Haier Case S
HAIER : Taking a Chinese Company Global
Overview:
Haier Group found in 1984 was a failing refrigerator company when Director Zhang came into force.At that time he did what he will be doing best in the coming years and signed a licensing agreement with German refrigerator company Liebherr.
In 1986, Haier reached a profit of 1 Mio RMB. Altough there was a huge market demand, the company resisted mass production and continued to focus on quality and brand-building instead.The company’s target was to become a first-class brand.
In 1991, Haier become China’s leading refrigerator manufacturer.
In 1992, Besides refrigerators, Haier expanded into freezer and air conditioner manufacturing and became ‘Haier Group’.
In 1993, Haier Group went public with %43.7 shares in Shangai Stock Exchange.
By 1997, Haier Group had taken over 15 companies in accordance with Haier’s acquisition strategy. Developed a formal global expansion strategy with 3 thirds.
Strategy in Int’l Markets: 1/3 of the revenues to come from goods; produced/sold in China produced in China and sold overseas produced/sold overseas.
By 1998, Haier Group’s annual revenues reached 16.8 billion RMB, and its market share increased to 30%.
In 2002, Haier Group’s share of the country’s refrigerator market was 27% by volume and 52% by revenue.
Scope: Main scope at the beginning was mainly the rural areas in China. As the company grew it expanded its scope to international markets for consumers who are looking for high-quality products.
Why international markets for Haier?
The margins on domestic sales are shrinking.(Profit margins coming down from %9.4 to %2.6 in five years.
Increased competition coming from local firms and foreign multinationals in China.
Overcapacity in the business; Manufacturers were cutting prices at 10% to 15% annually.
The way to success :
Value Proposition:
Obviously the most important thing is that Haier stayed committed to producing quality products whatever the market
Overview:
Haier Group found in 1984 was a failing refrigerator company when Director Zhang came into force.At that time he did what he will be doing best in the coming years and signed a licensing agreement with German refrigerator company Liebherr.
In 1986, Haier reached a profit of 1 Mio RMB. Altough there was a huge market demand, the company resisted mass production and continued to focus on quality and brand-building instead.The company’s target was to become a first-class brand.
In 1991, Haier become China’s leading refrigerator manufacturer.
In 1992, Besides refrigerators, Haier expanded into freezer and air conditioner manufacturing and became ‘Haier Group’.
In 1993, Haier Group went public with %43.7 shares in Shangai Stock Exchange.
By 1997, Haier Group had taken over 15 companies in accordance with Haier’s acquisition strategy. Developed a formal global expansion strategy with 3 thirds.
Strategy in Int’l Markets: 1/3 of the revenues to come from goods; produced/sold in China produced in China and sold overseas produced/sold overseas.
By 1998, Haier Group’s annual revenues reached 16.8 billion RMB, and its market share increased to 30%.
In 2002, Haier Group’s share of the country’s refrigerator market was 27% by volume and 52% by revenue.
Scope: Main scope at the beginning was mainly the rural areas in China. As the company grew it expanded its scope to international markets for consumers who are looking for high-quality products.
Why international markets for Haier?
The margins on domestic sales are shrinking.(Profit margins coming down from %9.4 to %2.6 in five years.
Increased competition coming from local firms and foreign multinationals in China.
Overcapacity in the business; Manufacturers were cutting prices at 10% to 15% annually.
The way to success :
Value Proposition:
Obviously the most important thing is that Haier stayed committed to producing quality products whatever the market