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Introduction
Sixteen years ago, the predecessor of Haier, an enterprise in the beautiful city of Qingdao, was still a small collective factory on the verge of collapse. Now even foreigner knows that China has an enterprise called Haier, whose products are exported to more than 160 countries and regions (February, 2000 China Daily). Nowadays Haier group achieved a global business volume of 40. ... Over the past 16 years, the Haier group has undergone a period of substantial progress: 4,000,000 sets of Haier household electric appliances have been sold on international markets while every year 10,000,000 sets of various electric appliances are bought by Chinese households (2000 Forbes).
Over the past 16 years, Mr Zhang Ruimin, CEO of the Haier group, has earned good comments and praises from home and abroad with his new ideas and practice in the field of corporate management. From the OEC management model to the ¡°market chains¡±, Haier has developed from a stage of borrowing ideas from advanced management methods to entering a leading position to establish its own ways of management.
Haier¡¯s famous brand strategy includes the following:
1. ...
l Assess the nature of the environment for Haier
Haier, an electrical appliance manufacture and a multinational firm, is an organization in complex situation facing environment influence different to comprehend. ...
As a multinational company, Haier needs to face varied requirement because of the different government, polities, culture, economic conditions and so on, also as an electrical appliance manufacturer, the technology of the appliance is changing day to day and the style that the customers are interested in is changing quickly. ...
Based on the above reasons, Haier¡¯s responses are probably more useful than the extensive model building. ... However, like most of the organization, Haier are affected by a set of external influences that are more immediate and carry a direct impact to the organization. This is called the competitive environment with factors influence the capability of Haier position themselves effectively against their competitor. Haier needs to learn and adapt in the face of environmental change. ... Although they are one of the top brands in China, Haier face an intense competition against other major local companies ever prior to this entry. ... With the belief that China market will be oversupplied that they can not rely solely on it, Haier had already shifted their focus on exploring foreign markets.
So, what is the nature of the Haier¡¯s competitive advantage? ... Haier¡¯s reputation is strong enough to count as a strategic asset when competing with small and medium-sized competitors, though it is not as strong as that of the largest, longest-established ones. ... Haier¡¯s original technological skill in locating cost savings for customers has been honed to the point where it is genuinely rare, and so counts as a core competence. ... Thirdly, as a result Haier has a distinctive capability in reliability-it is handling the products on time and done professionally. This gives Haier both differentiation advantages when compared with smaller companies, and cost advantage. ... Finally, Haier has developed enhancements to the basic products (e. ...
On the other hand, Haier do have the same benefit from China¡¯s entry into WTO when they explore their foreign markets. ... With Haier¡¯s international and export strategy, this will give them a big boost to compete in overseas markets. Haier will be able to compete in a fairer environment, where previously, European Union used to impose a quota on China¡¯s import products. ... Haier¡¯s main concern at overseas markets maybe is to do with public¡¯s poor perception about ¡®Made-in-China¡¯ products (2000, Forbes). ...
Overall, the level of competitive rivalry is very much depending on how Haier capitalize on this opportunity in the foreign markets to outweigh the threats they is facing back in China. ... Haier can use this opportunity to target each country customer needs like in west countries (America and Europe) they prefer larger freezer for frozen food while in east countries (Asia and Middle East) they prefer larger fridge for fresh vegetables and foods. ... Haier targets its small washing machines to urban residents with limited residential space. Haier targets its sturdy washing machines to rural residents who may use the machine-washing sturdy dirt and other purposed in addition to washing clothing. In terms of fridge, Haier built different style and type of refrigerators to target different segments of the market. Because there are so many products on offer, Haier can target each level of markets to obtain total market demand.
Beside that Haier has is its full china government support, with China now in the WTO, it will open a whole new around the world. ... Sales of China¡¯s second most valuable brand Haier is at 33 billion Yuan ($ 4. ...
As in most of the commodity market, it is hard for consumers to differentiate between the products offered by Haier and other major brands. ... The situation may be worse since Haier¡¯s strategy is to compete on image (or brand) rather than 35% of the market share in this area (Haier¡¯s web site). ... This somehow increases Haier bargaining power in the US marketplace.
Power of Suppliers
Since Haier is operating in large scale globally, this should give them the exercise of control over the suppliers. Haier can use collaborative strategies and alliances. ... Haier has the flexibility in the purchase of raw materials since they are doing business in many countries, and it will need a supply chain management. ... China¡¯s into WTO will provide Haier with more options at overseas because of the amendment of taxation issues and foreign trade regulations. ... It took Haier about fifteen years to become a ¡®threat of entrant¡¯ to major companies like GE and Whirlpool (1999, Forbes). ... Although the advance of technology may come out with some better-designed products, Haier are known for their innovative. For example, Haier are planning to launch stainless steel internet-linked appliances such as a home clothes washing machine that can be started via the Internet in the third quarter of 2001 (March 2002, China Daily). Anyway, the end product is still a washing machine and this is only a kind of innovation, which will increase Haier competitiveness. From the analysis, buyer power and competitive rivalry is identified the main forces that will have an immediate influence in Haier¡¯s competitive environment. The below figure has highlighted the forces that Haier should pay attention to. ... Haier can use the product life cycle to manage its product portfolio. However, the problem for Haier in planning its product mix is that it is very difficult in practice to tell what stage of the life cycle a product is at. ... A useful technique for allowing Haier to analyse its product mix is the product portfolio matrix developed by the Boston Consulting Group. ... Balancing these four categories can bring many benefits to Haier group.
Approximate Word count = 5690
Approximate Pages = 22.8
(250 words per page double spaced)
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