Whirpool

I.How to Enter Emerging Markets in Central and Eastern Europe

Summary

The case, entitled “How to Enter Emerging Markets in Central and Eastern Europe” is designed to evaluate the impact of the fall of the Iron Curtain on the business climate for foreign companies in this region as well as on the opportunities for local companies. The case study is also used to gain an understanding of why and how firms choose an alliance partner through an analysis of Whirlpool’s and Tatramat’s needs and intentions. It describes the situation in both Whirlpool Europe and in Tatramat at the beginning of the 1990’s. These two companies faced many problems and challenges at that time because of obstacles in their internal situations and changes in their external operational environment. After looking for the right partner and the right form of cooperation, and after evaluating all possibilities, they decided to negotiate with each other to find the right form of strategic alliance. This case can be used in courses dealing with the entry of companies on emerging markets of Central and Eastern Europe (e.g. World Economy, Corporate Strategy, International Business, Doing Business in Central and Eastern Europe, etc.)

I. How to Enter Emerging Markets in Central and Eastern Europe

by Sonia Ferencikova and Hans Brechbuhl

During 1990 and 1991 the board of directors for Tatramat, Slovakia’s primary manufacturer of washing machines and boilers, often met in the office of Tatramat’s Managing Director, Martin Ciran, in Poprad, a small city in Eastern Slovakia. The board usually discussed the future of the company and the troubles it faced. The board’s discussion led to the consideration of new business strategies, including a purchase of new technology, licensing or an alliance with a foreign investor. There were differing opinions among the board members as to which strategy would be the most appropriate solution.

During approximately the same time...