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Haier: Taking a Chinese Company Global in 2011
Transcript of Haier: Taking a Chinese Company Global in 2011
1984 - CEO Zhang Ruimin
China’s largest appliance “white goods” maker
Launched overseas in the 1990’s
1997 - “three thirds” goal
⅓ produced and sold in China
⅓ produced in China, sold abroad
⅓ produced abroad, sold abroad
Alternative 1 - Expanding US Market Share by Going Green
Alternative 2 - Expanding US Market Share through Luxury
Alternative 3: Increase Foreign Market Share through Customization
Entering into New Markets
US & Europe
Strategy and Management
Maintaining their dominance in China
Self Managed Teams
Haier Energy Star Certified products
ZERO Air Conditioners, Dishwashers or Washers
In 2009, Energy Star Certified machines accounted for...
68% of dishwasher sales
48% of clothes washers
36% of air conditioners
Residential energy accounts for about 22% of energy use in the US
Appliance and electronic energy usage
1978 - 17%
2005 - 31%
US homes built after 1990 are on average 27% larger than previous decades
$2,024 = US average household energy budget
Haier Group accounted for 1.6% of white-goods sales in 2010
Whirlpool lead with 26.2%
General Electrics had 19.5%
Pay closer attention to consumer demands
Using market research to discover consumer demands
Use their comparative advantage as a smaller manufacturer to rapidly develop or change products to meet consumer needs
Pay closer attention to changes in markets
The richest 1% own more than 35% of the wealth
Bottom 50% own 2.5% of wealth
Incomes increased by 31% for the top 1%
Only 4.5% for the bottom 99%
Trend toward designing/customizing your own consumer products
forecasted to continue for 3 main reasons:
every customer is their own market
consumers are more expressive
customization is the new loyalty
Haier’s manufacturing model is already fit for it - keeping costs down by developing products based on components and subsystems and on basic platforms that can vary
Much of Haier’s success has come from discovering what a specific consumer market needs and developing a product to suit those needs - this puts that task right into the hands of consumers
US Census Bureau for Income Distribution
Path of real wages
Increase in clicks, research, site traffic of Energy Star related products?
Increase in Haier Energy Star AC, Washer, and Dishwasher sales?
Would it Work?
Conversion rate of products designed to products bought
Clicks/site traffic on pages dedicated to customization
= Opportunity Statement
How can Haier increase its market share overseas?