We understand homes better: Jeff Fettig, chairman and CEO, Whirlpool Corp
Jeff Fettig, chairman and CEO, Whirlpool Corp, spoke about the company's strategy in emerging markets like India, Brazil and how innovation will drive its next phase of growth.
By Samidha Sharma, TNN | Updated:
BENTON HARBOUR, MICHIGAN: Whirlpool Corporation , the $18-billion home appliances maker, will diversify its global presence to achieve the company's $25 billion vision. The American Midwest company , which currently draws more than 50% of its global sales from North America, wants to grow the share of revenue out of Asia and Latin America to as much as 33% by 2014, an additional 5% from the present number . Jeff Fettig, chairman and CEO, Whirlpool Corp, spoke about the company's strategy in emerging markets like India, Brazil and how innovation will drive its next phase of growth. Excerpts from the interview .
Whirlpool has been in India for more than 15 years but you have not been able to capitalize on your early start until a couple of years ago when you turned profitable. Why has it taken you so long to make an imprint in India?
India has been a priority for us since the beginning ; in fact, one of our largest investments globally was when we put in $100 million with the acquisition of Kelvinator of India in 1995. Soon after which we invested $100-120 million both in manufacturing and technology in Pune. We invested early in building our presence but the fact of the matter is that the Indian market took off probably in the 4-5 years in the appliances business. So we built a position early and now we are benefitting from the growth curve and we are very bullish about India. India, percentage wise, is one of the fastest growing markets with sales of $550 million.
Whirlpool has faced competition from newer entrants , especially the Korean majors Samsung and LG. What is the strategy to counter these players in India?
I really like our position in India. Unlike other companies , we do not make cell phones, we do not make chemicals but we are the appliances specialists. And we believe we understand the home better than any other competitor in the market place. We generally produce the highest quality appliances and particularly in India we bring the most amount of innovation to the market. Everything from engineering, design to consumer research, it's all done in India as opposed to companies which may do it in their home countries.
Whirlpool does not design Indian products in Benton Harbour, Michigan , but it's done in Pune or Faridabad. We are specialists and we have resources in the market for the market . Innovation today adds globally 3% to our revenue growth rates, and in the case in India this reflects not only in the revenue growth but why we are the most profitable appliances company there.
Whirlpool has been in India for more than 15 years but you have not been able to capitalize on your early start until a couple of years ago when you turned profitable. Why has it taken you so long to make an imprint in India?
India has been a priority for us since the beginning ; in fact, one of our largest investments globally was when we put in $100 million with the acquisition of Kelvinator of India in 1995. Soon after which we invested $100-120 million both in manufacturing and technology in Pune. We invested early in building our presence but the fact of the matter is that the Indian market took off probably in the 4-5 years in the appliances business. So we built a position early and now we are benefitting from the growth curve and we are very bullish about India. India, percentage wise, is one of the fastest growing markets with sales of $550 million.
Whirlpool has faced competition from newer entrants , especially the Korean majors Samsung and LG. What is the strategy to counter these players in India?
I really like our position in India. Unlike other companies , we do not make cell phones, we do not make chemicals but we are the appliances specialists. And we believe we understand the home better than any other competitor in the market place. We generally produce the highest quality appliances and particularly in India we bring the most amount of innovation to the market. Everything from engineering, design to consumer research, it's all done in India as opposed to companies which may do it in their home countries.
Whirlpool does not design Indian products in Benton Harbour, Michigan , but it's done in Pune or Faridabad. We are specialists and we have resources in the market for the market . Innovation today adds globally 3% to our revenue growth rates, and in the case in India this reflects not only in the revenue growth but why we are the most profitable appliances company there.
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You said India has the potential to be a bigger market for Whirlpool Corp, what is the way of achieving this potential? Will we see new brands from your portfolio like a Kitchen Aid or Jenn-Air ?
In India we are very happy with the Whirlpool brand in terms of its equity and the value we get from it. If you look at the evidence, we have expanded into cooking products, water purifying and air conditioner all under the same brand. I would say innovation in the existing products will be the main driver and expansion into new categories will also be at the centre if growth in India. We have tremendous space to grow as far as the Whirlpool brand goes so we will explore that first.
What about the kitchen appliances which you plan to launch in India?
We will be looking to launch products like dishwashers , built-in ovens, hoods and other kitchen appliances all under the Whirlpool brand itself.
What is the $25 billion vision for Whirlpool Corp?
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We just don't want to be an appliances maker but be a brand that is offers consumer products in and around the home. We want to be even more global than what we are today and have a broader set of products. The $25-billion vision will be realized by using our best cost, innovation and trade position strategy to grow the core and grow beyond the core approach geographically and product wise. (The writer was in Benton Harbour, Michigan, on an invitation from Whirlpool Corporation)
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