...------------------------------------------------- Haier refrigerator strategy Global operations & Information systems February 5, 2014 212631842 February 5, 2014 212631842 Introduction: Company & Goals The Haier group is one of the most accomplished and important companies of China. It is the strongest domestic brand in China as per 2005 Financial Times’ survey. In 1995 Haier entered the US market in order to earn some foreign currency, they chose to enter this difficult market to establish themselves as an US brand instead of an imported Chinese brand. The company was very effective in capturing compact size refrigerator market with a 21% market share in 2006. Haier was also able to capture 3% of the standard refrigerator market in a very small span of time. Issues Immediate Issues There are a bunch of issues that Haier needs to address immediately to move towards meeting its goal of capturing US market. The immediate issues that Haier needs to address are product selection, price positioning, sourcing location and distribution strategy. In order to capture a major share in the US refrigerator market, Haier needs to decide which product segment in the standard refrigerator market it should focus on? There are typically three product segments in the standard refrigerator market, namely Premium (growing at 16.3%), Middle (declining at a rate of 19%) and economy (growing at 12.6%). Another major decision Haier needs to make is about the trade-off between...
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...the case Haier’s U.S. refrigerator strategy and answer to the following questions: 1. What were the drivers of Haier’s success in U.S. initially and why? 2. How did the competitors (Big Three) react to the Haier’s success? How are their strategies different than Haier’s? 3. Why do you think Haier built a new plant in South Carolina? Was it a wise decision? 4. What strategy (marketing, internationalization, etc.) Haier should follow in the future? This assignment represents 10% of your final grade. Deadline: Thursday, 5th March 2015! INDIVIDUAL ASSIGNMENT Haier’s U.S. refrigerator strategy 1. Haier achieved its success by familiarizing with the brand and competing with the major established brands for a larger market share. Haier corporate strategy is driven by international growth through creating brand awareness and recognition, meeting consumers’ needs and increasing market shares in different segments. Expending abroad is a response to competition within the domestic market both from imports and local products. Haier started ‘taking the fight to the enemy’ by breaking into the U.S. market using a combination of quality, price and local manufacturing. On product strategy and investment aspect, Haier should also follow the principle of “Easy to Hard”. For example, Haier chose its most excellent product-refrigerator to enter the US and European market as the first step. In the US Haier, the "Haier Design Center" is built in Los Angeles...
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...CHAPTER I INTRODUCTION Haier Group is the world’s 4th largest white goods manufacturer. It was founded in 1984 with the headquarter in Qingdao, Shandong Province, PRC. Under the leadership of Chairman and Chief Executive Officer (CEO) - Mr. Zhang Ruimin, Haier manufacturers home appliances in over 15100 varieties of different specifications under 96 categories. There have over 100 countries that selling Haier products around the globe. According to the Haier Group official website, Haier now has over 240 subsidiaries companies, over 110 design centers, plants and trading companies and over 50,000 employees throughout the world. Besides doing home appliances business, Haier’s also focused on technology research, manufacturing, trade and financial services. Eventually, the global revenue of Haier for 2005 was RMB 103.4 billion. 1.1 Ownership of The Company According to Financial times, as far as transforming moments in a CEO’s Career, Mr. Zhang Ruimin is the chairman of the Board of Directors and CEO of Haier Group. Mr. Zhang’s current goal is to further enhance Haier’s leadership in Chinese and global markets and strengthen the reputation of Haier’s brand worldwide. In 1984, Zhang Ruimin was appointed as the director of the Qingdao Refrigerator Factory, a small, ailing collectively-owned factory in the Shandong province of China. Under his leadership and unique management philosophy, the company has since grown to become the Haier Group as now to be the China...
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...HAIER, TAKING A CHINESE COMPANY GLOBAL 1. SUMMARY Haier (“the Company”) was China’s biggest white-goods producer and supplier in 1990s. In 1984, there was nearly 300 local producers in China market, most of which were producing poor quality goods. However, customers were willing to pay more for higher-quality products and reliable service. This need created an advantage for differentiation. In Chinese market, demand was high. Haier being able to read customer need properly, focused on Product Quality, After-Sale Services and Brand Building. While there was oversupply in the market, with product differentiation Haier was able to raise its prices. Their target was to be a first-class brand. In early 1990s, while the demand was exceeding the supply, they decided to set up a large scale production. In 1991, they focused on Diversification on product range. They acquired an AC and a Freezer company, which were performing poor and turned around these companies into profitability quite soon with the right restructuring and strategy. There was a government pressure on Haier to take over poor performing firms ( i.e. in 1993, acquisition of Red Star). In 1992 the Company needed additional capital to invest in land and construction, but did not get subsidied due to government restrictions.As an alternative solution the Company undertook an IPO and went public with its 43.7% refrigerators division on Shangai Stock ExChange in 1993. In 1997, the Company added TV and telecommunication...
