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Strategic management is a process that involves identifying and analyzing cross-functional business decision concerning the organization's objectives. Moreover, strategy management helps organizations achieve improved performance and provides them with a competitive advantage. The practice of strategic management is used by large and small groups alike and entails planning for predictable and unpredictable contingencies. Strategic management involves the following activities: analyzing the internal and external strengths and weakness of a team, formulating actions to curb the weaknesses of an organization, and executing action plans. The last step involves evaluating the degree to which the work in question can be successful (Porter & Michael 8).


The Threat of New Entrants

According to Porter & Michael (12), Porter's Five Forces Model involves a detailed description of five forces. These forces are the threat of new entrants, the bargaining power of buyers, the bargaining power of suppliers, the threat provided by substitute products and services, and the rivalry among existing competitors. Thereupon, the first force discussed in this paper will be potential new entrants threatening the Whirlpool Company.

The overall threat of new entrants is relatively small. The reason is that there are many already established companies in the sector. This fact serves as a significant barrier that prevents new competitors from entering the industry. Moreover, established companies have already created a product-specific economy of scale. They have established histories and customer trust. Therefore, Whirlpool has an advantage over new competitors.

Furthermore, according to Ahlstrom et al. (578), the initial capital necessary to start up a new company deters new businesses from competing with companies such as Whirlpool, which is already established and profitable. Even if new businesses could afford the initial startup cost, the already established firms would pose a considerably high threat to public relation and marketing, and the price war would run new corporations out of business. Additionally, the already established channels, as well as the high cost of switching experienced by consumers, create a barrier to new competition. Another factor to consider is the fact that the appliances manufactured and distributed by Whirlpool are expensive. Guaranteeing that they will work correctly is a difficult for first time producers.

The threat of new entrants is not something that Whirlpool should be concerned with or use resources to counter as it is quite small, as Whirlpool is not directly involved in the market . This can be considered an indirect benefit because the company enjoys its part of the oligopoly market. Additionally, a few industries in the appliance market are as well established and posses customer loyalty. Therefore, in case a new product is introduced. it would take a considerable amount of capital and time for it to become profitable.

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Bargaining Power of Suppliers

Whirlpool needs to be wary of its supplier's bargain power and their chain management. Moreover, if Whirlpools allows its providers to gain much lavage then the company will be at a competitive disadvantage. Nevertheless, Whirlpool uses a variety of products ranging from metals to plastic. In case the company is forced into a deal with another supplier, the company would be forced to raise the prices (Hill & Gareth 89).

Bargaining Power of Buyers

Interestingly, people are emotionally attached to electronic devices, especially home appliances. These devices make life convenient. If this attachment is high, new entries become quite rare. Thus, the power of suppliers is great. As a result, Whirlpool is not affected by substantial competition to prevent them from making a maximum profit. They have to stay competitive or they will lose their market share. That said, unless Whirlpool raises their prices they might lose their profit margin, but in an oligopoly market it is difficult for a company to change its prices, because any change in rates can result in a pricing war. Moreover, there are two ways through which the power of the buyers can change Whirlpool's revenue. The first one is demanding low prices through discounts and asking for higher quality of products, which can increase the production costs. Thus, if the buyers have power in a company, the profitability and individual companies in the industry are affected, and the individual companies are affected. However, buyers may not have much buying power to change the whole industry. Some companies are consumers of other businesses and, therefore, the consuming organization has more power because the company is large in comparison to an individual (Ahlstrom et al. 379).

Another question to consider is whether Whirlpool customers have much buying power. The company users do not have considerable power. Whirlpool is the standard in the major house appliances sector in the United States, and there are not many companies that can be compared to them, especially when it comes to price versus quality. However, if other enterprises, such as K-mart and Sears, sell Whirlpool brands, they will start pressuring Whirlpool to lower the costs so that they can also make a profit, This, in turn, may mean that Whirlpool will experience difficulties.

