Electrolux and ge appliances case study

CASE STUDY

Path of Haier’s international expansion (Liu & Lee, 2002, p. 702)

Path of Japanese companies’ international expansion (Liu & Lee, 2002, p. 702)

Haier’s internationalization strategy has been very successful so far (Crainer, 2015). Haier’s

international expansion (investment) in terms of the sequence strategy has resembled that

used by Japanese companies, which pursued two types of global market expansion (see the two

Figures above). Also, initially, Haier’s internationalization focused on developing countries in

Southeast Asia in order to build volume and gain international exposure. Indonesia was Haier’s

first international joint-venture in 1996. However, a major difference between Haier and

Japanese companies which followed the Type I path is that the Japanese concentrated on high-

tech industries such as semiconductors and computers, which were developed in Japan, while

Haier focused on its traditional products such as home appliances, and tried to

develop/enhance its technology in the U.S. market (Liu & Lee, 2002).

Haier’s Early Exports (1986-2000)

Year 1986 1993 1994 1995 1996 1997 1998 1999 2000

USD 300 K 1.8 M 1.84 M 4.2 M 5.0 M 5.64 M 7.57 M 1.38 B 2.8 B Source: Du (2003)

AMBA 660 Case Study - Haier’s North America Expansion - Page 4 of 18

Haier’s Early FDI (1996 – 2001)

Year Location Products

1996 Indonesia Refrigerators

1996 Philippines Refrigerators, A/C

1998 Malaysia Refrigerators, A/C

1999 Iran A/C

1999 USA Refrigerators

2000 Bangladesh Refrigerators, A/C

2000 Vietnam Refrigerators

2001 Pakistan Washer

2001 Italy Refrigerators Source: Liu and Lee (2002, p. 702)

Haier’s success is based on five foundations (Crainer, 2015, pp. 27-29):

1. Change, and change again

2. Small self-managed teams.

3. Customers first

4. Creating a marketplace of ideas

5. Borrowing and adapting

Haier’s international strategic objective (3 X 1/3) was to manufacture and sell one third of its

total production in China, manufacture one third of its total production in China, but export it,

and manufacture and sell the remaining one third outside China. The company realized that it

had to go abroad to develop products design, production, and marketing networks, especially in

the U.S., in order to build and enhance its brand internationally. Haier also pursued a product-

focused international market entry strategy, in which it focused on marketing of a single

product. Once this product picked-up and became successful, Haier followed-up with other

products, capitalizing on the now successful brand name (Liu & Lee, 2002).

Haier localized human resources, culture, and capital in an effort to enhance its brand globally.

Haier’s sales department was located in New York, and the entire sales team, with the

exception of the CFO was American. Haier also strategically established R&D centers in

Germany and the U.S. to develop, acquire, and transfer needed technologies (Liu & Lee, 2002).

AMBA 660 Case Study - Haier’s North America Expansion - Page 5 of 18

However, in pursuing its international strategy, Haier was faced with constraints such as (Liu &

Lee, 2002):

1. Limited resources.

2. Limited R&D capabilities for core technologies

3. Unfavorable international brand recognition

4. Negative country of origin effect

5. Lack of international management/market entry experience

Haier: TIMELINE (Bloomberg, 2016, (Crainer, 2015; Hoovers, 2016; MarketLine; 2015; Reuters,

2016)

Over the years, Haier expanded both locally in China, as well as globally with improvement in

quality and a wider product range.

- Founded in 1984, the Haier Group (Haier) was established in 1991, in Qingdao, through

the merger of Qingdao General Refrigerator Factory and Qingdao Air Conditioner

General Factory.

- In 1993, the Haier Refrigerator Company was listed on the Shanghai Stock Exchange.

- Also, in 1993, Haier started exporting refrigerators and other products to the Middle

East.

- In 1994, Haier started exporting its products to the US, initially OEM (original equipment

manufacturer) products, and later on under its own brand.

- In 1995, Haier launched its first top-loading washing machine and microwave oven.

