Task Requirements:

● Word Count: 300-400

● Formatting Style: MLA (for more information click here)

● Essay Structure: Case Study

*** Any sources must be properly cited according to the formatting style assigned

Whirlwind Corporation Case Study:

Whirlwind Corporation is one of the largest electrical appliance-based companies in the

world. The company employs around 100,000 people and has several sub-brands under its

umbrella. In 2019, the company reportedly owned 50 manufacturing and technology research

centers while having a global reach in all the continents of the world. The company has been able

to successfully expand globally by integrating its manufacturing plants in 11 countries and

partnering with suppliers and vendors in large emerging markets like India and China.

In December 2019, the safety team of Whirlwind identified that some product lines

associated with the washing machine category posed a fire risk to customers of the United

Kingdom. The company had sold 550,000 units in the past four years. The situation that the

company faced was critical because earlier that year, the company had already announced a

recall of 500,000 dryers in the same year. The product recall was due to a potential fire hazard

that had caused 750 fires in the five years. Whirlwind’s brand equity was at stake as it was a

forced recall initiated under the directives of the British government.

Justification for Problem Definition

For global companies like Whirlwind Corporation, brand equity is the most valuable

asset. The issue is analogous to the one that Samsung faced back in 2016 when its Note category

of cellphones posed a threat of getting blown off during regular use. But it has to be noted that
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Samsung’s response was adequate and timely. The company was able to identify the underlying

technical problem and was able to resolve the issue permanently. In this case, Whirlwind had

repeated a fatal mistake after already suffering from a major recall that was forced by the British

Government. The executive committee had to make a hard decision for the second time in the

same year.

Courses of action

The executive committee of Whirlwind Corporation had three options at their disposal:

1. Give the customers an option to modify or repair the sold units as the company did with its

driers.

2. Issue a press release and go for a recall and arrange reimbursement for the customers.

3. Issue a press release and announce the recall of products with an option of free repair or a free

replacement of the machine.

Evaluate each course of action and propose a Recommendation. What will be the consequences

of the proposed recommendation?

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The best course of action to recommend will be the third one regarding the press release,
recall and free replacement of the machine or free repair. The importance of the press releases is
to communicate newsworthy information and can carry information from an internal source of an
organization [ CITATION Pao08 \l 3082 ]. If Whirlwind does this press release, it will demonstrate
the immediate exposure to the already determined audiences and stakeholders with possibilities
for their returns and working relationships with PR firms.

The main factors to choose the recall of products course of action are time, responsible
recall management, opportunistic recall management and blame attributed to the company
[ CITATION Fra12 \l 3082 ] . The main benefits of the recall for Whirlwind will be the destruction
and replacement costs, redistribution costs and the loss of profits.

The reason why Whirlwind needs to provide the free repair and free replacement of their
machinery is to perform the rests, lubrications, and inspections of these equipment for optimized
installations and layouts [ CITATION Kar16 \l 3082 ] . The reasons why this company should opt for
these methods are based on cost to repair like the cost per breakdown, one-time and ongoing
costs, the costs to replace like disposal costs of the refunded or retired equipment and the cost of
purchasing and installing a replaced unit.

The consequences of this course of action will include costs such as labor of possible
removal of installations, material freight costs and costs in general, among others similar. The
safety team of Whirlwind needs to consider repercussions like efficiency loss, comfort of
customer service and the downtimes of equipment. The press release and product recall will
generate negative stock market reactions therefore the stock price to related products and a
higher level of hazard associated with severe market penalties [ CITATION Mic18 \l 3082 ]. Being
this said, this option by the same reasons but with a more realistic and manageable level, will be
the best course of action for this case study for the Whirlwind company.

GERARDO JOSUÉ BORJAS FERRERA

Bibliografía
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Bernon, M., Bastl, M., Zhang, W., & Johnson, M. (2018). Product recalls: the effects of industry, recall
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Management. Obtenido de https://epublications.marquette.edu/cgi/viewcontent.cgi?
article=1332&context=mgmt_fac

Catenaccio, P. (2008). Press releases as a hybrid genre: addressing the informative/promotional

conundrum. Milan: International Pragmatics Association.

Magno, F. (2012). Managing product recalls: the effects of time, responsible vs. opportunistic recall
managment and blame on consumers´attitudes. Bergamo, Italy: 8th International Strategic
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