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. 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 electronic controls and self diagnostic features.
The major appliance industry is a stable and profitable industry, although it is mature and saturated in the United States, there are many growth opportunities available abroad. The industry will always be affected by interest rates, new housing construction, kitchen remodeling and the market for replacement appliances, but as long as consumers need take care of clothes and prepare foods, there will always be a market for major household appliances.
Finding of Fact#1: A concern for manufactures of home appliance was the environmental and government regulations standards that they must adhere to.
The Home Depot is recognized as being the leader in the home improvement retail industry by combining the economies of scale inherent in a warehouse format with a level of customer service unparalleled among warehouse-style retailers. ("Home Depot to", 1999)
In liasion, the company’s products include services for home improvement professionals and contractors. This marketing mix from Home Depot highlights the quality of service they wish to provide. On the other hand, the majority of the products at the firm’s stores are from third parties, such as equipment manufacturers. Home Depot’s multi-faceted product mix include building materials, lawn and garden products, and home appliances, among other things. Kitchen and garden products accounted for nearly 27% of revenues in fiscal 2014 making them the best-grossing product categories. (Exhibit*- Revenue by product
First and foremost, it’s essential that the appliances are addressed. Appliances are the “age spots” of a house. As a result of planned obsolescence, products such as refrigerators and dishwashers are meant to be replaced every ten to fifteen years. This leads to the innovation of new ideas during product manufacturing. For example, when manufacturers released stainless steel refrigerators, the once-popular white models with the convenient ice distributer quickly became outdated. This illustrates a simple rule: investing in new appliances is one of the quickest ways to make a home feel as though the builders recently made the finishing touches and packed up their tools. They instantly modernize the house. This is the reason new appliances weigh so heavily in a buyer’s decision ...
Lowe’s is leading the way by example. Lowe’s believes that creating long-term partnerships is a win-win situation for both sides of the deal. Lowe’s is the second largest home appliance retailer in the country, by working hand in hand for twenty-six years with Whirlpool, the largest marketer and manufacturer of home appliances. Whirlpool and Lowe’s have worked together to become unmatched in bringing their customers a high quality product and a very low competitive price. Through a tremendous logistical effort Whirlpool and Lowe’s have created a one of a kind Innovation Tour. A semi-trailer transforms itself into a functioning kitchen to show customers cutting edge appliances that will be available at Lowe’s in the future from Whirlpool and Kitchen Aid. As Lowe’s motto states, Lowe’s truly is “Improving Home Improvement”. (http://www.businesswire.com/)
The United States recession (which lead to a world recession), began in 1997 and significantly impacted the United States automobile industry during the recession period. The United States automobile industry is still reeling from the effects of the recession throughout the period of economic recovery that continues today. According to Chu and Su, “In this credit-driven recession, one of the hardest hit sectors was the automotive industry, along with the housing and financial markets. Chrysler and General Motors were pushed into bankruptcy; and 276,000 jobs in the automobile and parts industry were destroyed, a whopping 36 percent of the total employment in the sector”.
I. How has an industry grown to become a 32 billion dollars a year machine?
After World War I, economy shot up causing historians to call the 1920s the second industrial revolution.' The economy of the 1920's was a key change as it brought about new mass production, mass consumption, and set the stage for the ever-looming Great Depression. The 1920's saw a great boom in mass production which allowed for cheaper prices of technology products. This decade was marked by an enormous expansion of consumer credit, where Americans were used to finance purchases of new products such as the growing popularity of cars and radios, which were created by the mass production. The automobile, movie, radio, and chemical industries skyrocketed during this decade-one of the most important was the automobile industry. As mass-produced automobiles were churned in by Henry Ford, about 1.9 million cars had been sold by the end of 1929. The economy of the automobile society had a great impact on not only business, but also society. Henry Ford, who had revolutionized the new workers day and the concept of mass-production, had indirectly affected how Americans lived and behaved. Cars promoted other markets to grow, such as steel, rubber, glass, and petroleum. It also promoted urban and suburban growth, where a new class of Americans was rising. Now, citizens could drive to new places, meet new people, act differently etc The speed with which the products of mass production diffused through America was astonishing: not just automobiles but also washing machines, refrigerators, electric irons, electric and gas stoves--a whole host of inventions and technologies that greatly transformed that part of economic life that takes place within the household. However, this changing and rising American economy cause called one major consequence. For one of the major consequences of mass production was the building-up of the stock of capital goods for within-the-home production. And this of course, was the biggest key change because it seemed like the rising stock market and industry of the 1920s would stay forever. This rising stock market led to the Great Depression a downward spiral of economic depression.
