Haier Group U.S. Expansion Case Report

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The Haier Group: U.S. Expansion

A case report prepared for

MG 495 Business Policy

Fall 1st semester 2011




A. Executive Summary

1. Summary statement of the problem: The Haier Group was a strong electrical appliance maker based in China. Their stated goal from CEO Zhang Ruimin was to become a truly international company, and not just a low cost supplier to Western companies. The problem was how Haier was going to differentiate its brand from the already established brands such as GE, Whirlpool, Maytag and others. This was at a time where there was a very high saturation rate of home appliances already. 2. Summary statement of the recommended solution: Haier was not
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To emphasize the three major product lines of Haier America, they divided up three separate business units for each type of product line. This allows them to operate alone, but can interact with the other business units to make a more cohesive organization.
2. Operations – Although they began as a very small manufacturing company, that serviced China, they quickly expanded. In the United States, they broke into the marketplace with small refrigerators. Mainly for use in dorm rooms or small apartments, and distinguished them by making flip up wooden boards that would create a desk and could easily be folded up or down depending on the need. This was very useful in a dorm environment, but did not build upon brand recognition or create a very large market share other than that. These smaller type refrigerators were successful in the Asian markets, because this is the type they used due to smaller living quarters than the United States market mainly demanded. In a very smart strategic move, Haier used their South Carolina to produce these larger-capacity refrigerators. They continued manufacturing their smaller units in China. The reason for this was because the could fit more of their smaller units (as opposed to the larger units) into shipping containers, manufacture them at a lower cost and ship them wherever they were needed. Haier created a very strong and motivated technician team that was continuously working to create more features and
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