Discuss the role of international expansion for her group as a growth strategy? Which international entry strategy Haier used and which are appropriate for continued growth?

stage of internationalization of Haier mostly focused on developing countries including Southeast Asia. These expanded internally to establish volume and acquiring international experience before it moved to United States. Successful experience of Haier in America supported its investments and operation in Europe. In Italy it expanded to manufacture refrigerator company and Haier refrigerators that were based on designs of French and Dutch engineers. Haier implemented the main strategy in which designs are localized and manufacturing or sales were accessed. In 2002, Haier group signed inclusive collaboration agreement with Japan’s Sanyo Electric Co which put forward great range business agreement to market consumer electric products (Haier.net, 2019)

 During the first 5 years, Haier was able to focus on restructuring of organization and management decentralizing regarding applications for advanced information and network system as well. These are used to fulfill market-chain performance, logistics and capital operation as well. During second five years Haier established an innovative management program that was termed as Strategic Business Units that stimulated employee enthusiasm and elevated competitiveness of Haier in the global market place.

growth strategy of hair divided into 3 stages:

Brand name strategy which took about seven years in refrigerators through the proper planning of QTC termed as total Quality Contol system. Zhang Ruimin took in charge of Haier and his initial step was to smash 76 poor quality refrigerators in order to improve quality.

The second strategy was Diversified Development Strategy for which Haier took 6 years to diverse the product catalog. When it was founded company contained only one product and staff of 800.with passage of time haier employee were increased dramatically.

The third strategy was named as Going Multinational Strategy in which first overseas of Haier manufacturer was set up in developing countries and explored to United States. After successful experience in United States it moved to Europe and Japan. The main aim of company was  listed among the Fortune 500 successful companies (Haier News, 2015) 

1.      What are the strength and weaknesses of the Haier group? Haier America?

The Haier group has played an important role especially by making strongly motivated technician team who focused on organizational restructuring and management decentralizing. Moreover, successful management system and introducing unique designs with fewer prices fascinated many people across China and land is also expanded for more features. Moreover, Haier America also paid benefits to Haier by importing product from China where labor cost is quite cheap. Not only this but Haier also successfully inaugurated design center in Boston which is actually called marketing center in New York. Haier also provided the facilities of manufacturing in California as well. Moreover, the main aim of Haier America was to allow the elevation of various sales in U.S. and modify the product of company in order to fulfill the American demand (Chan, 2011)

Although Haier got a better reputation with respect to home appliances this brand is still new with significant market shares that are limited to refrigerators, air conditioners and wine coolers, etc.  in United States. Furthermore, its sales of consumer electronics were growing but not large. The company faced long-term decisions to put forward American presence in which few decisions were how to integrate with locality and building of brand recognition or how to create specific products that could fulfill American needs or improve services to meet the trust of customers. As a whole, main problem for Haier to be resolved was the differentiation from various appliances such as General Electric, Whirlpool or Electrolux. Not only these but also to differentiate from Sony and Panasonic in consumer electronics (Chan, 2011)

3.      What are the opportunities and threats facing by Haier Group?Haier America?

The Haier Group regarding Chinese major appliances and manufacturer of consumer electronics has a big goal of becoming third largest appliance maker in world and economy has grown in the U.S. with technological innovations in digital technology Hence this company had used various horizontal integration from past 20 years. Also with constant diversification in order to obtain growth in multiple product categories and other geographical regions, it had become a wide range organization at global level, recognized in the world community. Furthermore, Haier had achieved a well-known leadership position in well-developed countries like China and U.S as well. Besides all Haier’s group has great threat that it is still new to U.S with very significant market shares and small consumer electronics. Also for establishing American presence company faced many long-term decisions (WiseGuyReports.com, 2017)

            The major problem in order to resolve for Haier is how to differentiate from General Electronic including Electrolux, Sony and LG, and many other companies. Haier yet less attracted with low brand awareness outside the target market and not well recognized in middle and high-end markets across United States. It also exhibited other threats such as excessive dependence on imports that could cause low response rate, relatively local trends and not high speed of inventory replenishment.

