The internationalization of Haier

Résumé du document

Haier group is a Chinese multinational consumer electronics and home appliances company headquartered in Qingdao, Shandong, China. It designs, develops, manufactures and sells products such as refrigerators, washing machines, dish washers, microwave ovens, air conditioners, televisions, computers and mobile phones. The company was founded in 1984 as Qingdao Refrigerator Company and later changed its name to Haier group in 1992 after diversifying its product line.

Being one of the strongest brands in China, Haier's massive and organized distribution and logistics network does a successful job in delivering and selling its products to every part of China. They have more than 35,000 specialized outlets across the nation, and hence their distribution networks cover most parts of the country. In the recent years, due to stiff competition and saturation of the urban market, Haier aimed to consolidate its sales network in rural areas that were seen as a giant potential market. Instead of cooperating with big retail giants, Haier's strategy in the low-tier cities is to build self-owned appliance specialist retailers and logistics centers, and hence create Gooday Mart. With a shorter response period and much slimmer size, Gooday Mart provides prompt delivery within 24 hours.

Extraits

[...] Haier saw internationalization as key to its survival and gradually build its entry strategies for each and every significant region. The failure cases that we have discussed earlier can also be considered as the experimental stages of Haier's internationalization process. These ‘experiments' were highly beneficial for Haier despite the financial losses in the sense that they taught the company important lessons on FDI. When talking about Haier's journey to become a global brand, one should note that the strategy the applied required a quick transition from exports to foreign investments and joint ventures, as discussed earlier in our report. [...]

[...] These low quality products represent a substitute that can threat the high quality brands' competitiveness on this segment. Competitive Rivalry The Indian market in this sector is currently dominated by Korean and Indian locals brands. Korean producer LG is still the leader in this sector with an average of 30% of the market share. Second runner-ups are Samsung and Whirlpool, followed by Indian brands. The Indian brands mostly compete in low-price segment. The competition is still diverse, and even though there are big multinational companies, local companies have an important market share in this sector. [...]

[...] SPIN(Situation, Problem, Implication, Need) selling strategy Consumer electronics segment is booming and set to grow at 14% CAGR(comp ound average growth rate), Haier's product offerings catering to this segment are limited Small appliance market set to grow. Tie up with big retailers will help in growth High disposable income “Green Product”:New energy sources could be used for ecological products. Threats Some kinds of products decreased in sales (e.g. medical freezers are not selling.). Price wars with competition Overall weak distribution network compared to native competitors. [...]

[...] The Haier Way: The Making of a Chinese Business Leader and a Global Brand. Dumont, NJ: Homa & Sekey http://www.businessdictionary.com/definition/greenfield-investment.html www.haier.com/EN/‎ http://www.open2europe.org Jeannie J.Yi, Shawn X.Ye, Haier A type of venture where finances are employed to create a new physical facility for a business in a location where no existing facilities are currently present. [...]

[...] According to the Porter's 5 Forces analysis India seems to be a difficult market in this sector. However, there is great opportunity in this market since as we mentioned the penetration is low and there is still a big opportunity for multinationals to gain market share in this market if they manage to adapt to the customer's needs. It is important for Haier to build strong relationship with dealers in India, in order to minimize this threat by offered them good products and competitive margins. [...]