University Strategic Marketing Report: Analysis of Haier's Strategies

This report provides a comprehensive strategic marketing analysis of Haier, a multinational organization specializing in electronic household appliances. It begins with a company background and then delves into a value chain analysis, examining inbound logistics, operations, outbound logistics, marketing and sales, service, infrastructure, human resource management, technology development, and procurement. The report also includes a detailed competitor analysis, differentiating between direct (Videocon, Hitachi, Target Store) and indirect (Symphony) competitors. Furthermore, it analyzes customer trends and challenges faced by Haier, followed by an evaluation of growth strategies using directional strategies, the Boston Consulting Group Growth Share Matrix, and Ansoff’s Growth Matrix. The report then discusses positioning strategies, customer value creation, the product life cycle, branding, innovation, and social and ethical strategies. The analysis offers a detailed overview of Haier's strategic approach to marketing and business development, emphasizing the importance of adapting to customer demands and maintaining a competitive edge in the global appliance market. Desklib provides access to similar solved assignments and resources for students.

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STRATEGIC MARKETING
Table of Contents
1.0 Introduction...........................................................................................................................................4
2.0 Company Background...........................................................................................................................4
3.0 Value Chain Analysis..............................................................................................................................5
3.1 Inbound Logistics...............................................................................................................................6
3.2 Operation..........................................................................................................................................6
3.3 Outbound Logistics............................................................................................................................6
3.4 Marketing and Sales..........................................................................................................................6
3.5 Service...............................................................................................................................................7
3.6 Infrastructure.....................................................................................................................................7
3.7 Human Resource Management.........................................................................................................7
3.8 Technology Development..................................................................................................................7
3.9 Procurement......................................................................................................................................7
4.0 Competitor Analysis..............................................................................................................................8
4.1 Direct Competitors............................................................................................................................8
4.1.1 Videocon.....................................................................................................................................8
4.1.2 Hitachi........................................................................................................................................9
4.1.3 Target Store................................................................................................................................9
4.2 Indirect Competitors..........................................................................................................................9
5.0 Customer Analysis...............................................................................................................................10
5.1 Market Segmentation......................................................................................................................10
5.1.1 Geographic Segmentation.........................................................................................................11
5.1.2 Demographic Segmentation......................................................................................................11
5.1.3 Psychographic Segmentation....................................................................................................11
5.1.4 Behavioral Segmentation..........................................................................................................12
6.0 Customer trends...................................................................................................................................12
7.0 Challenges faced by Haier...................................................................................................................12
8.0 Growth strategy...................................................................................................................................13
8.1 Directional Strategies.......................................................................................................................13
8.2 Boston Consulting Group Growth Share Matrix..............................................................................14
8.3 Ansoff’s Growth Matrix....................................................................................................................15
9.0 Positioning Strategy.............................................................................................................................16
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9.1 Product Positioning..........................................................................................................................16
9.2 Pricing Positioning...........................................................................................................................17
9.3 Brand Positioning.............................................................................................................................17
9.4 Positioning Error and Risk................................................................................................................17
10.0 Customer Value Creation..................................................................................................................18
11.0 Product Life Cycle.............................................................................................................................19
11.1 Introduction Stage.........................................................................................................................19
11.2 Growth stage.................................................................................................................................19
11.3 Maturity stage...............................................................................................................................20
11.4 Decline Stage.................................................................................................................................20
12.0 Branding............................................................................................................................................20
13.0 Innovation..........................................................................................................................................21
14.0 Social and ethical strategies...............................................................................................................23
15.0 Conclusion.........................................................................................................................................25
References............................................................................................................................................26
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1.0 Introduction
Today, all over the world people are more concerned with the utilization of appliances in their
homes and offices. Appliances may vary from home appliances, kitchen appliances to electronic
appliances. In general, most of the time people use electronic appliances in their daily lives. The
assignment is based upon the strategic management of HAIER. The selected organization is the
fastest growing provider of appliances all over the world. The company has held the largest
worldwide shares in market regarding appliances from the year 2011. It is very significant for the
appliance selling organizations to think about the strategic management of the business for a
smooth running of business. The assignment is divided into two parts. The first part is concerned
with the strategic analysis of HAIER. The second part is concerned with other strategies like
growth strategies, branding strategies, social and ethical strategies and relationship strategies.
Moreover, the company HAIER sells products like refrigerator, air conditioner, washing machine
and so on. During summer time, people prefers to stay in an air conditioned room and use fridge
and that is why it is important for organizations like HAIER to take care of the demands of the
customers. Therefore, the appliance company must make strategies and marketing plans to
perform a good marketing to their potential customers.
