Analysis of International Expansion - Haier Group

Running head: ANALYSIS OF INTERNATIONAL EXPANSION
ANALYSIS OF INTERNATIONAL EXPANSION
Name of the Student
Name of the University
Author Note

1ANALYSIS OF INTERNATIONAL EXPANSION
Answer to Question 1
Haier Group was established in the year 1984 as Chinese company which was owned
by the government with the name of Qingdao Refrigerator Co. Ltd. The company started its
operations in the industry with the manufacture of refrigerators and the technology that was
used for production was imported from Germany. The company has thereby shown huge
development in the past 26 years of its operations. The development of the company was
mainly based on the development of the new products and the investments that were made by
the company in technical research. The company presently has its operations in various
industries in the world (Andreeva and Kianto 2016). Haier has also acquired the topmost
position in various segments in the entire world. The different segments in which Haier has
been able to create the topmost position include, refrigerators in the United States, washing
machines in Iran and the air conditioners in Cyprus. The company has been successful in the
various segments of its operations with the help of the process by which it aims at
familiarizing with various brands and providing tough competition to the established brands
all over the world (Chen, Delmas and Lieberman 2015). The corporate strategy that has been
implemented by the Haier Group has been mainly driven the huge international growth of the
company in the market. The international growth of Haier has been facilitated with the help
of recognition and the awareness of the brand in the industry. This also helps the company to
meet the needs and the demands of the domestic and the international customers. This
process has been helpful in increasing the shares of the company in the market (Cohen and
Amorós 2014). The major source of the competitive advantage that has been created by Haier
in the market are consumer electronics. The name of the company is associated with the
innovative products that it offers to the customers all over the world. The company is thereby
capable of creating a huge competitive advantage in the domestic market. The research and
development based activities of Haier is of high levels. The company however demands

2ANALYSIS OF INTERNATIONAL EXPANSION
better conditions in the countries where it operates for the purpose of conducting high quality
research (Durand, Grant and Madsen 2017). The company has however encountered huge
competition on the local levels due to which it made huge investments for the purpose of
starting its operations in the international areas. The major reason behind the
internationalization of the companies is based on the various factors like the reduction of the
costs, manufacturing of high quality products and the enhanced preferences of the customers.
Haier has been able to enhance the name of its brand and improve the quality of the products
by entering the foreign areas of operations (Engert, Rauter and Baumgartner 2016). The
company has also been successful in building a name for its brand after its entry in the
various international markets. The differences that existed between the domestic and the
foreign markets of Haier was very well understood by the company during the course of its
operations. The sources of the competitive advantage have however not been same between
the domestic and the international companies (Frynas and Mellahi 2015). The company has
been able to understand the target market in a successful manner which has further led to
increase in the revenues of Haier all over the world. The entry modes that have been chosen
by Haier in various areas of its operations is different. The modes of entry used for the
purpose of global expansion have been quite different from each other. The late entry of
Haier in the global competition has increased the difficulties of the company to enter the
various areas in the world (Hill, Jones and Schilling 2014). The major factor that led to the
success of the international strategy of Haier was based on the usage of the internal strengths
for gaining the competitive position in the market. The success of the international strategy of
Haier has thereby led to the leading position of the company in the industry. The company
has been able to become the domestic leader within a short period of time. The ways by
which Haier has modified the strategies in different areas of its operations has also been a
major reason behind the immense success that has been gained by the company (Hubbard,

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Rice and Galvin 2014). This has thereby led to the successful operations of the company in
the international and the domestic markets.
Answer to Question 2
The strategies that are implemented by the Western based organizations and the
Chinese companies are quite different from each other. The companies are thereby able to
distinguish their ways of operating from each other. The organizations of the Western
countries like Australia have different operational styles as compared to the companies in the
emerging countries like China. The globalisation in the business environment has led to the
organizations to seek for opportunities of growth in the various international areas. The
companies are investing large amounts on the expansion based policies (Meyer, Neck and
Meeks 2017). The allocation of the resources in various areas has also played an important
role in the successful operations of the various multinational or the global organizations. The
process of internationalization of the organizations in the global environment has happened
quite fast and the companies have been successful in attracting the customers from various
parts of the world. The process of the internationalisation and the other activities of the
company have however been quite different in case of the Chinese and the Western
organizations (Michael, Storey and Thomas 2017). The Chinese organizations have been
quite successful in the international operations for the last few years. A company like Haier
has been able to gain huge success in the international operations in spite of the late entry into
the competition. The company has been able to create its competitive advantage in the market
with the help of the various innovative products that have been manufactured by them in the
market. China has been attractive area for the international expansion of the firms (Morschett,
Schramm-Klein and Zentes 2015). However, in the recent business environment the Chinese
companies are able to expand their operations and make significant investments in various
countries which also includes the various developed countries of the world. Haier has been