Essay Sample on Portfolio Analysis: Allocating Resources for Greater Profits

Introduction

Globally, there is a great concern by various business organizations on the different types of business units to invest in to maintain their competitive advantage. Portfolio analysis simply refers to the examination of various components to be included in the product mix for decision making with the mandate to improve the overall investment return. Most importantly, portfolio analysis aids in making managers allocate resources efficiently to the business units to increase profits (Hildebrandt et al., 2018). For example, consider a company like the Whirlpool Corporation. It is an American manufacturing company dealing in the manufacturing of home appliances like fridges, ranges, microwaves, dishwashers, and dryers, among other products.

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Whirlpool Corporation Portfolio Analysis

The Whirlpool Corporation has various business units that it controls. The business units include Amana, Whirlpool, Maytag, KitchenAid, and JennAir. Below is a brief description of the brands.

Amana Brand

It is a value-driven brand that suits homeowners with a tight budget and who seek practical and simple appliances. The brand aims at giving customers affordable products as well as ensuring that the quality of the products is maintained. The brand is in the best position of the company portfolio as it is budget-friendly, hassle-free, and simple. The target market for the brand is the customers who are cost-efficient with a lesser budget on homeowner’s appliances.

Whirlpool Brand

It is the flagship brand of Whirlpool Corporation that is perfect for family-oriented customers that are in need of appliances that will simplify household tasks. The brand balances the latest technology with special features that even exceed the expectations of homeowners. The brand falls in the second position of the company’s portfolio. The target market for this brand is the customers who have greater concern for the latest technology of household appliances to simplify their household chores.

Maytag Brand

It is the brand that tries to eliminate grease, dirt, and grass stains among dependable product ranges. It is a reliable brand since it assures homeowners of the cleanliness of kitchen and laundry appliances used at home. The brand falls in the third position of the company’s portfolio. The target market for the brand is to the customers who aid in ensuring cleanliness for kitchen utensils and home appliances, especially in the food industry.

KitchenAid Brand

It is the brand that customers are passionate about in creating culinary and pastries kitchen appliances designed to fulfill kitchen appliance needs. The brand has everything that a chef needs to deliver quality results in his cooking. The brand falls in the fourth position of the company's portfolio. The target market for the brand is to the customers who aid in the preparation of quality meals for clients in the hotel industry for the delivery of quality services.

JennAir Brand

It is the brand in Whirlpool Corporation that reinvents standard appliances, ovens, cooktops, turning refrigerators, among other appliances, to ensure that they are high performing and luxurious. The brand falls in the fifth position of the business portfolio of Whirlpool Corporation. The target market for the brand is the customers who love luxuries and highly performing appliances, especially the rich in society.

Preliminary Analysis of the Business Portfolio

From the preliminary analysis of the company business portfolio, there seems to be a gap between old and younger generations' use of the appliances manufactured by the Whirlpool Corporation. The technology gap is mostly experienced in the East region market territory of the company. Elimination of those gaps would help utilize opportunities to trap the younger generation market gap, which will help improve the sales of the company and hence the performance improvement of the company generally.

Growth and Profitability Strategies

Portfolio Management by Whirlpool Corporation

Strategic management enables a company to grow and compete in the global market concerning its product offing. The whirlpool corporation utilizes a strategy of market segmentation in which it identifies existing and potential customers and offers the best services. The company launches goods by closely monitoring the wants of customers, targets, and positions itself as a reliable home appliances producer. Through mergers and acquisitions, the company's management of its portfolio is robust and advantageous to its operation, given the position it holds in the production of home appliances. It is considered the leading home appliances company in the world, with a net turnover of more than $21 billion as of 2019 (Flaaen et al., 2019). The company focuses on manufacture, distribution and offers repairs for its appliances and offers the best customer care experience. The management of the business portfolio creates congruence and synergy in its businesses through corporation with other businesses, especially retailers and suppliers in various countries around the world.

Business Competition

Competition is healthy for any business because it encourages innovation, and it enables the company to adopt strategies that can help it beat the competition. The company is competing in the right business, given its success in the business. The company mitigates its threats in the business, such as distribution and retailing by corporations with retailers and distributors through mergers and acquisitions. Through these mergers and acquisitions, the company can have a defined distribution channel making its goods readily available to consumers. The company also has a robust customer care network where it handles customer complaints and repair of its goods. The company is well established n this business because out of all its units sold in the last year, only 5% have required repair and maintenances (Deneijer & Flapper, 2005). It has endeared itself to customers as a reliable and quality product producer. There are different players in the field of home appliances production, such as Sony, LG, and Samsung, but whirlpool is the leader. These revelations confirm the company is in the right business despite the completion and other external threats such as government policies. The company has diversified its investment portfolio by producing a wide variety of home appliances diversified from the kitchen, restroom, and washers.

Additional Business Venture for Addition to Portfolio

The company should consider venturing into building and construction because it is synonymous to consumes with home appliances. Venturing into construction and building will enable it to incorporate its products in the buildings they construct, widening its portfolio, and make it easy to sell its products. It will be easy for the company to distribute its products and widen its consumer base. It is a trusted and leading company in the production of home appliances, and it should capitalize on the customer trust to start their construction business.

Strategic Plan for Maintaining Sustainable Competitive Advantage

The differentiation strategy is applicable and suitable for whirlpool corporation as it centres on the creation of a unique product distinctive from other products in the market. The approach offers businesses a way of being different from the competition (Kerzer, 2001). Differentiation provides a firm with the opportunity to benefit from the uniqueness of its products and services. The game comes in when two firms are offering the same products and services. The strategy has advantages, and a successful strategy can create brand loyalty among buyers. A business can gain a market share due to the uniqueness of the product being offered in the market. The success of the strategy is dependent on the consistency of a business to produce high quality and unique goods. It, however, has disadvantages because the revenue stream is not guaranteed. After all, consumers might not find a product unique. It can also put a strain on resources, and a product’s value can decline.

References

Deneijer, M., & Flapper, S. D. P. (2005). The closed-loop supply chain of service parts: the whirlpool case. In Managing closed-loop supply chains. Springer, Berlin, Heidelberg.

Flaaen, A. B., Hortaçsu, A., & Tintelnot, F. (2019). The production relocation and price effects of US trade policy: the case of washing machines. National Bureau of Economic Research.

Hildebrandt, P., Oehmichen, J., Pidun, U., & Wolff, M. (2018). Multiple recipes for success–A configurational examination of business portfolio restructurings. European Management Journal, 36(3), 381-391.

Kerzer, H. (2001). Strategic planning for project management using a project management maturity model. New York: John Wiley.