Whirlpool SWOT Analysis / Matrix

Essays, Term Papers & Research Papers

SWOT analysis is a strategic planning tool that can be used by Whirlpool managers to do a situational analysis of the firm . It is a handy technique to analyze the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Whirlpool is facing in its current business environment.

The Whirlpool is one of the leading firms in its industry. Whirlpool maintains its dominant position in market by carefully analyzing and reviewing the SWOT analysis.  SWOT analysis a highly interactive process and requires effective coordination among various departments within the company such as – marketing, finance, operations, management information systems and strategic planning.

The SWOT Analysis framework facilitates an organization to identify the internal strategic factors such as -strengths and weaknesses, & external strategic factors such as - opportunities and threats. It leads to a 2X2 matrix – also known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps the managers of the Whirlpool to develop four types of strategies:

  • SO (strengths-opportunities) Strategies
  • WO (weaknesses-opportunities) Strategies
  • ST (strengths-threats) Strategies
  •  WT (weaknesses-threats) Strategies
Whirlpool swot analysis / matrix

SWOT Matrix Strategies Objective

The main purpose of SWOT matrix is to identify the strategies that a company can use to exploit external opportunities, counter threats, and build on & protect Whirlpool strengths, and eradicate its weaknesses.

Step by Step Guide to Whirlpool SWOT Analysis

Strengths of Whirlpool – Internal Strategic Factors

As one of the leading firms in its industry, Whirlpool has numerous strengths that enable it to thrive in the market place. These strengths not only help it to protect the market share in existing markets but also help in penetrating new markets. Based on Fern Fort University extensive research – some of the strengths of Whirlpool are –

  • Automation of activities brought consistency of quality to Whirlpool products and has enabled the company to scale up and scale down based on the demand conditions in the market.
  • Superb Performance in New Markets – Whirlpool has built expertise at entering new markets and making success of them. The expansion has helped the organization to build new revenue stream and diversify the economic cycle risk in the markets it operates in.
  • Successful track record of developing new products – product innovation.
  • Good Returns on Capital Expenditure – Whirlpool is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
  • Strong Brand Portfolio – Over the years Whirlpool has invested in building a strong brand portfolio. The SWOT analysis of Whirlpool just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
  • Highly successful at Go To Market strategies for its products.
  • Strong Free Cash Flow – Whirlpool has strong free cash flows that provide resources in the hand of the company to expand into new projects.
  • High level of customer satisfaction – the company with its dedicated customer relationship management department has able to achieve a high level of customer satisfaction among present customers and good brand equity among the potential customers.

Weakness of Whirlpool – Internal Strategic Factors

Weakness are the areas where Whirlpool can improve upon. Strategy is about making choices and weakness are the areas where a firm can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

  • Limited success outside core business – Even though Whirlpool is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
  • Not highly successful at integrating firms with different work culture. As mentioned earlier even though Whirlpool is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
  • Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
  • The company has not being able to tackle the challenges present by the new entrants in the segment and has lost small market share in the niche categories. Whirlpool has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
  • High attrition rate in work force – compare to other organizations in the industry Whirlpool has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
  • Financial planning is not done properly and efficiently. The current asset ratio and liquid asset ratios suggest that the company can use the cash more efficiently than what it is doing at present.
  • There are gaps in the product range sold by the company. This lack of choice can give a new competitor a foothold in the market.

Opportunities for Whirlpool – External Strategic Factors

  • The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Whirlpool to increase its profitability.
  • New environmental policies – The new opportunities will create a level playing field for all the players in the industry. It represent a great opportunity for Whirlpool to drive home its advantage in new technology and gain market share in the new product category.
  • Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Whirlpool to capture new customers and increase its market share.
  • Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Whirlpool.
  • The market development will lead to dilution of competitor’s advantage and enable Whirlpool to increase its competitiveness compare to the other competitors.
  • Stable free cash flow provides opportunities to invest in adjacent product segments. With more cash in bank the company can invest in new technologies as well as in new products segments. This should open a window of opportunity for Whirlpool in other product categories.
  • The new technology provides an opportunity to Whirlpool to practices differentiated pricing strategy in the new market. It will enable the firm to maintain its loyal customers with great service and lure new customers through other value oriented propositions.
  • Government green drive also opens an opportunity for procurement of Whirlpool products by the state as well as federal government contractors.

Threats Whirlpool Facing - External Strategic Factors

  • Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
  • New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
  • Intense competition – Stable profitability has increased the number of players in the industry over last two years which has put downward pressure on not only profitability but also on overall sales.
  • Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Whirlpool   in those markets.
  • Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
  • Liability laws in different countries are different and Whirlpool may be exposed to various liability claims given change in policies in those markets.
  • New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
  • Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.

Limitations of SWOT Analysis for Whirlpool

Although the SWOT analysis is widely used as a strategic planning tool, the analysis does have its share of limitations.

  • Certain capabilities or factors of an organization can be both a strength and weakness at the same time. This is one of the major limitations of SWOT analysis . For example changing environmental regulations can be both a threat to company it can also be an opportunity in a sense that it will enable the company to be on a level playing field or at advantage to competitors if it able to develop the products faster than the competitors.
  • SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself.
  • The matrix is only a starting point for a discussion on how proposed strategies could be implemented. It provided an evaluation window but not an implementation plan based on strategic competitiveness of Whirlpool
  • SWOT is a static assessment - analysis of status quo with few prospective changes. As circumstances, capabilities, threats, and strategies change, the dynamics of a competitive environment may not be revealed in a single matrix.
  • SWOT analysis may lead the firm to overemphasize a single internal or external factor in formulating strategies. There are interrelationships among the key internal and external factors that SWOT does not reveal that may be important in devising strategies.

Weighted SWOT Analysis of Whirlpool

In light of the above mentioned limitations of the SWOT analysis / matrix, corporate managers decided to provide weightage to each internal strength and weakness of the firm. Organizations also assess the likelihood of events taking place in the coming future and how strong their impact could be on company's performance.

This method is called Weighted SWOT analysis. It is better than doing simplistic SWOT analysis because with Weighted SWOT Analysis Whirlpool managers can focus on the most critical factors and discount the non-important one. It also solves the long list problem where organizations ends up making a long list but none of the factors deemed too critical.

Limitation of Weighted SWOT analysis of Whirlpool

This approach also suffers from one major drawback - it focus on individual importance of factor rather than how they are collectively important and impact the business holistically.

Buy Custom Essay and Term Paper on SWOT Analysis / Matrix , Weighted SWOT Analysis of Whirlpool

Example of Weighted SWOT Analysis

You can email us to get an example document of Weighted SWOT analysis.

SWOT Worksheet & Template

If you like to do your own SWOT analysis or want to make your own Weighted SWOT SWOT matrix then feel free to download Fern Fort University SWOT Analysis Template.

References / Citations & Bibliography

  • M. E. Porter, Competitive Strategy(New York: Free Press, 1980)
  • A. D. Chandler, Strategy and Structure (Cambridge, Mass.: MIT Press, 1962)
  • O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975);
  • L. Wrigley, Divisional Autonomy and Diversification (PhD, Harvard Business School, 1970)
  • R. E. White, Generic Business Strategies, Organizational Context and Performance: An Empirical Investigation, Strategic Management Journal7 (1986)