- Also, in 1995, Haier acquired Qingdao Red Star Appliance Company.

- In 1997, Haier established a local assembly plant in Malaysia; the Malaysia Haier

Industry (Asia) Co.

- Also, in 1997, Haier started producing dishwashers and color televisions.

- In 1998, Haier created Qingdao Lejia Electric Appliance, and branded its products as

Leader.

- In 1999, Haier established America Refrigerator Corporation in South Carolina.

- Also, in 1999, Haier founded its first overseas industrial complex, Haier (America)

Industrial Complex in the United States.

- In 2000, Haier founded Haier-CCT Holdings in Hong Kong and Qingdao, a joint-venture

with CCT Telecom Holdings. The joint-venture started producing mobile phones in

2001.

- In 2001, Haier established its second overseas factory in Pakistan.

- Also, 2001 Haier acquired the Italian refrigerator company Meneghetti Equipment.

AMBA 660 Case Study - Haier’s North America Expansion - Page 6 of 18

- In 2002, Haier launched its products in Australia and New Zealand markets.

- Also, in 2002 Haier established trading companies in Thailand and Malaysia, and

founded the Sanyo-Haier Company with the Japanese company Sanyo.

- In 2003, Haier launched its Benfeng slim mobile phones in China.

- In 2004, Haier launched its home computers in the France, established its Haier Middle

East Industrial Complex in Jordan, and founded Haier Electronics Middle East Company

in Dubai.

- Also, in 2004, Haier teamed-up with the with the Fujitsu Hitachi Plasma Display joint

venture to develop and sell plasma TVs.

- In 2005, Haier entered into a joint-venture with India's Scope Group creating Haier

Telecom (India) in an effort aimed at becoming a market leader in cell phones in India.

- In 2006, Haier launched a non-detergent powder washing machine in Malaysia.

- In 2007, Haier created a joint-venture with Qingdao Dong Ao Group to build the five-star

Haier Intercontinental Hotel in Qingdao.

- In 2007, Haier started selling refrigerators in France.

- In 2008, Haier founded a production facility in Thailand.

- In 2009, Haier acquired a 20% stake in New Zealand's Fisher & Paykel Appliances.

- In 2009, Haier supplied 70,000 desktop computers to schools in Macedonia.

- In 2010, Haier created Qingdao Haier Optronics Co in China (a joint-venture with AU

Optronics Corp.) for the production of TFT-LCD TV panels.

- In 2011, Haier New York Life Insurance, started business in Nanjing.

- In 2012, Haier enhanced its global brand with the acquisition of the Sanyo home

appliance business from Panasonic for $ 130 million, which helped extend Haier’s

operations in Japan, Malaysia, Philippines, Indonesia, and Vietnam, where it developed

and manufactured refrigerators and washing machines. Haier turned Sanyo’s loss-

making business around within the year.

- Also, in 2012, Haier increased its stake in New Zealand's Fisher & Paykel Appliances to a

controlling 92.8%.

- In 2013, Haier created a new joint venture with Fagor, a Spanish appliance

manufacturer.

- Also, in 2013, Haier formed a partnership with Alibaba Group for the creation of a

system for the delivery and installation of home appliances.

- In April 2015, Haier entered into a joint-venture with Alibaba to launch their second

generation customizable modularized television.

- In 2016, Haier bought GE appliances for $ 5.4 billion, creating a solid foothold for the

company in North America.

- Also, in 2016, Haier forged a long-term strategic partnership with GE that focuses on hi-

tech manufacturing in areas such as Internet manufacturing and health care.

AMBA 660 Case Study - Haier’s North America Expansion - Page 7 of 18

Haier America

Haier entered the U.S. market in 1994 through exports, and by marketing refrigerators only -

mainly compact models. After it successfully secured a foothold in the market, Haier followed

with their washing machine line, which required less promotion (Liu & Lee, 2002).

