Haier is a “full line generalist” and market leader in the home appliance industry in China. Haier’s value propositions are product quality, continuous innovation using “dynamic growth cycle” (Exhibit A), competitive prices and customer service. Haier’s strategy of entering global markets with “niche” products like compact refrigerators, freezers and portable washers has provided them significant market share as “product specialists” establishing them as number five globally. Haier’s goal is to step up to the third position worldwide. To be able to do so, Haier has to expand into conventional product categories globally and compete against companies which have their home base and biggest markets in the developed countries. Developed nations are the most mature market for home appliances industry. Therefore, it is difficult to penetrate these markets or steal market share from other established companies. The main problem for Haier in gaining significant market share in developed countries is the poor quality perception of Chinese products.
Maytag Corporation is the third-largest U.S. home appliance manufacturer at this time. Out of the nine main home appliance products in US, Maytag hold one of the top positions in six categories. Maytag’s target market is medium to high-range of appliance buyers. It does not cater to low-end segments or to retailers which serve to the low-end segments.
What should Haier do?
With respect to Haier’s objective of growing into third largest home appliance industry worldwide, the first alternative for Haier is to acquire Maytag and penetrate in the high-end appliance market gaining significant US market share instantly. Another alternative is to continue using their dynamic growth cycle (Exhibit A) approach and gradually build brand equity in United States and other developed global markets. Decision factors
Brand Equity - . Haier has been looking for opportunities to...