Haier, Taking a Chinese Company Global
Haier (“the Company”) was China’s biggest white-goods producer and supplier in 1990s. In 1984, there was nearly 300 local producers in China market, most of which were producing poor quality goods. However, customers were willing to pay more for higher-quality products and reliable service. This need created an advantage for differentiation.
In Chinese market, demand was high. Haier being able to read customer need properly, focused on Product Quality, After-Sale Services and Brand Building. While there was oversupply in the market, with product differentiation Haier was able to raise its prices. Their target was to be a first-class brand.
In early 1990s, while the demand was …show more content…
In 1997, Germany was the first export market for Haier refrigerators. Same year the Company entered into the Philippines market through a JV with LKG for the production of Haier branded White goods (AC, washing machines and freezers). After 1999, its full focus was on selling Haier branded products to overseas markets.
Haier’s Objective in exporting and expanding to overseas markets was to establish a “Brand Reputation” overseas. Because of the low- quality image associated with the Chinese manufactured products, other Chinese producers exported products under an OEM client brands, while Haier sold goods with its own brand.
In 2002 Haier was dominant in the China market, with a 38% share of all white goods revenue generated domestically. It achieved dominance mainly due to its high volume production and Scale Efficiency. Among the domestic rivals, only Kelon held the top position in China’s white goods market. However, Scale Efficiency was the biggest challenge for Kelon. Competition was high in Chinese market and Haier was distinguishing itself with its Differentiated Poducts, Higher Quality, and its Export Strategy. There was still room for expanding to second and third line markets (rural areas).
In 2001 China’s entry into WTO , added pressure on Haier. Chinese market became a part of the international appliance