Haier initially sold its household products through Wal-Mart; however; it took them a year

before they could secure a meeting with Walmart to discuss their products. While Haier

manufactured one out of every three refrigerators sold in China, it meant little to U.S.

consumers who were wary of Haier’s quality, and felt more comfortable buying better known

local brands (Chang, 2016).

To command higher profits, Haier realized that it had to sell its products through major U.S.

retailers such as Lowe’s and Sears. Haier began the production of higher-end appliances in the

U.S., as it would have been too expensive to ship them from China. Eventually, the company

started exporting those higher-end products to China targeting affluent customers there.

Around this time, Haier developed a refrigerator with a fold-out table that targeted American

university students who live in cramped dormitories. These are some examples of Haier’s

adaptability and flexibility in coping with market forces, and the new challenges of globalization

(Duysters, Jacob, Lemmens, & Jintian, 2009).

In 1999, Haier invested $30 million in establishing a marketing center in New York, a design

center in Boston, and a manufacturing facility in South Carolina; this was the largest Chinese FDI

in the U.S. to that date (Liu & Lee, 2002). Haier’s Industrial Park in Camden, SC was the first

Chinese production facility established in the U.S. (Business News, 2015).

In 2015, Haier America announced that it will expand its Kershaw County, SC refrigerator

factory, which should help support the company’s continued growth, and will enable it to

provide modern whole-home solutions in the United States. Haier America will invest an

additional $72 million into its existing $40-million facility; which is projected to create an

additional 410 jobs in South Carolina in the next five years. Construction is expected to be

finished in 2018. In January 2016, Haier acquired GE Appliances - the second largest

manufacturer of major household appliances in the U.S., for $ 5.4 billion. Haier’s offer was 60%

more than the Swedish firm Electrolux’s $3.3 billion offer. The Electrolux deal was scrapped due

to regulatory worries that the acquisition would create an entity with a very high market share

in cooking appliances (Chang, 2016).

AMBA 660 Case Study - Haier’s North America Expansion - Page 8 of 18

U.S. Household Appliance Industry (Ibis World, 2015)

- Key economic drivers

 Housing starts

 Price of household appliances

 Per capita disposable income

 Price of steel

 Price of plastic materials and resin

- Demand industries

 Home Builders

 TV & Appliance Wholesaling

 Apartment & Condominium Construction

 Commercial Building Construction

 Consumer Electronics Stores

- Key success factors

 Establishment of brand names

 Market research and understanding

 Development of new products

 Control of distribution arrangements

 Economies of scale

 Optimum capacity utilization

Haier: U.S. Main U.S. Competition (Global Figures)

2015 Key Figures Haier GE Appliances Whirlpool Electrolux

Annual Sales $32.10B* $ 6.30B $ 20.89B $14.71B

Employees 70,000 12,000 97,000 60,038

Market Cap Private GE Subsidiary $ 11.34B $13.91B * 2014 figure

Sources: GE Appliances (2016), Haier (2016), Hoover (2016), Statista (2016)

AMBA 660 Case Study - Haier’s North America Expansion - Page 9 of 18

U.S 2015 Market Performance

Company Haier Whirlpool1 Electrolux2 GE3 LG

Market Share 1.1% 37.8% 20.6% 13% 5.1%

Revenue $ 254 M $ 6,819 M $ 3,714 M $ 2,336 M $ 911 M

Op. Income Private $ 368 M $ 78 M $ 151 M $ 17 M

1. Includes Maytag, Kitchenaid, Magic Chef, Amana, Henn-Air, Admiral, and Inglis

2. Includes Electrolux, AEG-Electrolux, Eureka, and Frigidaire

3. Includes GE Monogram, GE Café, GE Hotpoint, and Ge Profile

Source: Google Finance (2016), Hoovers (2015) & Ibis World (2015)

U.S. Market Share

The U.S. Household Appliances industry has a high level of concentration. The top four industry

players accounted for around 81.8% of revenue in 2015. Whirlpool dominates the market with

a 37.8% share of all industry revenue. The company's dominance is derived from its wide

product range, competitive pricing, and acquisition of competitors. In 2010, the top four

companies claimed around 90.7% of revenue. After the recession, several companies left the

industry, which allowed the big players to gain market share. As market conditions improved,

the industry continued the consolidation trend as smaller manufacturers moved manufacturing

abroad to low cost countries such as Mexico and China, or exited the market. However, market

concentration has declined in the past five year due to low cost imports from China. This has

increased China’s share of the U.S. appliances market in 2015 to around 32.9% (Ibis World,

2015).

