...INTRO: AN OLD CHAMPION PROBING INTO THE FUTURE In this group assignment, we analyze Haier Group’s strategic position and outlook in China’s home appliances industry. By only focusing on the most up-to-date articles and resources available, we have come to the somewhat surprising realization that Haier Group is at the forefront of maturing into a networks platform and a solution provider to an ever-segmented market. While this transformation seemed only logical to any multinational corporation under the sea change brought about by the Information Age and the new paradigm spearheaded by Google and Amazon, Haier Group’s strategic response to what time has called upon them has been quite elusive and subtle. We will demonstrate how Haier Group, with so many success stories from its past, along with the cultural baggage it could evolve beyond, should adapt to the present and fulfill its future promise. PART I. Environmental scanning and industry analysis The STEEP analysis in this section will focus on the most relevant aspects with Haier Group in China: Chinese consumer’s recent socioeconomic development and technological development; the two aspects obviously have huge cultural and political ramification which we also include in the scanning. Toward the end of this section, we will demonstrate these aspects have presented both challenges as well as solutions. 1. Socio-economic facet While we focus our analysis on one single country, China, we have to point out that China...
Words: 3440 - Pages: 14
...The reason why Haier have such great success is that their group is not satisfied with the status quo but to continuously pursue innovations.The strong source of innovation is partly from the prediction, assessment and accreditation of a new technology, which Haier get from the surrounding technological environment. Haier Group is very good at capturing the analysis of market and technology environment of the their company. Every year, company give the analysis report of external environment to clarify the tasks of scientific research that Haier Group will do in future years. In Haier's analysis report, the main factors that affect the innovation environment are the extension of market demand, the increase of contenders and the replacement of technology in white goods。 1.the extension of market demand In the wake of China's accession to WTO, the Haier Group's strategy is to open the international market. The Haier Group established overseas design division, hoping to develop different home appliances for different region consumers. 2.the increase of contenders Abroad home appliance companies like Electrolux, Siemens possess huge advantages in technology and brand. Faced with the pressure of those companies, Haier's leadership position in the Chinese household appliance industry will confront severe challenges and shocks. Therefore, Hale should focus more on development of technological innovation. the replacement of technology in white goods With the development of high-tech...
Words: 411 - Pages: 2
...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...
Words: 10226 - Pages: 41
...INDEX |Contents |Page Numbers | | | | |EXECUTIVE SUMMARY |2 – 4 | |CERTIFICATE FROM MIMA | | |CERTIFICATE FROM COMPANY | | |ACKNOWLEDGEMENT |5 | |COMPANY PROFILE |6 – 10 | |INDUSTRY PROFILE |11 - 16 | |RESEARCH PROBLEM AND ITS BACKGROUND |17 – 19 | |OBJECTIVES, HYPOTHESIS AND SCOPE |20 – 22 | |RESEARCH METHODOLOGY ...
Words: 8513 - Pages: 35
...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...
Words: 3419 - Pages: 14
...After successfully breaking the stereotype of “made in China” in the 90’s and establishing itself in the overseas market as a quality brand, Haier decided to venture into India in 2004 owing to the potential market share it could amass. T.K. Banerjee, appointed as president of the Indian operations, set out to acquire 20% of the white goods market over a 5 year period and to place Haier in the top three companies in the industry in 7 years. However, these targets were far from being reached after the specified time period. The key issue was that the estimated growth had not been achieved. And according to the case, there were numerous aspects that seemed to have contributed to it. Firstly, the market was already crammed. Production facilities were constantly being added, but the demand hadn’t caught up to the supply. Secondly, the tax structure was such that it added to the cost of the products, resulting in higher prices and hampering industry growth. Thirdly, the escalating price wars kept the profit margins to a minimum. Big players, such as LG and Samsung, were keeping prices low to retain their market share while hardly making a profit. Lastly, sub-standard infrastructure contributed to making much of the rural market inaccessible. Poor condition of the roads and the delayed execution of rural electrification programmes contributed to holding up potential market demand. Besides the above mentioned reasons, there are three other aspects that the writer has failed...
Words: 1306 - Pages: 6
...THE IMPACT OF GLOBALIZATION ON HAIER Name: Institution: Date of submission: THE IMPACT OF GLOBALIZATION ON HAIER Introduction People across the world have been interacting with other cultures in numerous ways, many of them for economic reasons. Integrating the insights of the past, one could envisage that it was difficult initially for people to communicate and do business together. However, these obstacles still subsist even in today in international business. Despite that, our world has become undoubtedly smaller in the last decades, cultural and geographical contexts still take place in shaping different societies and their methods of relations. The term globalization is the method of international incorporation arising from the exchange of worldviews, products, ideas, and other aspects of culture. There are several factors generating interdependence of economic and cultural activities which include telecommunications and transport infrastructure. Most recently, due to the industrial revolution and innovation in the transportation and communication, the units of international interaction resulted into multinational corporations who were finding materials, labor, and clients outside their own. It can be realized that multinational corporations are agents of globalization. Haier Group Company has10 industrial parks world wide and 22 other plants overseas and has been impacted by the global world. The reality of this branches from the fact that it has many subsidiaries...
Words: 2864 - Pages: 12
...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...
Words: 1310 - Pages: 6
...opportunity to compete against established, slow moving companies there by being more customer-focused than they are. To win over those customers we have two approaches—speed and differentiation. — Zhang Ruimin, CEO Haier Group1 The Haier Group was one of China’s most accomplished and important companies, with estimated global sales in 2007 of $16 billion. Founded in 1984 as the Qingdao Refrigerator Company, the original company was a collectively owned enterprise in the same northeast coastal municipality that produced the popular Tsingtao beer. Haier became a conglomerate electrical home appliance and consumer electronic products company. Its core business was white goods—refrigerators and freezers, ranges, and microwave ovens, dishwashers, and washing machines and dryers—and room air conditioners. Later, it diversified into mobile telephones, television receivers, personal computers, and even financial services and pharmaceuticals. Overall it produced 96 different product lines comprising 15,100 different product specifications. It employed over 35,000 people worldwide. Haier was one of the world’s seven biggest home appliance makers—along with LG (Goldstar) Group and Matsushita headquartered in Asia; Whirlpool and GE in America; and Electrolux and Bosch-Siemens in Europe. Haier was widely regarded as China’s “Most...
Words: 10169 - Pages: 41
...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...
Words: 8738 - Pages: 35
...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...
Words: 8703 - Pages: 35
...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...
Words: 2086 - Pages: 9
...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...
Words: 2574 - Pages: 11
...dramatically. FDI accounts for $148 billion in 2009 and forecasted $300 billion in 2014. Policies like tax credits such as Real Estate Act 2010 removes the current taxes on foreign investors of commercial real estate and other investment incentives are provided to attract more foreign investors. But US- China relationship is not in a good shape due to the factors such as Yuan manipulation, import taxes, excluding foreign suppliers at certain sectors. Outlook Stable political environment and favor to foreign investments. US- China relationship may become better or not based on the leaders decisions. Impact: Haeir have to spend time and effort on understand the system and to adhere to the State government regulations and Federal regulations. Haier may not get the preferences with government process due to US-China relationship Policies for FDI: http://digitalcommons.wcl.american.edu/cgi/viewcontent.cgi?article=1675&context=auilr Economic Well developed and largest economy in the world. Moderate economic recovery from the 2008-2009 financial crises overall but obvious uncertainty remains for the future. Growth in 2011 is...
Words: 2286 - Pages: 10
...------------------------------------------------- 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...
Words: 1242 - Pages: 5
