History of Haier Group
Haier Group was established in the year 1984 as Chinese company which was owned by the government with the name of Qingdao Refrigerator Co. Ltd. The company started its operations in the industry with the manufacture of refrigerators and the technology that was used for production was imported from Germany. The company has thereby shown huge development in the past 26 years of its operations. The development of the company was mainly based on the development of the new products and the investments that were made by the company in technical research. The company presently has its operations in various industries in the world (Andreeva and Kianto 2016). Haier has also acquired the topmost position in various segments in the entire world. The different segments in which Haier has been able to create the topmost position include, refrigerators in the United States, washing machines in Iran and the air conditioners in Cyprus. The company has been successful in the various segments of its operations with the help of the process by which it aims at familiarizing with various brands and providing tough competition to the established brands all over the world (Chen, Delmas and Lieberman 2015). The corporate strategy that has been implemented by the Haier Group has been mainly driven the huge international growth of the company in the market. The international growth of Haier has been facilitated with the help of recognition and the awareness of the brand in the industry. This also helps the company to meet the needs and the demands of the domestic and the international customers. This process has been helpful in increasing the shares of the company in the market (Cohen and Amorós 2014). The major source of the competitive advantage that has been created by Haier in the market are consumer electronics. The name of the company is associated with the innovative products that it offers to the customers all over the world. The company is thereby capable of creating a huge competitive advantage in the domestic market. The research and development based activities of Haier is of high levels. The company however demands better conditions in the countries where it operates for the purpose of conducting high quality research (Durand, Grant and Madsen 2017). The company has however encountered huge competition on the local levels due to which it made huge investments for the purpose of starting its operations in the international areas. The major reason behind the internationalization of the companies is based on the various factors like the reduction of the costs, manufacturing of high quality products and the enhanced preferences of the customers. Haier has been able to enhance the name of its brand and improve the quality of the products by entering the foreign areas of operations (Engert, Rauter and Baumgartner 2016). The company has also been successful in building a name for its brand after its entry in the various international markets. The differences that existed between the domestic and the foreign markets of Haier was very well understood by the company during the course of its operations. The sources of the competitive advantage have however not been same between the domestic and the international companies (Frynas and Mellahi 2015). The company has been able to understand the target market in a successful manner which has further led to increase in the revenues of Haier all over the world. The entry modes that have been chosen by Haier in various areas of its operations is different. The modes of entry used for the purpose of global expansion have been quite different from each other. The late entry of Haier in the global competition has increased the difficulties of the company to enter the various areas in the world (Hill, Jones and Schilling 2014). The major factor that led to the success of the international strategy of Haier was based on the usage of the internal strengths for gaining the competitive position in the market. The success of the international strategy of Haier has thereby led to the leading position of the company in the industry. The company has been able to become the domestic leader within a short period of time. The ways by which Haier has modified the strategies in different areas of its operations has also been a major reason behind the immense success that has been gained by the company (Hubbard, Rice and Galvin 2014). This has thereby led to the successful operations of the company in the international and the domestic markets.
Position of Haier Group in Various Segments
The strategies that are implemented by the Western based organizations and the Chinese companies are quite different from each other. The companies are thereby able to distinguish their ways of operating from each other. The organizations of the Western countries like Australia have different operational styles as compared to the companies in the emerging countries like China. The globalisation in the business environment has led to the organizations to seek for opportunities of growth in the various international areas. The companies are investing large amounts on the expansion based policies (Meyer, Neck and Meeks 2017). The allocation of the resources in various areas has also played an important role in the successful operations of the various multinational or the global organizations. The process of internationalization of the organizations in the global environment has happened quite fast and the companies have been successful in attracting the customers from various parts of the world. The process of the internationalisation and the other activities of the company have however been quite different in case of the Chinese and the Western organizations (Michael, Storey and Thomas 2017). The Chinese organizations have been quite successful in the international operations for the last few years. A company like Haier has been able to gain huge success in the international operations in spite of the late entry into the competition. The company has been able to create its competitive advantage in the market with the help of the various innovative products that have been manufactured by them in the market. China has been attractive area for the international expansion of the firms (Morschett, Schramm-Klein and Zentes 2015). However, in the recent business environment the Chinese companies are able to expand their operations and make significant investments in various countries which also includes the various developed countries of the world. Haier has been able to set an example for the other Chinese organizations by creating an excellent position in the market. The unique internationalization process that has been implemented by the company has been the major reason behind its success in the various markets. The company has used different strategies for entering the different markets in the world (Popkova et al. 2015). This is quite different from the types of strategies that have been used by the different Western organizations to operate in the market in a successful manner. The Chinese organizations are thereby able to operate in a successful manner in the international environment with the help of their unique strategies. The globalisation of the Chinese organizations have increased the competition in the market for the Western companies (Sakas, Vlachos and Nasiopoulos 2014). The major factor that has been helpful in the operations of the Chinese organizations in the global market has been the strategies that are implemented in the different areas of its operations in the market. The growth rate of Haier has shown the speed with which the international organizations are growing in the industry. The Chinese companies have been showing huge rates of expansion in the current environment of business. The global ambitions of the company have been fuelled with the help of the ways of operating of Haier in the global environment (Shah et al. 2015). The strategies of the Chinese companies are becoming much more sophisticated than before. The companies have thereby been provided with the different types of challenges that have thereby led to the increase in the competition between the Chinese and the Western companies in the market. Haier has thereby been able to gain a lot from the highly growing market of the international operations (Simon, Fischbach and Schoder 2014).
