Haier is the world’s 4th largest white goods manufacturer. The business scope of Haier is technology research, product development and manufacturing, trade and financial services. The key products are refrigerators/freezers, commercial air-conditioners, microwave ovens, washing machines, dishwashers, televisions, mobile phones, and computers, etc. Haier has 240 subsidiary companies and 30 design centers, plants and trade companies and more than 50,000 employees throughout the world. Haier specializes in technology research, manufacturing industry, and trading and financial services. Zhang Ruimin founded Haier in 1984, which was the 6th year of Chinese Reform and Opening-up policy released.
Haier had experienced the development stages, noted as Brand Building, Diversification and Internationalization. Haier announced its 4th strategic development stage of global brand building.
This case is a classic example of how a company can become profitable in the global marketplace with right strategic planning and implementation processes in place.
In terms of the market share, Haier has earned more than 26.2% in the Chinese home appliance market. It especially occupies more than 30% in high-level market domain. Both of the figures are better than the famous foreign brands, Panasonic, LG, Samsung, Siemens, and Philips. However, Haier owns a much lower market share and influence all over the world compared to these international appliance giants.
The Market Place – Environmental Analysis
The transformations in the world marketplace have been extensive and, in many cases, rapid. Integrated global markets contested by global players challenge local industries operating in protected national economies. National borders are becoming increasingly irrelevant as liberalization and privatization take place. This has led to such phenomena as the growing scale and mobility of the world’s capital markets and company’s ability to leverage knowledge and talent across borders. Governmental support in domestic market, resistance to home country brands in international markets and price wars with intensified competition characterize the home appliances industry around the world.
Black and white are Chinese classification: the black is to bring to people, entertainment and leisure, such as cell phone, TV, computer, PS3, MP3 whereas the white is to reduce people's labor intensity, such as washing machines, dryers, dishwashers, microwave, oven and some other kitchen appliances; home appliance to improve the living environment and improve living standards, such as air conditioners, water heaters, refrigerators, wine cooler and so on.
Problems facing Haier
In 1984, when Zhang Ruimin took control of Haier, it was a loss making refrigerator firm. Zhang faced financial constraints, and even indiscipline at the work place that resulted in poor quality products.
Solution was a turn around strategy in terms of reforms in the production processes, organization structure and management, human resources management, and financial administration. Together, the reforms were directed to achieve greater profitability and higher standards of quality in order to build a strong brand image for Haier in the global market place.
Technology strength| Low level of core technology|
Innovation strength| Low brand influence|
Corporate Culture strength| Small location network|
Superior service| |
Government Support| Competition from foreign brands|
Global Economic Integration| Country Image|
Advantages in domestic market| |
Zhang took the reforms one at a time. This led to various stages of development in the history of Haier.
During the 80s, the firm focused on restructuring and brand building in China. Restructuring intended to impose management control on product quality and after sales service. The key...