HAIER, TAKING A CHINESE COMPANY GLOBAL 1. SUMMARY
Haier (“the Company”) was China’s biggest white-goods producer and supplier in 1990s. In 1984, there was nearly 300 local producers in China market, most of which were producing poor quality goods. However, customers were willing to pay more for higher-quality products and reliable service. This need created an advantage for differentiation.
In Chinese market, demand was high. Haier being able to read customer need properly, focused on Product Quality, After-Sale Services and Brand Building. While there was oversupply in the market, with product differentiation Haier was able to raise its prices. Their target was to be a first-class brand.
In early 1990s, while the demand was
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He named the strategy as “Three Thirds”, with a long-term goal of generating revenues from three different categories of sales; 1. One-third from goods produced and sold in China. 2. One-third produced in China, and sold overseas. 3. One-third produced and sold overseas.
In other words, with this Global Strategy, Haier entered into international markets in 3 different ways; 1. It first exported to global markets, 2. Then established JV (“Joint Ventures”) with the local firms and, 3. Finally made investments and set- up production facilities overseas, in global markets.
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.
In line with the expansion strategy, Haier made a technology licence agreement with a German manufacturer Liebherr, realizing that the German goods are of higher quality. The Company initally observes and digests foreign technology and design, then
“Made in America” vehicle by a German leader. So Apart from its franchise-expansion mission, it
Suppliers: The possible pressure on BMW by its suppliers means they are very powerful and play a key role in BMW’s business model; this is because it is the parts fabricators that ultimately assume and absorb some of the rising costs of the raw materials. Even though BMW is the dominant part of the relation, the supplier´s individual power is not reduced by this because of the high extent of specialisation of each producer, and to find new suppliers that meet BMW quality requirements. Taking as an example the parts supplier list for a single model comprises 70 companies including the likes
In the United States the home appliance industry is a mature market with high penetration, therefore, replacement product is significantly important to the industry. The United States has three major manufacturers for domestic production: Whirlpool, General Electric, and Electrolux. The appliance industry is changing rapidly and becoming more competitive with the influence of Asian competitors, specifically, LG Electronics and Samsung Electronics, who are major appliance importers. Subsequently, in January 2016, a Chinese manufacturer, Haier, bid for the purchase of General Electric Appliances, finalizing the contract on June 6, 2016 (Thompson, 2016).
3) Global marketing may take the form of diversification strategy in which a company creates new products or services for the domestic market.
Last thing is that, surveys have showed that, consumers think that, If products’ price is lower product has a lower quality. If there would be any decrease in prices, consumers feel that, this brand is not the best in market in terms of quality. But this issue is not problem for Industrial segment, but it is a problem for
The thing is that, the company provides the products for household security and air conditioning. In addition it also has been the developer and the owner of patents for production of various types of compressors, filters, dehumidifiers of the air and climate control solutions for buildings and commercial vehicles, for instance such brands like: Hussman, Koxka, Schlage, CISA and Thermo-King are widely known among the consumers. As for the compressors the most common brands are: BOGE, VMtec, IPS, Kaeser Kompressoren, Spitzenreiter Compressor Technics, Ingersoll Rand, Remeza. Today, the compressor of I.R. is one of the most reliable and durable machines which has proved its quality by working even
Our firm has set out to Internationalise its operations by opening to different facilities One in China Assembling and Maintaining Aircraft Engines and the other in Europe fabricating turbine blades for Aircraft
Therefore, if a firm are able to produce more and more of their products, they also have the opportunity to reduce their costs. MABE was the largest appliance manufacturer in Latin America which shows that they were able to produce more and more of the products for the demand of U.S. market. Proving that they possessed the economies of scale in attaining the main key success factors.
The analysis of the internal factors shows that Global Household Products have strong distribution throughout the industry and have a core competency for developing quality products. This analysis allows for GHB to
Consequently, China is now often seen as the most lucrative opportunity in the developing world. The country is no longer just viewed as a low-cost manufacturing base, but also increasingly as a lucrative market with a receptive audience of customers. As such, companies are now under growing pressure not only to better understand Chinese buyers, but also to successfully navigate the many barriers and potential risks when trying to find a route into the China market.
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
In the United States, the cooking industry is a mature market with high penetration, therefore, replacement product is significantly important to the industry. The United States has three major manufacturers for domestic production; Whirlpool, General Electric, and Electrolux. The appliance industry is changing and become more competitive with the influence of Asian competitors, specifically, LG and Samsung is importing appliances into the United States. Subsequently, in January 2016, a Chinese manufacturer, Haier, bid for the purchase of General Electric Appliances, finalizing the contract, Monday, June 6, 2016 (Thompson, 2016).
The Greek philosopher Heraclitus is commonly attributed with the idea that nothing is constant but change (Stanford Encyclopedia of Philosophy, 2011). This is particularly true in business. If an organization is not changing and evolving with the market then they are stagnating and falling behind. In this exercise XYZ, Inc. is pursuing an international expansion into Shanghai, China followed by an expansion into four other international markets a year later. I believe XYZ, Inc. should use the Systems Contingency Model to launch the international expansion in Shanghai because this change model is complex enough to incorporate all the environmental requirements and a good tool to highlight how the different internal dimensions of the
Buying other companies is the perfect way to grow market share, by adding new product lines to the catalog, getting exposure to new markets in regions where there was previously no presence and also by adding new business services that enhance the “in house” capabilities of the company. It also adds a new level of expertise from the people who perform the services to the executives that run the company. To fulfill the service and capabilities gap Kaman has been working on a “three-platform strategy” that provides products and services for Power Transmission (PT), Fluid Power (FP) and Automation, Control and Energy (ACE). To make this a reality Kaman has been acquiring companies over the last ten years specifically with the goal of filling in these gaps in order to offer more products and services.
Companies can decide to go global or to enter international markets for various reasons, and these different objectives at the time of entry that enable the business to produce different strategies and the performance goals, and even forms of market participation.