Haier Case Study
Haier appliances group enters New Zealand market: analysis of its strategy’s suitability with resource based view and SWOT
Ma Jinxiao SUN:109028310
News story summary
Haier is a Chinese electronical appliances producer and it decided to take a 20 per cent stake in Fisher & Paykel Appliances Company (F&P) which is a New Zealand company. According to their agreement, besides the stake, Haier will also take two seats on F&P’s board and also they will cooperate in various business functions, including product development, sourcing, manufacturing and marketing. This action brought win-win situation to both companies. For Haier, unlike its domestic acquisition strategy, this alliance strategy enabled access to well established distribution channel and factories in foreign market, especially in overseas high-end niche market. Meanwhile, F&P can recapitalize itself.
Analysis
The agreement between Haier and F&P can be classified as strategic alliance towards their global expansion. A model of success criteria presented by Johnson, Scholes and Whittington (2006) helps evaluate this option, majorly the suitability one in Haier case. Hence, this essay will firstly introduce strategic alliance on aspect of motives and definition. Then it will focus on evaluating to what extent this strategy is suitable by applying resource based view and SWOT analysis.
Because Haier tries to sell its existing products in New Zealand market which is new to it, according to Ansoff Matrix (Johnson, Scholes and
1
Whittington, 2006), the strategic direction Haier generated is market development. And among the three method types of pursuing market development, strategic alliance can best explain Haier’s move. Driven by globalisation, there is rapidly increasing pressure that motivate thousands of worldwide strategic alliance activities, including obtaining up-to-date technology and manufacturing capabilities, responding to local demand, accessing to specific market and so on (Hill,
Ma Jinxiao SUN:109028310
News story summary
Haier is a Chinese electronical appliances producer and it decided to take a 20 per cent stake in Fisher & Paykel Appliances Company (F&P) which is a New Zealand company. According to their agreement, besides the stake, Haier will also take two seats on F&P’s board and also they will cooperate in various business functions, including product development, sourcing, manufacturing and marketing. This action brought win-win situation to both companies. For Haier, unlike its domestic acquisition strategy, this alliance strategy enabled access to well established distribution channel and factories in foreign market, especially in overseas high-end niche market. Meanwhile, F&P can recapitalize itself.
Analysis
The agreement between Haier and F&P can be classified as strategic alliance towards their global expansion. A model of success criteria presented by Johnson, Scholes and Whittington (2006) helps evaluate this option, majorly the suitability one in Haier case. Hence, this essay will firstly introduce strategic alliance on aspect of motives and definition. Then it will focus on evaluating to what extent this strategy is suitable by applying resource based view and SWOT analysis.
Because Haier tries to sell its existing products in New Zealand market which is new to it, according to Ansoff Matrix (Johnson, Scholes and
1
Whittington, 2006), the strategic direction Haier generated is market development. And among the three method types of pursuing market development, strategic alliance can best explain Haier’s move. Driven by globalisation, there is rapidly increasing pressure that motivate thousands of worldwide strategic alliance activities, including obtaining up-to-date technology and manufacturing capabilities, responding to local demand, accessing to specific market and so on (Hill,
References: 1. Hille, K., 2009, Haier acquires stake in Fisher& Paykel, www.ft.com [internet] 28th, May, 2009. [Accessed at 25th, October, 2010] 2. Duysters, G. et al., 2009. The internationalisation of Chinese and Indian firmstrends, motivations and strategy, Internationalization and technological catching up of emerging multinationals : a comparative case study of China’s Haier group, [online] Available at: [Accessed 15 November 2010] 3. Hill, C.W.L., 2008, International Business: Competing in the Global Marketplace, 7th ed. McGraw 4. Hunger, D. J. and Wheelen, T. L. 2007. Essentials of Strategic Management. 4th ed. USA: Pearson prentice hall. 5. Johnson, G., Scholes, K. and Whittington, R. 2006. Exploring Corporate Strategy: Text and Cases. 7th ed. UK: Pearson Education Limited. 7 6. Karmin, C., 2003, Wall street journal, Enterprising Firms Finad Success Abroad, [online] Available at: [Accessed 14th November 2010] 7. Lu, Y.D., 2009. Strategic Plan for Haier’s Global Brand Building[pdf]. Available at: [accessed 15th November 2010] 8. Mueller, D. C. 1986. Profits In The Long Run. [e-book] Cambridge: Cambridge University Press. Available at: [Accessed at 10th November 2010] 9. Wolf, A. 2009. Twice. Haier, F&P Extend Majap Partnership,[online] available at: [Accessed 13th November 2010] Key Words Strategic alliance, suitability of success criteria of strategic options Words count: 1,515 8