or service. In truth there is no real definition of innovation except by its functionality and the effect it has on the markets, the customers and the economy in general. Often a new business model creates a new image and the products so marketed are perceived to be innovative. Thus an existing product presented with different usage and possibilities becomes and innovation and creates a new market space for itself or caters to a new segment which had not known it till now. Innovative options open to an enterprise may either be strategic, research and development (R&D) results or non-R&D results. Strategic Innovations are those that emanate out of decisions to serve a specific market or segment by creation of a different perception or usage of an existing product. Experimental development that goes beyond applied research forms the basis of Innovations that are results of R&D. They constitute basic research for intensifying knowledge about fundamental processes related to the production processes in the company. The non-R&D: activities are those that do not have straight forward relation to R&D, and are not defined as R&D, yet they play a major role in corporate innovation and performance. 4 The Whirlpool Concept Whirlpool has pooled internal resources by drawing out talent from within its employees to create an entire division to invite, investigate, research and develop innovative ideas into innovative products with new or better usage. They have lined up monetary and recognition incentives for employees which has created anticipation and involvement of the workforce and resulted in rise in productivity as well. This has also brought about customer loyalty through better brand value and enhanced product value. 5 Acquiring Maytag A feather in the cap has been the acquisition of its close rival Maytag. This has brought about grater marketshare and created higher share value. Contrary to fear and general belief at creation of a monopoly and reduction in jobs, this has resulted in better product, lower prices and higher value additions for customers and creation of more jobs despite closure of the Maytag headquarters and some factories. This was possible by re-alligning and enhancing production lines in existing facilities. Adding the Maytag brand to its existing brands will help Whirlpool to carry further its strategic management policy of innovations. It will have a larger pool of both talent and products on which to continue innovations as this has already proven to be the winning method of capturing the imagination of its customers. It can safely be said that for the foreseeable future innovations will remain the strategic objective at Whirlpool. Read More