Please don\'t answer the same question as another person, thank you! Conduct own
ID: 364054 • Letter: P
Question
Please don't answer the same question as another person, thank you!
Conduct own intensive study of both strategic approaches and strategies of a company, "Haier," through the attached file in this module, Google, CWU library online database, and its webpage http://www.haier.com/ (Links to an external site.)Links to an external site.. You should also check AMAZON.com to find information about products, pricing, and customer satisfaction. Your study will allow you to find Haier's strategies, strategic approaches, product policies, pricing, advantages or disadvantages, your suggestions, and etc. This intensive study will worth a lot for this part, ok?
(1) Make a good report of Haier's strategies, strategic approaches, advantages or disadvantages, your suggestions, and etc. Make this report as if you will submit to your boss who really wants to have it to make strategic planning, ok? This is a free writing assignment while you should write sufficiently!
Being creative and strategic is always welcome in my class!!!! Showing your own ideas based on own experiences or examples of other companies are also welcome in my class!!!
Explanation / Answer
Haier
Haier is a Chinese company and had originally been founded as Qingdao Refrigerator Co. in 1984. Germany's refrigerator company Liebherr entered into a joint-venture contract with Qingdao Refrigerator Co., offering technology and equipment and its refrigerators were to be manufactured under the name of Qingdao-Liebherr. The company later changed its name to Haier which is the Chinese pronunciation of the last part of the word Liebherr. With the JV with Liebherr, Haier was able to improve the quality of its products, namely the Refrigerator, and slowly it started turning profits. Haier is supposed to be a cooperative, but it is also a government owned enterprise. The company was made to take over a number of ailing companies in Qingdao, making microwaves, air conditioners and freezers. Haier expanded its product line and in a short time had the largest market share in China for its white goods.
The company forayed into the International markets by introducing production facilities in Indonesia, Philipines and Malaysia in the 90’s. They also started production facilities in the US, India, Pakistan and many other countries. For the last eight years, Haier has been the world leader in white goods in terms of volumes.
Strategies and approaches
With the advent of online sales of products, Haier adopted a strategy of introducing online factories. They are a model of manufacturing developed by Haier with a vision for the future. Customers are linked to their factories and suppliers, and can design their own refrigerator or air conditioner, assist in R&D and manufacturing of new products etc. This is their strategy to make the whole world their R&D dept and their Human Resource department.
One of the products developed in this way is the Clean-Free washing machine that cleans its tube while washing clothes and helped it gain top spot in Home Laundry Appliances. Anopther is the Xinchu Refrigerator that connects to the Internet enabling customers to watch videos and do online purchases.
Haier has a strategic partnership agreement with General Electric and has acquired GE Appliances and plans to continue its evolution from a traditional manufacturing company into a platform to incubate entrepreneurs.
Since inception, Haier has introduced a wide range of innovative products in all major categories including Refrigerators, Air Conditioners, Washing Machines, Panels (LEDTV’s), Water Heaters, Commercial Refrigerators, Wine Cellars and Microwave Ovens. Every Haier product has originated from innovation and technology and has been designed keeping the day-to-day customers needs in mind.
Another strategy of Haier is to setup manufacturing facilities close to the market. So they strive to open manufacturing facilities in all the countries they sell in. This was also to give the market a feeling of a homegrown brand rather than a Chinese brand and to instill confidence in the company’s products.
Another strategy that Haier used was to be known for its quality and innovation unlike the reputation associated with most Chinese companies and was successful in this aspect in the US and other countries, and was ranked 19th as the most trusted brand in India.
Haier is one of the first consumer durable companies to adopt the world’s most efficient service process innovation (SPI), which seamlessly integrates all the service process functions for a better consumer experience by simplifying the procedure at different stages of customer care process.
All the above strategies have worked to the company’s advantage. They have achieved the largest market share for white goods in the whole world. Haier has adopted many strategies that have differentiated it from other Chinese companies and also most white goods manufacturing companies.
However, a few of the issues they have faced in their journey is given below.
Initially, as a Chinese government owned enterprise, Haier was made to acquire a lot of ailing companies in the white goods sector. This led to reduced profits, poor quality and falling sales. They also had difficulty in listing in the stock exchange and so had difficulty in raising funds. Most of their sales still come from China. The stigma of Chinese product quality still haunts Haier and all other Chinese companies. Haier is also heavily reliant on Chinese government subsidies to be competitive.
Though Haier may not be known as the number one company in terms of brand image or quality, overall, the company enjoys a wide acceptance and due its novel strategies have been able to maintain the leadership position in sales volume. The company has adopted latest trends such as giving customers an online interface with the company and this strategy seems to be working well for the company.