4.      What are the strategic factors facing Haier America?

Although Management of Haier had built an expansion in United States market shares it is still unclear that which alternative strategy is there to follow. There are so many strategic factors that are facing by the Haier America one of which is weak brand recognition throughout the United States and other, in which there is not any competitive advantage for consumer electronics.

Recently, Haier faced great challenges in expanding modest U.S. footprints to become genuine brand globally. Although Haier won access to major distributors of U.S. but still unvivid and not familiar to most consumers of U.S. Many analysts believed that Haier struggled and more focussed on core products but still did not gain solid reputation in United States and Europe. Moreover after the four years of unimpressive work, there already existed stumbling blocks especially in personal computers which company exited in 2001. Therefore, Haier needs recognition and enhancement in its brand image (Fischer, Lago, & Liu, The Haier Road to Growth, 2015)

5.      Does the Haier group have any core competencies? If yes what are they? Which are of these held by Haier America?

 Haier group has got core competency that actually exists in refrigeration and cooling. These competencies are able to make a strong move in the major home appliances and industries thus able to broaden the product line. Haier contributed towards design center in Boston which is called marketing center in New York. It also showed huge designs and manufacturing to sales and distributions that indicated that haier had strong and long term commitments to be persisted in country like country United States. Moreover, competence in major home appliances and various electronics in country like United States has been originated from multinational companies that are able to design many types of appliances and consumer electronics (Liu, Li, & Che, 2006)

Not limited to these but it has also successfully manufactured major international domestic players. These focused on home appliances and many consumer electronics. Many multinational companies played a part in product categories such as Matsushita, Haier and LG as well. Many other companies in U.S. which mainly focused on major home appliances were Maytag and GE with many others like Whirlpool, Electrolux that played significant role in air conditioners. While taking into account about Whirlpool which was still very active in appliances that are particularly small with 2.9% market shares.

6. Does the Haier group have distinct competencies? If yes what are they? Which are of these held by Haier America?

Haier gained first place in the most developing countries such as the United States in which it plays great role in wine coolers and refrigerations. These aspects specifically showed great interest in Iran in making washing machines and air conditioners in Cyprus which depicted the distinctive competencies. Furthermore, it also planned for future to be a part of Japanese market by cooperation with Sanyo Electric and Samsung. From 2002 Haier moved into the innovative phase globally of designing the product to its manufacturing. Haier got long term development and commitment in United States. Moving forward, Haier exceeded to level in which electric billboard in shopping district belonging to Ginza, Tokyo symbolized that Haier truly played its best role to reach Japanese marketplace The company also planning in multiple manners for joint venture with Sampo based upon Taiwan that is so-called appliance manufacturer. This company also exhibited joined forces with Fujitsu Hitachi Plasma Display (Haier lnc., 2019)

These are for the purpose of developing market plasma TVs. Moreover, reaching to major market for consumer electricity in China and Asia where Haier developed greater acceptance for consumers. Thus Haier had very significant competitive position and strong distribution network in Haier America. Moreover, collaboration of company with COSCO could make a strong saving in transportation and consolidation in price advantage.

7.      Discuss porter’s industry analysis forces and how each force pertains to Haier America in terms of both major home and appliances and consumer electronics. How competitive is each industry?

 Porter five forces analysis is a simple framework for assessing and evaluating the strength and position of a business. The theory is based on the five forces that are widely used to analyze the industry structure as well the corporate strategy. It can also be used as self-check on the current position of the organization by identifying strengths, improving weaknesses and avoiding mistakes. The forces include

1.      Competition in the industry

These forces refer to the number of competitive organizations in the market and their ability to undermine a company. For example, if a completion in market is low, the company has the flexibility to charge higher prices and set deals according to their own terms to get higher sales and profit. Haier America may face the same issue as there are already a lot of competitors in the market including Sony, Whirlpool LG hence they don’t have the freedom to quote their own terms as they need to attract customers

2.      Potential of new entrants into the industry

A company’s position may be weakened or affected if it is easier, less time consuming and cheap for the competition to get into the market 

3.      Power of suppliers

The force highlights the importance of supplier, how easily a company can be affected if they drive up the cost, a high cost is to be paid if there needs to be a switch in suppliers