According to Jason, “costs would fall if people adopt new energy-efficient technologies without a price hike in energy” (Shogren, 2004). A study done by Jaffe and his colleagues concluded that 20-25% of existing carbon emissions can be eliminated if people switched to fluorescent light bulbs, improved thermal insulation, more efficient heating and cooling systems (Jaffe, Newell, & Stavins, 2003). It all comes down to the consumers. Some of the energy efficient technologies are readily available but are still expensive. The driving force to efficient-energy technology depends on the changes of relative price. People will not want spend money on newer appliances especially if the prices are high, and if their current one still functions.
Once the war ended, soldiers returned home to find a prosperous economy with innovations and jobs. Sub-sequentially, in 1950 and 1960, the commodity industry was booming and citizens had disposable money to spend (Broughton 27). Manufacturing towns such as Galesburg saw immense prosperity. In ten years leading up to 1974, manufacturing jobs increased by 62% in 1974 and the area was quickly coined Appliance City (Broughton 33). However the economy started to shift and these companies needed to find ways to cut their costs and remain competitive to make a profit. For the decision makers in these firms, “everything boiled down to economics… what can a company do to reduce or minimize their costs” (Broughton 82). Instead of attracting cheaper labor, Maytag and other manufacturing companies relocated their plants in less developed companies, such as Mexico. This environment provided cheaper resources of all kinds. Maytag closed its Galesburg facility to open one in Reynosa Mexico and several other companies did the same. From 1998 to 2003, the United States lost three million manufacturing jobs (Broughton 64). This drastically killed American towns that were reliant on these jobs. Towns such as Galesburg lost their jobs and became a ghost
The threat of new entrants is moderately strong. Incumbents do not strongly contest entry of newcomers, but existing industry members are consistently looking to expand their geographic reach and offer a broad product assortment. Brand awareness and customer loyalty are high and greatly important i this industry.
The history of the automobile begins with the technological advances that occurred in the USA with Henry Ford’s Model T. Since then, the automobile market has had its ups and downs, but it has no doubt flourished into an industry that is the cornerstone of many economies. The world economic collapse due to the Great Depression caused consolidation in the manufacturing market. However, after World War II, an expanding highway network fueled by economic growth as well as television advertising spurred sales for car companies in many countries. The globalization of the industry accelerated during the late 1990 's due to the establishment of overseas plants and the merging of large multinational corporations.
The boom began as a result of America’s immense industrial power. This was caused in large part by the First World War and the unique nature of America’s involvement therein. For most of the war America did not actively participate, and instead lent money and exported arms, munitions and food supplies to the Allies (Walsh 187). They also took the opportunity to expand their markets in the colonies of the warring countries, and they reaped economic benefits. Furthermore the war conveniently destroyed their industrial competitors; after the war, many countries’ industries were impoverished. Their industries in steel, coal, oil and textiles remained strong after the war, and their chemical and film industries developed; America was the industrial leader of the world (Walsh 186). Moreover the growth and actions of these businesses were left unregulated by the predominantly Republican gover...
Starting in the 1920’s America began its shift towards a consumer culture as the economic growth of the nation began to depend more on the proliferation of consumer goods than of capital goods. Even at the outset of this trend, the automobile held a significant place in the new consumer economy. The automobile, which was once thought of as a rare luxury, was being sold by the millions. Assembly lines were becoming more efficient, thus allowing cars to be made more cheaply allowing the price of automobiles to drop. The growth of the automobile helped stimulate the economy through its dependence on other industries such as glass, rubber and steel, which were connected to the production of cars. These automobile related industries created new jobs, greater affluence and more spending power for millions of American consumers. Even at the beginning of America’s transformation into the consumer culture of today the automobile was at the forefront this conversion.
Refrigerators and stoves are the main product lines in which Atlas Eléctrica has its core competences. They are also working fine due to the production system.
Gome, founded by Huang Guangyu, in 1987 as a little shop selling only imported home appliances in Beijing. In 1996, following the emergence of domestic brands, Gome adjusted its operational structure and shifted its focus to domestically produced, joint-venture brands. From early 1990s, Gome has expended rapidly and established its top position in China’s home appliances market. Gome pursued a retail plus low prices operation strategy from the very beginning. Dealing with manufacturers directly with guaranteed sales volume, centralized purchase and decentralized sales obtained concessions and higher level of rebates from suppliers and hence low costs, which in turn contributed lower retail prices and larger sales volume. Gome has established a positive cycle of capital and goods.