Haier Group U.S. Expansion Case Report
The Haier Group: U.S. Expansion
A case report prepared for
MG 495 Business Policy
Fall 1st semester 2011
9/3/2011
THE AMAZON.COM CORPORATE STRATEGY
I. INTRODUCTION
A. Executive Summary
1. Summary statement of the problem: The Haier Group was a strong electrical appliance maker based in China. Their stated goal from CEO Zhang Ruimin was to become a truly international company, and not just a low cost supplier to Western companies. The problem was how Haier was going to differentiate its brand from the already established brands such as GE, Whirlpool, Maytag and others. This was at a time where there was a very high saturation rate of home appliances already. 2. Summary statement of the recommended solution: Haier was not a well-known brand name outside of the United States, and therefore needed an aggressive introduction into the market place. It moved it’s national headquarters to New York, making the statement that it is committed to becoming an international player in the consumer electronic, and home appliance market. Their advantage was them having the framework in China to reduce labor and manufacturing costs that were troubling many established companies in the market. This helped them absorb rising prices of raw materials as well as labor.
B. The Situation Haier was founded in China in 1984 and its main product it brought to market was household refrigerators. Haier was not satisfied with it’s Chinese market share and was aggressively pursuing, and considering ways to expand globally, especially into the United States market.
Haier first problem was brand name, it was vastly unknown in other countries, so from 1984 to 1991, CEO Ruimin placed a Total Quality Control system in which made Haier known for high quality and innovative products.
From 1992 to 1998, Haier started a Diversified Development Strategy. It went from producing one product and a staff of just 800, to over 13,000 products and more than 30,000 employees in just 6
A case report prepared for
MG 495 Business Policy
Fall 1st semester 2011
9/3/2011
THE AMAZON.COM CORPORATE STRATEGY
I. INTRODUCTION
A. Executive Summary
1. Summary statement of the problem: The Haier Group was a strong electrical appliance maker based in China. Their stated goal from CEO Zhang Ruimin was to become a truly international company, and not just a low cost supplier to Western companies. The problem was how Haier was going to differentiate its brand from the already established brands such as GE, Whirlpool, Maytag and others. This was at a time where there was a very high saturation rate of home appliances already. 2. Summary statement of the recommended solution: Haier was not a well-known brand name outside of the United States, and therefore needed an aggressive introduction into the market place. It moved it’s national headquarters to New York, making the statement that it is committed to becoming an international player in the consumer electronic, and home appliance market. Their advantage was them having the framework in China to reduce labor and manufacturing costs that were troubling many established companies in the market. This helped them absorb rising prices of raw materials as well as labor.
B. The Situation Haier was founded in China in 1984 and its main product it brought to market was household refrigerators. Haier was not satisfied with it’s Chinese market share and was aggressively pursuing, and considering ways to expand globally, especially into the United States market.
Haier first problem was brand name, it was vastly unknown in other countries, so from 1984 to 1991, CEO Ruimin placed a Total Quality Control system in which made Haier known for high quality and innovative products.
From 1992 to 1998, Haier started a Diversified Development Strategy. It went from producing one product and a staff of just 800, to over 13,000 products and more than 30,000 employees in just 6
References: Wheelan, TJ and David Hunger. Strategic Management and Business Policy. Upper Saddle River, NJ: 2010 Anonymous. “Haier America Reorganizes Into Three Business Units” New Bay Media LLC. 2011 Wolf, Alan. “Haier Launching First Front-Load Laundry Line”. New Bay Media. 2011 Haier America. http://www.haieramerica.com/