ISMS MBA CASE STUDY PAPERS - Analyse the Haier case and identify significant issues
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Sales and Distribution Management
Case 6 :- Haier Brand
Haier is the world’s 4th
largest white goods manufacturer and one of China’s Top 100 electronics and IT
companies. Haier has 240 subsidiary companies and 30 design centers, plants and
trade companies and more than 50,000 employees throughout the world. Haier specializes in technology research,
manufacture, trading and financial services. Haier’s2005 global revenue was
RMB103.9 billion (USD12.8 billion).
Guided
by business philosophy of CEO Zhang Ruimin, Haier has experienced success in
the three historic periods – Brand Building, Diversification and Globalization.
At the 21st anniversary of founding of the Haier Group December 26,
2005, Haier announced its 4th strategic development stage of Global
Brand Building. In 1993, Haier brand was officially recognized as a famous
brand and in 2005 valued at RMB70.2 billion. Since 2002, Haier has
consecutively been ranked first in the row of China’s most valuable brands for
manufacture of 15 products, including refrigerators, air-conditioners, washing
machines, televisions, water heaters, personal computers, mobile phones and
kitchen integrations. Haier was ranked first of China’s Top 10 Global Brands by
China State Bureau of Quality and Technical Supervision (CSBTS) for
refrigerators and washing machines. On August 30, 2005, Haier was ranked 1st
of China’s Top 10 Global Brands by the Financial Times.
Haier
has been widely recognized as a leader of 9 products in terms of domestic
market shares and the 3rd player of 3 products in the world market
and world-class company in the fields of home integration, network appliances,
digital and large-scale integrated circuits and new materials. Haier has long
attached significance to innovation in satisfying the demands of worldwide
consumers and realizing win-win performance between Haier and clients. Haier
has currently obtained 6,189 patented technology certificates (819 for
inventions) and 589 software intellectual property rights. Haier has hosted and
taken part in modification of about 100 China’s technological standards. Haier
invented technology, incorporated in the Safe Care water heaters and dual-drive
washing machines, has been proposed to the IEC Criteria.
Haier’s
“OEC”, “Market-chain” and “individual-goal combination” management performances
have been recognized worldwide. Haier’s experiences have also been introduced
into case studies of business mergers, and to financial management and
corporate cultures of many foreign educational institutes, including Harvard
University, University of Southern California, Lausanne Management College, the
European Business College and Kobe University. Haier’s “Market-chain”
management practice has also been recommended to the EU for Case Studies, and
its “Individual-goal combination” management concept has been recognized by
worldwide management researchers as a feasible solution of commercial over
stocks and accounts overdue.
Facing
fierce global market competition, Haier has launched the global brand building
strategy and updated the spirit, “Create resources, worldwide prestige” and
work style “Individual-goal combination, swift action and success”, with an aim
to gain global recognition and sustainable development.
Haier
is an example of how an Asian company can build a brand and take it beyond its
national market. Haier brand which is built on quality and a commitment to
offer innovative products at a competitive price, exports to over 150 countries
around the world, has 13 factories spreading from Philippines to Iran to the US
and recently become the no. 1 refrigerator maker in the world, overtaking Whirlpool.
Haier
traces its history back to the Qingdao General Refrigerator factory, which was
founded in 1958 as a cooperative to repair and assemble electric appliances.
Till Chinese entrepreneur Ruimin Zhang took charge of the factory in 1984, the
company struggled with its quality and incurred huge losses. Haier attracted
tremendous publicity when Zhang smashed faulty refrigerators with a
sledgehammer, to send out a message about his commitment to quality. Today,
Haier commands approximately over 30% share of the Chinese market in white
goods and had revenues of US $9.7 billion as of 2003.
True
to that event, Haier has built its brand on quality. Haier’s strategy has been
to establish a leadership position in the domestic market before venturing into
global markets. Unlike most players who concentrate on the low end of the
market by offering cheap products, Haier has focused on offering innovative
products at a competitive price and the brand is starting to see results. A
case in point is that Haier is the leading brand in the US in mini-refrigerator
category.
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| ISMS MBA CASE STUDY PAPERS - Analyse the Haier case and identify significant issues |
Haier’s
commitment to quality and innovation is evident by the 18 international product
design centers that it has established in Los Angeles and Tokyo which are in
turn support by production facilities in Us, Japan and Italy.
Though
it is common to see charismatic CEOS such as Sir Richard Branson, Steve Jobs
and Bill Gates leading the brands in the western world, it is hardly the case
in Asia. Many Asian executives shy away from publicity. Ruimin Zhang has set an
example to many Asian companies about how the CEO can take charge of the brand
and be the chief brand ambassador. Zhang’s aggressiveness to build his brand,
his commitment to quality and his business acumen has attracted much deserved
global accolades.
Ruimin
Zhang was placed nineteenth among the twenty-five most powerful people in
business outside the US by Fortune magazine in 2003 and Haier was ranked the
most admired Chinese brand in 2004 by a Financial Times/Pricewaterhouse Coopers
survey.
Questions
1.
Analyse
the Haier case and identify significant issues.
2.
Discuss
Haier’s branding strategy.
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