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U.S Major Home Appliances Industry in 2002

Essay by review  •  July 18, 2010  •  Case Study  •  4,714 Words (19 Pages)  •  3,730 Views

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U.S Major Home Appliance Industry in 2002

* The household appliance industry is huge! The number of household appliance grows every year, but there is one sector of the industry, the major appliance sector that remains constant. The appliances that comprise this sector are ranges, refrigerators, washers, dryers, and dishwasher.

* The major appliance industry is both saturated and mature.

* The five major players are General Electric, Maytag, Whirlpool, Electrolux, and Raytheon. All are well established in the industry and have been major players for many years.

* Prior to World War II, most appliance manufactures produced a limited line of appliances derived from one successful product. For example, General Electric made refrigerators, and Maytag focus on washing machine. During this era a company was reluctant to enter the market of another company. It was not until 1945 that firms begin to offer full lines of various appliances.

* The industry almost double in size during the 1960s, as sales of several products grew rapidly. The sales continue to increase in the 1970s despite the high interest rates and inflation. During the 1980s the industry was beginning to expand, because of the acceptance of the microwave by the U.S. consumers. By 1990s, U.S. manufactures offered a full range of products even if they did not make the items themselves.

* By 2002, new technologies and designed were being introduced into major home appliances. Due to governmental pressure, appliance manufactures were introducing energy efficient versions of refrigerators and washing machines

* the industry began a globalization process that started when Electrolux of Sweden acquired White Consolidated Inc. of the United States with the Frigidaire, Kelvinator, and White Westinghouse brands. This was followed by Whirlpool's acquisition of Phillips's European appliance business. Since that time, there have been several international acquisitions, consolidations, and restructurings. Along the way there have been a few missteps and retreats.

Today's kitchens are often the entertainment center of the home. Many consumers are demanding appliances that are attractive, convenient and easy to clean. Many consumers are willing to pay top prices for top of the fine appliances that enhances their décor's and save precious time. The manufactures have responded to the consumer demands, by manufacture smart appliances with sophisticated...

1-This an industry had been able to successfully ward off strong foreign competition and were actually on the offensive internationally.

2- the industry had been very successful in keeping prices law and in improving the value of its products.

3- from 1982-2002 the prices had increased more slowly than the increase in U.S earning and the Consumer Price Index.(Average American)

4-1991-2001-after adjusting for inflation, retail prices actually declined (12.7% -.4%)

5-the energy efficiency had increased every year since 1972.

6-2001 Maturity year (Largest sales) (73000 against 37010 in 1980)

7-after 50 years of rising sales, the market had reach maturity (U.S And Canadian)

8- Sales were expected to grow only 1.9% annually from 2000 to 2005 in (U.S And Canadian)

9-Operating margins had been dropping as WG Industry was forced to keep prices low to be competitive even though costs kept increasing.

10- the situation was the same in Western Europe, (25 % larger ) Where unit sales were expected to grow only 1.7 % annually.

11-Markets in Asia, Eastern Europe, and Latin America had become more important to world trade as more countries changed to free market economy.(5%-6% annually)

12-Governments pressure to make environmentally safe product plus significantly improve appliance efficiency in terms of energy usage and water consumpation.

13-1945 there were 300 U.S major appliance manufacturers.

14-2002 the big Four (Whirlpool, General Electric, Maytag, And AB Electrolux)

Controlled 99 % of the U.S Market.

15- 1% Siemens German and Chinese Hair And Niche market.

16-The consolidation of the industry over the period was a result of fierce domestic competition. Emphasis on quality and durability coupled with strong price competition drove the surviving firms to increased efficiencies and a strong concern for customer satisfaction.

17-U.S automobile firms and electronic firms had participated at some time in the WG industry.

18-Only GE and Emerson Electric (In-Sink- Erator and Motors) remained in WG Industry in 2002.

19-World War 2 most WG manufacturers produced a limted line of appliances derived from one successful product.(GE made refrigerators .Maytag foused on washing machines)

20- 1945-1955 firms begin to offer full lines of various appliances , over capacity , leading to mergers and acquisitions .

21- 1960 WG industry doubled in size.

22-1970 were time of high inflation and high interest rates. Profit margins squeezed and the industry continued to consolidate around fewer firms. (Antitrust consideration prevented GE and Whirlpool from acquiring other appliance units)

23- 1980 the market continued to expand (Microwave oven).

24-1990 WG offered a full range of products (Out Sourcing)

25-Innovations in WG industry

❖ New products

❖ New technologies and designs

❖ New customer-oriented features

❖ Process improvements to reduce manufacturing costs.

26- New products drove the growth of WG industry( 1960 dishwashers and 1980 microwave)

27-

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