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AgendaCORPORATIONRPORATION
•Whirlpool Background
•Industry Dynamics•Growth Opportunities•Competition Environment
•Segmentation•Macro•Micro
Administrative Center at Benton Harbor, Michigan, USA Founded in 1911 by Lou Upton at Benton Harbor Employees: 59,000 split into the following regions:
– NAR (North American Region)– LAAG (Latin American Appliance Group)– Whirlpool Europe– WAAG (Whirlpool Asia Appliance Group)
Manufacturing, Marketing and Sales of home appliances 25 brands world-wide (including affiliates)
Whirlpool Corporation
Whirlpool Background
CORPORATIONRPORATION
#1 in North America
#1 in Latin America
#3 in Europe
#1 Western white goods manufacturer
Whirlpool’s global position today...
Whirlpool Background
CORPORATIONRPORATION
North AmericaNorth America 17,755,000 units17,755,000 units EuropeEurope 9,774,000 units 9,774,000 units Latin AmericaLatin America 4,817,000 units 4,817,000 units AsiaAsia 1,644,000 units 1,644,000 units OthersOthers 42,000 units 42,000 units
TotalTotal 34,032,000 units 34,032,000 units
Whirlpool CorporationUnits Shipped in 1998
Whirlpool Background
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19.5 19.221.2
23.325.4 26.4 27.8 28.9
34
0
5
10
15
20
25
30
35
millions
1990 1991 1992 1993 1994 1995 1996 1997 1998
Unit Volumes
Whirlpool Sales…
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$6.4 $6.6$7.1 $7.4
$7.9$8.4 $8.5 $8.6
$10.3
$00$01$02$03$04$05$06$07$08$09$10$11
Billions US$
1990 1991 1992 1993 1994 1995 1996 1997 1998
Net Sales
Whirlpool Background
CORPORATIONRPORATIONWhirlpool Sales…
Every Home...EverywhereEvery Home...Everywhere
withwith
PassionPassionPerformancePerformance
PridePride
Whirlpool Vision….
Whirlpool Background
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AgendaCORPORATIONRPORATION
•Whirlpool Background
•Industry Dynamics•Growth Opportunities•Competition Environment
•Segmentation•Macro•Micro
Industry Overview
•Commercial laundry is often a family owned business of highly independent entrepreneurs
•Very competitive industry. •Price and margin erosion•Manufacturers are focused on cost cutting and economies of scale
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Industry Dynamics
Industry Overview
•Customers do not perceive a compelling difference among manufacturers
•Price is still the main driver for making decisions
•Consumers do not request/ask for a particular brand of products
•No brand loyalty•Low satisfaction / Low willingness to spend more money
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Industry Dynamics
Growth Potential
0
500
1000
1500
2000
2500
1999 2000 2001 2002 2003
Units
•Market for commercial laundry will remain stable in the future*# of households w/o washer remain stable*# of apt. units per machine served is slightly decreasing
•Slight growth in multi-housing offset by coin stores•Breakthrough opportunities:*In-unit laundry offers clear consumer benefits (opportunities for domestic lease and/or pay per use domestic)*Pay per use domestic products attractive alternative to single households*Shifting life style encouraging outsourcing fabric care - Drop-off service for Laundromats
•Export opportunity a bonus
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Industry Dynamics
Product Line Maytag Speed Queen GE Whirlpool
Brand Reputation Excellent Average Good Below Average Average second Tier Brand
Recent Prod Innovation High End Front Load, New Electronics Front load and Good Electronics None New Electro-Mechanical
Price Position +15-20% +10-15% -5% Base
Distribution Strong and Improving Stronges t but weakening Phas ing Out Significant in Route
OrganizationDedicated Team in Commercial Products
Division, Poised for growthDedicated commercial Laundry
companyCasual
Partial Focus , Informal bus iness
team
Market share (Trend) 31%+ 45%- 3%- 15%-
Route Distributor 30%(+) 50%(-) 4%(-) 16%(-)
Route Distributor32% 40% 2% 6%(+9% Kenmore)(-)
CompetitionCORPORATIONRPORATION
Industry Dynamics
AgendaCORPORATIONRPORATION
•Whirlpool Background
•Industry Dynamics•Growth Opportunities •Competition Environment
•Segmentation•Macro•Micro
Macro Segmentation
MHL Coin
OPL
Industrial
Con
sum
er I
nter
face Low
High
Product Type
Small Load Large Load
Entering OPL (On Premise Laundry) and Industrial requires significant investment and produces less synergy with Brand Value Creation strategyLow risk approach is to enter and dominate MHL and Coin before entering OPL and industrial
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Segmentation
Micro Segmentation
•Familiar and non-chain laundromats
•Laundry owners who are the decision makers
•Laundromats with Domestic-type washing machines (non large chassis washing machines)
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Segmentation
Market ParticipantsM
anuf
actu
rer Route
Operator
Distributor
Property Owner/
Management
Property OwnerOperated Ldy.
