Take an organization that you know well and identify its distinctive capabilities. Compare the organization with its competitors and comment on the implications for strategy.

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University of Hull, Business school, MBA Apr.2003 ~ Mar.2004

Assignment:

Take an organization that you know well and identify its distinctive capabilities. Compare the organization with its competitors and comment on the implications for strategy.

Main Topic:

Overview of Haier’s Globalization/Internationalization strategy, compare with its’ rivals to explore its’ successful transnational strategy.

Main Structure:

  1. Preface: what is strategy
  2. General Introduction of Environment                                                     …………… 200 words
  3. Company brief: A successful transnational corporation                         …………… 300 words
  4. Haier’s strategy study I: Why goes globalization/internationalization? …………… 800 words
  1. Local fierce competition calls for enlargement of the market
  2. The successful experience of foreign competitor prove the possibilities
  3. Structural divers of change (analysis of rivals)
  1. Haier’s strategy study II: How goes globalization/internationalization?    ……… 1,500 words
  1. Product internationalization
  2. Sales network internationalization
  3. Inter-enterprise internationalization
  4. Resource internationalization
  1. Summary & Conclusion                                                                        ………… … 700 words
  1. International brand -- the physical base
  2. International marketing strategy -- an efficient device
  3. International sales network -- an important term
  4. International resource -- a efficient way to go abroad
  5. Analysis of transnational strategy

Total counted: 3,000 words

GOING TO THE WORLD: EXPLORE THE SUCCESS OF HAIER

Preface

Strategy, as recognized by Steiner (1979), is an art of creating value, designing a desired future and identifying ways to bring it about . Taking the complexity arising out of ambiguous and non-routine situation into account, strategy management puts its emphasis on fundamental and long-term operation direction organization-wide. Based on strategy position, strategy choices and strategy in action (Figure 1.1), this article concentrates on illustrating the globalization/internationalization strategy of Haier, a transnational model, aiming to abstract some of the successful experiences from the company’s operation.

 

General Introduction

Along with the fast development of national markets and international market, nature of internationalization has infiltrated extensively to different sectors of business world, no matter national-based production or overseas-based production, both those target markets are national wised and international wised. Globalization/internationalization strategy is becoming one of the hot-issues for enterprise development.

In the 90’s of 20 century’s China, the steps of global markets integration put national-based enterprises under the great impacts coming from international markets. The accession of WTO greatly pushes forward the relationship between national and global markets. Those enterprises have strong ability to survive in competition started to expend their business global-wisely, from unitary product export to overseas production investment, some of them succeeded in resource optimizing and advantages complementary.

Meanwhile, Chinese enterprises were also being fiercely challenged by global competitors, products competition power are relatively low. These threats might come from several areas: an enterprise not been well-known to international market, its brands not been well-known to international market, it is not authorized by international standard organization, or low-realized international marketing network are all among which the most out-standing problems. To go globalization, an enterprise has to find solutions for problems mentioned above. Haier group provided us some distinctive experiences.

Company Brief: A successful transnational corporation

Haier, a household electrical appliance producer, founded in 1984, has grown and prospered as a transnational company widely recognized in the world community during the last 18 years. Recently, Haier’s business covers 86 categories with 13,000 specifications and exports products to more than 160 countries. Its annual output of 1995 equals only one-nineteenth of the smallest corporation on the top 500 list. By the end of 1998, Haier's annual output accounted for a quarter of the smallest firm of the leading 500 multinationals. In recent years, Haier has maintained an annual growth of 80%, the global sales in 2002 counted up to RMB71.1 billion, including overseas turnover of USD1 billion. Together with her ‘Famous Brand” strategy, the transnational strategy makes her distinctive among all the rivals.

Haier’s global framework consists of international trading, design, production, distribution and after-sales service networks. It has established 18 design institutes, 10 industrial complexes (1 in USA, 1 in Pakistan, 5 in Qingdao, 1 in Hefei, 1 in Dalian and 1 in Wuhan), 13 overseas production factories, 58,800 sales agents and 11,976 after-sales services throughout the world. Haier’s current domestic market share for refrigerators, freezers, air-conditioners and washing machines is about 30% respectively. Haier products are marketed to 12 of 15 European and 9 of 10 American top chain supermarkets, using local facilities and labor forces for design, production and sales in the United States and some European countries.

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Haier is now widely recognized in the world. As the latest statistics of Euro-monitor, Haier was placed 5th of the global white goods manufacturers with the largest world market share for refrigerators. As showed on the Far Eastern Economic Review issue December 26, 2002, Haier was placed 1st of the most respected companies in Asia and Pacific Region.

Going multinational (since 1998) with the aim of building an international brand name, Haier now has 62 distributors and more than 30,000 outlets around the world. The company's target for the beginning of the next century is to enter the top 500 ...

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