Haier's Internationalization: Strategy, Success, and Management

This case study examines Haier Group's internationalization strategy since 1990, highlighting its unique features compared to Western enterprises, such as focusing on challenging markets first and adopting a 'locally designed, locally made, locally sold' approach. It assesses the success of Haier's strategy, attributing it to continuous innovation, adapting to local preferences, and creating a strong brand image. The analysis also delves into Haier's management system, emphasizing employee empowerment, training, and a corporate culture that fosters innovation, contrasting it with more traditional Western management styles. The report concludes by underscoring the lessons other emerging market multinationals can learn from Haier's achievements.

Competitive Strategy &
Innovation

Table of Contents
Introduction .....................................................................................................................................1
Case Study ......................................................................................................................................1
Discuss the main features of Haier's internationalisation strategy since 1990 and how it is
different from the pattern of internationalisation typical of western enterprises...................1
Assess how successful has Haier's internationalisation strategy has been and why..............3
Discuss what are the principal attribute of Haier's management system also how do they differ
from those traditionally deployed by Western companies.....................................................5
Conclusion.......................................................................................................................................7
References ......................................................................................................................................8

Introduction
The internationalisation strategy involves the detailed plan or strategy developed and
implemented in to smoothly carry out their business at the international level effectively. It helps
business organisation to easily expand their business at the international level through
minimising the risk. International strategy involves analysing and evaluating the international
market, availability of resources , determining international goals also evaluating the market
dynamics effectively. It helps enhancing the overall performance of the company. For this report
the Haier Group is taken into consideration. This report highlights main features of the
internationalisation strategy of the chosen company and how different from the western
enterprises. Also the effectiveness of the Haier's internationalisation strategy along with the
principle features of the company's management system and how they differ from the western
company is also highlighted in this report.
Case Study
Discuss the main features of Haier's internationalisation strategy since 1990 and how it is
different from the pattern of internationalisation typical of western enterprises
The Haier group is one of the top and biggest producer of the essential home appliances
from 1990, offering their services around the world effectively. Company was founded in 1984
offering wide range of home appliances services to their customers around the world effectively.
In the earlier development the company under the guidance of CEO, Zhang Ruimin mainly
focused on the refrigerator market mainly through the imported technology from the Germany.
The main focus of the company was to offer quality products and services to their target
customers in order to gain competitive advantage in the marketplace effectively. The company
mainly focused on enhancing their quality so as to achieve the international quality standards
which requires a essential reformulation and improvement in their process effectively. Zhang's
focused on customers services and his efforts of developing an after sales services network
helped him in 1990 through implementing a computerised services which allows them to
effectively monitored their customers. In the year 1990 , the company acquired 16 other Chinese
companies which lead them to enhance their services not only in the domestic appliances but also
in television, telecommunication tools also other consumers electronics products. The
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internationalisation strategy is the detailed planning which helps in the effectively carrying out
the business activity at the international level. The Haier company started focusing on their
internationalisation process between the 1992 and 1997, the company entered into company of
international markets such as
 In south East Asia, mainly in Indonesia, Philippines and Malaysia, company started their
business through the joint venture with the local companies allowing them to
manufacture and sell the refrigerator and air conditioners.
 In case of Us the company started offering the compact refrigerator to an importer,
allowing them to sell their products using their brand name.
 In the 1997 the company started exporting the appliances to countries like Germany,
Netherlands and Italy.
