Haier Case Study

1295 Words Jan 30th, 2015 6 Pages
Haier Case Study
1. Discuss the primary reasons why Haier moves from a single and dominant business strategy to a diversified strategy.

The single and dominant business strategy, which denote relatively low levels of diversification, more fully diversified firms are classified into related and unrelated categories. A firm is related through its diversification when there are several links between its business units; for example, units may share products or services, technologies, or distribution channels. The more links among businesses, the more constrained is the relatedness of diversification. Unrelateness refers to the absence of direct links between businesses.

참고 : http://wenku.baidu.com/view/6a080e260722192e4536f624

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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.

Zhang Ruimin recognized that pursuing strictly a related diversification strategy might make Haier susceptible to failure. He states, “This is a globalised era…, no single industry can survive.” (pg. 13) By the end of 2006, Haier’s product portfolio had extended to include products ranging from washing machines to mobile phones as well as pharmaceuticals and tourism. This wide range use of

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