Haier Case Analysis

Whirlpool is the world’s largest producer and marketer of small and large home appliances such as mixers, food processors, washing machines, refrigerators, air conditioners, etc. Whirlpool also has a long standing relationship with Sears, which sells Whirlpool products under the brand name Kenmore. In addition to its North American presence (both manufacturing and sales), Whirlpool also has a strong presence in Mexico, and Europe. Being the largest producer in the world has helped Whirlpool to compete on lower costs through economies of scale and through its Global Procurement Organization (GPO). In addition, its large networks also help in

Haiser entered into overseas markets as a contract manufacturer for multinational brands in early 1990s. First exported products to UK, then Germany, France and Italy. It also establisted joint ventures to explore the foreign markets; i.e. established a JV with Mitsubishi to set up China’s largest AC (“air conditioners”) production plant in 1994, in 1995 set up a JV with a local firm in India to produce refrigerators and ACs, in 1997 establised a JV with a Yugoslav company in Belgrade to produce ACs.

Conditions have changed. Global trade has rapidly increased in both volume and value, reaching nowadays more than $4 trillion in 1997 (Daniels J.D., Radebaugh, 1998, pg. 529). Competition is fierce from all corners of the world. Failure at the global level can backfire and may consume existing brands and business relationships. At the same time, global opportunities have emerged that offer possibilities for growth, profit, and an improvement in worldwide standards of living.

Dorchester, Inc is a U.S based conglomerate and has the intentions of expanding its operation to international levels. Recently there has been a trend by its competitors to expand their operations internationally as well. This is the prompter to the decision by the management of Dorchester, Inc to follow their competitors' trend and venture into the new and emerging markets globally as a long term business strategy. Through this international expansion Dorchester, Inc. hopes to gain a competitive advantage over its competitors. The particular area of expansion targeted by Dorchester, Inc is consumer electronics. The conglomerate has indicated their interest in purchasing companies that specialize in consumer electronics in three countries that identified herein (Prodi, 2010).

Initially as a market entrant, Galanz focused on a low cost strategy to gain leverage in the domestic market. This strategy was supported by an abundance of cheap land and labor. The expensive microwaves produced by players like Toshiba and LG were unaffordable for majority of the Chinese population and hence, Galanz became popular right from its inception. The rapidly increasing demand, which rose to almost 25 million units in 2003, for these low-cost microwaves prompted Galanz to expand its production capabilities. Galanz, facing shortage in production, decided to outsource magnetron production to Japan for the production deficit that it faced. Furthermore, deals with customers like Fillony to transfer entire production lines made sure that the ever growing demand for the ovens was met successfully. The perennial working shifts for the production team ensured that production scale and costs of Galanz was unmatched anywhere in the entire market.

Describe how Haier uses activity sharing and the transfer of core competencies to create value. (related diversification strategy)

The main differences between Matsushita and Sony’s products are that, Matsushita product line is more involved in the household appliances market as it is the world leader in this category, while Sony strives to be the globe’s technological leader and has a product line that is driven by advanced consumer electronics. “While companies such as Matsushita concentrates on being customer intimate, Sony has differentiated itself by focusing on product leadership.” Matsushita is the largest home appliances and household equipment (HAHE) producer in the world. Some of Matsushita’s products include: microwave ovens, refrigerators, irons, fax machines, air compressors, automatic washers and dryers, vacuum cleaners, air

5) Another example of creating value by using a related diversification strategy was when Haier applied innovation to product design and production from the Liebherr Corporation of Germany. This strategic move created value by not only competing and expanding its product categories, but also by creating market needs. (pg. 7) The activity sharing and market need helped create product breakthroughs like washing machines that operated without detergent or water, and refrigerators that needed no compressors. (pg. 8) Another example of creating value was when Haier entered a strategic business alliance with Sanyo. Sanyo wanted to increase its competiveness in China taking advantage of Haier’s extensive distribution network, whereas Haier hoped to enter the Jampanese market by utilizing Sanyo’s distribution and service centres’s. (pg. 12) In the end Zhang Ruimin utilized this diversification strategy in an attempt to gain market power. B.Also discuss how Haier can use unrelated diversification strategy to create value.

The brand-globalization goes on rapidly, an increasing numbers of organization invested their brand track to overseas markets. New markets have new consumers, chances, and profits and extend brands existence. The international expansion of BMW and IKEA has led them to achieve huge success. In this essay, will explore what lead each brand to move away from their traditional market and investigating how the two brands developed successful international expansion, and what has made them global household names.

Each company has a different strategy that they follow and execute and different areas of expertise that they are competing with. This market, like others, has premium, regular, and budget players. Godrej Appliances is by brand reputation a premium player, as can be clarified by their achievements listed earlier. But they also cater to the budget sensitive customers with their wide and long product lines. Godrej Appliances can be looked at as the top player of Indian origin in this segment and uses the Indian connect with its customers as

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

This report talks about the successful strategies adopted by GE that was accountable for its success. It will start by answering the question the importance of studying GE recent globalization strategies and practices, and then, by giving a quick background of the company globalization process evolution. After that, the report will demonstrate a close analysis to 4 main strategies of the company. Finally a conclusion will be given based upon the current challenges and future perspective.

Haier business strategy was to enter niche markets, where they could compete with industry giants. Competing with top global international players like Samsung and LG in a number of segments, as well as with Whirlpool and Electrolux specifically in white goods, one of the main problems for Haier was how to clearly show its commitment to quality products and differentiate itself from them. Haier did not want to fall into a trap of general customers’ perception over the Chinese products as of being low quality. Another challenge was to compete with multiple brands producer (i.e Kelon), while Haier was focusing on genuine

Above everything else, what consumers want from companies is the quality of the products that they are buying. Most consumers do not mind spending an extra buck for the sake of having the best product available. In addition, to this, consumers will go way out of their comfort zone to get a durable product. However, the truth of the matter is that most companies that lasted in the market do not have this in mind. Their provision of quality products is limited to what the statistical analysis in their books shows. If it is very expensive, then it is an unsuitable option. This has led to a scenario whereby American companies have been left out and defeated by other competitors in other markets. The realization of this fact has come to them at the opportune moment. And by taking advantage of this, most American companies have adopted a system of analyzing quality that will be analyzed in this paper. The system was not based on an aggressive strategy to gain and hold markets founded on a competitive linchpin with high quality; they were just defensive measures to simply eliminate ‘defects’ or preempt failures – which is not what managers need.

For international business strategy, Hill and Jones (2004) suggested that there is four basic components of strategy development need to be addressed by a firm in order to succeed in foreign markets. These components are: ¡¥distinctive competence¡¦, ¡¥scope of operations¡¦, ¡¥resource deployment¡¦, and ¡¥synergy¡¦. By applying the theory, it is revealed that Whirlpool¡¦s distinctive competence is its brand name ¡V Whirlpool, the world¡¦s largest white-goods manufacturer. For the scope of operations, Whirlpool is specialised in broad middle market niche of white-goods products. In terms of resource deployment, Whirlpool allocates the resources equally to its three product lines. As far as synergy concern, due to the poor business performance of Bauknecht and Ignis, Whirlpool is not benefited in whole.