Haier Case - Market Entry
Analyse Haier’s growth
patterns internationally and
on the domestic market
Outline the synergies and
major stages of Haier
restructuring process to
implement their international
strategy and adress the
impacted corporate
functions.
1.
2.
3.
Value chain outline
Business model restructuration
Domestic market
1. Analysis
2. Factors of success
4.
International expension strategy
1. Management method
2. Analysis
3. Factors of success
5.
6.
Value creation
Debate
Top quality products
Adapted and
productive
management style
Group capacity to
restructure and
stimulate other
companies
Value chain analysis
& good partnership
Value Chain Outline
Business model
restructuration
Domestic Market
International
expension
strategy
Value Creation
Debate
Value Chain Outline
Business model
restructuration
International
expension
strategy
Domestic Market
1984
1988
Zhang become
Manager of
Quingdao General
Refrigiretor Factory
Gold medal for
product quality in
national
competition
Value Creation
1989
1991
Chinese market
face oversupply
Diversification
through aquisitions
(eg,
telecommunication,
equipment…)
Debate
Raise the price and
move to high
quality strategy
1998
Operational
restructuring
Value Chain Outline
Business model
restructuration
Domestic Market
Diversification and
internal
reorganization
7 product divisions
Glocal strategy:
◦ 4 Group-wide
« Development
Divisions »
International
expension
strategy
Value Creation
Debate
Value Chain Outline
Business model
restructuration
Domestic Market
International
expension
strategy
Value Creation
Debate
Market share in 2004
Refrigerator
Washing Machine
Air conditioner
28%
18%
30%
other
By 2002, they accounted for 61% of
industry profits.
From 1989 to 1996, the number of
refrigerators producers :100 to 20
3 Chinese manufacturers = 60% of
the market
◦ Kelon is the main competitor
Value Chain Outline
Business model
restructuration
Domestic Market
After the Chinese entry in
WTO:
◦ new entrants (Electrolux,
Siemens…)
◦ Refrigerator unit sales: 31% in
2002 vs 26% in 2001
◦ Automatic washing machine:
38% in 2002 vs 31% in 2001.
Before 2000:
◦ Core profit state-owned
department stores
In 2004:
◦ individual specialized shops/
private retail
International
expension
strategy
Value Creation
Debate
% Haier's sales
Domestic Chain
International chain
Licensed dealers
Independent retail shops
Government purchases
Online/Telephone sales
Value Chain Outline
Business model
restructuration
Domestic Market
Management method
Market responsiveness: focus on
meeting customer needs
Good after-sale service: offerings that
Chinese customers was not
accustomed (free replacement,
warranty…)
Distribution network: one single
company (Haier logistics) serving the
entire group, good network
Be cautious: These points can be
learnt, copied and imitated by
multinationals
International
expension
strategy
Value Creation
Debate
Value Chain Outline
Business model
restructuration
Domestic Market
International
expension
strategy
Value Creation
Debate
Key factor for international strategy
Focus on market pressure: choose difficult market (eg.,
US, Europe)
« If we can succeed there we can succeed in easier market »
Look for hard challenges
Focus on Human Resources assets
◦ Implement a « local thinking »
◦ Hire Local employees
Value Chain Outline
Business model
restructuration
Domestic Market
International
expension
strategy
Value Creation
◦ Since 1997: Willpower...
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