Haier Case - Market Entry

Topics: Strategic management, Marketing, Value migration Pages: 14 (684 words) Published: October 20, 2012
Vincent Garcia - Lennart Cocquyt - Alexia Radichia - Gad Zerbib - Héloïse Condamin





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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