Key U.S. Competition for Haier

A. Whirlpool

Founded in 1898, Whirlpool is the world’s largest manufacturer of household appliances with

net sales of $ 21 billion in 2015 (Hoovers, 2016). Whirlpool has production facilities in 18

countries and employs 100,000 people worldwide. The company has a strong brand portfolio

that includes Whirlpool, Maytag, Jenn-Air, Amana, Admiral, and KitchenAid. North America

AMBA 660 Case Study - Haier’s North America Expansion - Page 10 of 18

accounts for about 53.0% of the company’s, with the remaining 47.0% of sales generated in

Asia, Europe, and Latin America. Whirlpool sells its products directly to retailers such as Home

Depot, Sears, Lowe’s, and Best Buy. Also, a few products are sold as OEM, such as some of

Sear’s Kenmore products. In March 2006, Whirlpool and Maytag merged in a $2.7 billion

transaction that included the assumption of debt. Whirlpool projected that the merger would

provide better asset utilization, significant efficiencies, a wider range of products; and a broader

customer base (Ibis World, 2015).

B. AB Electrolux

Founded in Sweden in 1901, AB Electrolux (Electrolux) is one of the world’s largest producers of

household appliances, selling more than 40 million products in 150 countries. Around 15.4% of

its workers are in North America. The company has a strong brand portfolio that includes

Electrolux, Eureka, Frigidaire and AEG-Electrolux. North America accounts for about 31% of

Electrolux’s net sales, and 23% of its core appliance sales (excluding vacuum cleaners). Around

75% of the company’s North American sales are generated in the U.S. In the past five years,

Electrolux has faced higher manufacturing costs due to volatile prices of plastics and steel. As a

result, the company has shifted most of its US manufacturing facilities to Mexico. In 2011,

Electrolux acquired the Egyptian Olympic Group, the leading manufacturer of appliances in the

Middle East, as well as the Chilean appliance company CTI. In 2014, Electrolux made a bid to

buy GE Appliances for $3.3 billion. However, the U.S. Justice Department contested the merger,

claiming that it would eliminate competition that benefits consumers through lower prices and

more options. Electrolux challenged the antitrust claim arguing that companies such as LG

Electronics and Samsung are entering the U.S. appliances market, and thus diluting its market

power (Ibis World, 2015).

C. GE Appliances

Founded in 1892, GE is one of the largest and most diversified companies in the world. GE

Appliances operates in North America, Asia, South America, and Europe; however, the bulk of

its appliance sales are in the U.S. GE has a good brand portfolio that includes GE Hotpoint, GE

Monogram, GE Cafe, and GE Profile. GE's gas ranges, microwave ovens, and freezers are

outsourced. The company produces its own dishwashers, refrigerators, electric ranges,

washing machines, and dryers. In May 2008, GE announced that it was reviewing strategic

options for its appliance division, including a joint-venture, sale, or spinoff. The company

believed that the business needed a global reach and more investment in order to be more

competitive. GE Appliances sought to integrate new technologies to enhance efficiency and

AMBA 660 Case Study - Haier’s North America Expansion - Page 11 of 18

profitability (Ibis World, 2015). In January 2016, GE announced that it was selling its appliances

business to Haier (Reuters, 2016)

D. LG Electronics (LG)

The South Korean firm LG specializes in producing electronic and telecommunication products

that are sold worldwide. The company has production facilities in 14 countries, and employs

