Researching Haier’s global operations and strategic ventures over the past sever

Question

Researching Haier’s global operations and strategic ventures over the past several years, answer the following:

Characterize Haier and its industry.

Discuss Haier’s entry timing, location selection, and modes of entry in light of the module’s concepts and vocabulary.

Was Haier able to leverage differences between its home and foreign institutional environments?

What are the strategic imperatives for action for Haier to successfully balance its international expansion with its need to deepen its home country competitiveness?

Explanation / Answer

Haier’s is a China based multinational company specializing in production of home appliances and consumer electronics. Haier is an international electronics group with more than 70 thousand employees in worldwide. Haier is one of the most successful Chinese companies internationalizing in global markets. They are third largest producer of home appliances and consumer electronics in the world and first in China. With their high quality of products they have good brand reputation and product differentiation. This is most important factor to their business success as they spend good portion of money for research and development of the products. Customer satisfaction is their major focus as they have many distribution channels for this purpose.

Haier’s entry timing, location selection, and modes of entry are different from the common pattern of the other multinational companies trying to enter in international market. Haier’s strategy in exporting is like a competitor who does not follow any formal internationalization models and routines. They follow first difficult, then easy principle. Haier first entered into the developed economies by directly exporting to Europe, Japan and US markets, to obtain prestige and to establish their brand. By using this strategy and building a highly desirable industrial image for their quality products enabled the company to compete globally. They follow the mix strategy of direct export, joint venture and through FDI into an international market. They focus on difficult market first and start with some different and innovative product and used local staff to establish the business.

Haier is able to leverage differences between its home and foreign institutional environments. In home market they project them self as a home company and focus on innovative product strategy with continuous innovation and give high priority to the quality product and satisfied customers. In global market they focus of continuous brand building initiative, the product quality, adaptability and flexibility in approach. In the international market they rely more on the local staff for the brand building initiative and customers dealing.

Haier is the leader in launching full-scale operations and participating in the globalization process. Haier’s international strategy to compete with world’s major multinational companies and the competition is the key driver as competitive-oriented foreign market entry is the major inspiration for them. Haier did not follow any set rules and implemented its survival strategies very flexibly both in its exporting and FDI. It follows its customer timely, meets competition bravely to build a strong market position and exchanges threat and finally shapes the competition. Going head-to-head against experienced international companies, they also compete with their Chinese counterpart and try to focus on the principals of their early success in the domestic market that are innovative product strategy with continuous innovation and high priority to the quality product and customer satisfaction. They are still leader in domestic market and giving tough completion to domestic as well as international market.

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