The Haier Group was founded in 1984 as a Chinese government-owned business that produced mainly household refrigerators. Encouraged by the government, Haier set their sites on becoming an international brand. Haier’s executives believed that the strong brand recognition that was created domestically could be extending into the Western market by creating and introducing products for the niche consumers and then expand into larger markets.
“Globally, Haier had gained first place in the United States in sales of compact refrigerators and wine coolers, in Iran for washing machines, and in Cyprus for air conditioners.” (p24-16) Haier also looked at expanding into the Taiwan market by combining with Sampo to create compressor for air conditioners, and had partnered with Hitachi to create Hitachi Plasma Display in Japan. All was going well for Haier, so well that in 2004, Haier’s CEO, Zhang Ruimin, announced that the main goal of the company was to expand and increase the number of products sold in the United States. Haier also planned to modify the products to meet the needs of the American consumers.
“On March 4, 2002, Haier opened its American headquarters in New York City, an indication that Haier had moved into a new phase in the globalization of product design, manufacturing, and sales.” (p24-16) Haier was determined to break into the market in the United States, but the company had strong competition in the United States. A majority of the home appliance market in 2004, was held by Electrolux, General Electric (GE), Whirlpool, and Maytag holding 93.2% of the market, and on the consumer electric side Matsushita, Sony, Philips Electronics, Sanyo, and LG Electronics controlling the market. “Compared with most of these major brands, Haier’s consumer electronics products had no competitive adavantages either in technology advances or in product quality, except for the relatively lower prices.” (p24-17)
Haier offered several different home...