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...Mission The mission of Haier is to innovate and become a leader in the industry. Under this umbrella, Haier has further designed a series of strategies to address the following two issues: 1. Lead by building a strong brand, centered on product quality and best of breed services. 2. Build a strong research and development capacity to boost Innovation to capture and meet the needs of customers, Another important dimension of Haier’s mission and strategies is to build Haier into a global brand by internationalizing its R&D, manufacturing, distribution, services, etc. Internationalization Strategies * Focused on difficult markets first-enter the difficult developed market first. This will allow Haier way to develop highest quality standards since the requirements in the developed market are very tough and not easy to meet. * Staff with locals who have worked multinational/top brand. Use local people and local thinking to satisfy the needs of the customers. * Utilized speed and differentiation approach. Haier paid close attention to consumer needs in overseas market and made modifications to meet them. Focuses on minor details (e.g. freezer with a separate compartment for ice scream). * Rapid product development which was facilitated by its eight design center * To manufacture quality products and sell it at a premium price * Offered what the developed market didn’t have. Going Global- The EU Market Objectives Given the fact that Europe...
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...Case Analysis On Haier – Management Control on a Tactical Level INTRODUCTION * Haier Group is China's largest white goods manufacturer and one of the world's fastest growing white goods companies. * The company started out as a nearly bankrupt refrigerator plant in Qingdao, China, equipped with a group of low skilled and undisciplined workers, low productivity, inferior product quality and a loss making business. * Its current CEO, Zhang Ruimin, first took over the company in 1984 and established corporate rules and culture, revamped business strategy and set up an incentive-based management control system. All of these transformed Haier into a global player in less than 2 decades. * This case study examines the establishment of Haier's management control system and how it was adapted into the company's internationalization strategies, how it motivated employees to reach high performance goals and how it structured the business units to obtain optimal operational efficiency. SWOT ANALYSIS Strengths * Haier enjoy a well-known brand name and high reputation for reliable quality and first-rate customer service. * Its strength also lies in its innovation in both production and management practice. * Haier was ranked fourth among the global white goods manufacturers in 2004. * The Group successfully carried out product diversification to expand its brand beyond refrigerators, adding washing machines, air conditioners, and other items to...
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...facing the globalization challenges and also worldwide learning challenges. Haier has started its formal globalization in 1997, and has been able to set up a successful example in competing with those challenges. However, the coming years are bringing more challenges including how to establish itself as a major localized US brand, integrate with locality, build brand recognition and manage its brand. Analysis Reputation of the brand and company’s creativity has long been the Haier’s main strengths for competing inside China. As a result, the sign of success in global competition is also supposed to be the brand. Meeting consumer’s needs is always what Haier focuse and what helped Haier to establish its image. What Haier should do is to continue creating resources, which is based on innovation, and create worldwide prestige based on its accumulated knowledge and experiences. SWOT analysis: Strengths: Technology, innovation, corporate culture, high quality products and service; Weakness: low level of core technology, small location network and brand influence; Opportunity:government support,global economic integration,advantages in domestic market; Threats:global economic integration, strong rivals, country image(China: low quality). International strategies(base on China to spread all over the world): Cost leadership, differentiation and focus are three ways to penetrate in global markets. Haier chose the differentiation by being more customer-focused, stressing Speed...
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...TARUN KHANNA INGRID VARGAS Haier: Taking a Chinese Company Global Only by entering the international market can we know what our competition is doing, can we raise our competitive edge. Otherwise, we’ll lose the China market to foreigners. — Zhang Ruimin, 19961 All success relies on one thing in overseas markets—creating a localized brand name. We have to make Americans feel that Haier is a localized U.S. brand instead of an imported Chinese brand. — Zhang Ruimin, 20032 On December 26, 2004, Haier Group, ranked China’s number-one company by the Asian Wall Street Journal,3 celebrated its 20th anniversary with annual sales topping RMB 100 billion.a (See Exhibit 1 for Haier revenue growth.) Starting with a defunct refrigerator factory in Qingdao, Shandong province, founder and CEO Zhang Ruimin built Haier into China’s largest home appliance maker.b Globally, Haier ranked third in white goods revenues, and was the second-largest refrigerator manufacturer (with about 6% of the global market) behind Whirlpool and ahead of Electrolux, Kenmore, and GE.4 Zhang pledged to make Haier the world’s best-selling refrigerator brand by...
