Why haier go global

Every minute on average overseas consumers are becoming Haier customers. Moreover, Haier has achieved quick expansion and consolidation of overseas resources through differentiated international acquisitions. This multinational acquisition is a milestone event for Haier. On June 7th, , — Qingdao Haier, Inc.

Send Feedback. RSS Subjects. Case study: Haier group. Wang, Xiaoying. Department of Marketing and Management Markkinoinnin ja johtamisen laitos. Global branding , Branding strategy , Traditional Western brand management , Country of origin , Chinese economy , Chinese branded company. P1 I Archive number: Archive. These are the words that customers use themselves, as opposed to a slogan dreamed up by a marketing professional. Because they worked closely together from the start, managers from all these functions were moving forward in concert, addressing possible disconnects as they arose.

The company is known for several distinctive capabilities: a precise understanding of consumer needs, especially in China and other emerging markets; the ability to rapidly innovate new types of appliances that meet those consumer needs; the management of complicated distribution networks, a skill honed in the complex Chinese market; and a high level of execution ability, including the automation of factories to deliver products to consumer specification.

These attributes have served it especially well in China, allowing Haier to outcompete more experienced appliance companies such as Whirlpool and Maytag in that country. The company first took the role of a category leader, maintaining top market share because of its reputation for quality in China. Then it became a customizer adapting its products to customer demands and a solutions provider helping consumers manage issues like water quality and home design.

Haier now sells not just home appliances but related services, adapted to consumer demand in China, and, increasingly, other markets. Haier delivers its way to play by excelling at four differentiating capabilities. Haier is now the fastest-growing provider of appliances in the world.

Since , it has held the largest worldwide market share in white goods. It has accomplished this by being a consistently coherent and capable company: staying true to its core identity as a company dedicated to solving problems for consumers, while continually reinventing itself with imagination and verve. Throughout the 30 years of his tenure, his sharp focus on customer service leadership has given the company consistency even as it propels Haier through dramatic changes.

In the earliest years, that meant bringing new levels of quality and reliability to Chinese products. Later, it involved increasingly sophisticated forms of customization and new types of services. Through its simplicity and continuity, this principle has given all employees a reliable compass with which to make decisions, even in the face of disruptive market challenges such as new technologies or new competitors. In a country that was just beginning to emerge from a Maoist mind-set when Zhang took the helm, the idea that success depended on the entrepreneurial efforts of individuals, recognized for their differences and rewarded for their achievements, was relatively unfamiliar.

Haier has thus invested a great deal, especially for a Chinese company, in training its employees and demanding innovative ideas. Despite the success it has achieved, and its willingness to stick to one core value proposition and one CEO since the s, the company has never become complacent.

Zhang established early on that changes would be a way of life, not soon-to-be-completed episodes that must be traversed. Indeed, Haier has reinvented itself at least four times. The first reinvention, in the s, was the decision to differentiate the company by the quality of its products. The second, in the s, was the adoption of consumer-responsive innovation, starting with but not limited to products for particular customer needs.

The third, which took place in the s, was the reorganization into a bottom-up structure, in which self-managing teams led decision making. The fourth, going on today, is the reinvention of Haier as a truly Internet-based company, open to the world in a way that few other companies have attempted, let alone realized. Zhang did not develop this management approach on his own. From the beginning, he displayed a fervent curiosity about management and high performance, and he studied the work of leading scholars and observers, especially eminent management writer Peter Drucker.

He took from Drucker, for example, the idea that the purpose of a business is not making money, in itself, but attracting and meeting the needs of customers. A visit to Qingdao with Zhang and his associates can take the form of a management seminar; visitors are subjected to relentless questioning on management innovations that might be of interest to Haier.

Zhang often takes his own notes, and he frequently applies the concepts to Haier — first in small experiments, and then rolled out through the company. Haier, founded in the s, was nearing bankruptcy in the early s, when Zhang brought it back to life. At that time, demand for appliances was slowing down in the West after 35 years of growth. Most Chinese families lacked basic home appliances, and the offerings from local manufacturers did not meet basic standards for quality or consumer appeal.

With their strong brands and relatively sophisticated technology the automatic refrigerator icemaker and microwave oven had recently been introduced , overseas manufacturers believed that they would have an easy time in cities like Guangzhou, Beijing, and Shanghai.

But Chinese domestic firms fiercely defended their home markets by drastically reducing prices. Most of the foreign competitors, and quite a few of the emerging Chinese manufacturers as well, could not compete. General Electric chose not to enter the China market at all because it foresaw the price war. One of the Chinese companies that won this round was the Qingdao Home Appliance Company, a small collective enterprise that had made various electronic devices, including washing machines, but had recently settled on refrigerators.

It had changed its name repeatedly over the years, but had always been located in Qingdao, a port in the Shandong province of northeastern China, midway between Beijing and Shanghai. The appetite for refrigerators was so strong in China that Haier sold just about everything it produced. The Chinese consumer in those days expected poor quality and was prepared to have any new product repaired almost immediately.

Nonetheless, the company was moribund. The factory was so run-down that workers had to be told not to relieve themselves on the floor, and they burned parts of the walls for heat. After three managing directors resigned in rapid succession, a year-old deputy manager in the company named Zhang Ruimin was asked to find a replacement. He found no acceptable candidates, and reluctantly took up the challenge himself.

But this appointment turned out to be fortuitous. Zhang was a visionary who saw that a middle class would emerge in China, a public interested not just in refrigerators, but in high-quality, branded, innovative products — made in China, but as good as or better than their Western-made counterparts. Soon after Zhang took the role of managing director, a customer wrote a letter to the factory complaining about a faulty refrigerator.

This led Zhang to one of the most famous episodes of his career. We inspected them one by one. If they had any problem whatsoever, we pulled them out. We ended up pulling out 76 problem fridges.

I had to change the perception [of our quality]: If products left the factory, they should be first rate. Zhang had his incredulous employees line up those 76 defective refrigerators in the street outside the factory and publicly smash them to bits with sledgehammers.

They all knew he could have sold them, or given them as political favors to local officials.