Haier Group: A Chinese Company That Created A Global Brand
Haier Group: Chinese Company That Created A Global Brand
Haier Group (“HG”) is a leading Chinese international manufacturer of large and small appliances, including refrigerators, freezers, conditioners, dishwashers and laundry products to cell phones and televisions. HG is not only known around the world for quality and innovation but as an early mover outside of the Chinese marketplace; it was able to implement a market strategy to take away market share from large manufacturers on their own home-front.
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Haier Group’s Global Brand Strategy
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Haier Group’s Expansion Strategy – It Was Time to Expand
China joined the World Trade Organization (“WTO”) in December 2001 and became part of the international appliance marketplace. HG had a choice to maintain its current position as the leading manufacturer in China or to expand its operations into global markets. HG faced stiff competition from domestic manufactures and multinational companies (“MNCs”) that were penetrating the Chinese market. Although HG maintained a market advantage based upon its innovative and rapid market response to customer needs, superior after-sales servicing and efficient distribution centers, it would be only a matter of time before MNCs acquired similar resources through third-parties and adapted to local market needs (Palepu pp. 7-9).1 HG could face overcapacity within the Chinese market – i.e., too many manufactures and not enough market share – and lose the opportunity to support its global expansion to capture market share overseas. If HG have had kept the status quo, it may never have another opportunity to use profits generated from its domestic sales to go head-to-head with large manufactures and develop its own brand.
As early as 1997, HG had developed a formal global expansion strategy (Id. at 10). It manufactured products for MNCs overseas and entered into joint ventures (“JVs”) to explore foreign markets (Id.). HG had acquired access to the latest
Haier Group (“HG”) is a leading Chinese international manufacturer of large and small appliances, including refrigerators, freezers, conditioners, dishwashers and laundry products to cell phones and televisions. HG is not only known around the world for quality and innovation but as an early mover outside of the Chinese marketplace; it was able to implement a market strategy to take away market share from large manufacturers on their own home-front.
I.
Haier Group’s Global Brand Strategy
A.
Haier Group’s Expansion Strategy – It Was Time to Expand
China joined the World Trade Organization (“WTO”) in December 2001 and became part of the international appliance marketplace. HG had a choice to maintain its current position as the leading manufacturer in China or to expand its operations into global markets. HG faced stiff competition from domestic manufactures and multinational companies (“MNCs”) that were penetrating the Chinese market. Although HG maintained a market advantage based upon its innovative and rapid market response to customer needs, superior after-sales servicing and efficient distribution centers, it would be only a matter of time before MNCs acquired similar resources through third-parties and adapted to local market needs (Palepu pp. 7-9).1 HG could face overcapacity within the Chinese market – i.e., too many manufactures and not enough market share – and lose the opportunity to support its global expansion to capture market share overseas. If HG have had kept the status quo, it may never have another opportunity to use profits generated from its domestic sales to go head-to-head with large manufactures and develop its own brand.
As early as 1997, HG had developed a formal global expansion strategy (Id. at 10). It manufactured products for MNCs overseas and entered into joint ventures (“JVs”) to explore foreign markets (Id.). HG had acquired access to the latest