Haier
HAIER
Strategic Implementation Assignment
Mandeep Singh Grover 3/12/09
# 317
Question 1: Mention the defying strategic perspectives at Haier over the years. What have been the salient and meritorious points in the implementation of such strategic initiatives at Haier in China?
Answer1: Haier is one of the world’s largest manufacturer of home appliances. Haier started off as a defunct refrigerator factory in 1984. Its development from a small Chinese producer to Global player has been nothing short of amazing.
The defying strategic perspectives that Haier followed over the years are:
• Focus on Quality: Till the mid 1980s the refrigerator market in China was characterized by cheap and poor quality products. Zhang believed that consumers would be willing to pay a premium for quality, therefore he tried to make “quality” an inherent part of company work culture and strategy. Zhang believed in providing the consumers with nothing other than the best
Implementation: Zhang once pulled 76 refrigerators off the production line for minor scratches in them and asked his workers to destroy them to make them realise a focus on making quality products would be their way of doing business. Workers were also made to be personally accountable
• Brand Building: Their target was to become a first-class brand. Also other Chinese manufacturers exported products under an OEM client brand. However, on the other hand, Haier was willing to bear the early costs of establishing the firm as an independent player overseas Implementation: They spent a lot on advertising also to build an established brand
• Premium Pricing Strategy: It helped to create a perception of quality in the minds of consumer
Implementation: Haier did not indulge itself in price wars. Instead, in 1989, when all its competitors cut prices due to oversupply in the market, Haier raised them. Zhang discovered that Haier brand commanded a 15% premium even during a price war.
•
Strategic Implementation Assignment
Mandeep Singh Grover 3/12/09
# 317
Question 1: Mention the defying strategic perspectives at Haier over the years. What have been the salient and meritorious points in the implementation of such strategic initiatives at Haier in China?
Answer1: Haier is one of the world’s largest manufacturer of home appliances. Haier started off as a defunct refrigerator factory in 1984. Its development from a small Chinese producer to Global player has been nothing short of amazing.
The defying strategic perspectives that Haier followed over the years are:
• Focus on Quality: Till the mid 1980s the refrigerator market in China was characterized by cheap and poor quality products. Zhang believed that consumers would be willing to pay a premium for quality, therefore he tried to make “quality” an inherent part of company work culture and strategy. Zhang believed in providing the consumers with nothing other than the best
Implementation: Zhang once pulled 76 refrigerators off the production line for minor scratches in them and asked his workers to destroy them to make them realise a focus on making quality products would be their way of doing business. Workers were also made to be personally accountable
• Brand Building: Their target was to become a first-class brand. Also other Chinese manufacturers exported products under an OEM client brand. However, on the other hand, Haier was willing to bear the early costs of establishing the firm as an independent player overseas Implementation: They spent a lot on advertising also to build an established brand
• Premium Pricing Strategy: It helped to create a perception of quality in the minds of consumer
Implementation: Haier did not indulge itself in price wars. Instead, in 1989, when all its competitors cut prices due to oversupply in the market, Haier raised them. Zhang discovered that Haier brand commanded a 15% premium even during a price war.
•