Haier Group's Internationalisation Strategy: A Case Study Analysis

Case study analysis HAIER GROUP - Internationalisation
Strategy
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Table of Contents
Introduction................................................................................................................................3
1. What are the main features of Haier’s internationalisation strategy since the early 1990s?
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2. How does Haier’s internationalisation policy vary from the outline of international
growth typical of Western initiatives?.......................................................................................6
3. How effective has Haier’s internationalisation policy been and why?..................................9
4. What are the main structures and specificities of Haier’s management system?.............11
In what ways do Haier’s philosophies and approaches of management vary from those
deployed by Western companies?............................................................................................11
What lessons might be drawn by a) other Chinese companies and b) by Western enterprises?
..................................................................................................................................................12
Conclusion................................................................................................................................13
Reference list............................................................................................................................14
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Introduction
The strategic conversion of the bankrupt Qingdao General Refrigerator Factory into the Haier
Group, one of the world’s largest and affordable household appliance organizations, is a
classic example, which symbolized China’s development to become one of the globe’s
leading manufacturing centre as well as main source of FDI (Foreign direct investment)
(haier.net, 2018). Up till now, the success story of Haier is also an atypical of China’s
manufacturing development. By the year 2015, it had attained an international position,
which had eluded most of the other domestic and state-owned organizations. With this
success, Haier has become now one of the leading international brand, a frontrunner in terms
of product design, innovation and others. This study will indulge in investigating the
background details of this industrial success and strategic management of Haier.
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1. What are the main features of Haier’s internationalisation strategy since the
early 1990s?
Haier has started its internationalization strategies in, what happened to be, a random fashion.
The main executive team, between 1992 and 1997 enlisted a number of foreign markets to be
invested in (Haier.net, 2018).
The main internationalisation strategy of Haier was joint ventures with the local companies in
Malaysia, Indonesia and Philippines. They have initially decided to manufacture and sell air
conditioners and refrigerators. After that, the marketing team had decided to develop business
in US (Grant, 2016). There Haier began supplying compact electronic products like
refrigerators to an importer named Welbilt Appliances. This company initially sold the
compact products under the retailer’s brand. Later they started to sell products under the
Haier brand. This internationalisation strategy has helped this company to enlarge their
compact refrigerators business with wine coolers. Sales were then concentrated on a large
chains, specifically with Walmart (Glowik, 2016).
On the other hand, in 1997, as their internationalisation strategies began to stand out in the
global market they started exporting appliances to Germany, Italy and in other countries for
sale by importers under their own brand name (Liu and Li, 2002). This initial internalisation
strategy has produced effective results by increasing the sales in Germany, where Liebherr
was its sales distributor and agent.
Figure 1: Framework for internationalisation
(Source: Liu and Li, 2002)
The main objective behind this internalisation strategy was not to seek export income through
exploiting Haier’s low manufacturing costs in their domestic country but was to create an
international brand. This objective is partially related with the national pride addressing the
statement “China ought to have globally recognized brands of its own”, as well as
challenging the capabilities of the company to develop excellence of manufacturing, product
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