University Case Study: Haier Group's Innovation and Market Expansion

This case study analysis examines the growth strategy of the Haier Group, a leading global white goods manufacturer. The paper explores the company's journey from a small Chinese factory to a multinational corporation, focusing on critical factors contributing to its success, including diversification, global expansion, and networking strategies. It addresses the major challenges Haier faced operating in the USA, such as managing overheads, competition, regulation, and staffing. The analysis also evaluates Haier's reasons for foreign market expansion, including increasing customer base, forming a global brand image, and optimizing profits. The study provides innovative recommendations for Haier's future growth, emphasizing competitive pricing, sustainability, and regular competitive analysis. The paper concludes with a detailed critique, addressing case questions and offering insights into emerging market innovations and strategies.

Running Head: CASE STUDY
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Innovation of New Market
Case Study Analysis
(Student details :)
5/6/2019

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Contents
Case Study Analysis: The Growth Strategy of Haier.................................................................2
Introduction................................................................................................................................2
Case Study Analysis: The Haier Group.....................................................................................2
About the Haier Group...........................................................................................................2
Critical Factor in the growth of the Haier Group...................................................................2
Major challenges for the Haier Group to operate within USA..............................................4
Managing overheads..........................................................................................................5
Responding to enhanced competition................................................................................5
Regulation and Compliance...............................................................................................5
Uncertainty.........................................................................................................................5
Finding the suitable staff....................................................................................................5
Reasons why the Haier Group got engaged into foreign market expansion..........................5
To increase Customer Base................................................................................................6
To form global brand image...............................................................................................6
To increase and optimize profits and revenue....................................................................6
Innovative recommendations for future growth of Haier Group...........................................6
Conclusion..................................................................................................................................6

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Case Study Analysis: The Growth Strategy of Haier
Introduction
This discussion is based on analysing a case study over an innovation in modern market. To
do so, this paper will focus on criticising a case study in order to highlight emerging markets.
In this context, case study of the Haier Company is going to analyse in this paper. The case
study is on the growth strategy of Haier Group (MGMT, 2016). In this way, the case study
analysis is going to cover several problems covered into seminars while identifying critical
strategic success elements for the case. Thus, with the help of a critique analysis this paper is
going to answer four major questions related to the case study. In addition, this paper will
offer a detailed analysis over the corporate strategy, which the company has been adopted for
becoming a global brand.
Case Study Analysis: The Haier Group
About the Haier Group
Haier Group is the globe’s greatest producer of white goods and it is a Chinese company
having the full name Qingdao Haier. Within only 30 years, the company has grown up from a
single worn-out manufacturing factory in Qingdao, which is Chinese city to being a MNC
(multinational company). The company is having a global market share within white goods of
10.2 % in 20143 while having more than 60,000 employees (MGMT, 2016).
Hence, it is Chinese collective international consumer electronics as well as home appliances
firm having major headquarter in Qingdao, China. The company designs, manufactures
develops, and sells products such as air conditioners, computers, mobile phones, microwave
ovens, refrigerators, washing machines, televisions and many more. The Haier group is not
only an original brand but its acceptance within the global market is paramount (Zhao et al.,
2016).
Critical Factor in the growth of the Haier Group
In this context, while people of the Western globe think of white goods brands, most of them
often think of key American manufacturers like Whirlpool, GE or maybe the South Korean
LG Corporation and the German company Bosch (MGMT, 2016). Yet, surprisingly the

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globe’s greatest producer of white goods is a Chinese company known as Qingdao Haier
Group. Hence, here we are going to discuss the main factors behind the growth of the Haier
group being world’s topmost white goods manufacturer (Herring & Roy, 2008).
For overcoming the competition, the Haier Group had acquired total 18 companies by 1997.
Hence, apart from a wide range of white goods, the company was now making consumer
electronics like mobile phones, televisions, and personal computing systems to become
popular and acquire reputation among global consumer market (Herring & Roy, 2008).
Moreover, the diversification strategy of the company emerged Haier an important player
within the Chinese market for mainly white goods as well as other products. Later then, the
company’s success was clear in the year 1998 when its sales surpassed RMB 14.29billions.
With the help of diversification of the Haier, it had reached at impressive market shares in
China (MGMT, 2016).
Source: (MGMT, 2016)
On the other hand, the key factors and capabilities, which had helped Haier becoming a key
player in the international market for white goods, were completely different from those
capabilities needed to flourish in the market designed for pharmaceuticals (Amit & Zott,
2012). In this way, to become a global white goods manufacturer the company has adopted
following strategies as the key factors of its growth and success in an international market:

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 In the turnaround phase during 1984-1985, the company did not take it as a negative
feedback but it has taken it as a challenge for the future growth (Johnston & Marshall,
2013).
 Haier utilised the diversification phase in between 1991-1998 while applying the
diversification strategy in order to expand their image and business worldwide.
 Later then, the Haier Group utilised the global expansion strategy with the help of
entering into international market. For an example, opening production facilities in
countries like Indonesia, Malaysia, Philippines, Jordan, Pakistan and many more
helped the company to become a leading white goods manufacturer (MGMT, 2016).
 In this way, after the company is global brand strategy worked out, they adopted the
networking strategy while restructuring of the entire international business. For
restructuring, the Haier Group has started reducing their workforce through cutting
more than 16,000 jobs. Hence, in the year 2014 the Haier Group has achieved the
biggest share of the international market within white goods with 10.2 % (MGMT,
2016).
Source: (Herring & Roy, 2008)

