1、Four Strategic Development Phases of HaierBrand Building Phase (1984-1991)In the early days of Chinas reform and opening, the market was still relatively controlled; a limited supply of goods was insufficient to meet the enormous demand. Economic conditions in the early 1980s were such that to buy a
2、 refrigerator required first obtaining a refrigerator coupon. Haier observed that the demand was unrelated to product competitiveness, but was rather a byproduct of a closed system which kept companies from tapping an enormous potential market for high quality consumer goods.As a result, Haier estab
3、lished the “Brand Building Strategy“ and the “Zero Defect“ quality standard. In no time, Haier reaped the rewards of these initiatives. In 1988, in only its fourth year of existence, Haier earned the first http:/ ever National Gold Medal awarded in Chinas refrigerator industry.By the late l980s, the
4、 time was changing and the market was flooded with refrigerators, forcing many suppliers to cut prices. Despite the glut, Haiers products remained consistently popular and the company was even able to increase prices by 12%.Features: By only focusing on refrigerators, Haier was able to accumulate va
5、luable business and management experience. This experience allowed the company to build a management model which could be used with future business units.Achievements: Haier was able to transform itself from a small factory operating at an annual loss of nearly RMB 1,470,000 into the number one refr
6、igerator brand in China.Diversification Development Phase (1991-1998)In the 1980s, demand vastly exceeded supply with Chinese firms generally setting sales targets based on production capacity. By the early 1990s, however, the situation had reversed, dealing a significant blow to the strategies of t
7、he past decade. Many home appliance manufacturers chose to compete on the basis of price, which provided occasional short-term market gains but reduced their capacity for further innovation and corporate development. For example, by 1998 the average color television manufacturer in China operated in
8、 the red, and in 2001 nine publicly listed home appliance companies combined for over RMB 3.545 billon in losses.Haier observed that marketing was less about beating annual sales quotas and more about winning the hearts of the customers. The reduced demand in the 1990s did not mean the market had re
9、ached the limits of its potential, but rather that products were not meeting the expectations of increasingly savvy consumers. The company established its “Diversification Strategy“ to expand the Haier brand beyond refrigerators, adding washing machines, air conditioners, and other items to its prod
10、uct line. At the same time, Haier did extensive consumer research, listening to its customers and even regarding complaints as a valuable tool for refining corporate strategy. When the industry followed Haiers example by also focusing on product quality, Haier once again forged ahead of the competit
11、ion, extending its emphasis on quality to customer service, a move which further bolstered customer loyalty to the Haier brand.Features: Haier moved from a single-product company to a manufacturer with multiple product lines and expanded its brand to include both brown goods as well as white goods.
12、Internally, the company restructured operations to maximize latent corporate potential, using intangible assets to get the mosthttp:/ out of existing tangible assets. By doing so, Haier was able to quickly grow the scope of its business while enhancing the companys overall strength and position.Achi
13、evements: From being a top producer of refrigerators, Haier became the number one home appliance brand in China.Globalization Phase (1998-2005)In the 21st century, globalization provided opportunities for Chinese companies to earn foreign exchange by leveraging lower production costs and functioning
14、 as an original equipment manufacturer (OEM), for multinational corporations (MNCs). But as China developed economically, rising labor costs meant that Chinas time as the worlds factory floor would soon be coming to an end, and many MNCs shifted their production facilities to countries, such as Viet
15、nam, which offered a cheaper source of labor. Those Chinese manufacturers who continued to rely on cut-rate production to attract business soon found themselves abandoned by their international partners. Haiers view was that in the age of globalization, only those MNCs with their own proprietary int
16、ellectual property and strong brand identities would be competitive in the world business arena. Faced with this reality, Haier knew the time was right to go global.Features: The Haier Group implemented a three-step globalization strategy: 1) enter international mainstream markets; 2) utilize main s
17、ales channels to deepen market penetration; 3) establish Haier as an internationally recognized global brand.Achievements in this phase: A tripartite (design/production/marketing) operational framework was established in six key regional markets: North America, Europe, Middle East/Africa, Asia-Pacif
18、ic, ASEAN, and South Asia. Utilizing this strategy, Haier now sells products in over 160 countries around the world.Global Brand Building Strategy Phase (2005-)With the development of information technology and ever faster global economic integration, the world is flattening. Every minute of every d
19、ay, there are 1.4 million internet search requests; we live in a global information age. For some companies, over 30% of their innovation comes from outside sources. Companies cannot satisfy consumer requirements on their own; finding a way to integrate the individual talents is the key to future su
20、ccess. Haier believes that no individual, company, or country can survivehttp:/ without the support of a wider community. The new rule for international businesses today is this: Co-operate or Perish. To his end, Haier last year launched a 1000-day information management revolution. This revolution
21、has involved restructuring organizational frameworks, processes, and people. Haiers design centers, manufacturing bases, and trading companies in over 30 countries will come together to share global resources through a single information platform.Features: Opening the gate, build a garden without fe
22、nces. In the spirit of “openness, equality, sharing and global operation“, Haier is on the way to integrate global resources to satisfy consumers needs all over the world. The difference between the Globalization Phase and Global Brand Building Phase is as follows: in the Globalization Phase, Haier
23、is still based in China, radiating to the world; while in the Global Brand Building Phase, Haier aims to build a local Haier brand in each geographic area all around the world.Achievements: By integrating its centers around the world, Haier created a 1+1+N team without borders. Through tapping the g
24、lobal marketplace of ideas, innovations, and human resources, the company has improved its ability to confront challenges and develop timely, effective solutions. Haier programs, like the PC Ordering Department in Macedonia, demonstrate the companys ability to internationalize its business culture a
25、nd adapt to conditions in a global marketplace.TasksMr. Yang, the chairman of Haiers board of directors, has read the business strategy report drafted by Zhang Lu. The global financial crisis has influenced Chinas economy deeply since 2008 and the development of Haier group is now facing to great ch
26、allenges. There are different opinions about Haiers future business strategy. Haier has been the No.1 brand in the global white home appliance market, so manager Li who takes charge in sales department suggests that Haier should adopt unrelated diversification which belongs to substantive growth str
27、ategy. Manager Wang, the leader of foreign trade department, believes that there are still great potential in global home appliance market, so Haier need to implement market penetration which belongs to limited growth strategy. In another word, Haier should try to increase the market share in the do
28、mestic and international market. Manager Zhang, the leader of finance department, insists that Haier should carry out retrenchment strategy. He considers that financial crisis will influence Chinas economy for a long time, so Haier must divest unrelated industries such as real estate and personal computer to maintain competitive advantage in home appliance industries.