91,000 people worldwide. LG’s home appliance division produces refrigerators, washing

machines, dryers, microwave ovens, and vacuum cleaners. Around 19.5% of LG’s sales come

from its home appliance segment, while around 23.0% of its overall revenue is generated in the

U.S. In 2004, LG started to focus on the U.S. home appliances market, and by 2008 it was

ranked #1 in customer satisfaction for washing machines in the J.D. Power and Associates

Laundry Appliances Study. In February 2009, LG announced that it would increase its R&D

expenditure to prepare its product lines for the anticipated economic recovery. Since 2009, LG

has introduced several new products for the US market, such as an Internet refrigerator, and a

double range. In the next five years, LG is expected to introduce new Internet-capable smart

appliances that are capable of interacting with smart grids (Ibis World, 2015).

AMBA 660 Case Study - Haier’s North America Expansion - Page 12 of 18

Haier Electronic Co., Ltd.: Income Statement (Google Finance, 2016)

In CNY ‘000 (except for per share items) 12 months ending 2015-12-31 12 months ending 2014-12-31 12 months ending 2013-12-31 12 months ending 2012-12-31

Turnover 62,826,119.00 67,133,962.00 62,263,162.00 55,615,047.00

Interest income - - - -

Interest expense - - - -

Net interest income - - - -

Net fee income - - - -

Net trading income - - - -

Other operating income - - - -

Total operating income - - - -

Net insurance claims incurred - - - -

Net operating income before loan impairment charges and provisions - - - -

Total impairment charges and provisions - - - -

Net operating income - - - -

Total operating expenses - - - -

Operating Profit 3,068,219.00 3,160,302.00 2,637,840.00 2,244,072.00

Non-operating/Exceptional items 264,053.00 5,613.00 0.00 190.00

Associates 11,714.00 0.00 0.00 0.00

Profit Before Taxation 3,343,986.00 3,165,915.00 2,637,840.00 2,244,262.00

Taxation 609,489.00 650,813.00 547,527.00 537,285.00

Profit/(loss) after taxation - - - -

Minority Interests 31,501.00 68,497.00 53,431.00 11,855.00

Preference share dividend 0.00 0.00 0.00 0.00

Net Profit 2,702,996.00 2,446,605.00 2,036,882.00 1,695,122.00

Total Dividend 280,907.00 237,191.00 200,824.00 157,480.00

Retained profit/(loss) 2,422,089.00 2,209,414.00 1,836,058.00 1,537,642.00

Gross Profit 9,992,692.00 9,841,933.00 9,137,549.00 8,941,181.00

Depreciation 235,344.00 147,213.00 114,658.00 98,941.00

Interest Paid 70,525.00 95,961.00 68,334.00 64,504.00

Interest Capitalized 0.00 0.00 0.00 0.00

Turnover Growth (%) -6.42 7.82 11.95 11.03

Net Profit Growth (%) 10.48 20.12 20.16 20.44

Taxation Rate (%) 18.23 20.56 20.76 23.94

EPS (HKD) 1.17 1.15 1.03 0.88

Diluted EPS (HKD) 1.16 1.12 1.00 0.82

AMBA 660 Case Study - Haier’s North America Expansion - Page 13 of 18

Haier Electronic Co., Ltd.: Cash Flow Statement (Google Finance, 2016)

CNY’000 (except for per share items) 12 months ending 2015-

12-31

12 months ending 2014-

12-31

12 months ending 2013-

12-31

12 months ending 2012-

12-31

Cash Generated from (Used in) Operations 2,852,272.00 3,566,852.00 2,958,408.00 2,096,477.00

Net Cash Flow from Operating Activities 2,529,744.00 2,902,971.00 2,210,030.00 1,740,167.00

