Haier, an international icon: Success Factors and Market Challenges

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INTRODUCTIONBorn out of Qingdao Refrigerator Factory in 1984, the Haier (pronounced "high-er") Group is China's largest home appliance manufacturer (Wang and Ong 2007), and the world's fourth largest white goods manufacturer (Chen 2008).

Haier was ranked first among China's Top 10 Global Brands by the Financial Times in 2005 (Haier's company facts 2008). It was also ranked 86th among the world's 500 Most Influential Brands by World Brand Lab in 2006 and is the only Chinese brand to be among the top 100 for three consecutive years. (Haier's company facts 2008).

Its Chairman and CEO, Zhang Ruimin who was appointed in 1984 as the director has been credited for pulling Haier out of bankruptcy to become a global corporation (Zhang Ruimin
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As a result, Haier received the first ever National Gold Medal Award in China's refrigerator industry (Haier 1988) and ranked first in China's Top 15 Brands by Forbes (Kim 2003).

InnovationTo improve its technology knowledge and create innovative products, Haier has been increasing investment in research and development (R&D) (Duysters et al 2008, 16) establishing an extensive global R&D and design network (DiPaolo and Li 2007). Its R&D investment is significantly higher than the market average - RMB6.7 billion in 2006, equivalent to 6.2 percent of its sales (DiPaolo and Li 2007).

Haier also formed alliances with leading companies such as Liebherr, Philips, Mitsubishi and Toshiba to acquire manufacturing and technological know-hows, expand product lines as well as enter foreign markets (Duysters et al 2008, 11-12).

The basis of China's advantage is low-cost labour (Zeng and Williamson 2007, 27). Haier is take advantage of the cost advantage to provide high technology, choice and customised and specialty products at low price (Zeng and Williamson 2007, 55). Using cost innovation, Haier gained brand awareness in the US by making compact refrigerators and wine chillers to the mass market (Jain, Malik and Cruickshank 2006, 21).

SpeedHaier understands that the speed in bringing products to customers to satisfy their needs before rivals is important to win them over (Wu 2003). Since entering US markets, Haier has

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