Haier's Internationalization Strategy: Influencing Organizational Strategy

Running Head: INFLUENCING ORGANIZATIONAL STRATEGY
Influencing Organizational Strategy
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INFLUENCING ORGANIZATIONAL STRATEGY1
Introduction
The study will be discussed on the influencing organizational strategy of the Haier. The
study will provide a clear idea regarding the internationalization strategy that the company is
following as well as modifying from the year 1990. The company follow different internalization
strategy pattern for the development of western enterprise. Haier adopted different strategy to
compete with the both Chinese companies as well as the other companies who are already there in
the global market. Therefore, it is somewhat important for the organization to adopt and change
accordingly. The change in the strategy of the company is taking place from the 1990 as they want
to globalize their product in the market.
1. What are the main features of Haier’s Internationalization strategy since the 1990s?
Answer: In the year 1984, the Haier group was established and it kept on growing for the last 20
years. The company is based on China and it is mark as the fastest growing Chinese company in
respect to the household appliance company, compare to the other Chinese brand. The company
face a lot of trouble when China entered the WTO (Haier.net 2019).
The company with the new technology adopted the Ansoff Matrix in the international
market. They introduce existing product in the new market as well as new product in the existing
market. This helps the organization to grow in the market and to earn large sum of money from the
international along with the local market. This strategy played quite well in the favour of the brand
and help them to enter other market with the popular image that they already gained from the
European market (Wang et al. 2016).

INFLUENCING ORGANIZATIONAL STRATEGY2
Fig. 1: Ansoff Matrix of Haier
(Source: Created by Author)
In Ansoff Matrix, there are four parameters which need to be taken care by the organisation
namely,
 Market Penetration: The market penetration is considered as the sale of any product or
service in a specific market and it can be measured with the help of quantity of sales. The
good is already present in that market.
In case of Haier, the company mainly deals with the home appliances and electronic goods.
There are many companies who deals with this type of product but the company is able to
penetrate the international market with the help of innovation and new technologies to
produce goods and services (Phillips and Moutinho 2018).
 Market Development: The market development is considered as the growth of the
existing product in the new market. This is generally done by the company to expand the
business. This help the company to capture the market.

INFLUENCING ORGANIZATIONAL STRATEGY3
In case of Haier, the company is a Chinese company but they expand their business in the
international market. This helps in the market development as new competitors are entering
in the market as well as expanding in it.
 Product Development: The product development is considered as the introduction of new
product in an existing market which provide additional benefit to the customers. The
modification of existing product can also be considered as the product development.
In case of Haier, they introduce cell phone in the market along with the boilers and small
home appliances which will provide benefit to the customers. This is done to expand the
market in an international level. The company also introduced freezer which help them to
earn profit from the market (Phillips and Moutinho 2018).
 Diversification: This is the introduction of new products in the new market. This will help
the organization to earn profit and capture huge market share from the new market.
In case of Haier, they introduce cell phone in the cell phone industry and that is new for the
company as they mainly deals in the home appliances. Therefore, it can be considered as
the diversification of the company in the international market.
Haier also adopted the strategy of BCG Matrix in the international market as they mainly
deals with the electronics along with the home appliances. The BCG Matrix consists of four area
namely (Vogel 2016),
 Cash Cows: In the refrigerator industry Haier possess the cash cow as they sale their
product over 100 countries all around the world competing with various competitors. The
company still earn profit by investing little effort in the refrigerator market. The market
growth rate is low with respect to the relative high market share.