Interest Received 270,271.00 179,127.00 79,681.00 35,854.00

Interest Paid -15,461.00 -29,558.00 -28,907.00 -36,657.00

Dividends Received 341.00 0.00 0.00 6,733.00

Dividends Paid -285,373.00 -232,825.00 -180,042.00 -40,057.00

Taxes (Paid) / Refunded -581,893.00 -835,493.00 -828,059.00 -392,164.00

Additions to Fixed Assets -999,718.00 -688,437.00 -259,374.00 -406,421.00

Increase in Investments -1,723,112.00 -254,264.00 -30,602.00 -300.00

Disposal of Fixed Assets 9,804.00 9,372.00 1,307.00 4,473.00

Decrease in Investments 178,295.00 1,446.00 0.00 0.00

Net Cash Flow with Related Parties -27,000.00 0.00 0.00 0.00

New Loans 945,509.00 280,812.00 348,699.00 39,800.00

Loans Repayment -1,016,840.00 -460,444.00 -228,867.00 -25,000.00

Fixed Income/Debt Instruments 0.00 1,055,023.00 0.00 0.00

Equity Financing 745.00 1,211,260.00 172,518.00 82,948.00

Net Cash Flow with Related Parties 45,619.00 413,435.00 -2,338.00 93,891.00

Net Effect of Foreign Exchange Rate Changes /

Others 25,777.00 8,199.00 -20,187.00 -8,482.00

Repayment of Fixed Income/Debt Instruments 0.00 0.00 0.00 0.00

Net Cash Flow from Financing Activities -401,791.00 2,149,105.00 73,200.00 114,925.00

Net Cash Flow from Investing Activities -2,372,976.00 -339,859.00 -1,654,029.00 -649,083.00

Increase(Decrease) in Cash & Cash

Equivalents -245,023.00 4,712,217.00 629,201.00 1,206,009.00

Cash & Cash Equivalents at beginning of year 10,463,738.00 5,743,322.00 5,134,308.00 3,936,781.00

Cash & Cash Equivalents at End of Year 10,244,492.00 10,463,738.00 5,743,322.00 5,134,308.00

AMBA 660 Case Study - Haier’s North America Expansion - Page 14 of 18

Haier Electronic Co., Ltd.: Balance Sheet (Google Finance, 2016)

In Thousands of CNY (except for per share items) As of 2015-12-31 As of 2014-12-31 As of 2013-12-31 As of 2012-12-31

Cash and short-term funds - - - -

Items in the course of collection from other banks - - - -

Placings with banks and other financial institutions - - - -

Trading bills - - - -

Certificates of deposit held - - - -

HK Government certificates of indebtedness - - - -

Trading assets - - - -

Non-trading assets - - - -

Financial assets designated at fair value - - - -

Derivatives - - - -

Loans and advances to banks - - - -

Loans and advances to customers - - - -

Available-for-sale financial assets - - - -

Financial investment - - - -

Held-to-maturity investments - - - -

Interests in associates and joint ventures - - - -

Goodwill and intangible assets - - - -

Fixed assets 3,118,800.00 2,147,625.00 1,501,599.00 1,323,529.00

Investments 1,611,037.00 2,925.00 2,925.00 2,925.00

Current Assets 23,287,625.00 23,804,981.00 19,029,897.00 16,040,609.00

Other Assets 2,279,868.00 1,559,743.00 1,346,742.00 846,203.00

Other assets - - - -

Total Assets 30,297,330.00 27,515,274.00 21,881,163.00 18,213,266.00

HK currency notes in circulation - - - -

Deposits and balances of banks and other financial institutions - - - -

Deposits from customers - - - -

Items in the course of transmission to other banks - - - -

Trading liabilities - - - -

Financial liabilities designated at fair value - - - -

AMBA 660 Case Study - Haier’s North America Expansion - Page 15 of 18

In Thousands of CNY (except for per share items) As of 2015-12-31 As of 2014-12-31 As of 2013-12-31 As of 2012-12-31

