Case A: Haier Group - Internationalization Strategy

Running head: CASE A: HAIER GROUP
Case A: HAIER GROUP -Internationalization Strategy
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1CASE A: HAIER GROUP
Executive summary
It has been a long while since Haier is using “Global” as their internationalization strategy. It
was a bit unconventional strategy and was fairly different from many other Western Enterprises.
The strategy was a huge success in the United States of America. However, they could not repeat
the same performance in Europe, Japan and in many emerging countries. The main purpose of
the study was to discuss how Haier has managed so far its international business. Indeed, no
other Chinese company was equally successful when Haier entered the international market.
Despite the fact that Haier has a tough run in Europe and Japan it is still considered a successful
company. Now, with "Ren" the new management paradigm, they are going to empower
employee through increased autonomy and decision-making rights. The study identifies that this
new management model could help Haier to increase its customer satisfaction rate.

2CASE A: HAIER GROUP
1. Introduction
Doing business locally is hugely different from that in foreign places. Factors affecting
the business though remain the same everywhere; however, the level of severity varies from
place to place. Doing business in countries around the globe is never easier and often meets the
range of challenges. Challenges can be related to the political state of a country or the economic
state. This study also revolves around a business operating at a global level. The business in
focus is “Haier Group”. Haier is the first Chinese company to receive the ISO: 9001
certifications (Pallas 2016). It is also the first Chinese company to have attained huge success
outside China despite following a very unconventional internationalization strategy rarely
followed by other major companies. Haier follows “Global" as its internationalization strategy.
However, various major companies follow "Multi-domestic” instead of “Global” such as Nestle
(Van Tulder 2015).
The main purpose of this study is to analyse the internationalization strategy of Haier and
compare this with those of Western Enterprises. The study identifies whether the
internationalization strategy of Haier is successful. Moreover, the study analyses the
management system of Haier.
2.0 Body
This section covers three purposes as highlighted in the introductory section of this task.
2.1 Haier’s Internationalisation Strategy and Differences against Western Enterprises
Internationalization Strategy:

3CASE A: HAIER GROUP
Internationalization in the domestic appliance industry has long been a topic of discussion
and debates for scholars, industry experts and so forth. It was being thought that an economy of
scale has only benefitted some of the leading domestic appliance brands in the international
market. Some of the domestic appliance brands to have performed well in the internal market are
Indesit and Merloni (Hertzmann 2016). With times the perceptions kept changing as many
believed that standardised models are highly productive (Li, et al., 2016). In the 21st century, the
home appliances industry was dominated by some of the leading multinational appliances brands
like Samsung and LG (South Korea), Whirlpool (the US), Electrolux (Sweden) and Bosch-
Siemens (Germany). Some major and highly reputed domestic players were Maytag and General
Electric (the US), Haier, Hisense Kelon, and Wuxi LittleSwan (China) and Merloni (Italy).
However, some of the major national or regional players either sold out to multinational
companies or internationalized. For example, Whirlpool acquired Maytag and Electrolux
acquired GE’s appliance division (Hbr.org 2019).
Haier started entering foreign markets in a much-unorganized manner in between 1992
and 1997 (Lewin, et al., 2017). The company entered various international markets. In South-
East Asia especially in the Philippines, Malaysia and Indonesia, Haier did joint ventures with
local business entities and acquired an understanding of the market, its culture, the consumer
behavior and so forth. Haier initially sold refrigerators and air conditioners. Haier entered the US
market by initially importing compact refrigerators to Welbilt Appliances. This was followed by
wine coolers. This means products were being sold under a retailers’ brand. Haier developed a
large chain of sales with the help of popular retailer brand like Wal-Mart. In the year 1997, Haier
started to import its products to Germany, Italy and the Netherlands. Products were imported and