Laundromats
Mul
ti-h
ousi
ng/
dorm
itor
ies
resi
dent
s
Single Family House Hold
Trade Partner Customer Consumer
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Segmentation
Decision Makers
•Value from affordable high quality•Speed, Large capacity•Low acquisition cost•Smart Cards & Coin scalability•Low life-cycle cost.•Fast repairing (15 min)•Easy, fast service installation (12 minutes)•Duraprint finish console (looks new)•Complete support & Service for commercial trade partners•Availability
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Segmentation
Coin Stores:
•30,000 Laundromats
•52 machines per store
•1.6 to 1.8 million installed machines
•7.5% to 15% replacement rate
•150,000 to 200,000 units/year
Market Size CORPORATIONRPORATION
Segmentation
Coin Stores
•Total # of coin stores: 30,000-35,000*Average turn per day: 4,7*New construction slowed by heavy hook-up fees imposed by local government, increasing pressure on water reuse*National/Regional chain emerging with mixed result, multi store ownership increasing*Industry image improving, promoting as fabricare center, adding service such as drop-off, folding, etc…*Owners handle most of maintenance/services, good loyalty to distributors*Biggest problem: high utility cost (15-25% of total expense)
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Segmentation
Coin Store Product Mix
•Top load washer still biggest, but is losing quick•Front load washer gaining share, leading by Maytag High Efficiency model•Product mix varies across regions, with northeastern leading the trends to FL•Whirlpool competes in top load, and #18 dryer market, total about 42% of installation and about 115K new purchase
35 lb+26%
18 lb42%
25-30 lb32%
Topload35%
Dryer40%
Frontload25%
Front load
50 lb+8%
18 lb18%
30 lb74%
Dryer
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Segmentation
Distribution Channel
Coinmach40%
Web15%
Mac-Gray9%
Others36%
•Market size: 200k•Fragmented market, over 280 in total, mostly family owned•Big companies trying to grow by consolidation/geographical expansion, resulting in increasing # of locations•Exploring new opportunities such as domestic lease, Laundromat, distributorship•Targeting owner operated laundry (20% of MHL) as growth opportunity
Route Operator:
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Segmentation
Distribution Channel
Coin Stores80%
Owner Op. MH20%
Dom. Type76%
Large Chassis
24%
•Very Fragmented market, about 350 specialized dealers, mostly family owned, local•Some big retailers and multi-housing distributors carry commercial laundry products, competing more on owner operated segment•Specialized dealers usually offer full service to customers, including arranging financing, design, location, selection, brokerage•Strong customer loyalty to distributors•Trade margin: TL 12-15%, FL 25-30%
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Segmentation
Positioning StatementCORPORATIONRPORATION
Segmentation
Whirlpool delivers long term performance through manufacturing quality. We provide value from affordable high quality, easy and fast installation setup and maintenance.