Innovation at Whirlpool - Creating a New Competency
| Case Code: HROB081 Case Length: 21 Pages Period: 1999-2006 Pub Date: 2006 Teaching Note: Available |
Price: Rs.500 Organization: Whirlpool Corporation Industry: Electricals and Electronics Countries: USA, Europe Themes: - |
Abstract Case Intro 1 Case Intro 2 Excerpts
Background Note
In 1911, three brothers - Frederick, Louis, and Emory Upton - set up a company, Upton Machine Corporation (Upton) at St. Josephs, Michigan, USA. The company produced electric motor-driven wringer washers. Upton later went on to become Whirlpool.
Upton got its first major order for 100 washers from Federal Electric. However, when the machines were put to work, there was a recurring problem - a cast-iron gear in the washer failed to function. The company's General Manager, Louis Upton, offered to repair all the gears free of cost, although he could hardly afford it then. Impressed with the company's ethical standards, Federal Electric not only agreed to repair the machines themselves, but also ordered an additional 100 washers. In 1916, Upton entered into a partnership with Sears, Roebuck and Co (Sears) under which Sears marketed the washers manufactured by Upton under the brand name 'Allen'. Sears sold two models of washers - one for US$54.75 and another deluxe model for US$95.
The partnership turned out to be a huge success and the demand for the washers exceeded supply. By 1925, Upton had become the exclusive supplier of electric and gasoline powered washing machines for Sears.
In 1929, Upton merged with Nineteen Hundred Corp. (Nineteen Hundred) of New York, USA. By 1936, Nineteen Hundred began entering global markets, and sold its washers in Europe and Asia. In 1948, Nineteen Hundred marketed an automatic washer under the Whirlpool brand.
With this, the company had dual distribution - one line of products marketed by Sears and the other by Nineteen Hundred. In 1950, Nineteen Hundred officially changed its name to Whirlpool. Whirlpool expanded its product range to include automatic dryers, refrigerators, and air-conditioners. To keep pace with the competition it faced, Whirlpool decided to spread out its manufacturing facilities around the globe...
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