Corporate Strategy of Haier Group
The main factor that is related to the international strategy of Haier is based on the successful branding of the products that are manufactured by the company. The company had started its operations with the help of a small store. However, the organization had been able to show huge growth in different fields with the help of various strategies that have been implemented in the years of its operations. The company had started its branding strategy in the year 1985 (Slater 2015). Haier thereby designed products that were of high quality and was able to attract huge number of customers from all over the world. The loyal customers and the company itself was quite proud to provide tough competition to the established global organizations in the industry. The vision of the company was communicated to the other members of the company in the year 1990. Haier also started making major acquisitions in the market during this time (Bromiley et al. 2015). The company thereby started increasing the portfolio of the products and brand name was quite famous all over China within this period of time. The next part of the strategy implemented by Haier was based on the increase in investments in the international expansion based activities. The company focussed on changing the strategies that it wished to use in the international markets (Punt and Handling editor: Emory Anderson 2015). The products were localized and manufacturing based process was also changes so that the brand can be given a local feel. The company has also been able to expand in a successful manner in developed markets of Europe and the United States as well. The products of the company have been made available in the various upmarket stores in the United States. The research and development based activities of the company have been given huge importance (Gumerov et al. 2015). The company has started investing huge amounts in the research facilities in the aim of creating more innovative types of products for the global customers. Haier and the various subsidiary companies have been providing a wide range of the innovative products which have led to the increase in the customer base of the company. The extensive research based activities have actually made way for the innovation in the company (Punt and Handling editor: Emory Anderson 2015). The recent innovation that has been implemented by Haier has been named as the “Safe Care” technology. The technology is mainly used for the purpose of monitoring the wiring of the various electrical components. The technology was introduced by the company in the year 2002. The research and development based activities that have been performed by the concerned department has helped in the successful development of various software that are required for the products of Haier (Bromiley et al. 2015). The company has also been able to earn more than 6000 patents due to the innovative technologies that have been implemented by Haier. The designs and the products that are manufactured by Haier have been supplied to the various countries with the help of the global network that has been formed by Haier. The company has implemented various strategies for the implementation in the difficult markets. The organization has always aimed at concentrating on the domestic markets before the products are taken to the global areas of operations of Haier (Simon, Fischbach and Schoder 2014). The major categories of products that are under the focus of Haier are, the refrigerators, the air conditioners, the washing machines. The company also has a significant division of electronics. The organization has also adopted the unique strategies for the purpose of entering the international markets like, Europe and the United States. The company thereby aims at creating its position in the developed markets for the purpose of the objectives and goals. The appliances that are offered by Haier are based on the strong designs and high quality (Sakas, Vlachos and Nasiopoulos 2014). The international strategy that has been implemented by Haier is thereby based on the ways by which the company can create its successful position in the market. The focus that has been placed by Haier on the process of building a strong brand for the company has thereby been able to bring the company back from bankruptcy state and further create its position in the market as well (Simon, Fischbach and Schoder 2014). The company has been successful in holding the topmost position in the market in spite of the high competition levels that have been faced by the company in the industry. The growth rate that has been experienced by Haier was around 68% from the year 1984 to the year 2005. The company also has more than 40% of the entire shares of the Chinese market (Morschett, Schramm-Klein and Zentes 2015). The economic slowdown that had occurred in the year 2008 was also not able to affect the huge growth that was shown by Haier. The company has mainly built its success on the basis of the successful branding of the products for the purpose of creating a successful position in the industry. The international strategy of the company is also based on the effective process of branding of the products that are offered by the organization. The strength of the brand of Haier was increased in the domestic market (Michael, Storey and Thomas 2017). The strong domestic brand of the company was helpful for its entry in the various international areas. The innovativeness of the products is another way by which the company has been successful in creating a share in the market. The strong brands are able to create different position in the market with the help of the high quality products and the marketing based activities. Haier has thereby been able to create its share in the market with the help of various marketing strategies that have been used in the course of its operations (Hubbard, Rice and Galvin 2014).
Sources of Competitive Advantage for Haier Group
The company has an effective system of management which has been helpful in the creation of its position in the industry. The management system of Haier has been termed as the OEC type, where O stands for overall, E stands for everyone and C stands for control. The system of management of the company is mainly based on the ways by which the company attempts keeping a check on the quality of the products in an effective manner. The daily routine has been set by the company based on the ways by which the products are checked and their quality is ensured by the managers (Frynas and Mellahi 2015). The system of the management of Haier is further based on the sustainability of the operations and the ways by which the company aims at operating in the environment. The sustainable methods that are used by the company have been able to provide the maximum amount of cost effectiveness to the company. This has been helpful for taking out Haier from the stage of bankruptcy that has been experienced by the company in the start of its operations in the industry (Sakas, Vlachos and Nasiopoulos 2014).
The methods of the management that is used by Haier is quite different from those which were used by the other Western companies in the industry. The management system of Haier is focussed solely on the quality of the products. On the other hand, the management and the culture of the Western companies is focussed mainly on the employees and the entire process of the company. The Western culture of the companies is much more open as compared to the culture that is followed in the Chinese companies. The Western companies are mainly based on the welfare of the employees and the ways by which they can be provided with comforts (Punt and Handling editor: Emory Anderson 2015). The culture in the Chinese companies is not highly based on the welfare of the employees. The employees are just a part of the entire operations of the Chinese companies. The Western companies are easily able to adapt to the culture of the countries where the operations are started. The Chinese companies however take some time to settle down in the culture of the new place where the operations have been started (Morschett, Schramm-Klein and Zentes 2015). The major factor that is helps the Chinese companies to provide tough competition to the Western organizations is the ways by which the employees are committed towards the company and the quality of the products that are provided at low prices.
International Operations of Haier Group
References
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