Haier was just found in 1984. At the beginning stage of its business, it mainly produces household refrigerators as the core product. 20 years later, Haier has obtained the leadership position in the Chinese home appliance industry which consists about 21% of market share. More importantly, Haier has become a multinational company and has expanded its business to America and elsewhere Asia. According to sales, Haier was ranked fourth in the major home appliances industry in the world. What are the seasons behind which make Haier creates such an amazing performance for just 20 years? In the followings, it is going to discuss about the comparative competition of Haier in terms of product, manufacturing, supply chain and distribution network, sales channels, warranty and service and management system.
Haier totally has two product lines. Home appliances products are its core products which include, but not limit to, wine cellars, air conditioners, laundry products. The secondary product line is the consumer electronics such as plasma television sets, DVDs, VCDs. Each of the product lines has unique features.
The wide range home appliances offered by Haier are usually in higher quality with relative lower prices while the consumer electronics have special design on its appearance and also set in low prices. Both product lines of Haier can offer low prices because most of the products are imports from Asian manufacturing factories which involve a lower labor costs. The cost leadership strategy successfully attracts the low-end market in the United States.
Haier has an outstanding design and technician team further increases the attractiveness of the Haier’s product. The team is good at modifying and adding new features to the existing products. These modified products are attractive to the middle and high-end group. Also, the time to market of new products from Haier is much shorter than its competitors. It just takes 5 months but other companies may spend about half and a year to do that. It is because Haier can respond to the specific needs of customers much quicker than the competitors. This creates a comparative advantage for Haier.
In addition, some people may ask how Haier can control its manufacturing cost with so many different products. It is because Haier use common basic platform for the same categorize of products. Then Haier may change some of the modules of components so that products with different features are produced. It results in producing wider product range with minimum manufacturing costs.
4. Supply chain and distribution
Most of the products from Haier America are imported from the Asian manufacturing factories. It may involve a high shipping cost for Haier. Yet Haier has overcome this difficulty into the support of cost leadership strategy. As it cooperates with COSCO, the largest oversea shipping company in China, it further reduces the logistics cost in shipping the products from Asia to America. Apart from building up a reliable supply chain network, the alliance with COSCO help Haier explore to more opportunities in the world.
5. Sales channels
General speaking, Haier has two major distribution channels to reach its final customers. It sells the product via the internet and retail chain stores. According to the statistics in the essay, around 80% of consumers will buy home appliances and consumer electronics in the retail stores. Haier’s products have appeared in the top 10 chain stores in the world. Since Haier has a very good relationship with the major individual stores, it may obtain a lower charge for the shelf spaces, better exhibition area or vigorous in-store promotion. This may increase the brand cognition and get in touch with more customers.
On the other hand, internet sale is another distribution channel of Haier. Haier have built up networks with the worldwide internet sellers, for instance, eBay and Amazon. Due...