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Copy of Haier

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Maximiliano Marques

on 1 May 2014

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Transcript of Copy of Haier


Welcome - Tasks
Corporate History
Address the Managerial Questions
5 Analysis Tools
Stakeholder Analysis
Internationalization Strategy
Resources & Capabilities
Financial Analysis
Porter’s 5 Forces
Answer Managerial Questions
Top Management Team
Class Questions?!?!

Sarah Jeep, Kristina Connolly, Niyanth Anand, Deevyang Bhakta, Kristy Maes, Uuganbayar Batkhuyag

Welcome Haier Representatives

Annual Board Meeting
7 of Haier's divisions
Each division has a dilemma based on 3 Managerial Questions
LOOK at yours!

Haier’s Corporate History

1984: Zhang Ruimin took over a failing Chinese refrigerator factory
Company culture emphasizes extreme commitment to quality
1991: Became leading refrigerator manufacturer in China
1990s: Manufacturing for multinational brands allows overseas expansion
1997: Formed global expansion strategy

Managerial Questions

How to achieve synergies on a global scale to unite their brand as Haier?
How to achieve economies of scale while still offering customization to local markets?
How can Haier achieve #1 brand status while defending its dominant position in China against growing competition from Western and Asian multinationals?

Stakeholder Analysis

Stakeholders are the individuals and groups who can affect, and are affected by, the strategic outcomes achieved and who have enforceable claims on a firm’s performance


Founder and CEO - Zhang Ruimin
President – Yang Mianmian

Currently 70,000 employees
Local people

Haier Logistics
Independently operated company created in 1999

Joint venture companies


IPO of A shares (limited to investors from mainland China) in November 1993

Before 2000, mostly state-owned department stores
By 2004, individual specialized shops and private retail chains
In 2004:
Domestic chains such as GOME accounted for 30% of sales
International chains like Wal-Mart accounted for 5% of domestic revenue
Networks of licensed dealers in second and third tier cities 30%
Independent retail shops and government purchases 15%
Online and telephone sales 20%

Stakeholder Analysis Matrix



Low High


Stakeholder Analysis Takeaways

Management & shareholders
Manage closely
Keep informed
Staff locals
Key to international expansion success
Keep satisfied—market responsiveness & service

Haier Division
Chinese Customers
What made you decide to purchase or not purchase a Haier product?
Haier’s International Business Strategy

Haier's International Strategy
Haier's Vision
European Sales Force
How Haier unite Europe into one market to acheive synergies?
Haier Division

Indian Sales Force
How can Haier tailor the strategy used in China to achieve Economies of Scale in India?
Why analyze resources and capabilities?

One tool used to answer Haier’s managerial questions
Comparison of strategic performance to relative strength
Determine the strengths and weaknesses of the company along with identifying areas for improvement


Resource Capabilities Matrix

Resource & Capability Recap

Haier has many strengths and market advantages that have allowed it to grow and become successful
It is difficult for Haier to thrive globally in the long run with all of the competition it faces domestically
In the future, Haier believes its strong emphasis on human resources will carry the company and allow it to continue thriving


Haier Division

What kind of synergies can we achieve with our strategic selling process for all Haier Employees?

Financial Analysis – Revenue Growth

Financial Analysis – Statements

Financial Analysis - Ratios

Financial Analysis – Take Away

The success of the companies strategies and growth is direct reflected in the company’s financials
The company has proved that it is stable; even in a dynamic environment
The company has the resources and health for more ambitious projects

China Sales Force

Haier Division

How will they defend their dominant position in China against competition?
Haier Division

What kind of synergies can we achieve with our strategic selling process for all Haier Employees?
Porter’s Five Forces Analysis

Threat of New Entrants

High Barriers to Entry (Small/Domestic Competitors)
High Capital Requirements
High Manufacturing Costs and Set up Costs
Haier Distribution Logistics Network
Attractive and Profitable Industry to Enter
High Threat with Multinational Companies
Global presence
Well established
Cost advantages

Threat of Substitutes

High substitution cost to consumer
Necessity vs. Want
Fridge or appliances
DvD player, iPod, Computer, ect.
Cost vs. Price substitutes
Greater price, but without cost exceeds the price
Further developing R&D and innovation

Bargaining Power of Buyers

High buying power
Decreased # of domestic competitors
Small but STRONG number of Multinational Competitors
Low switching costs to buyers
High product importance (necessity)
Customer Needs
Differentiation with price, quality, innovation and customer service

Bargaining Power of Suppliers

Haier has established suppliers, materials, laborers, servicers, & distributers (LOYALTY). Established presence
Haier suppliers understand price, quantity, quality (Meet demands)
Little differentiation amongst products
Understanding of customer & suppliers needs

Intensity of Rivalry

Intense Competition
Decreased but still large number of small domestic competitors
BIG 3 Multinational Competitors
Unique Internationalization Strategy
Difficult Markets First
Understanding/Importance of Market Place

Porter’s Recap

Threat of New Entrants: Medium - High
Threat of Substitutes: Low
Bargaining Power of Buyers: High
Bargaining Power of Suppliers: Low
Intensity of Rivalry: Medium - High

American Sales Force
How will Haier be able to gain Market Share against Whirlpool, GE, Electrolux who have been around for many years?
Haier Division

Mangerial Team
How can Haier achieve #1 brand status globally?
Top Management Team ??'s
Test Question 1
Reference the Internationalization Strategy or Porter’s Five Forces when answering how Haier can achieve number one status in China while defending its position in China against growing competition from Western and Asian multinationals?

True/False: Haier’s modes of entry into foreign markets primarily include licensing.

Test Question 2
False-primarily joint ventures, acquisitions, exporting
Test Question 3
As of the case which market had Haier not yet entered?

A) America
B) Australia
C) India
D) Europe
Thank you!
Global Sales and Strategy Consulants
~As of 2010, Haier had over 70,000 employees globally and a turnover of over 135.7 billion yuan ($21.5 billion)
~Voted by USA Newsweek as one of the Top 10 innovative companies
~Over 10,000 patent applications
~Sole consumer appliance sponsor for the 2008 Beijing Olympic Games

~Still keeping its competitive advantage in China through its virtual network and zero inventory system
~Continuing to integrate R&D, production, and sales resources worldwide
~Increasingly focusing on social responsibility
Helped build 145 primary schools
Created a popular children’s science cartoon (Haier Brothers)
Updates Cont...
Strategic Coherence Map
Due to demonstrated success we recommend they continue with Internationalization Strategy and Go Strong in India, Europe, and America
Achieve synergies through Unifying Europe, then using Template for Global Unification.
Happy medium between Multidomestic and Transnational
Economies of scale through Globalization of Haier Brand
#1 Brand status through...
Global Brand Recognition
Local Brand Preference & Loyalty
Each strategy BUILDS on one another

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