The internationalisation strategy adopted by the Haiers company allowed them to enhance their
performance in the international market effectively. One of the main feature of the Haier's
internationalisation strategy was its main focus on entering the international market and handling
the challenging and difficult markets effectively before handling the easy and less developed
countries. The main strategy followed by the company was to focus on entering the most
challenging market and also overcoming the most difficult process effectively. The company
started acquiring the small and medium sized industries of the others countries in order tro
expand their business in that particular market effectively. The CEO of the company earlier
stated that the main objective of the company's expansion to the international market is not to
enhance their profitability through exploiting their low manufacturing cost but to build strong
and effective brand image in the marketplace. In order to enhance their brand in the international
market the company focused on locally designed, locally made and locally sold approach which
makes them different from any other from the pattern of internationalisation strategy used by nay
other country or any other western enterprises. The CEO of the company stated that they have to
make the American realised that Haier is a localised US brand rather than feeling that it an
imported Chinese brand. Company's this internationalisation strategy made them different from
any other western enterprises and strategy used by them. The company's Locally designed,
locally made and locally sold approach includes three stages of development effectively which
are highlighted below:
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Seeding: This includes establishing product and services in the international market and
making them aware of the brand image effectively through involving the local distributors and
various sales agents.
Rooting: Under this approach the company focus on developing the market share and
building the essential manufacturing plants in the international market effectively.
Harvesting: The last stage of the development includes establishing research and
development facilities in the international market and also conducti8ng necessary activities in the
international market which will help them to enhance their performance effectively.
In case of Haier, rather than choosing nearby market or countries with similar stage of
development as the china. The company chose to market with challenging environment with
challenging consumers. Company believed in taking risk which leads them enhancing their
overall performance.
Assess how successful has Haier's internationalisation strategy has been and why
The internationalisation strategy plays an essential role in the growth and development of
business organisation at the international level, it helps in evaluating the international market
through analysing the availability of resources effectively. The Haier group is the one of the
biggest operator of the home base products in china since 1990s, the company is well known in
the domestic as well in the global market under the essential guidance of the CEO, Zhang
Ruimin mostly (Abe, 2019). The company is mainly focusing on the refrigerator market with
well advance technology imported from Germany with their main focus on the quality to gain
competitive advantage in Chinese market effectively, company has effectively dealt with the new
feature of growing economic era. In case of new emerging innovation the company has gone
through a large number of innovations from its product designing, product mix and its
mechanism improvement. These various innovational changes has largely helped the company to
build strong brand image in the marketplace. The internationalisation strategy adopted by the
company has been considered as the the most successful strategy which has lead the company to
enhance their performance in the international market also enhance their market size in the
various international market also (Dogra and Neubert, 2021). The most common reason that can
be analysed behinbd the success the chosen company's growth and success can be that it
company has analysed its major innovation strategies effectively in order to develop and create
the innovation continuously which is also considered as the major driving force in the progress
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and growth of chosen company's enhancement in order to gain competitive advantage and
development of the sustainability. It is analysed that due to the growing globalisation and
increasing competition in the international market and starting of China's WTO entry each
Chinese appliances company and other industry is facing the lots of competition and challenges
from the national and international market, in addition to this there is also lots of environmental
and competitive challenges faced by the Chinese company which has lead them to directly
influencer their performance in these competitive environment (Gregersen-Hermans and
Lauridsen, 2021). In such situation the Haier company has set a successful example of the
successful running company amidst the challenges and competition faced by the other companies
in the environment, it has effectively shown the great example of company effectively facing
realities and challenges. The company constants efforts towards internationalisation has made
them to effectively face these challenges and become successful in the international market.
Their unique approach and innovative approach towards the international market has let them to
satisfy the needs and wants of their international customers, increasing their profitability. One of
the another reason that can be taken into consideration to analyse the success of chosen company
in the international market can be the producing the products as the culture and preference of the
international market which lead the company to satisfy the their customers as per their
preference. Such as if the company was operating in the US market the products were produced
as per the preference of the US customers. This has helped the company to gain competitive
advantage in the international market. The competition is considered to be the major foreign
market entry is the major objective of the Haier's internationalisation strategy in order to create
strong brand position in the international market. The company did not follow any already
existing strategy in order to be successful in the international market but implemented its own
effective strategy which was bot effective and flexible in terms of exporting and FDI (Haughton
and Han, 2020). The company regularly ensures the changing needs of its customers through
detailed market research, effectively compete with its competitors in order to create strong brand
image in the marketplace. The chosen company is considered to be the top most successful
Chinese company effectively operating in the international market. This has proven that the
company has strong and effective internationalisation strategy which has made them to be
continuously gain competition advantage in the international market. The company has strong
and successful strategy because they don't follow any existing strategy rather they follow they
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own strategy implemented according to the situation and preference of the international market,
which is also the major reason behind the success of the company.