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...Haier Case Study 1. Discuss the primary reasons why Haier moves from a single and dominant business strategy to a diversified strategy. The single and dominant business strategy, which denote relatively low levels of diversification, more fully diversified firms are classified into related and unrelated categories. A firm is related through its diversification when there are several links between its business units; for example, units may share products or services, technologies, or distribution channels. The more links among businesses, the more constrained is the relatedness of diversification. Unrelateness refers to the absence of direct links between businesses. 참고 : http://wenku.baidu.com/view/6a080e260722192e4536f624 2. A.Describe how Haier uses activity sharing and the transfer of core competencies to create value. (related diversification strategy) Haier uses both related and unrelated diversification strategies. Haier catapulted in the last two decades producing consumer products that are sold in similar fashion. They all shared distribution channels, outbound logistics, and sales forces. Haier was able to develop core competencies through effective activity sharing of primary activities resulting in a superb competitive advantage, ultimately creating value. CEO Zhang Ruimin realized that using both strategies’ can work in Haier’s favor with the ultimate goal of getting name recognition globally. His related diversification strategy used both operational...
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...Jimmy and Kevin Contents 1) What is Haier Group 2) History of Haier Group 3) Product and Culture of Haier 4) Strategies of Haier 5) Questionnaire What is Haier Group Haier Group is a Chinese multinational consumer electronics and home appliances company headquartered in Qingdao, Shandong, People's Republic of China. Its products include air conditioners, mobile phones, computers, microwave ovens, washing machines, refrigerators, and televisions. In 2011 the Haier brand had the world's largest market share in white goods, with 7.8 per cent. Haier group is the world's fourth largest home appliance manufacturers, a Chinese brand with most value. Haier have been to 30 countries to establish the localization design center, production base and trading company, the global total employees are more than 50’000 people, It has become a large-scale multinational enterprise group, Haier group in 2007 has achieved turnover RMB 118 billion. In August 2005, Haier was awarded by Britain's financial times "China top ten world-class brand". In 2006, in the Asian Wall Street journal organization selection "Asia top 200 enterprises", Haier group for the fourth year in a row on the "mainland China enterprise comprehensive leadership" charts. Haier has become a world-class brand ranks, its influence is with global market expansion and rapid rise. History of Haier Group The origins of Haier date are back long before the actual founding of the company...
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...An Assessment Study (A Strategy Paper) on (for) HOME APPLIANCES & CONSUMER ELECTRONICS / WHITE GOODS Submitted by: Teofilo, Reymark P. 2009104355 As partial fulfillment of the requirements of EMG166 – Section T Strategic Planning & Management 3 Quarter SY 2014 – 2015 EXECUTIVE SUMMARY Haier in the Philippines are Corporation that the Filipinos embraced. It is a Home Appliances that gives comfort to the people that offers quality products. It is value for money, where normal people are looking for not like other competitors usually focuses only on their products. Haier is a corporation that brings life to your home. The corporation is still new to the market so it will be the focus of the strategy. Since the corporation is young compared to its competitors but they are different among their competitors having a variety of Home Appliance aside from having electronic gadgets. They aim to satisfy the needs and wants of their consumers that make them different among their competitors. Haier faces challenges and problems on how to penetrate since they only have one branch. They lack promotion that can help them to gain consumers and have the share in the market. With the help of the strategic plan one of the ways on how Haier will grow the market is that their marketing efforts should widened and strengthened. Along with the plan is the changing of the structure for the organization and marketing strategies to make their mark and to innovate...
