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    Haier Group-4 Q&A IB Assignment

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    Sandipan Chowdhury
    Haier was successful in China due to its commitment to high quality, continuous innovation, strong brand reputation, and superior customer service. Haier's decision to globalize early into developed markets through localizing production, raising brand awareness, and partnering with local players was a good strategy. While building its brand overseas, Haier can successfully defend its position in China against Chinese and multinational competitors due to its strong domestic market knowledge, customer orientation, innovative culture, efficient operations, and competitive advantages over multinationals. However, Haier's "three thirds" strategy of dividing its focus equally among China, developed markets, and other emerging markets is only viable if it maintains constant innovation, efficiency, and high customer service globally

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    Haier Group-4 Q&A IB Assignment

    Uploaded by

    Sandipan Chowdhury
    291 views3 pages
    Haier was successful in China due to its commitment to high quality, continuous innovation, strong brand reputation, and superior customer service. Haier's decision to globalize early into developed markets through localizing production, raising brand awareness, and partnering with local players was a good strategy. While building its brand overseas, Haier can successfully defend its position in China against Chinese and multinational competitors due to its strong domestic market knowledge, customer orientation, innovative culture, efficient operations, and competitive advantages over multinationals. However, Haier's "three thirds" strategy of dividing its focus equally among China, developed markets, and other emerging markets is only viable if it maintains constant innovation, efficiency, and high customer service globally

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    Heir Success in China and abroad

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    Haier was successful in China due to its commitment to high quality, continuous innovation, strong brand reputation, and superior customer service. Haier's decision to globalize early into developed markets through localizing production, raising brand awareness, and partnering with local players was a good strategy. While building its brand overseas, Haier can successfully defend its position in China against Chinese and multinational competitors due to its strong domestic market knowledge, customer orientation, innovative culture, efficient operations, and competitive advantages over multinationals. However, Haier's "three thirds" strategy of dividing its focus equally among China, developed markets, and other emerging markets is only viable if it maintains constant innovation, efficiency, and high customer service globally

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    291 views3 pages

    Haier Group-4 Q&A IB Assignment

    Uploaded by

    Sandipan Chowdhury
    Haier was successful in China due to its commitment to high quality, continuous innovation, strong brand reputation, and superior customer service. Haier's decision to globalize early into developed markets through localizing production, raising brand awareness, and partnering with local players was a good strategy. While building its brand overseas, Haier can successfully defend its position in China against Chinese and multinational competitors due to its strong domestic market knowledge, customer orientation, innovative culture, efficient operations, and competitive advantages over multinationals. However, Haier's "three thirds" strategy of dividing its focus equally among China, developed markets, and other emerging markets is only viable if it maintains constant innovation, efficiency, and high customer service globally

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    of 3

    HAIER – Taking a Chinese Company Global

    Q1. Why was Haier so successful in China?

    Haier Group was the leader in appliance manufacturer business in China. It was the second
    largest manufacturer of refrigerators in the world. This was evidence of its outstanding
    growth. Haier strictly abided by its objectives in a very focussed manner. Success of Heir
    attributes to many reason including following:

    Quality: In order to stay for long for their industry Haier was committed to higher quality
    products than their competitors.

    Continuous Invention: Haier also believe that differentiation is the key to distinguish their
    products. They had about 96 categories with 15100 specifications. With this the company
    also ensured healthy currency in the long tally.

    Brand Reputation: Haier also believed a strong brand awareness is essential to globalize
    their company. Their scheme involved developing trade name around a individual categories
    of products.

    Customer Service: Another cardinal distinguishing factor was superior after gross revenues
    service to its customers. They have service network with 5500 independent contractors, to
    provide free temporary repairs and full repair cost within warranty periods.

    Operational Efficiency: Haier Logistics served the entire group for all categories. This
    reduced transit costs and enabled speedy delivery.

    Q2. Was Haier’s decision to globalize into developed markets early on a good strategy?

    Yes, i feel the choice to expand their brand into developed market was an honest strategy.
    Haier globalizes the corporate with three phases-

    • Localize design, production, and sales


    • Focus on social awareness of Haier’s name
    • Pull in local resource of capital and human expertise

    Haier’s strategy to expand its market globally made its path simple. The hurdle during this
    option was to perforate the pyramid. However, Haier identified weak configurations within
    the top of the pyramid, global part, and perforate it successfully. After perforating it, it started
    moving downwards to complete the circular path.

    They decided to enter the worldwide market by “first the hard, then the easy” approach. The
    brand name created in developed markets gave Haier credibility in other developing markets.
    However, this strategy can't be applied by all companies uniformly. Haier succeeded because
    it identified a particular need in developed markets and moved in fast to satisfy it.
    Q3. Can Haier successfully defend against Chinese and multinational challengers in
    China while building a brand overseas?

    Haier’s competitive advantages in the Chinese market

     Haier is known in china as a high-quality product – Good brand image


     Haier always close to Chinese customer (design, needs) in comparison with
    multinationals – Customer oriented
     Haier invest high in R&D (5 to 7% of revenues) so they launch new product every
    year like smart house appliance (cooperation with Huawei/Xiaomi)– Very Innovative
     Haier responsiveness to the market is very high, they focus on meeting customers &
    their needs, they had 42 distribution centers in china operation as sales companies -
    Good customer relationship
     Haier provide high level of service with better after sales service than competitors –
    Happy customer base for good sales
     Haier had very good distribution network, with “Haier logistics” as compare to
    multinationals, establishing a logistic network in china is complicated – Very Good in
    logistics
     Haier have better & cheaper staff as compare to multinationals.
     Haier have a superior domestic market knowledge as compare to multinationals –
    Good in domestic market analysis
     Haier’s employee’s working environment is motivational, innovative, efficient &
    internal talent development.
     When multinational are focusing on high production then they focus on “niche”
    product.

    Q4. Could Haier have chosen to be a pure exporter of white goods from China? Why?

     It could not have chosen to be pure exporter of white goods from China.
     Haier’s business strategy revolved around the closely knit fabric of ensuring product
    differentiation in nice markets with high emphasis on quality, innovation and
    customer responsiveness as well as highly regarded after sales service, and if it
    wanted to succeed as an exporter, the whole so called well woven fabric had to be
    exported in any country it wished to enter.
     To obtain speed and differentiation, and challenge existing market players in countries
    like USA, they had to ensure to pay attention to the consumer requirements and adopt
    quickly and respond to the needs of the customers as soon as possible. This could not
    happen if it chose to be a pure exporter
     Further customers would not know the value that Haier brought along with them if
    they went in countries only as an exporter and would have not met with acceptance
    from customers who would reject them as an “inferior quality good supplier from
    China”
    Q5. Is Haier’s “three thirds” strategy a viable or wise approach?

     By opening up its share of Chinese market up for grabs by competition, Haier may be
    preventing itself from making use of profits earned at home (a formidable part of its
    total profits pie) and investing abroad, even though the potential was great
     If it finds a way out and makes sure to distance the competition at home (Local and
    foreign) and sustainably maintain its top position in the appliance maker’s list, then
    this strategy is very viable and a wise approach
     With its strategy of product differentiation and entering niche markets, it could
    capture three thirds of all possible markets targeted only if constant focus on
    innovation, operational efficiency and customer service is maintained along with
    ensuring on obtaining a competitive local advantage in the target markets outside
    China
     They should leave out mature markets and find emerging markets to spread their
    reach and score winning runs on the decided strategy

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