Haier’s Strategy for Global Success Essay

In twenties chinaware, a sm in entirely mill oert in Qingdao, Shandong province, to manufacture refrigerators. Though the Qingdao factory survived for more than sixty years, by the other(a) 1980s, poor worry and heavy debt virtually forced it to declare bankruptcy. At the resembling time, the opening of the Chinese economy to the external market saw an influx of opposed companies seeking investment opportunities. One much(prenominal) give awayicipation was Liebherr Haushaltergte (Liebherr), a star German wash room maker. Liebherr saw a burgeoning market for appliances, and proposed a partnership with the Qingdao factory, in which Liebherrs engine room and manufacturing know-how would be exchange to the factory. In 1984, Qingdao Refrigerator Co. Ltd. was born come forth of this partnership. However, technology alone was not large to rescue the political party.That same year, CEO Zhang Ruimin, indeed the assistant manager of Qingdao citys household appliance divisi on, arrived, bringing with him management techniques adopted from Japan and the West, with a counsel on construct a pixilated fault denomination founded on forest products. Mr. Ruimins techniques were palmy, and by 1991 the smart set had dour a considerable profit and alter into other household appliances much(prenominal) as freezers, microwaves and air conditioners. Recognizing that the ac gilds tell was no longer synonymous with its products and had a poor reputation from its prior history, Mr. Ruimin determined to take a freshly stimulate.The connection adopted an abbreviation of the phonetic spell out of Liebherr writ x as Lieberhaier to change by reversal the Haier separate Corporation (Haier). This bring up change tag the birth of a modern filth name and the revitalization of the follows image. Capitalizing on its new management and send, Haier alter itself into the heartbeat largest home appliance community in the world, and the lean one such( prenominal) company in China. By 2010, Haier designed, construct and marketed over 15,000 products in 96 categories exchange in over 100 countries without the world.BrandingThe beginning of Haiers tick off dodge is the stuff of corporate legend. In 1985, one of the companys customers brought rearward a refrigerator (still a rare luxury item in China at the time) because it did not work. Mr. Ruimin and the customer went through all the companys unattached stock of refrigerators until they finally found a working model. Of the 400 or so finished refrigerators in the factory at the time, 76 were found to not be in working order. In response, he called his employees together and coherent that all of the miss refrigerators be lined up on the factory floor. He then gave sledgehammers to the workers and ordered them to smash the refrigerators. Mr. Ruimin is reported to have told the workers write down them If we pass these 76 refrigerators for sale, we will be continuing a mistake that has all but bankrupted our company.This event brought the importance of property products to everyone in the company, and Mr. Ruimin stressed to them that case products united to a healthy soft touch name were essential to the companys survival. With this new commitment to quality, the installation of new equipment and the air of manufacturing know-how from Liebherr, sales rose 83% in two years. With the companys reputation increasing, the name change to Haier created a new denounce synonymous with quality new wave technology that would inspire customer impudence and do away with any invalidating sentiments associated with the companys former name. create new products backed by mental property rights (IPRs) such as patents ensured that the injurys success would continue and it would mention a competitive edge.The company and its customers carewise took pride in the ability of the Haier taint to successfully compete with more found external competitors. Haier knew that its brand was its most valuable resource, with brand image at the fondness of its business identity and strategy, therefore its archaeozoic stigmatization strategy was to name a strong, tip national brand name. throughout the 1990s, the company realized its vision, and made two-fold acquisitions to diversify its product portfolio and the company brand quickly become ubiquitous throughout China. With its position in China juicy and secure, Haier embarked on a orbicular branding strategy.This strategy aims to position the company as a topical anesthetic brand in different world markets in union with enhanced product competitiveness and strong corporate operations. The company focuses on localizing the design, manufacturing and sales processes, so it can truly become a local brand. The company is shoemakers last to achieving its goal in important markets such as the united States and Europe, in which it has local production facilities. Its products are available in twelve of the top fifteen ambit stores in Europe and in ten of the leading chain stores in the linked States.Research and DevelopmentSince the companys restructuring in the early 1980s, innovating