Haier: Taking a Chinese Company Global in 2011 Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Haier: Taking a Chinese Company Global in 2011 Case Solution

Success of Haier in China

Haier has faced numerous issues while on its way of being successful. Despite all the issues it face, it is a well-known brand now. It had to formulate numerous strategies for creating its brand name locally and internationally both.

The reason for Haier’s success in the refrigerator market was clear as there were no other players in the market that were providing quality product. Haier has never compromised on the quality of its product. However, due to not compromising on the quality of the product and with the aim of being a brand name, the companyhad a boost with itsoutput.

The management of Haier has remained foreseen with itsvision. As it became a part of the Shanghai stock exchange, it raised IPO with RMB 369 million. This was risky for Haier, but it was the first time for the company. Nonetheless, with the company was a big successafter taking such a risk in fact, the company would have shut down if it had not taken the risk. Haier catered the market soon due to its large-scale production. It was the need of the company to produce at large–scale otherwise the company would have to bear the loss. By makinguse of its labor and debts, Haier moved towards diversification from refrigerator to air conditioner and freezer. Better management skills provided Haier with betterdecision making. 2.

Globalization of Haier

Haier started selling in the U.S market with the name of Wel bilt in 1994. It was good communication, production, and distribution of goods that gained Haier 10% of the market share of U.S compact refrigerator market. It is hard to get into large retail store of the U.S,however Haier made it possible and its sales increased on a yearly basis. The company used its marketing strategy of being customer oriented and got the attention of the customers through innovations. Furthermore, Haier established its own refrigerators in South California in 2001. By 2005, its share of wine cooler was 50%, for compact cooler was 26% and for window air conditioner it was 17% in the U.S market, despite the US market being a developed market. Similarly, in 2011 Haier started its distribution in 13 countries of Europe from Italy, where it began manufacturing its refrigerators. For serving four distribution channels Netherland, U.K, Italy and Spain, the logistics centers of Haier were in coordination in the 2004. Moreover, the company generated 17% of its revenue from the European market. However, the company faced an issue when it entered India after alliance with Indian appliance firm Fedder Lloyd Corporation. Nonetheless,Haier’s was able to launch its product.

Haier formulated different strategies to enter into a develop market of the U.S and Europe. It competed with companies such as Philip, GE, and Matsushita. Haier catered the market of the U.S, Europe, and India. These all practices were only possible with the strategies followed by Haier. Similarly, it remained profitable for Haier to create its brand name in the global market even though it had initiated early. The strategies that Haier devised for moving toward international market are discussed below.

Strategies and their benefits by globalization

Differentiation

Haier selected the U.S market for international development. Although it was a developed market however,Haier selected and formulated plans for catering that market. Firstly, it distributed with the name of Welbilt in the U.S market. Moreover, the retail stores had accepted to distribute Haier’s products, and Wal-Mart was the best selection to increase its sales. With the help of Walmart, Haier made sales of 50,000 in the first year, and with time its sales increased. The strategy adopted by Haier over here is differentiation. Haier found the need of compact refrigerators for offices and students. However, small refrigerators had a market share of 30% in theU.S market. Similarly, with the help of the analysis, Haier found a gap for mini fridges as well and this led to another factor of differentiation created the opportunity in the developed market. ...................

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