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...A Profile of Haier Group Founded in 1984, the Haier Group has been dedicated to innovation and creating a world famous brand over the past 26 years. Originally a small collective plant on the verge of bankruptcy, it has now grown into an international group which has more than 70,000 employees around the globe and realizes a turnover of 135.7 billion yuan in 2010. Haier has risen to be the world's No.1 brand of consumer appliances. In addition, it was selected as one of the world's Top 10 innovative companies issued by USA Newsweek's website. Haier aims to create a world famous brand in the age of the Internet, which features satisfying the personalized needs of users in a short time. What such a business needs is large-scale customization rather than massive production. Taking this opportunity provided by the Internet, Haier addressed this challenge and actively explored and practiced the "Win-win Mode of Individual-Goal Combination". Through "Inverted Triangle" organizational innovation and "End to End" ZZJYT construction, it realized the transformation from "selling products" to "selling services" and fostered differentiated and sustainable competitive advantages. Trend-leading R&D advantages ---- The Haier's patent applications total over 10,000- ranking first among Chinese home appliance firms. Haier takes the lead to make breakthroughs in international standards. It participated in the drafting of 51 international standards, 27 of which have been issued and implemented...
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...Introduction Haier is famous as a white goods home appliance manufacturer. Haier Electronics Group Co Ltd. (Haier ELEC) which is listed on the Stock Exchange of Hong Kong Limited (stock code: 01169) is subsidiary of Haier Group. Its main business includes research, manufacture and sale of water heater and washing machines in China. Meanwhile, it is responsible for distributing other home appliance products such as air-conditioner, refrigerator and television (Haier ELEC Annual Report, 2010). Industry and SWOT analysis The home appliance industry has high level of rivalry. There are many different businesses, such as National Electrics, Chigo, Siemens, and Midea, compete in the industry. Therefore, the large amount of substitute products cause to a high bargaining power of buyers. Strengths | Weaknesses | 1. Good brand image and reputation. 2. Market leader in water heater and washing machine sales. | 1. Lack sound distribution and selling system, causing to a high level of distribution costs, which is defeated by many other companies. | Opportunities | Threats | 1. Haier has core technology in water heater and washing machine. Entering small house appliances is an opportunity for Haier because Haier can quickly master the technology of small house appliances due to its good ability of research and development. | 1. High level of competition. In the area of air-conditioner, television and refrigerator, market share is surpassed by other new competitors...
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...------------------------------------------------- Assignment 7: Haier: Taking a Chinese Company Global * Solution 1: * * Established in 1984 by taking over a failing refrigerator company, Haier has come a long way in becoming the largest appliance company in China. Globally Haier ranked 3rd in whites goods revenues and was the 2nd largest refrigerator manufacturer in Chinese market. It accounted for a staggering 30% share in China’s white goods market which was running at an overcapacity of almost 30% in major appliances. There are many factors which led to Haier’s success story in China before they ventured in to international markets. Haier could leverage some of these key factors in framing its international strategy. The major drivers of its success in China were: * * Continuous Innovation (Invested 5-7% revenues in R&D) * High market responsiveness (Time-to-market was very less) * Adherence to highest quality & Operational efficiency (Turned around fortunes of debt ridden companies by streamlining operations and stringent quality control) * Pro-active customer support (5500 independent contractors across China) * Integrated Logistics (Reduced costs) * * With a backdrop of this success story and also at the same time declining profit margin of Shanghai arm of Haier to 2.6% from about 10%, local manufacturers cutting prices by 10-15% annually, Haier developed a formal global expansion strategy in 1997. This was built around its...
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...Contents Haier 2 Research on brands and branding 2 Strong in home market 2 Geographical balance in sales 3 Addresses similar consumer needs worldwide 4 Standardization vs. Adaptation 4 Marketing mix 5 Consistent positioning 5 Haier’s mission statement 6 Haier’s Vision statement 6 Consumers value the country of origin 6 COO theory 6 Product category focus 7 Corporate name 8 Branding and strategy 8 Extent of globalization 9 Analysis of the brand 10 Marketing metrics 10 Revenue metrics 10 Marketing programs performance metrics 11 Profit per customer 11 Bibliography 13 Haier Haier Group is a Chinese multinational home appliances and consumer Electronics Company which has it headquarter in Qingdao, China founded in 1984. It designs, develops, manufactures and sells a wide range of products which includes air conditioners, mobile phones, computers, microwave ovens, washing machines, refrigerators, televisions etc. Research on brands and branding International marketing today requires that the products used by the consumers must be branded and have good branding image. China created a portfolio of global brand champions. These features were presented by John Quelch in 1999 that were common in all the ten brands, which are as follows. Strong in home market In order to be successful on a global level, firms first of all need to have strong position in their domestic markets. If the cash flow and market share at domestic level is strong...
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