4.      Power of customers

This force deals with the ability of customers to bring the prices down

5.      The threat of substitute products

This highlights the substitute good or services which are available to the customers in place of a company’s products, this may pose a big threat as the customer has the option to buy other companies products if cheaper or more convenient, weakening the companies power in the market. Similarly, for Haier America as the competition is huge there is various option for the customer to avail which is a threat to Haier America (Muzi & Wong, 2013)

8.       Evaluate Haier’s position in major home appliances and in consumer electronics in the U.S.

Ans: Haier’s international framework encompassed design, procurement, production, distribution, and after-sales. The company could reach its objective of 10% market share in U.S refrigerator sales in 2005 by expanding the facility from 400,000 units in 2003 to 500,000 units. Moreover, Haier was able to achieve first position in sales of compact refrigerators in the US which showed that they were able to anchor their position in major home appliances in United States. For consumer electronics the target of Haier was the young people with lower income and college students. Haier mostly used to import electronics from the Asia and China bases which meant that they had to bear much lesser labor cost than America. This made them able to attract low-end market as they had the price advantages as well as they had a unique design on its products with quite simplified function gaining attraction of its customers. But they had the disadvantage as they had lower brand awareness if compared to other reputed companies which meant the company failed to get recognition in the middle and high-end markets in the United States (Tung, 2012)

9.      What was Zhang Ruimin’s philosophy of management? What impact has CEO Rumin had on the company?

Zhang Ruimin was able to turn Haier from the run workshop into an international enterprise accompanied by his colleagues. He had a broad imagination and extensive knowledge combined with the ability which made him earned loads of success. As a leader, he always used to set up different goals and had the urge to think about the future. His aim in mind about what is his target and how he needs to achieve it. He took great account of the feelings of the employers and made sure to inject the “quality is first” principle into their minds. His aim was to make the employers care for the company. He can be called a transformational leader who tends to change rules according to the situation the company was (University of Pennsylvania, 2018)

He was able to improve management efficiency by combining Chinese traditional culture and western by establishing the OEC market chain system. The philosophy of OEC was to identify problems, causes, and find its solution one by one. This made them achieve zero distance contact with the customers making a large impact on the success of the company.

10.  Explain why Haer has been so successful in entering the U.S. market in major home appliances and Consumer electricity?

 Haier has been successful in entering the US. It was initiated by gaining different opportunities for consumer electronics generated by U.S. transition of television broadcasting from an analog and reached to digital platform. Later the profit opportunities were flourished rapidly from consumers and replaced the analog televisions to new big screens sets to home theatre system that is why it brought success after entering into U.S (Tung, 2012)

 Moreover, for consumer electronics, Haier targeted to people with lower low-income and college students, for this Haier used to import the electronics from Asian as well as Chinese bases of manufacturers where labor cost was not as much as in America.

 The price advantages of Haier on such imported electronics like LCD and DVD fascinated attention from small markets. Form the mid and reaching too high income, and older people tried major brand products with a good reputation for quality such as Sony and Panasonic. These unique prices also attracted young and many consumer segments as well. And with time the product distribution of Haier in United Sate was moved to nationwide.  Internationally, Sony was consumer electricity as a whole is not only market shares but also in technology development through advertising and reached to higher perceived level. The company could use new technology to inaugurate the new products in a very short time and made attractive appearance with good warranty service. Sony products concerning wide Internet and distribution networks is found anywhere in the world. And soon it developed eight manufacturing sites in North America.

 While talking about major appliances lime Whirlpool, Electrolux and Koc Group the company made many improvements to specify the products, performed many conversions, Target setting and innovations in Whirlpool from las three years strengthen its power in United states and made the well-recognized brand. Whirlpool also dominated U.S. sales with frim international and nationwide supply chains.

11.   Can Haier successfully move from being a niche marketer in the U.S. to be a major competitor like Whirlpool? What does it need to do? Can it do same thing in consumer electricity?

