Product details

The year 2005 had proved to be a year of exceptional achievements for the world''s number one home appliance brand company, Whirlpool. It had achieved record net earnings of US$422 million on record sales revenues of US$14.3 billion, which had in turn propelled the company''s share price to an all-time high of US$92.64 by April 2006. Much of Whirlpool''s performance was attributed to the new products and features introduced by the company, based on ideas received from the company''s employees working under the ''innovation system'', established by the company''s former Chief Executive Officer, David Whitwam in 1999. The innovation system was implemented to counter the company''s almost stagnant performance over the past decade, judging by everything from stock price to profit margin to market share. The company''s failure to introduce exciting products or product features had reduced Whirlpool''s machines to mere commodities and the prices of its most important products were falling each year. Following the implementation of the innovation drive, revenues from products that fitted the company''s definition of ''innovative'' increased from US$10 million in 2001 to US$800 million in 2005, ie, 5 percent of the company''s record US$14.3 billion in total revenues. In 2005 alone, Whirlpool launched more than twice as many new products in half the time, as compared to the time before the innovation process was launched. The case looks at the introduction of this successful innovation strategy.