Haier's U.S. Refrigerator Strategy 2005

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HAIER’S U.S. REFRIGERATOR STRATEGY 2005

The U.S Refrigerator Industry

Data 2004:
TAM = 13.2 million units (29.5% of the total white goods)
CAGR (2004 – 1996) = 3.4 %
CAGR (2004 – 2000) = 5.4 %
CAGR (2004 –2002) = 6.2 %
CAGR (2004 – 2003) = 2.3 %
TAM = $ 7.5 billion
ASP = $ 568

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Notes:
1. Refrigerators are the biggest market segment in the major home appliance business. 2. The refrigerator market segment is growing with the same rate of all the white good market (comparable CAGR values) except for the last year (2004) when Refrigerators grew only 2.3% vs 7.2% of the white goods market. 3. After the big growth from 2002 to 2003 (10.3%), there is a slow-down from 2003 to 2004 (2.3%), giving an average CAGR (2004-2002) = 6.2%. Why this slow-down?

Refrigerator Classifications

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Notes:
1. Standard Refrigerators segment shows an average annual grow of about 2%. 2. Compact refrigerators segment shows a much bigger growth but also a slow-down from 2003 to 2004. This slow-down causes the total slow-down in the refrigerators market. Why compacts slow-down from 2003 to 2004?

Maybe it is not so important. Think that the CAGR (2004-2002) = 14% => Compacts are growing much more than the standards!

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Standard refrigerators:
Sales: 10.6 million units
Replacement demand: 7.3 million units / year
Delta: 3.3 million (31% of sources beyond replacement)
Compact refrigerators:
Sales: 2.6 million units
Replacement demand: 1.0 million units / year
Delta: 1.6 million (62% of sources beyond replacement) Notes:
1. There is a constant demand each year due to replacement => Very low risk market! 2. Sources beyond replacement:
← New houses/offices/hotels: growing but very slowly ← Bigger houses: more area => more than one refrigerator? More wine cabinets (sources for compacts)? ← 25% of new houses with home office => compact refrigerators also for the house market (new...
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