Strength of Haier was its low price and specific designs, more specifically the appearance of many electronic products. Moreover, distributions and supply exhibited extreme importance to business development of Haier because it showed how fast company could respond to emerging needs of market. Not only this, but it also gained importance into Web site designs that put it more behind than Whirlpool or Sony. So these characteristics and many others allowed the Haier to move from niche marketer to major competitor in U.S. is tremendous ways with the products found in major chain retailer. Furthermore, during 17 years period Haier experienced rapid growth with average growth rate of 78% and extreme elevation in Global sales. Haier annual sales grew double in US market, not only this but total exports exceeded to tripled (Fischer, Lago, & Liu, The Haier Road to Growth, 2015)

On the other hand, compared with most major brands, Haier’s consumer electronics products has not any competitive advantages either in technology advances or in product quality. And also the weak brank recognition in the U.S. with threats of substitute, so Haier needs to work on integrations such as production paths having control on the suppliers and competitors. It also has to work better on market penetration and market development. And many other diversification or differentiation strategies

For consumer electronics, Haier mainly targeted to low-income young people. Also, relatively low prices of Haier on such products like TV/DVD fascinated attentions to small markets or young people and with time, form mediate level to high income older people preferred major brands products which lead to the good reputation for quality such as Sony or Panasonic. The unique designs on high tech products with very simple functions and designs attracted the mind from consumer segments as well. So it can be evaluated that Haier played its huge part in consumer electronics as well (Fischer, Lago, & Liu, Reinventing Giants: How Chinese Global Competitor Haier Has Changed the Way Big Companies Transform, 2013)

12.  Discuss the role of market segmentation in Haier America’s strategic management?

 Haier America segmented the market under two alternative management strategies. The first one was for Haier that required them to introduce a wider range of products to the U.S. market to expand and become a global brand. This meant that they could gain repute as they were not that known as sony whirlpool in this part of the world or compared to the middle East. This alternative would make them overcome the Asian brands like LG, as Haier tends to increase competitiveness in the low-end market segment by its cost advantages and to offer lower rates to attract the locals. The second was for Haier America to develop new features for consumer electronics and home appliances to expand in the area. This meant they would have to manufacture the products locally, and they had to change the production lines, modules and add new versions (Yan & Guanli, 2011) 

13.  Evaluate Haier’s position within KSA Market and apply SWOT analysis of the company product in KSA?

In Saudi Arabia, the Haier brand has significant amount of market share. The performance of Haier has increased up to 30% in the Middle East region. In the kingdom of Saudi Arabia the demand of side by side refrigerator of Haier has increased significantly and now become number 1 in Saudi Arabia. The raise of Haier products in KSA is the result of its branding strategy in the Middle Eastern region. Haier has 5 No. 1 market shares in Saudi Arabia, which indicates that the products of Haier such as washing machines, refrigerator and T door refrigerators have become quite popular in Saudi Arabia (China Net, 2017)

Conclusion

Haier considered as the 4^th largest manufacturer of goods and at the top list of China. With producing key products like home appliances and consumer electronics. It has maintained global importance in industry, trading and financial services by its dominant designs and manufacturing. But main problem for Haier is to differentiate from competitive companies like Whirlpool, Maytag, Panasonic and LG that already gained winning competitive in U.S. market. No doubt its annual growth is 78% with third largest appliance maker in world with constant goal of increasing volume of products or integration. Many strategies like diversified, development and multinational strategies adapted by Haier for taking actions and managing inappropriate way. Haier faced many threats of substitutes and rivalry among existing firms.

But yet the company gained much importance in managing system successfully, focused on organizational restructuring and building strong motivated team. Major problem Haier has faced is weak brand recognition in US and not any competitive advantages. So man alternative strategies can be followed to introduce new innovative products and differential strategies to meet demands and flourish as a well-reputed country.

Recommendation

To maintain and flourish the reputation for Haier, the forward horizontal integration should be followed that is achieved by controlling over competitors at the place where the company will have strong financial position. Moreover, product strategy for product development should also be adapted in which new features can be added to existing products leading to final strengths of Haier. These qualities with low prices and unique designs will fascinate the consumers to buy electronic products. Furthermore, concentric diversification should also be considered to introduce new services to customers in Haier’America for land expansion. In the last, the products with new features should also be designed to broad range of customers who are price sensitive. These approaches will lead the company with great expansion geographically.

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