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Major challenges for the Haier Group to operate within USA
In general, MNCs face many operational, managerial challenges when expand their business
worldwide. These challenges can be uncertainty, changed working environment, new
regulation, and compliance, and most importantly responding to increased competition
(Pontiskoski & Asakawa, 2009).
In this way, every MNC while expand and operate into a new international country and
business market then face the all above-mentioned challenges (Oke et al., 2009). Likewise,
when the Haier Group has expanded their business into the USA, then the company faced
following major challenges in terms of operation:
Managing overheads
Managing overheads in the form of admin expenses, utility charges, insurance, or rent was a
major challenge in front of the Haier Group while entering into USA. This challenge of
excessive overheads can easily be damaging while not managed timely, hence Haier has
managed this challenge effectively (Amit & Zott, 2012).
Responding to enhanced competition
When the Haier Group entered into the USA market, then there were so many well-
established white goods manufacturers present, which raised competition for the new entering
firm into the electronics business (Dodgson, 2018).
Regulation and Compliance
As we know that Haier is the Chinese company and hence when Haier entered into the USA
nation, they face very new regulation and compliance. Therefore, the changed regulation and
compliance pose the main challenge in front of Haier to operate in the USA (Herring & Roy,
2008).
Uncertainty
The uncertainty of the business operations into new country and business market has played a
major role of operating challenge in the USA. Hence, for addressing this great challenge the
Haier Group set short-term and long-term goals (Breznitz & Murphree, 2011).

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Finding the suitable staff
On moving to USA from the China, the company faced a major challenge of finding suitable
staff and employees for an effective and efficient working into an international market while
preserving their pre-existing image and reputation (Di Serio et al., 2011).
Reasons why the Haier Group got engaged into foreign market expansion
There are so many reasons for which the company has entered into foreign market of white
goods for its expansion and growth. The reasons are as follows:
To increase Customer Base
For increasing the customer’s base of the company, Haier group has decided to enter into
foreign market for an expansion (MGMT, 2016).
To form global brand image
The most important advantage of the global brand image management is that sales, profit, and
growth on local level are increased. For an example, a customer who is going to buy new a
washing machine will definitely go for an international brand rather than a national or local
brand of the electronics goods. In this way, it is clear why Haier Group has adopted the
internationalization strategy for its growth and success into white goods manufacturing
(Pteronzio, 2017).
To increase and optimize profits and revenue
One of the important reasons why networking as well as global brand strategies have been
utilised by the Haier group is to enhance as well as optimize revenues and profits of the firm
largely (Zhao et al., 2016).
Innovative recommendations for future growth of Haier Group
In this context, from the above analysis of the given case study it has been clear that Haier
Company is growing like nobody else in this field with its very well formed growth strategies
in the international market (Johnston & Marshall, 2013). Still, there is always an opportunity
to grow more from the perspective of sustainable business in future. Therefore, few
innovative recommendations are as follows:
 The Haier Group should take care of competitive prices as competition is rising day-
by-day in the global market with the increased technologies.

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 The Haier Company should be indulged into more sustainability oriented activities
and events for ensuring a sustainable future for the company (Herring & Roy, 2008).
 The company should get involved with non-profit organizations, for sponsoring,
promoting, and marketing itself.
 The Haier Group should practice a competitive analysis on a regular as well as
country basis so that internal and external business environment can help the firm for
further developing while working on their weaknesses (Hojnik & Ruzzier, 2016).
Conclusion
In conclusion, the case study of Haier Group has been analysed with a detailed critique of the
case. While studying the different growth strategies of the company, this paper has also been
analysed the different aspects of the company’s growth while considering key factors of its
international market growth. In addition, the case questions have been addressed successfully
so that Haier Group’s business growth strategies can be analysed in detail for finding its
future opportunities. Additionally, the case study has been analysed from the perspective of
emerging market innovations and strategies based on them. While considering the Haier
Company’s present situation and marketplace into global white goods market, this paper has
also provided some useful innovative recommendations for its sustainable future.
References
Amit, R. & Zott, C., 2012. Creating value through business model innovation. MIT Sloan
Management Review, 53(3), pp.41-49.
Breznitz, D. & Murphree, M., 2011. Run of the red queen: Government, innovation,
globalization, and economic growth in China. China: Yale University Press.
Di Serio, L., De Oliveira, L.H. & Siegert, S., 2011. Organizational Risk Management: A Case
Study in Companies that have won the Brazilian Quatity Award Prize. Journal of technology
management & innovation, 6(2), pp.230-43.
Dodgson, M., 2018. Technological collaboration in industry: strategy, policy and
internationalization in innovation. London: Routledge.
Herring, H. & Roy, R., 2008. Technological innovation, energy efficient design and the
rebound effect. Technovation, 27(4), pp.194-203.

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Hojnik, J. & Ruzzier, M., 2016. What drives eco-innovation? A review of an emerging
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Johnston, M. & Marshall, G., 2013. Sales force management: Leadership, innovation,
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