Haier Group: Company Case

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Introduction

Most Americans pronounce it as hair, while others make it sound like higher. The latter is more like it, for Haier Global occupies a higher place in the worlds electronic and home appliances goods and products. This Chinese company with a global presence has a long history, from a Qingdao-based, state-controlled, loss-making, and almost bankrupt company in the 1980s to the worlds fourth-largest manufacturer of home appliances. This turnaround phenomenon has been made possible by the visionary and strategic management techniques of Zhang Ruimin, the companys chief executive officer. This man assumed leadership in this company in 1984, as a young manager, and through his disciplined management techniques, he turned it into one of Chinas jewels in the global arena.

Haier Group Company: Going Higher

Haier Group Company appears to have resources and capabilities that make it move higher and higher in the market. Some of the capabilities are distinctive, while others are subtle and not discernible by a casual observer. Some are also common in the industry, making them be not so unique to Haier Group Company. Capabilities, according to Coulter (2008, p37), stand for the companys core competitiveness. This means that they are the factors that make the company stand out from the others, giving it an edge in the market. If the capabilities are properly developed and distinctive to the company, they have the potential to take to greater heights, and this is no different to Haier Group Company.

One of the capabilities is human resources. At the helm of the company is one of Chineses finest business executives, Zhang Ruimin (Haier Global, 2010, para. 3). This man has been ambitious all along, and his persistence has made this company one of the worlds best in the market. This can be viewed as a distinctive capability. He has an MBA from a Chinese university, and this, combined with his knowledge of global business trends, makes him competent in coming up with strategic policies that address the uniqueness of Chinese culture and market while at the same time being adaptable to the global market.

Other capabilities of the firm include its financial capital. The annual revenue for the company is estimated to be thirteen billion dollars (Engardio & Arndt, 2006, para. 3). This may not be as distinctive, but it is one aspect of the company that Zhang can use to make it move to a higher place. The company can make this capability distinctive by turning it into a sustainable factor, ensuring that the revenues do not fluctuate. This can be done by improving the quality of the products and turning Haier into a reputable global brand.

David (2009, p. 35) is o the view that every business has strengthed and weaknesses, and it is up to the strategic managers to rectify the weaknesses while at the same time making use of the strengths to take the business to new levels.

One of Haier Group Companys strengths is the sheer number of countries where it has operations. It exports to more than 160 countries in the world (Raskin, 2009, p. 92). More than 58,000 sales outlets all over the world are dedicated to the promotion of Haiers products (Raskin, 2009, p. 92). This makes it possible to increase revenues by increasing sales. It is also a recognizable brand, having been ranked as the third most popular brand in China, ahead of coca-cola and behind Motorola. It is also recognized as one of the worlds most popular brands (Engardio & Arndt, 2006, para. 5). This makes it possible to attract and retain a profile of loyal customers, increasing the potential of the company to grow.

But Haier, despite all the strengths and others highlighted above, has some weaknesses that, if not taken seriously, can derail the progress thus far made. For example, the products of the company are associated with other Chinese products, which are taken to be low-end, low-quality products (Raskin, 2009, p. 93). It is associated with the production of refrigerators and other appliances ranging from two hundred to three hundred dollars. This reputation can make it the brand harder to penetrate high-end markets for example in the United States.

The company can prevent its strengths from becoming weaknesses by several methods. First, Zhang should conduct an internal analysis to map the strengths, while at the same time identifying the weaknesses. The company will then come up with strategies to ensure that it exploits the strengths while at the same time keeping at bay the negative effects likely to be incurred from the weaknesses.

Zhang Ruimin should adopt a capabilities assessment profile in carrying out an internal analysis of the firm to map the strengths and weaknesses. This is because the most important aspect for the company now, given the fact that it has the ambition to go global, is to identify the capabilities that it has for it to be able to compete in the global market. The distinctive capabilities, such as the high quality of products, will be identified and developed.

Zhang has several goals that he has set for the company in the future. One of the most important and notable of these is the intention to turn Haier into a reputable global brand (Haier Global, 2010, para. 6). This is to put it at par with other brands such as coca-cola and Microsoft. This is the right direction for the company to go at this juncture, and it is well-timed. This is given that for a successful global venture, a company must have developed a strong home base. This will ensure that it enjoys economies of scale and have a platform to test their products before going global (David, 2009, p. 45). Haier has attained all this, having established itself in the Chinese market.

The company needs to strengthen its marketing strategies if it is to go global. It can do this by exploiting the capabilities and resources at its disposal. For example, it can adopt online marketing, whereby customers around the world can place orders and have their goods delivered. This is given that the company must take advantage of the developments in information technology for it to remain relevant and have a global face.

Conclusion

Haier Global operates more than forty-six factories in different parts of the world. It employs more than 50,000 people in these factories. This is up from eight hundred employees in the 1980s. It is one of the worlds largest producers of home and electronic appliances. Zhang Ruimin, the CEO, seeks to make this into a global brand, and this is the current dream of the company. To do this, the company must carry out internal and external analysis to identify its strengths, weaknesses, opportunities, and threats. The CEO will then make strategic decisions based on this.

Reference

Coulter, M. (2008). Strategic Management in Action. 4th ed. Upper Saddle River, NJ: Pearson Prentice Hall.

David, Fred (2009). Strategic Management Concepts and Cases, 12th ed. Upper Saddle River, NJ: Pearson Prentice Hall.

Engardio, P. & Arndt, M. (2006). Haier: Taking a brand name higher. BusinessWeek. 

Haier Global. (2010). Haier Global Company. Web.

Raskin, B. L. (2009). Strategic management in practice: A case study of Haier Group Company. New York: McGraw-Hill.

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