Haier, An International Icon: Success Factors And Market Challenges

2351 words - 9 pages

INTRODUCTIONBorn out of Qingdao Refrigerator Factory in 1984, the Haier (pronounced "high-er") Group is China's largest home appliance manufacturer (Wang and Ong 2007), and the world's fourth largest white goods manufacturer (Chen 2008).Haier was ranked first among China's Top 10 Global Brands by the Financial Times in 2005 (Haier's company facts 2008). It was also ranked 86th among the world's 500 Most Influential Brands by World Brand Lab in 2006 and is the only Chinese brand to be among the top 100 for three consecutive years. (Haier's company facts 2008).Its Chairman and CEO, Zhang Ruimin who was appointed in 1984 as the director has been credited for pulling Haier out of bankruptcy to become a global corporation (Zhang Ruimin 2006) with annual turnover of USD16.2 billion in 2006 (Haier's company facts 2008). Zhang was ranked 26th among World's Most Respected Business Leaders by the Financial Times in 2005 and 6th among Asia's 25 Most Powerful People in Business by Fortune magazine in 2004Haier's key markets are China, Europe, USA, Japan (Beebe et al 2006) and India (Mumbai 2007). It has over 240 subsidiaries and 87 trading companies, design centers and industrial parks and over 50,000 employees worldwide (Haier's company facts 2008).HAIER'S PATH TO SUCCESSIn 1984, CEO Zhang Ruimin took over the nearly bankrupt refrigerator factory (Lin 2005, 1). Today, Haier is known as a global brand. How did it become such as a success (Lin 2005, 1)?Strong leadership, customer service, product quality, innovation, speed, pricing, positioning, localisation of design, production and sales, latecomer advantages and market entry strategy are among the top ten factors for Haier's success.Strong LeadershipZhang Ruimin (Zhang), Chairman and CEO of Haier is described as down-to-earth and a charismatic leader who has worked his way up (Chinaview People: Zhang Ruimin 2003). Zhang demonstrated out-of-the-box thinking and risk-taking when he combined traditional Chinese philosophy with modern Western management style (Chinaview People: Zhang Ruimin 2003) and avoided following norms of the industry (Wu 2003)."From the OEC management model of "Never Leave Today's Work Till Tomorrow" and "Daily Settlement Leads to Daily Improvement" to the market chain management", Zhang's unique management ideas have won praises and is much of a discussion topic among management specialists and top universities around the world (Chinaview People: Zhang Ruimin 2003).Zhang's aspiration for Haier to become a global brand began during the early stage he took on the factory (Liu and Li 2002, 701) With this ambition, Zhang set clear objectives and focuses in building the brand, diversifying product lines, going international and now building a global brand name in different phases (Haier's development strategy 2008).In 2006, for the fourth consecutive year (Haier introduction 2008), Haier was ranked first for overall leadership among Chinese companies in the Wall Street Journal Asia's annual...

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