Derivatives - - - -

Debt instruments in issue - - - -

Subordinated liabilities - - - -

Other liabilities - - - -

Total Liabilities - - - -

Share capital 2,891,084.00 1,863,462.00 2,761,754.00 2,501,181.00

Share premium - - - -

Retained profits/(accumulated losses) - - - -

Other Reserves - - - -

Reserves 11,951,924.00 9,626,968.00 4,959,274.00 3,038,545.00

Shareholders' funds 14,843,008.00 11,490,430.00 7,721,028.00 5,539,726.00

Minority interests - - - -

Total Capital Resources - - - -

Total_Liab_Cap_Resources - - - -

Long Term Debt 1,124,652.00 1,800,701.00 716,835.00 699,643.00

Other Liabilities 1,327,967.00 1,103,524.00 1,012,204.00 1,052,588.00

Current Liabilities 13,001,703.00 13,120,619.00 12,431,096.00 10,921,309.00

Inventory 4,399,479.00 3,668,067.00 2,891,587.00 2,479,191.00

Cash On Hand 10,526,559.00 11,277,384.00 7,044,672.00 5,430,112.00

Short Term Debt 86,400.00 0.00 159,633.00 39,800.00

Total Debt 1,211,052.00 1,800,701.00 876,468.00 739,443.00

AMBA 660 Case Study - Haier’s North America Expansion - Page 16 of 18

Assignment

A. General Instructions

1. Use UMUC’s library as much as possible for research in this assignment. Look for

worldwide data, and not just North American data; remember; this is a global business

course!

2. Only cite scholarly publications and reliable non-scholarly sources such as The

Economist, Financial Times, WSJ, NYT, Bloomberg, Reuters, Money, Forbes, and Fortune.

Reliable non-scholarly sources may yield articles which are more useful for practitioners.

Websites like Wikipedia, answers.com, QuickMBA and NetMBA are unacceptable for

graduate level work.

3. Your analysis should be supported by a minimum of three scholarly (peer-reviewed)

articles, and a minimum of three reliable non-scholarly sources. You can also use the

required readings from this week to support your analysis where appropriate.

4. Your analysis should be written in an academic paper format; not a question and answer

format.

5. Please include the following: A half page Introduction, and a half page Lessons Learned

& Conclusion at the end of your report. Use section headings to organize your paper. An

Executive Summary is not required.

6. All questions are to be attempted. Do not restate the information from the case study;

go beyond the included information; analyze and draw your own conclusions!

7. Your report should be approximately 8 pages long, with one inch margins, 12-point font,

double-spacing, and should be posted as a Word document. The cover page, references,

and appendices, if any, are not part of the page count. All graphics and tables, if any,

should be placed in an appendix.

8. Use the APA format for in-text citations and the reference list.

B. Case Study Questions

Support your answers using scholarly and reliable non-scholarly sources!

1. What were the factors behind Haier’s decision to start production in the U.S. in 1999?

Use the PESTEL (political, economic, social, technological, environmental and legal)

framework to analyze the external environment pertinent to Haier’s expansion plans in

the U.S. in 2016-2017.

2. Do a Porter’s Five Forces analysis of the U.S. white goods industry.

3. Why did Haier buy GE Appliances? What change can GE Appliances’ employees expect

from the change in ownership/management? Also, discuss the impact of the differences

AMBA 660 Case Study - Haier’s North America Expansion - Page 17 of 18

in national and organizational cultures, and how can Haier, the new owner, overcome

them?

4. What are the strategic implications of emerging Chinese multinationals such as Haier?

5. How will Haier’s success in the US market support its operations and investments in

other markets?

AMBA 660 Case Study - Haier’s North America Expansion - Page 18 of 18

References

Ajmera, A. (2016). GE to sell appliances business to China's Haier for $5.4 billion. Reuters.

Retrieved from www.reuters.com

Business News (2015). Appliance Design, 63(10), 10.

Chang, R. (2016). Haier has higher ambitions. Businessweek, (4460), 22-23. Retrieved from

www.bloomberg.com/businessweek

Chang, R. (2016). Higher ambitions: China Haier's gambit to invade American homes.

Bloomberg. Retrieved from www.bloomberg.com

Crainer, S. (2015). Haier calling. London Business School Review, 26(1), 24-30.

doi:10.1111/2057-1615.12008

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