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Topics: Supply chain management, Logistics, Management Pages: 21 (6607 words) Published: June 21, 2013
Logistics Management in China: A Case Study of Haier

Jason C.H. Chen
School of Business Administration
Gonzaga University
Spokane, WA 99258, USA
(509) 323-3421; chen@gonzaga.edu

Binshan Lin*
College of Business Administration
Louisiana State University in Shreveport
Shreveport, LA 71115. USA
(318) 797-5025; blin@pilot.lsus.edu

Lingli Li
School of Business Administration
Gonzaga University
Spokane, WA 99258, USA

Patty S. Chen
School of Business Administration
Washington University in St. Louis
St. Louis, MO, USA

Forthcoming in Human Systems Management

*corresponding author

Logistics Management in China: A Case Study of Haier


Chinese businesses began with a weak foundation in the intense world trade environment, similar to the many other companies that grew from developing countries. How were these Chinese businesses able to compete with foreign competitors armed with strong capital structures and efficient communication networks? Haier is an excellent example of how Chinese companies have successfully adapted to and prospered in the global economy, using information technology as a strategic weapon to improve its competitive advantage and further to create collaborative advantage. Haier’s growth is miraculous: in less than two decades, it grew from a state-owned refrigerator factory into an innovative international giant. The company has become China’s first global brand and the fifth largest appliance seller in the world. What are the secrets of Haier’s success? Many researchers have conducted extensive studies on Haier’s management and found the key is Management Information Systems such as e-Commerce and logistics systems that improve business operations between its suppliers, customers, and business partners. This article recounts the journey of Haier's achievements to excellence through its MIS, and provides analyses of the company's business model, the market chain management model.

Keywords: Logistics, Management Information Systems, Information Technology, e-Commerce, Customer Relation Management, Supply Chain Management, Business-to-Business.

Logistics Management in China: A Case Study of Haier

With a rapid entry into global economics, Asia - particularly China with one of the fastest growing markets and the largest populations - has become the most energetic trading ground in the world. The year 2002 marked the first year of China's membership in the WTO. As a member of the WTO, a profound influence was brought to the Chinese electrical appliance industry in addition to a significant increase of trade with other countries. Businesses were forced into the reality of market economics, and those that did not adjust to the new rules perished. As the mindset of the corporate strategist changes, the role of information technology (IT) changes accordingly from being a competitive weapon to a tool for creating collaborative advantage or both. Companies like Haier that adjusted to the new market adopted new international standards utilizing information systems to foster its competitiveness. Haier has broken the record of achieving 71.1 billion RMB ($8.89 billion) in revenue to become the sales leader among all Chinese businesses (www.haier.com). Many have wondered what impetus Haier acquired in developing into an industry leader pursuing the vision of becoming a Global Fortune 500 company. Though China is a country full of opportunities, few corporations have the financial capacities and human resources to enter the Global Fortune 500. In order to achieve this vision, Haier depends on its adaptability to the world environment and quick response to the market. For example, the company interacts with the global environment, applying appropriate development strategies in varying phases such as “brand strategy” (1984-1991), “multiple strategy” (1992-1998) and...
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