When Dale Garwood orchestrated one of the first exclusive home builder/appliance supplier agreements for Whirlpool Corp. in 1993, such relationships were uncommon. Instead, builders worked with multiple suppliers in one-off transactional relationships as opposed to long-term strategic ones.
Fast forward 20 years and the agreement between Benton Harbor, Mich.-based Whirlpool and Los Angeles-based KB Home has not only withstood the challenges of time and changing market conditions, but has become a model of a successful builder/vendor relationship. As Garwood, now director of strategy and operations for national contract sales at Whirlpool, says: “It comes down to people. When you have good, open, transparent relationships, even the most difficult obstacles won’t diminish that relationship. In fact, the hard times actually strengthen that relationship even more.”
Founded in 1957, KB Home is one of the largest home building companies in the United States, operating across 40 metropolitan markets last year. For the past two decades, the homebuilder’s growth has been aided by the company’s partnership with the country’s largest home appliance manufacturer and its KitchenAid, Maytag, Jenn-Air, and Amana brands. Here are some of the top reasons why it’s been a mutually beneficial relationship:
--Name recognition. “When you consider how important appliances are to people, it’s clear that having a choice of well-known brands provides an immediate impression to the customer of overall home quality,” says Dan Bridleman, senior vice president of sustainability, technology and strategic sourcing for KB Home. Whirlpool and its brands help build home buyer confidence, he says, particularly in KB Home Design Studios, where buyers get to choose appliances and materials and personalize their homes.
The ability to offer these choices is one of the home builder’s strongest selling points, says Larry Oglesby, KB Home’s senior vice president of national operations. “In our business model, our No. 1 competitor is not another builder--it’s an existing home,” he says. “But one thing an existing home can’t offer is choice – on finishes, floor plans or appliances. For consumers, often the first place they look for significant upgrades is in the appliances, and by being able to offer all the choices that Whirlpool provides, we have an advantage.”