The overall threat of suppliers is not significant to Whirlpool Company. The provider's products will not be highly differentiated, especially considering the low switching cost power of other firms in the industry. This fact allows the companies in the industry to be able to switch between suppliers very easily. Therefore, this lessens the threat of providers tothe industry. However, in accordance with Wachenheim & Edgar (545), the product quality is important to the buyers, and this poses a slight threat to the industry. To top it all, the suppliers only pose a minimal threat connected to forward integration. This threat is relevant because the provider creates inputs for appliance companies, and they may instead try to make their own devices that would compete with the already existing companies.

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Threat of Substitutes

Actually, a company that can provide a substitute to Whirlpool products is very rare. For instance, there is no valid substitute for a washing machine or a refrigerator. The supposition that households may go back to hand washing and hanging their clothes out to dry is simply not realistic, just as the idea that a refrigerator can be replaced with traditional ways of cooling food. Therefore, Whirlpool is a safe company in an oligopoly environment, and a substitute development is very umlikely. Competition and rivalry in such an industry are quite significant in an oligopoly environment. These forces of competition influence the quality of the final product. The stronger the forces are, the stronger the competition is. This can result in the company gaining an advantage over the rest of the companies in the sector. Additionally, exit barriers in the home appliances market are very high. With that said, there are two exit barriers involved in this enterprise: the economic factors and social factors (The Essentials of Strategy (Business Literacy for HR Professionals) 266).

Moreover, the buyers have medium bargaining power in the sector ,because the buyers have influence only on accounting in the industry sales. The high switching costs for the consumers is created due to the already existing contracts. Nevertheless, the customers do not create a significant threat of backward integration, decreasing their bargaining power as a result. Finally, there are no viable substitutions available to the customers as there is only one credible application for each activity such as a cooker to cook food.

Rivalry among Existing Competitors

Regarding competitive rivalry, Whirlpool faces three major competitors. According to Mathur (287), these competitors include Maytag, GE, and Electrolux. These large competitors are mainly domestic industries, whereas Whirlpool is a global company. Therefore, Whirlpool has the financial resources and capacity to face this competition. Thus, the globalization of the enterprise has created significant differences in strategic situations. Nevertheless, Whirlpool is struggling to differentiate its products from those of the rival firms. This is done by using various strategies that can keep up with the innovations for more than one year. With that said, Whirlpool and Maytag are the major firms in the sector, and their stakes are very high in the appliances market compared to other industries.

The other issue to be addressed is the threat of substitute products. Because the expectancy of products' functionality period is high, it is less important to the firms if replacements are not available. Therefore, the perceived value does not exist as there are no close or direct replacements for home appliances. As a result, the threat involving the alternatives to Whirlpool's brands on the market is not significant. Economic factors experienced by Whirlpool include getting out of contracts, medical payments, pensions costs, and other payments that are connected to selling their brands. On the other hand, the social factors include the customers' emotional attachment to these home appliances because these instruments provide convenience in household chores. When this social barrier is high, competition is great. Whirlpool demonstrates high marks in all the five forces involved in the evaluation. Therefore, an introduction of new entries and substitutes is rare, and Whirlpool is not impacted by competition that could prevent it from staying in business in the US oligopoly market environment.


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In conclusion, Whirlpool is a company with an already established reputation. It is a major firm that deals with large sums of money every day. Therefore, Whirlpool's business has competitive advantage in the industry of supplying household appliances. By conducting an internal and external analysis using Porter's Five Forces Model, it became evident that Whirlpool has dominated the market share and has made all the possible steps to ensure that it will continue dominating the market for years to come. Nevertheless, according to Hunger & Thomas (112), Whirlpool should never become complacent. The managerial body must keep their extensive options open and watch every move of the rival firms so that they can keep up the good reputation and maintain their place in the market. If they are not vigilant, a new innovative corporation can enter the market and negatively influence Whirlpool's performance. The economic history can offer many examples of this happening.