Haier's US Strategy: GE Appliances, Rendanheyi, and Turnaround

This case study examines Haier's strategic entry into the US market through the acquisition of GE Appliances. It explores the cultural adaptation, strategic approach, and customer-centric values Haier implemented to succeed. The analysis covers the restructuring of the organization, the execution of the Rendanheyi model, and its impact on GE Appliances' turnaround. The study highlights the advantages Haier leveraged, the changes implemented, and the successful transfer of the Rendanheyi model, emphasizing the importance of zero distance to users and employee entrepreneurship. It also discusses the pre-acquisition state of GEA, Haier's subsequent turnaround efforts, and the overall impact of Rendanheyi on the company's performance and innovation capabilities. The case provides insights into Haier's platform organization model and its ability to adapt to the US market, fostering a user-driven, constantly innovating ecosystem.

Running Head: BUSINESS LEVEL STRATEGY / GENERIC STRATEGIES
Business level Strategy / Generic Strategies
Student’s Name
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Author’s Note

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BUSINESS LEVEL STRATEGY / GENERIC STRATEGIES
Table of Contents
Culture.............................................................................................................................................3
Strategy............................................................................................................................................3
Customer Value...............................................................................................................................4
Structure...........................................................................................................................................5
Execution.........................................................................................................................................5
Summary..........................................................................................................................................5
Reference List..................................................................................................................................6

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BUSINESS LEVEL STRATEGY / GENERIC STRATEGIES
Culture
In the case study, it is evident that Haier as well as GE Appliances have sought to adapt
to the condition of changing times as also their customer preferences. The mutual statement of
business had been agreed up on between the GE appliances as well as Haier because both the
organizations have been striving to achieve significant synergies. The culture of Haier
amalgamated to deliver a steady ‘Internet Enterprise’ by means of which they are willing to
foster their business based on cultural innovation as well as the top preferences of the customers.
in this respect, it is worth mentioning that GE Appliances have a great base of employees as well
as an enhancing customer base (Kanter and Cohen 2018). Hence by the dint of this
collaboration, they are willing to embrace the advantages as well as peculiarities of the digital era
so that they are offered the best possible choices to the customers.
Analyzing the pros and cons of this business merger, it can be emphasized that this
merger will turn out to be largely positive for the employees, customers, shareholders as well as
the business partners, who have been experiencing an excruciating growth in the US as an
outcome of the recently implemented organizational growth strategy of Haier. As referred by
Zhou and Jing (2018), the talented management team of the GE appliances will help to foster the
growth of the joint enterprise, thereby working together closely in order to develop the position
of being a truly global leader in terms of designing as well as manufacturing for innovation in
high quality home appliances.
Strategy
The strategy that is to be fostered that is terms of the business is that Haier and GE is to
be involved in this customer faceting business as strategic collaboration rather than a business

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BUSINESS LEVEL STRATEGY / GENERIC STRATEGIES
undertaking. Haier have been preserving long drawn global aspirations, thereby establishing
manufacturing business in various parts of Europe including South Carolina. The first step of
merger had been the purchase of Fisher and Paykel appliances situated in New Zealand some
years ago. In line with this strategy, now they have owned the GE line of appliances (Jiang, Hu
and Wang 2019). Such collaboration is expected to bring about a disruptive element in the home
appliances industry. However, the organization is also interested in an industrial makeover and
as an account of this strategy they are thinking of penetrating the less explored markets with a
stronger brand name and that is the reason why the real essence of success in consent with the
Haier deal is the platform organization model that the organization is attempting to develop as an
outcome of their strategy of merger as well as acquisitions.
Customer Value
The customer faceted business policy of the organization is plausible. The new
organizational focus features three main aspects as per the customer policy of the organization is
concerned. The three main factors are zero distance, disruptive networking as well as
decentralization. Zero distance refers to the establishment of relationship between customers as
well as enterprise. This is one of the few organizations which will be able to witness the entire
process of manufacturing their appliances and that is possible only by means of enabling of mass
communication. Decentralization implies that all the organizational stakeholders will share the
responsibility of development of more product ideas. Lastly, as per the opinions of Burkitt,
Lublin and Mattioli (2016), it can be referred that disruptive networking refers to flattening the
organization as well as distribution of the resources all over the organization rather than
consolidation of control from the centralized quarters.

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Structure
The Haier team of management has accumulated from GE their most popular Six Sigma
discipline of quality control as in the 1990s. After the assimilation of Haier and GE Appliances,
there has been a breakdown of the large stakeholder groups of the merged association. The large
base of employees comprising of 60000 employees has been broken down in to small business
units numbering over 1000 (Yang 2016). The organization is now following an overhaul
structure of governance structure, performance as well as payment system. It is evident in the
public discourses of the CEO of Haier that the organization has been a linear relationship
between the various working departments which has now been dissolved in order to develop
several nimble business units in order to respond to the changing customer needs.
Execution
The linear management incorporating the various work departments incorporating
research and development, production, sales and others have been broken down in order to
develop a broken down infrastructure so that the smaller and better cabled business units are able
to cater to the business in a better way. As an outcome, the organization has also removed their
middle management team of 12000 members which helped them in cost management (Yang
2016). This reduced investment scheme helped the organization to deliver more in terms of
financial rewards for the employees.
Summary
In summarization, it can be referred that the organization has set a collateral partnership with GE
Appliances so that they can utilize their platform business organization model in order to deliver
maximum value and enjoy benefits of their business in to the US.

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Reference List
Burkitt, L., Lublin, J.S. and Mattioli, D., 2016. China’s Haier to Buy GE Appliance Business for
$5.4 Billion. The Wall Street Journal, 15, p.2016.
Jiang, S., Hu, Y. and Wang, Z., 2019. Core Firm Based View on the Mechanism of Constructing
an Enterprise Innovation Ecosystem: A Case Study of Haier Group. Sustainability, 11(11),
p.3108.
Kanter, R.M. and Cohen, J., 2018. Haier in the US: Transforming GE Appliances.
Yang, Y.A.N.G., 2016. The Maker-Platform Eco-system Model in Internet Environment: A Case
Study of Haier. DEStech Transactions on Economics, Business and Management, (icem).
Zhou, L. and Jing, R., 2018. Management After Acquisition Inside Multinational Companies
from Emerging Economies: The Haier Experience. In Business Despite Borders (pp. 213-224).
Palgrave Macmillan, Cham.