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Haier:: Taking A Chinese Company Global
Haier:: Taking A Chinese Company Global
Haier:: Taking A Chinese Company Global
Group- 9
Mrityunjay Basak, 17/094
Pragati Srivastava, 17/104
Pratyasha Burman Ray, 17/106
Sweta Satpathy , 17/118
Venkatesh Balakrishnan, 17/124
HAIERS DEVELOPMENT
BRAND-BUILDING
PHASE(1984-1991)
Focused primarily on
refrigerators,
technology licensing
agreement for higher
quality products
Accumulated
business and
management
experience
Able to command
premium on products
because of
commitment to
quality, distinguished
itself from other
Chinese companies
DIVERSIFICATION
DEVELOPMENT
PHASE(1991-1998)
Diversifies into
freezer, air conditioner,
washing m/c, TVs and
Telecommunication
equipment
Total number of
acquisitions made=15
Internally, restructured
operations, Groupwide Development
divisions
GLOBALISATION
PHASE(1998-2005)
Entered foreign
markets through
licensing, JVs and
exports
Established wholly
owned subsidiariesHaier America, Haier
India and Haier
Europe
GLOBAL BRAND
BUILDING
PHASE(2005present)
Introduction of a full
line of products under
the Haier brand name
Moving from niche
markets and breaking
into the major leagues
International strategy
phase to global brand
strategy phase
National Advantage
Political Stable, Pro-Industry, Against Labour
Formal Institutions, Regulatory- Weak IPR, Limited control over MNCs
Informal Institutions, Culture Frugality, growing consumerism
Factors of Production
Has cheap, easily controllable labour
Easy to acquire land with government support, except
in urban areas like Shanghai
Rich in natural resources
Capital is available from both local, and especially
foreign sources
Since 1980s, there is rich infrastructure, but still tough
to reach beyond coasts
Demand Conditions
Large domestic demand- but easily accessed
areas are saturated and rural areas are tough
to profit from
Nature of demand is stable and growing
CHINA
Firm Strategy, Structure and Rivalry
Chinese firms generally focus on low cost
Mass production is preferred
Low emphasis on quality
Orientation is towards export
Transnational
Strategy
Multidomestic
Strategy
MULTIDOMESTIC
-Strategic and operational decisions are decentralised
to SBUs(Haier America, Haier Europe and Haier India)
-Each unit tailors products to the local markets eg:
refrigerators for students, beer dispenser for the American
markets(paying attention to the local clienteles needs)
-Staffing consists of the locals itself to increase local
responsiveness and understand the local market
-Competition restricted by geographical boundaries
-Need for global integration and standardisation is low.
This is because Haier wanted to be seen as the brand of the
country in which it wanted to operate. This shall have two
advantages
1)Being perceived as an indigenous firm
would enable higher sales(a local Haier brand)
2)It will help Haier get rid of the low cost and
quality image associated with Chinese products
Contende
r
92
Dodger
After 92
Pr. to Globalization in
industry
Abroad
Defender
84-91
Extende
r
After
92
Low
Competitive assets
High
COMPETITIVE STRATEGY
Haier concentrated on 1)Product differentiation and 2) Response speed
COST
BROAD
MARKET
COST
LEADERSH
IP
NARROW
MARKET
FOCUSED
COST
LEADERS
HIP
DISTINCTIVENE
SS
DIFFERE
NTIATIO
N
FOCUSED
DIFFERENTI
TATION
Initially,
service differentiation
Haiers high quality & high
pricing strategy can strength its
customer loyalty and attract more
CHALLENGES
Recognition of Haier as a brand
Moving beyond specific markets to
more mainstream products
Maintaining its superior position at
home in response to competition from
multinationals
Securing human resources to maintain
rapid growth and manage foreign
markets
SOLUTIONS
1)RECOGNITION OF HAIER AS A BRAND
-use differentiation as a means of gaining recognition
1)Product differentiation
2)Service differentiation
-glocal strategy i.e. think globally and act locally. e corporate
level shall give global strategic direction while local units focus
on the individual consumer differences across global markets.
-adapt their prices, products, and promotions to meet the
unique needs of each areas targeted customers
-Follow localisation
-design the products to meet local consumers needs
-manufacture the products in the local market
-market the products in local ways
SOLUTIONS
SOLUTIONS
MAINTAINING ITS SUPERIOR POSITION AT
HOME
-Maintain in depth knowledge of the Chinese
consumer
-Maintain high quality and good service with the
customer
-Continue to pursue innovation to satisfy domestic
demands
-Strengthen distribution and logistics channels
-Transform itself from a manufacturer to a service
provider which means putting more emphasis on
marketing, logistics, and responding faster to the
market needs by offering personalized services to
THANK YOU