2.0 Company Background
Haier is a Chinese multinational organization which sells electronic household appliances.
Headquarter is located in Qingdao Shandong province in China. The origins of Haier was long
before the actual establishment of the company (Ansoff, 2014). During the year 1920s, a
refrigerator factory was built in Qingdao to source the Chinese market. After the 1949
establishment of the People's Republic of China, this factory was then taken over and turned into
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an initiative of a state. During the year 2008, the organization has surpassed rival Whirlpool as
the world’s top refrigerator producer according to the terms of sales. During the tear 2012, the
electronic based appliance company has bought the New Zealand appliance manufacturing
company called Fisher and Paykel.
3.0 Value Chain Analysis
Source: https://www.google.co.in/url?
sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwiIvdWE79DT
AhWBro8KHSZCDLsQjRwIBw&url=https%3A%2F%2Fbettyfeng.wordpress.com%2Ftag
%2Fvalue-chain-analysis%2F&psig=AFQjCNH7F1Vli1AxguOgg-
NY_B8OZdpLPQ&ust=1493802729594855
The above diagram is the diagram of Porter’s value chain model. A value chain analysis is
implemented by most of the companies for customer satisfaction. First of all it is significant to
know the concept of value chain analysis. A procedure where an organization identifies its prime
and support undertakings that adds value to its final product is known as value chain analysis or
VCA. In value chain analysis, the product of HAIER will be analyzed for the reduction of costs
as well as increase differentiation. Porter’s value chain model consists of inbound logistics,
operations, services, marketing and sales as well as outbound logistics(Masette, 2013). These are
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the primary activities. The support activities of Porter’s value chain model includes human
resource management, technology, procurement and firm infrastructure. HAIER needs more
production in the United States and therefore it is recommended for the business firm to
implement primary activities as it adds value to the production procedure. The supporting
activities of the value chain model will help HAIER to achieve competitive advantage. The
competitive advantage can be accomplished by using innovative technologies in the
manufacturing process of products. The fridge, washing machine and air conditioner should be
made in an innovative manner to attract new customer and retain the old ones(Fearne, Garcia
Martinez and Dent, 2012).
3.1 Inbound Logistics
With the help of inbound logistics, the management of Haier can build co-operative relationship
between internal employees as inbound officers or executives.
3.2 Operation
Operations like production process, sales process and distribution process are performed by
Haier for long term sustainability in this competitive appliance market.
3.3 Outbound Logistics
Mainly distributers and marketing repairing teams are included in the outbound logistics of
Haier.
3.4 Marketing and Sales
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The marketing executives of Haier have a critical role in value chain analysis. In addition, the
sales team of Haier needs to implement effective marketing strategy to impress the customers.
3.5 Service
To sustain in this competitive market, Haier needs to focus on this service factor of value chain
analysis. HAIER can meet customer’s expectation by providing good quality after sales service.
3.6 Infrastructure
Infrastructure is one of the main factor of value chain analysis which explain the significance of
organizational structure to meet desired goals and objectives. In other words, the structure, the
management system and the classes of operational activities are notifies as infrastructure.
3.7 Human Resource Management
Human Resource Management is one of the main department of a company. The human resource
managers are concerned with the recruitment and selection of individuals who are willing to
work with HAIER. Moreover, the human resource management of HAIER needs to observe how
much skill an individual possesses to match the recruitment eligibility criteria of the company.
3.8 Technology Development
The organization HAIER is fully dependent upon the technology. All the electronic goods are
made by means of technology. The appliance company needs to innovate and improve their
technological department for accomplishing the competitive advantage.
3.9 Procurement
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The management of HAIER needs to provide good quality product as committed earlier to the
customers. In other words, the customer should get good quality and certified product from
HAIER according to the competitive bidding process.
4.0 Competitor Analysis
HAIER can determine what innovative features should be added and what not. Besides that,
competitive analysis helps an organization to reveal broad trends in the marketplace. A
competitive analysis on the other hand is useful for HAIER to determine the strength, weakness,
threats and opportunities of the company(Hitt, Ireland and Hoskisson, 2017). During processing
a competitive analysis, the business firm will be able to determine the needs and wants of their
potential customers. It is significant for every appliance selling organizations to know the
demands of the customers.