Discuss what are the principal attribute of Haier's management system also how do they differ
from those traditionally deployed by Western companies
Since the time Haier has entered in the international market the company has gone under
a number of changes, company has adopted essential new market chain and order by which the
company was able to develop and innovate new product and services which will be able to
satisfy the needs and wants of the target customers, in order to do so the company has well
talented and qualified employees, company also focused on hiring the local employees having
knowledge of the foreign market which also helps in reducing various operational and
competitive risk at the international market (Liu, 2021). The employees were given the top most
priority at the chosen company, clearly focusing on the giving required training to the employees
so that they can effectively get adjusted to the international market. The company has given
required resources and training to the employees of the company in order to enhance their
motivational level and achieve desired goals and objectives at the international market. The
growth of the Haier's management has been seen after a big smashing of around 76 inferior
products which had captured a huge media attention also. This has literally lead to the
development of 6the japenese TQC system and enhancing the management system but the export
system is restricted by the indirect agents. The chosen company has gain the competitive
advantage through the adoption of the advantage technology, offering range of innovative and
differentiated products in the market place and also enhancing their management system
effectively. The haier's corporate culture has been moving in the innovative way, the company is
continuously developing strong brand image in the international market, it is analysed that
innovation has become the essential part of the business organisation and part of the company's
culture enhancing the productivity and profitability of the business (Sanders and Wong, 2021).
It is not possible for the companies to enhance their growth and development in the
international market through being remaining in the local market. And Haier has realised this that
they can not create global brand image through operating from the locals market. In order to
move into the international market and also gain competitive advantage the company already had
vision and strategy, similar the each and every company has their won vision and strategy in
order to survive in the international market. For example, Samsung has vision to move the
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convergence digitalisation movement, with the objective of creating innovative strategy which
will help the company to become the market leaders and enhance the lives of their potential
target customers. Both haier and Samsung operates in the same industry producing home
appliances products and service, but having different vision and mission created as per their
target customers. Haier company was considered as the top second company in term of
production of the refrigerator around the globe, the brand image and the reputation of the
company are the major driving force behind the success and growth of the company (Shahbari,
2021).
(Haier's Four strategic stages, 2018)
The company also focus on satisfying the needs and wants of their target customers, the
company follows the OEC management system that is depended on the level of competition in
the marketplace also helps in enhancing the management skills so that company can effectively
gain sustainable competitive advantage in the marketplace, the company had clear vision of
develop strong brand image in the marketplace and continuously satisfy their target customers
which will lead to enhancing their performance in the marketplace. Company had decided to
operate and acquire various parts of the china planning to expand their business in the
international market (Tamtik and Jang, 2018). The mission of the company is to develop
structure that will lead to attracting large number of customers plus effectively working towards
saving electricity. In the second stage, the OEC management control system has lead the
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company to implement various rules and regulation. The management of the company was
continuously working towards motivating employees to be more creative and innovative. And in
the final stage the company has developed a system of market chain achieved by the employees
which has lead to developing the concept of re- engineering process helping the innovation of the
product and services (Zhang, 2018).
Conclusion
From the above discussion it has been analysed that the internationalisation strategy plays
an essential in growth and development of the business organisation in the international market
through implementing required strategy needed for the smooth flow of business activity in the
international market effectively. This report helps in analysing detailed analysis of the
internationalisation strategy adopted by the Haier Group along with its main feature which lead
the company towards continuous growth and success. It is also analysed that the
internationalisation strategy adopted by the company has been the driving force behind the
growth and success of the company along with the principle feature of the company's
management system also they different from the the traditionally developed by the western
companies.
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References
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