Haier Analysis

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How can Haier compete against larger multinationals experienced in advanced country markets?

Haier has had the advantages of operating in a very large and fast growing home base which contributed to its rapid growth. Since its foundation, focusing on higher production quality and meeting customer needs to the fullest extend, along with formulating an international expansion strategy; Haier became a dominant player in the global appliances market.

Haier’s first international expansion took place in developed markets such as USA which allowed its products to meet higher safety and consumer standards. During its international expansion in above mentioned markets, Haier successfully focused on niche products by offering a variety of versions for different market segments. Although successful for an entry strategy, in today’s intense global competition where large scale is a must, Haier will have to gradually offer a complete line of products (diversified product portfolio) and move beyond niche markets.

Haier’s strategy of letting local managers take care of a particular country is the correct strategy to attain “global localization”. However, this strategy should not undermine the fact that Haier’s success also depends upon local employees and managers that understand international markets and are very familiar with international business practices, thus have the ability to steer Haier into future.

In an era where design matters as much as a good quality and attractive pricing, Haier’s design centers in several locations facilitates localization of its products. But, this may cause overlapping in design and component use and reducing production efficiency. R&D and production facilities must be located in accordance with particular locations competitive advantages.

Haier’s global strategy is to use only one brand name rather than several names for each segment. I agree with this strategy but considering today’s markets where it is very easy...
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