Haier in India

The original motive of the East India company was almost certainly a desire for personal monetary profit, but there were certainly other reasons for the further expansion into India. As the Industrial revolution began in Britain the

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.

Currently, the developing countries of Asian and Eastern is both of the main sourcing regions and production providers to the world, these countries offers a great deal of low cost and skilled labours, relatively low price raw material which creating the ideal

Britain took over India after a brief struggle with France; initially to aid in its economy; mainly its textiles. The plan was to have Indians harvest raw materials to ship back to Britain. Britain would therefore have cheap raw materials sent back to them; because India was mercantilist (could only trade with the mother country) they did not have much of a choice but to sell to Britain cheaply. Britain therefore always had a steady source of raw materials Britain would turn raw materials into finished products that it would ship back to India and sell to Indians. Prices for goods were low and Indians liked that, but also Britain had a steady source of income. The most useful Indian industry for Britain was its cotton industry; Britain often used Indian cotton for clothing. India made for a cheap way to assemble (cheap labor) and an easy way to get business.

Production operations played a huge role on whether to allow more production in North America, or more in Europe-Africa. After many decisions, we begun to notice that North America, and Europe-Africa were our main consumers and had stronger demands for our products, we suddenly realized that we should offer the other more compensation to raise the production. We than decided to offer Asia-Pacific, and Latin America a larger discounts, and longer return dates, to increase the demands.

First, Europe’s relationship with India was of mutual prosperity and trade. Until the East India Company began to create a monopoly for itself in Indian trade, pushing out other European rivals, notably the French, followed it’s by conquest of the country, that phase was from 1600 to 1757 was not an unequal colonial relationship. The East India Company had a large interest in promoting the export of silks and cotton textiles from India which soon began to be noticed on British industrial

There are several specific aspects of the political environment, such as the principle of “indigenous availability”. Which was very difficult to trade and also establish the rules and the regulation. Secondly, it was forbidden the use of foreign brands in India.

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

The expansion of the company will have different inferences; the company may get high level of profits or get losses. Profits can use as a good measure of the company’s expansion in a certain region. The success of the company is normally measured by the level of profits that it generates by involving itself in a certain venture. In this case this company is completing whether to enter the India market or not. It is recommendable for the company to enter India market since there is high demand for its products in the country (Hafford-Letchfield, 2010). Though its products received mixed reactions from China and Japan, the company can take encouragement from the fact that the Indian market did not compose of many electrical companies like in the case of china and Japan. The degree of competition in India is low while the demand is high. Applying the law of demand and supply, entry to the Indian market will signify an increase in the profits of the company (Kuada, 2008). The demand for its products would be in the rise in this country.

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

Moreover, even though producing in Vietnam would suppose a strong saving in cost in the labor-intensive processes, the risk of mold duplications and counterfeits is high. The imitation of the company’s products would eliminate the differentiation that allows them to charge a much higher price than the local manufacturers (15$ compared to 3$). Also, the company lacks of experience establishing a wholly owned subsidiary in a new country.

1. Discuss the primary reasons why Haier moves from a single and dominant business strategy to a diversified strategy.

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 end of 2004, Haier, China's number one company and a leader in white goods market segment, had almost $15 billion in sales revenue and a growing presence in black/brown goods sector. Haier followed a distinct expansion strategy, entering developed markets in Europe and USA, at first as a niche player, and penetrating markets in Southeast Asia afterwards. Haier pursued a very aggressive globalization strategy and entered the Australian and New Zealand Markets in 2002. They diversified the production capacities, manufacturing goods for Asian and Middle Eastern markets at their plant in Pakistan, while the products for American market were produced in USA and even had ‘Made in US’ sign in order to make connections with strongly patriotic US customers. So, by 2005 Haier has achieved globe recognition, establishing its presence across all continents.

For any company going out for the foreign market is because of any one out of globalization, reducing tariff all over the world, to increase the market share, saturation of the local market, for getting the economies of scale of production, to use their excess capacity and use the resources where it is available at law cost.