Introduction:
The famous HaierCompany was founded by Zhang Ruimin, who was working as CEO of the company as well. He founded the company in 1984, he has made the company, by acquiring the company already established but failed. SoZhang accepted the challenge and acquired that company and make it number one company, as specified by the Asian journal in 2004. It is considered as world’s third largest company in revenue generation. In 2010, the company made 136 billion RMB revenue, it is one of the leading company of consumer electronics and home appliances all over the world. When Zhang acquired therefrigerator, he was of the view of makinghigh-quality, superior products. Zhang has aimed to become number one and a brand of a category, by diversifying their operations. After 1992, Haier has taken theinitiative of expanding his businesses, by looking into those businesses similar to their operations. The company solved management issues of various companies having apoor performance by acquiring them, and making innovative changes in their operations.
The company released their IPO in 1993, after that in 1997, the company has started extending their product lines. In 2004, the company became number one appliance company in china. The company has faced strong competition throughout the world and still growing considerably. They hold 30% of white goods market and increasing their spam to the black goods market as well.
Q: What is the concern in the case?
The company is considering to expand its operations out of China, but not to lose its current position as number one in the same country as well. The issue here to discuss, whether they expand globally without losingtheir stake in china. The discussion is based on the pros and cons and the relative strategic measures that the company should take without losing its stake in China.
Haier the global innovation of Chinese company Harvard Case Solution & Analysis
Q: What is the global strategy of Haier?
- The Haier’s strategy for entering the global market, is to focus the difficult markets first and then and there to meet their high-quality standards in the world’s emerging markets.Afterward entering into relatively easy markets and apply the understanding gained from the difficult markets.
- Start production with the niche product first and then enter the local market.
- The staff is appointed locally because, of the great market know how they want to get perceived as a local brand.
What are the strategies adopted by Haier internationally (1993-2010)?
| Short term | Long term |
| · Local staff and personals
· Depending on mergers and acquisitions. · Haier should focus niche market development in the US.
|
· Own people in key positions
· The diversified product line, rely on product differentiation. · Focus on building animage. |
Q: What are the strengths and weaknesses of Haier in theforeign market over Chinese companies? DoSWOT analysis:
| Strengths | Weaknesses |
| · vast experience to enter the new market.
· Customer oriented products. · Having good name fetches people support and reaction to the new products. |
· The negative image of a Chinese brand i.e. less durable.
· Production constraints abroad. · Production costs are on the higher sides when doing manufacturing in abroad. |
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