4.1 Direct Competitors
The competitive analysis of HAIER can be determined by identifying the competitors of the
particular organization. The competitors of HAIER are LG electronics, Videocon, Hitachi and
GE General Electric (Werther, 2001). These competitors pose a serious threat to HAIER and
they are known as direct competitors. These competitors rise wages in USA market and it puts a
pressure on the pricing of HAIER. Therefore, the organization should make an appropriate
pricing strategy so as to attract customers to the company.
4.1.1 Videocon
The full form of Videocon is Videocon Industries Limited. It is a public company and it is a
large diversified Indian Company. Headquarter of Videocon is located in Mumbai, India. The
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organization has manufactured seventeen sites in India. On the other hand, the industries care
located in Mainland China, Italy, Poland and Mexico. Moreover, their products are television,
air-conditioner machines, refrigerator, and mobiles and so on. Videocon can pose a serious threat
to HAIER regarding delivery of products to the customers.
4.1.2 Hitachi
Hitachi is a Japanese Company and it is a multinational conglomerate company. Headquarter of
Hitachi is located in Chiyoda, Tokyo, Japan. The parent company is Hitachi group. The
organization has ranked 38th position in the 2012 Fortune Global 500. Hitachi provides products
like aircraft engines, construction machines, LCDs, hard disk drives and so on. Apart from
electronic goods, the organization sells constructive products which is the main competitive
advantage.
4.1.3 Target Store
The target store of HAIER should be shopping malls, departmental stores and electronic stores
where customers often visit to purchase home appliances such as refrigerator, television and air
conditioner machines. In strategic planning of HAIER, competitive analysis play a major role in
the business to target a store. It allows the strategic planners of HAIER to improve and develop
matrixes for spotting unwarranted gaps in the market. Moreover, the competitive analysis helps
in developing innovative products.
4.2 Indirect Competitors
The substitutes which offer alternative solutions to the customers are mainly notified as indirect
competitors. In other words, some companies produces low priced alternative products which
can reduce the profitability of HAIER by attracting potential customers. The indirect competitors
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of HAIER is Symphony. Symphony provides a range of perfect air coolers to defeat the heat of
summer. The organization offers various kinds of air coolers which includes domestic and
commercial products.
5.0 Customer Analysis
5.1 Market Segmentation
Source: https://www.kullabs.com/uploads/market-segmentation.jpg
It is very important for each and every companies to implement a market segmentation process
for the segmentation of customers. It means HAIER needs to identify which place is suitable for
their marketing and what type of customers are suitable for their product. Also, market
segmentation is done by four segmentation method such as demographic, psychographic,
behavioral and geographical segmentation. The segmentation process is very long and it can be
utilized for both the consumer and business consumer.
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5.1.1 Geographic Segmentation
At last, geographic segmentation is also very useful for organizations like HAIER to divide
people based on their geographic location. The customers of HAIER may have different
requirements based on their geographic location.
5.1.2 Demographic Segmentation
Demographic segmentation will helps HAIER to determine the age, gender, social class, marital
status, income, religion of individual(HOWELL, 2011). The particular segmentation undertakes
that consumers with similar demographic profiles will exhibit similar patterns of buying.
5.1.3 Psychographic Segmentation
In the meanwhile, the organization can utilize psychographic segmentation for the determination
of people’s lifestyle, their interest as well as their activities. Moreover, psychographic
segmentation is useful for determining the opinion of the customers to define a market segment.
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5.1.4 Behavioral Segmentation
It is necessary for HAIER to use behavioral segmentation for identifying the buying behavior of
the consumers. Behavioral segmentation will help HAIER to determine the demands of the
customers.
6.0 Customer trends
In order to meet customer satisfaction, the management of HAIER needs to focus on current
trends. The customer trends and organization structure of a business helps a firm to retain the
employees and keep the customer satisfied. The customer trends and structures of HAIER
depends on four factors such as customer focus, empowerment of employees, reduction of cost
and adaptability. Moreover, HAIER increasingly focus their operational structure on making an
outcome that their customers finds valuable (Spence, 2011). On the other hand, a marketing
structure is significant for an organization to make a market segmentation of target customers.
Besides that, the organizational structures helps HAIER to identify the characteristics and
features that meet the demands of the customer and challenge their company for satisfying those
requirements. The trend concerning about the empowerment of employees is supported by
evidence that the organizations that provide the employees more responsibility and a
corresponding authority to make decisions accomplishing higher job satisfaction and
performance of employees.
7.0 Challenges faced by Haier
The first challenge faced by HAIER is high competition. Most of the people are preferring brand
value which HAIER has comparatively lower than many famous brands such as Blue star,
Videocon, Hitachi and other related industries. The second challenge face by HAIER is market
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