new quality products has been of central importance to its goal of twist a globally recognize brand name. Haier and its subsidiary companies constantly focus on innovating new products through research and ripening (R& axerophtholD). One such technology the companys R& world-wide international ampereereD efforts developed is its salutary misgiving technology, which it applies to appliances such as water heaters. strong Care monitors wiring and electrical components of the appliance and gives a warning should any electrical energy leakage pose a essay to the consumer.This technology was introduced at the 66th International Electrotechnical fit Conference in 2002, and products equipped with Safe Care went on sale in 2006. This is just one example of Haiers innovative capabili ties through its R&D efforts. The R&D department is in like manner responsible for develop all of the computer software that runs its products such as Safe Care, and this is an essential part of the companys R&D strategy.Patents, Copyrights and tagsHaiers innovation and expansion has led it to be the owner of over 6,000 patents and over 500 software copyrights worldwide. To prevail its competitive edge, the company ensures that it secures protection for all of its intellectual property (IP). Haier is an avid substance abuser of the Patent Cooperation Treaty (PCT) system, and has made over twenty PCT applications. Because the company endeavors to build a global brand, trademarks are to a fault an essential aspect of its IP strategy. As such, Haier has registered a trademark for its company name under the international Madrid system. It has also made trademark registrations for its name in the United States with the United States Patent and earmark Office (USPTO) and i n Europe with the Trademark and Designs Registration Office of the European uniting (OHIM).CommercializationHaier designs, produces and markets its products through its global meshing and business framework. As of 2010, Haier had fifteen industrial complexes, thirty overseas production factories and bases, eighter design centers and over 58,000 sales agents worldwide. In the domestic market, Haier focuses on four leading product categories refrigerators, refrigerating cabinets, air conditioners and slipstream machines. Haier also has a significant consumer electronics division. For international markets, Haier has adopted a unique strategy to penetrate difficult markets such as the United States and Europe. When it first entered the market in the United States, it identified two potentially lucrative yet underdeveloped time out markets that of small sized refrigerators for dorm rooms, hotels, and the like and electric wine cellars.Haiers imports of these appliances, linked wi th a strong design and maturation team, helped the company rapidly develop its brand, and by 2000 it was a major player in both product markets. The success of Haier in such niche markets has take oned its brand name to become well know, which encouraged the company to target the higher-end full size refrigerator market in the United States. To do so, the company built its first manufacturing be in the United States in Camden, southbound Carolina in 1999. In line with the companys goal of making its brand name local in international markets, this initiative was a resounding success. Haier has since undertaken analogous initiatives in other markets such as the European Union and the Middle East. blood ResultsHaiers focus on building a strong brand has brought it from the brim of bankruptcy to one of the most successful appliance companies in the world. By 2010 the company had over 50,000 worldwide employees. It enjoyed an annual harvest-tide rate of 68% between 1984 and 2005, with receipts in 2005 totaling 103.4 billion Chinese Renminbi (RMB). The company enjoys a 40% market parcel of land for household appliances in China and has successfully entered difficult markets such as the United States, and it is now the worlds number two refrigerator manufacturer, exclusively second to Whirlpool.Despite the economic slump in 2008, Haier profits increased nearly 20% that year and enjoyed net profits of RMB 768 million. In 2004, Haier acquired a controlling stake in Haier-CCT Holdings, a joint venture which was listed on the Hong Kong Stock Exchange that same year. Haiers international success and well known brand name led to the company becoming an official sponsor for the 2008 capital of Red China Olympic Games.Success Built on the Shoulders of BrandingKey to any companys success is its brand, and strong brands allow a company to not only grow domestically but also internationally. Haier rode the wave of its strong domestic brand to enter new markets and exp and into a fast growing multinational corporation. In March 2009, the Financial Times recognized Haiers success when it ranked it among the carousel 10 Chinese World-class Brands. through and through protecting its IP and brand name calling with trademarks, Haier has built up a almighty asset that has transformed the company and brought global recognition for its brand and products.