Dynamics of Strategy - Haier Case Study

Topics: Strategic management, Vermiform appendix, Brand Pages: 16 (5423 words) Published: August 18, 2013
Dynamics of Strategy
Author [ID: XXXXX]
June 2013
Word count: 3294

Table of contents
2.Haier's strategy analysis (Part A)4
2.1Haier's strategy overview4
2.2Macroenvironment analysis5
2.3Industry analysis6
2.3.1Key points of the industry analysis8
2.4Industry key success factors (KSFs)9
2.5Internal analysis10
2.6Points on KSFs and internal analysis14
2.7Dynamic context14
2.8Purpose and stakeholders perspective15
3.Recommendations (Part B)17
6.Assignment instructions25

This report provides an in-depth analysis of the strategic steps taken in Haier India using the B835 module frameworks. The analysis covers scanning the external environment, industry analysis, identifying Industry key success factors, internal analysis, the effects of the "pressures", and examining from organisational purpose and stakeholders perspectives. Following the analysis, numerous conclusions are drawn applying module concepts with the data available both from the case study and some from additional research. Finally recommendations are presented for Haier's future strategy after highlighting the strategic issues from the analysis, applying further module concepts around corporate and competitive strategies.

Haier's strategy analysis (Part A)
Haier's strategy overview
Haier's strategies implemented since 2004 are outlined following analysis of information provided in the case study. Strategies during the leadership of T. K. Banerjee, India operations president, during period: Jan 2004 - Aug 2009: 1. Localisation strategy comparable to other Haier markets. Aim is for Haier to become the top-three home appliance brand in India (evidence: Appendix A) 2. Get into high-end markets (US & Europe) first to spot problems quickly (evidence: Appendix B) 3. Implement localisation (“three-in-One”) strategy (internationalisation) step by step instead of rapid moves (evidence: Appendix C) 4. Asset acquisitions as growth strategy for local production (evidence: Appendix D) 5. Adopt and build global branding strategy (evidence: Appendix E) 6. Household acquisitions such as Maytag Corp to remove "Chinese-ness" liability (evidence: Appendix F) 7. Target higher income bracket consumers and opt for premium price (evidence: Appendix G) 8. Fight in "value war" not in "price war" (evidence: Appendix G) Strategies during Eric Braganza's leadership during period: Sep 2009 - 2012, who replaced India operations president Banerjee: 9. Reposition pricing strategy closer to masses aligning to middle markets (evidence: Appendix H) 10. Launch 25 new products, e.g. LED TVs, deep freezers, dishwashers, juicers (evidence: Appendix I) 11. Plans to launch more new products: laptops & cameras (evidence: Appendix I) 12. Upgrade factory capacity in 2010 by investing $22.2m for new product lines: air conditioners, washing machines (evidence: Appendix I) 13. Invest $9.5m in 2011 to double refrigerator production, triple washing machine production by 2013 (evidence: Appendix I) 14. Launch aggressive marketing & branding campaign in 2010, including recruitment of actor J. Abraham as Haier's brand ambassador (evidence: Appendix I) 15. Strengthened after sales service (evidence: Appendix N)

Macroenvironment analysis
According to Paul Skinner of Shell Oil Products (Unit 2.2), the macroenvironment is a source of both opportunity and threat. Based on this concept continual environment scanning is critical for Haier to prepare "an appropriate" response to the changing circumstances. The word "appropriate" here refers to the answers the SFA model can provide to Hair's strategy following tests of: suitability, feasibility and acceptability (Unit 5.5 of Johnson et al. (2006)). Haier's macroenvironment is scanned making use of PESTLE framework (Unit 2.2) to understand the...

References: III. Haier Appliances (India) Ltd, company review, http://jobbuzz.timesjobs.com/company/Haier-Appliances-%28India%29-Pvt-Ltd-/company-review&txtCompId=519&currreqtb=interview (Accessed 09 June 2013).
IV. Haier ownership structure, http://en.wikipedia.org/wiki/Haier#Ownership_structure (Accessed 22 June 2013).
V. Investopedia (2013), http://www.investopedia.com/markets/stocks/hrelf/ (Accessed 27 May 2013).
VI. The Open University Business School, “Unit 2.2: Exploring the macroenvironment ", https://learn2.open.ac.uk/mod/oucontent/view.php?id=190804§ion=1.1 (Accessed 27 May 2013).
VIII. The Open University Business School, “3.1: Introduction to Unit 3", https://learn2.open.ac.uk/mod/oucontent/view.php?id=190809§ion=2.1 (Accessed 02 June 2013).
X. The Open University Business School, “4.4: Stakeholder analysis ", https://learn2.open.ac.uk/mod/oucontent/view.php?id=190818 (Accessed 01 June 2013).
XI. The Open University Business School, “5.3: Corporate strategy", https://learn2.open.ac.uk/mod/oucontent/view.php?id=190823 (Accessed 21 June 2013).
XII. The Open University Business School, “5.4: Competitive strategy", https://learn2.open.ac.uk/mod/oucontent/view.php?id=190824 (Accessed 22 June 2013).
XIII. The Open University Business School, “5.5: Testing and evaluating strategic choices", https://learn2.open.ac.uk/mod/oucontent/view.php?id=190825§ion=2 (Accessed 01 June 2013).
XIV. The Open University (2012) E807 Study Guide [Figure], Available at http://learn2.open.ac.uk/mod/oucontent/view.php?id=64592§ion=11.2 (Accessed 30 August 2012).
XV. The Open University Business School (2011), “B835 The dynamics of strategy Selected readings”, p69 - 87
XVII. Wikipedia, http://en.wikipedia.org/wiki/PC_World_%28retailer%29 (Accessed 01 June 2013).
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